CONFIDENTIAL
M. THORN'S VISIT TO CHINA AND HONG KONG
NOTE ON THE FUTURE OF HONG KONG
Recent Developments
1.
Anglo-Chinese talks have been taking place through Diplomatic channels in Peking since soon after Mrs Thatcher visit to China in September 1982. Both sides share the common aim of maintaining the stability and prosperity of Hong Kong.
2. The talks have been useful and constructive but progress has
been fairly slow. The Chinese are seeking recovery of sovereignty in 1997 and regard sovereignty and administration as indivisible. 3. A more detailed phase of talks began in July. The Chinese delegation was led by Vice Foreign Minister Yao Guang, the British Delegation by Her Majesty's Ambassador, Peking. The Governor of Hong Kong has participated on the British side since July. The latest session was on 19/20 October. The next session will be on 14/15 November.
4. The United Kingdom's aim is to seek gettlement acceptable to Britain, China and People of Hong Kong./ Views of/latter are being
taken fully into account.
5. Chinese propaganda has floated a plan for Hong Kong to come within the Chinese State but with considerable autonomy and functioning essentially as it does now. Hong Kong would become a special administrative region (SAR) of China under Article 31 of the constitution. Its Government would be drawn from the local People of Hong Kong. Economy and basic freedoms would be 'protected' and the laws would be 'basically unchanged'. There would be an independent convertible currency and 'existing external relations. in the economic and cultural fields' would be maintained.
6. Most Hong Kong people are sceptical. The plan is superficially attractive, but lacks the key ingredient for confidence:
an
insulator against Chinese interference in Hong Kong. At present this is provided by British Administration. The problem is that the Chinese appear to believe that by simply saying that Hong Kong will
CONFIDENTIAL
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