TNAG-1256-FCO40-1589-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 21

CORETZENTIAL

weakness. In Chinese thinking Hong Kong's future is closely linked with that of Taiwan and Macao, both of which the PRC

also regard as Chinese territory removed from their jurisdiction as a result of foreign interference.

13.

Nonetheless, the Chinese derive considerable economic benefit

from Hong Kong in its present form. They obtain more than 30 per cent of their foreign exchange from Hong Kong and derive additional advantages from investments by Hong Kong businessmen. In China, from the managerial, financial and technological expertise available in the territory, and from the port and airport.

British Position

14. Britain has been responsible for the People of Hong Kong

- now totalling 5.3 m of which 98 per cent are Chinese for some 140 years. Hong Kong is an important commercial and financial centre for the UK, and the West, in the Far East. It is important as a market for British exports, particularly capital goods, and as a communications and air services centre.

Interests of the People of Hong Kong

15. Any resolution of the whole question of Hong Kong's future must take account of the views and wellbeing of the population

there.

CONFIDENTIAL