TNAG-1257-FCO40-1590-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 194

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assuring continuity and

(iv) Central issue: to devise package inspiring confidence. Given agreed common aim, confident this

possible.

(v) Meanwhile important nothing said or done to damage

confidence in Hong Kong or atmosphere of talks. Grateful

your understanding.

Special Autonomous Region) (vi) Chinese propaganda floats Hong Kong as SAR of China, with considerable autonomy and lifestyle basically

unchanged.

This

(vii) Most Hong Kong people sceptical of SAR idea.

Evidence suggests details rudimentary and basis for

confidence not grasped by Chinese. Investors need

effective guarantees against Chinese interference. at present provided by British administration.

(viii) We do not obtain revenue from Hong Kong nor have

we colonialist aspirations. We want best possible deal

for Hong Kong people.

Sovereight

(ix) Chinese and British positions well-known. We

fully realise importance of sovereignty to China.

not inflexible. Willing to consider any solution

acceptable to Britain, China and Hong Kong.

Confidine in Thongkong

(x

We are

Underlying state of Hong Kong's economy generally

healthy. Cumulative effect of Chinese propaganda

campaign is main reason for decline of Hong Kong dollar

and of stock market. There is tack of confidence in

China's SAR plan for Hong Kong. But Chinese propaganda

recently has eased. eff at present and Recent measures taken by Hong Kong Government have helped stabilise the dollar.

BACKGROUND (NOT FOR USE)

2. The Prime Minister is aware of the background to the

future of Hong Kong.

3.The Germans have some interest in this subject. The FRG

is Hong Kong's third largest market for domestic exports.

There is a strong German business community in Hong Kong,

and considerable German investment there.

2.

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14.