TNAG-1260-FCO40-1600-Briefings-for-Ministers-and-FCO-officials-on-the-future-of-H-1983 — Page 40

PRIME MINISTER'S TALKS WITH MR LUBBERS : 19 SEPTEMBER 1983

BRIEF I : HONG KONG [DEFENSIVE}

POINTS TO MAKE

1. Talks through diplomatic channels between Britain and China

agreed last September. Meetings held in Peking with common aim of maintaining Hong Kong's stability and prosperity.

2. Second (ie more detailed) phase of talks began in July. Will reconvene 22/23 September after seven week recess. Chinese delegation led by Vice Foreign Minister Yao Guang, British

delegation by HMA Peking. Governor of Hong Kong participating as appropriate on British side.

Atmosphere generally friendly

3. Content of talks confidential.

though Chinese line on substance tough throughout. We have given nothing away.

A.

Our aim is to seek a settlement acceptable to Britain, China and people of Hong Kong. Their views being taken fully into account. Made known to us and Governor through many channels. We are in close consultation, through the Governor, with Hong Kong's Executive Council (EXCO). Mr Luce to visit Hong Kong 24-29 September.

5. Chinese propaganda has floated idea of Hong Kong as (Special Administrative Region (SAR) under Chinese constitution, with considerable autonomy and functioning essentially as it does now. Propaganda campaign aimed at undermining our position. Party General Secretary, Hu Yaobang, told Japanese reporters on 15 August that China would recover sovereignty over Hong Kong on 1 July 1997. He gave erroneous impression. We have conceded nothing.

6. Most people in Hong Kong sceptical of this SAR idea. Evidence

suggests Chinese have not thought through most detailed issues

involved. They seem to assume that by saying Hong Kong wil1 continue to be financial/commercial centre or that currency will

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