TNAG-1310-FCO40-1667-Future-of-Hong-Kong-1984 — Page 154

CODE 18-77

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Reference....

factional fighting and the unaccountable and high-handed authority of the new State Security Ministry.

5.

As regards steps which the Hong Kong government should now take, Mr Davies said the priorities should be speeding up the localisation of the civil service and democrati- zation in line with Chinese statements on "Hong Kong run by the people of Hong Kong".

6.

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Mr Davies was obviously in some difficulty in replying to a question from the audience, asking what better results he would have expected from the Sino-British negotiations if the "errors" he had mentioned had been avoided, but he commented that he would have expected that the process of educating the Chinese in the realities of Hong Kong would have gone more smoothly. Mr Davies responded affirmatively to another questioner who asked whether, if he were a businessman, he would in present circumstances make large investments in Hong Kong. Asked about the background to Jardine's decision to move its legal base from Hong Kong and to the Lobo motion that Legco should be allowed to debate any proposed UK-China agreement on Hong Kong's future, Mr Davies said he thought that the former had been taken entirely by Jardines, but the latter had been stimulated by the Hong Kong government.

NeWalke

Kenneth Walker

CONFIDENTIAL