TNAG-1257-FCO40-1590-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 137

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AND REPUTATION WOULD BE DISCARDED. PERHAPS BRITAIN WOULD LOSE

CERTAMIN BENEFITS? BUT MRS THATCHER HAS SAID THAT BRITAIN RE-

CEIVED NO PROFIT FROM HONG KONG. DENG SAID HE DID NOT BELIEVE

THIS. IF THAT WAS REALLY THE CASE THEN BRITAIN WOULD HAVE

NOTHING TO LOSE AFTER 1997.

7. THERE WAS NO QUESTION OF BRITISH PARTICIPATION IN THE

ADMINISTRATION OF HONG KONG AFTER 1997. BUT DURING A TRANSITION PERIOD IT WOULD BE POSSIBLE TO INVITE BRITISH ADVISERS UN, FOR EXAMPLE, THE FIELDS OF THE POLICE AND THE FINANCIAL SYSTEM. ONE COULD THINK OF ZIMBABWE AS AN EXAMPLE OF THIS TYPE OF ADMINISTRATION. THE NEGOTIATIONS WOULD CONTINUE IN A FRIENDLY FASHION BUT THERE WAS NOT VERY MUCH TIME LEFT. THE CHINESE HAD TOLD MRS THATCHER THAT THEY HOPED THE NEGOTIATIONS COULD BE COMPLETED IN TWO YEARS. IT WAS NECESSARY TO REACH AGREEMENT AND A JOINT STATEMENT BEFORE SEPTEMBER 1984.

THE CHINESE WISHED TO COMPLETE MATTERS BEFORE THEN.

DISCUSSIONS WITH WU

8. WU SAND THAT DENG HAD IN JULY THIS YEAR MADE A SHORT SPEECH IN WHICH HE HAD SET OUT THE BASIS OF THE CHINESE POSITINON. THE MATTER WAS OF INTEREST TO MANY COUNTRIES BECAUSE OF

THE QUESTION OF THE SECURITY OF FOREIGN CAPITAL IN HONG KONG AFTER CHINA RECOVERED SOVEREIGNTY OVER THE TERRITORY. THE

INTENTION OF THE CHINESE GOVERNMENT WAS THAT HONG KONG SHOULD BE- COME A SPECIAL ADMINISTRATIVE REGION. THIS IMPLIED NO CHANGE IN THE

SOCIAL AND LEGISLATIVE SYSTEMS IN HONG KONG, NO CHANGE IN

ITS STATUS AS AN INTERNATIONAL FINANCIAL CENTRE, AND NO THREAT TO FOREIGN CAPITAL, PARTICULARLY BRITISH CAPITAL. HONG KONG COULD CONTINUE TO HAVE PREFERENTIAL RELATIONS WITH THE REST OF THE WORLD. AFTER RECOVERING SOVEREIGNTY, CHI-NA WOULD NOT SEND OFFICIALS TO ADMINISTER THE REGION. IT WOULD

BE IN THE HANDS OF THE CITIZENS OF HONG KONG.

9. IN FIVE ROUNDS OF TALKS BRITAIN HAD MAINTAINED A VERY RIGID

POSITION, ACCEPTING THE TRANSFER OF SOVEREIGNTY BUT INSISTING

ON THE MAINTENANCE OF A BRITISH ADMINISTRATION. BUT IT APPEARED

FROM THE LATEST INDICATIONS THAT THE BRITISH ATTITUDE WAS

MORE FLEXIBLE. IN ANY CASE, FOR CHINA, DISCUSSION OF THE

PRINCIPLE OF SOVEREIGNTY WAS IMPOSSIBLE, AS WAS DISCUSSION OF THE

RIGHT OF ADMINISTRATION FOR THE REGION. BRITAIN WOULD HAVE TO

ACCEPT THESE TWO PRINCIPLES. AS IT WAS A QUESTION CONCERNING A

FRIENDLY COUNTRY, CHINA HOPED THAT THE SIXTH ROUND OF TALKS (IN

MID-NOVEMBER IN PEKING) WOULD ENABLE PROGRESS TO BE MADE

TOWARDS A SOLUTION WHICH WOULD BE BEST FOR PRESERVING

STABILITY AND PROSPERITY IN HONG KONG.

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/ THORN'S