TNAG-1311-FCO40-1673-Future-of-Hong-Kong-1984 — Page 22

INFDENTIAL

9. WU INSTANTLY REPLIED THAT THIS WOULD BE VERY DIFFICULT FOR

THE CHINESE. IT WOULD CARRY AN IMPLICATION OF CONTINUING SOVEREIGNTY OVER HONG KONG AFTER 1997. HE ASKED THE SECRETARY OF STATE TO RECONSIDER THIS. THE SECRETARY OF STATE RETURNED TO THE CHARGE, SAYING THAT THIS FORMULA HAD BEEN CHOSEN AFTER VERY CONSIDERABLE THOUGHT. WU THEN SAID THAT HE WANTED TO MAKE ABSOLUTELY CLEAR THAT THE FORMULA WAS UNACCEPTABLE TO THE CHINESE GOVERNMENT AND THAT THE BRITISH GOVERNMENT WOULD HAVE TO GIVE FURTHER THOUGHT TO FINDING ANOTHER FORMULA.

CLAIMS

10. THE SECRETARY OF STATE REMINDED WU THAT WE HAD HANDED IN A LOST OF CLAIMS SOME TIME AGO. THE CHINESE GOVERNMENT HAD SPOKEN OF PREPARING COUNTER-CLAIMS BUT WE HAD HEARD NOTHING FROM THEM SINCE. HE THOUGHT IT IMPORTANT THAT THIS QUESTION SHOULD BE EXPEDITED. WU TOOK NOTE AND SAID THAT THIS SHOULD BE DISCUSSED FURTHER THROUGH DIPLOMATIC CHANNELS.

AIR SERVICES

UA11. THE SECRETARY OF STATE SAID THAT THE JOINT DECLARATION HAD CREATED GOOD CONDITIONS FOR CATHAY PACIFIC. BUT WE WOULD WANT TO SEEK A GREATER ROLE FOR CATHAY PACIFIC ON

HONG KONG/CHINA ROUTES, AND A FURTHER EXTENSION OF THE PRESENT ARRANGEMENTS GOVERNING THE BRITISH AIRWAYS HONG KONG/ PEKING SERVICE. THESE QUESTIONS COULD ALSO SE PUSUED THROUGH DIPLOMATIC CHANNELS. WU AGAIN TOOK NOTICE AND AGREED THAT THIS COULD BE PURSUED BETWEEN OFFICIALS.

CONSCRIPTION

12. THE SECRETARY OF STATE MENTIONS THIS AT LUNCH TO

WO WHO WAS NON-COMMITTAL. THIS EVENING WU TOOK THE INITIATIVE TO HAVE A WORD PRIVATELY WITH THE SECRETARY OF STATE. HE SAID THAT PEOPLE WERE WORRYING UNNECCESARILY OVER THIS PROBLEM. WITH ONE BILLION PEOPLE CHINA COULD FIND PLENTLY OF RECRUITS. THE SECRETARY OF STATE POINTED OUT THE GOOD EFFECT WHICH A PUBLIC STATEMENT OF REASSURANCE BY THE CHINESE GOVERNMENT WOULD HAVE. WU TOOK NOTE AND SAID HE WOULD REFLECT ON IT.

EVANS.

HONG KONG AGREEMENT

LIMITED

HD/HKD

HD/FED

HD/PLANNING STAFF

HD/PUSD

DEP HD/PUSD

RESEARCH DEPT (MR WALKER) PS

PS/MR LUCE

PS/PUS

SIR W HARDING

MR WILSON

SIR J FREELAND

MR J CROWLEY, PUSD

3-

COPIES TO:(VIA ADR)

MR ROBERTS, NEWS DEPT

MR FIFOOT, LEGAL ADVISERS MR BURROWS, LEGAL ADVISERS

MR MARTIN, ASST STAFF CABINET

OFFICE

MR CARTLEDGE, CABINET OFFICE MR COLVIN, CABINET OFFICE SIR P CRADOCK, NO 10 DOWNING ST

CONFIDENTIAL