TNAG-1313-FCO40-1688-Future-of-Hong-Kong-views-and-involvement-of-Australia--Cana-1984 — Page 108

CONFIDENTIAL

SPEAKING NOTE FOR SECRETARY OF STATE'S MEETING WITH

HIGH COMMISSIONERS, 21 NOVEMBER 1984: HONG KONG

1. Sino-British agreement on Hong Kong's future initialled in

Peking on 26 September. Culmination of two years of intensive negotiations agreed when Prime Minister visited Peking September 1982. We entered negotiations to end uncertainty generated by 1997 deadline when our lease on New Territories (comprising 92% of

Hong Kong's land area) due to expire. Remaining territory not a viable entity. Hong Kong since 1898 has become an integral whole. Choice therefore between reversion to China under agreed, legally binding arrangements or reversion to China without such

arrangements.

2. Agreed common aim of negotiations was maintenance of Hong Kong's stability and prosperity. Our aim was settlement which would ensure stability/prosperity and be acceptable to Parliament,

China and people of Hong Kong. Believed that such a settlement would need to enshrine, in form legally binding on both sides, clear and detailed arrangements for Hong Kong's future based on continuity of present systems and lifestyle.

3. Two phases to negotiations. Second, more detailed phase began July 1983. Explained importance for Hong Kong's systems of British administrative rôle and link and explored possibilities of their continuation after 1997. Soon clear that this unacceptable to

Chinese.

4. Subsequently proposed examining what other effective measures might ensure Hong Kong's continuing stability/prosperity. Concentrated on Chinese ideas for Hong Kong as Special Administrative Region (SAR) of People's Republic of China enjoying considerable autonomy and functioning essentially as now. Said that if arrangements ensuring stability/prosperity could be constructed on this basis, would consider recommending to Parliament a bilateral agreement enshrining them.

5. Initial discussions completed in April. Although some points unresolved, clear that acceptable basis for settlement possible.

CONFIDENTIAL

/both