TNAG-1256-FCO40-1589-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 115

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differing views on sovereignty. Mr Luce said that we believed that

the Chinese genuinely wanted a negotiated settlement on Hong Kong.

Hong Kong was economically valuable to them. Moreover, Deng

Xiaoping was himself subject to various pressures. Most important

from the Chinese point of view, was that a satisfactory solution to Hong Kong could induce Taiwan to reunite with China. But if forced

to choose, there was little doubt that the Chinese would sacrifice

economic considerations for national pride. The recovery of

sovereignty over Hong Kong was their most.important consideration.

There was also little doubt that at a high political level, the

Chinese had only an incomplete grasp of how Hong Kong worked and was

integrated into the international system. We had therefore

concentrated in the talks on trying to educate them. In this

context it was helpful when influential people in the region (such

as Lee Kuan Yew), could point out to the Chinese some of the basic

truths about Hong Kong.

4.

Sir V Garland suggested that Hong Kong people and investors

needed guarantees against interference in their affairs. Hong

Kong's economic success derived substantially from conscious decisions taken by individual companies. Mr Luce agreed. From

HMG's point of view the ultimate safeguard would be a settlement

acceptable to Britain, China and the people of Hong Kong.

5. On the ways in which deadlock might be avoided, Mr Luce said that agreement on what constituted the basic ingredients of Hong Kong's stability and prosperity was the first essential. There were

some grounds for confidence in this. Recent newspaper reports indicated, for example, that the Chinese had welcomed the measures recently taken to stabilise Hong Kong's economy. If true, such reports showed that China had genuinely been worried about the

prosperity of Hong Kong.

6.

There was some discussion about ASEAN affairs and then about

Brunei. On the latter, Mr Luce said that during his recent visit to Brunei he had not been impressed by the Ruler. Brunei would be a potential trouble spot if the Ruler did not begin to show greater sensitivity towards his people's aspirations. He agreed that it would be useful for the British and Australians to keep in touch

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