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FLEXIBILITY WHICH HAVE BEEN DROPPED BY ZHOU NAN HIMSELF ON 3
SEPARATE OCCASIONS. ON TWO OF THOSE OCCASIONS HE WAS SPEAKING IN
FRONT OF MEMBERS OF HIS DELEGATION, AND THEY HAVE ALSO AMPLIFIED
CERTAIN OF HIS REMARKS. OBVIOISLY THE EXTENT OF CHINESE
FLEXIBILITY REMAINS TO BE TESTED BUT IT SEEMS VERY UNLIKELY THAT
THEY WOULD HAVE SPOKEN IN THESE TERMS IF THEY HAD NOT BEEN SO
INSTRUCTED BY THEIR SUPERIORS.
3.
WE ARE CERTAINLY UNDER NO ILLUSIONS ABOUT CHINESE
AMBITIONS. THE PAPER REFERS IN PARAGRAPHS 5 AND 6 TO THE PLACE
WHICH THE CHINESE INTEND THAT A HONG KONG BASED JOINT GROUP
SHOULD OCCUPY IN 'A PATTERN OF GRADUALLY INCREASING CHINESE
INVOLVEMENT IN THE TERRITORY IN THE PERIOD UP TO 1997'. IN
PARAGRAPH 4 IT RECALLS CHINESE AMBITIONS CONCERNING JOINT
SELECTION OF SENIOR OFFICIALS AND THE RUNNING OF THE EXCHANGE
FUND. PARAGRAPH 7 DESCRIBES THE POSSIBLE REACTIONS IN HONG KONG
TO THE BASING THERE OF A JOINT GROUP. THE DETAILS OF THE CHINESE
PROPOSALS, AND THE UNDERLYING CHINESE OBJECTIVES, HAD BEEN FULLY
DESCRIBED IN THE EARLIER PAPER DRAFTED IN CONJUNCTION WITH RICHARD
EVANS AND YOURSELF AND DISCUSSED BY MINISTERS ON 23 MAY (FCO
TELNOS 931-2 TO HONG KONG REFER). MINISTERS WILL THUS BE FULLY
AWARE OF THESE CONSIDERATIONS WHEN THEY COME TO DISCUSS THE
CURRENT PAPER.
4. WE ARE NOT SURE WHAT YOU HAVE IN MIND IN IMPLYING THAT
DENG XIAOPING HAS GIVEN FURTHER CLEAR INDICATIONS OF CHINESE
INTENTIONS ON THIS POINT SINCE HIS CONVERSATION WITH THE
SECRETARY OF STATE ON 18 APRIL. NOR, AFTER REVIEWING THE
MATERIAL AVAILABLE FROM SECRET SOURCES, CAN WE FIND ANY
ADDITIONAL EVIDENCE WHICH IS NOT REFLECTED IN THE TWO PAPERS THAT
HAVE BEEN SUBMITTED TO MINISTERS.
5. I DO NOT THINK THAT THERE IS ANY DIFFERENCE BETWEEN US OVER
THE ASSESSMENT THAT THE CHINESE AMBITION IS TO USE THE JOINT
GROUP TO INTERVENE IN THE ADMINISTRATION OF HONG KONG BETWEEN NOW
AND 1997. WE ARE CONSCIOUS OF THE RISKS. GIVEN THE STRENGTH OF
THE CHINESE ATTACHMENT TO THE BASING OF THE JOINT GROUP IN
HONG KONG HOWEVER IT SEEMS RIGHT AT LEAST TO CONSIDER WHETHER THE
HINTS OF CHINESE FLEXIBILITY GIVE US THE CHANCE OF REDUCING THE
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