TNAG-1260-FCO40-1600-Briefings-for-Ministers-and-FCO-officials-on-the-future-of-H-1983 — Page 53

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CALL BY LORD SHAWCROSS ON MR RICHARD LUCE MP, MINISTER OF STATE,

10.15 AM, ON WEDNESDAY 7 SEPTEMBER 1983.

Present

Mr Luce

Lord Shawcross

MIKKO40 |11

RECEIVED IN REGISTRY

13 SEP 1983

Mr Warren-Gash, Private Secretary

Mrs Priest, HKD

DESK OFFICER

INDEX

PA

1.

REGISTRY

Action Taken

TiCH 2019

There was some initial discussion about Brunei. Lord Shawcross

said that his concern has been to ensure that the ending of the arrangement with the Crown Agents did not spill over into a clash between the Brunei and UK Governments. He personally had been in no way involved, and only learnt of the decision after it had been

taken.

2. Lord Shawcross then said that he was likely to visit. China

within the next few months. His business interests took him there frequently and he was on good terms with several Chinese personalities including the Chinese Ambassador here. He might also pass through Hong Kong. His impression was that the Hong Kong people were very nervous indeed about their future. In his professional capacity he had seen evidence of significant capital

outflow from Hong Kong. Mr Luce asked about the scale of this. Lord Shawcross explained that it was substantially greater than was

usual. Although the Hong Kong market had recently picked up, it had

been extremely volatile since September 1982 and was unlikely ever again to reach former levels of buoyancy. This was partly

because the market had become over-heated at one stage, and share prices had soared way above levels that could be sustained. Chinese investors were very worried about the future.

But

3. Mr Luce stressed the importance of reaching an agreement with

the Chinese which would maintain Hong Kong's stability and

prosperity. Did Lord Shawcross know what the Chinese considered to be the essential components of these? Lord Shawcross thought the

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