TNAG-1342-FCO40-17722-Visit-by-Margaret-Thatcher--UK-Prime-Minister--to-Beijing-fo-1984 — Page 53

SUCCESSFULLY RESOLVED THE QUESTION OF THE RESUMPTION OF THE

EXERCISE OF SOVEREIGNTY BUT ALSO WAS CONDUCIVE TO THE MAINTENANCE OF HONG KONG'S LONG TERM STABILITY AND PROSPERITY AND TO WORLD PEACE. IT OPENED A NEW CHAPTER IN BILATERAL RELATIONS. IT WAS AN EXAMPLE FOR OTHER PROBLEMS LEFT OVER FROM HISTORY. ZHAO AGREED

THAT THE AGREEMENT CONFORMED TO THE INTERESTS OF CHINA, THE UK

AND HONG KONG COMPATRIOTS. HE PRAISED THE PRIME MINISTER'S VISION

AND STATESMANSHIP AND HER GREAT CONTRIBUTION TO ITS SUCCESSFUL

CONCLUSION.

IMPLEMENTATION

6. THE PRIME MINISTER UNDERLINED HMG'S COMMITMENT TO IMPLEMENTING

THE JOINT DECLARATION IN EVERY RESPECT. WE APPRECIATED ZHAO'S AND DENG'S COMPARABLE STATEMENTS. THE UK WAS COMMITTED TO COOPERATING

CLOSELY OVER THE AGREEMENT'S IMPLEMENTATION. IT WAS IMPORTANT

THAT BOTH SIDES' TOTAL COMMITMENT SHOULD BE CLEAR IN ORDER TO

SUSTAIN OVERSEAS CONFIDENCE AND THUS CONTINUED INVESTMENT.

7. ZHAO SAID THAT THE TASK WAS NOW TO IMPLEMENT THE AGREEMENT IN EVERY RESPECT. CHINA WAS READY TO DO SO. HE WAS SURE THE UK WAS TOO.

THE DECISION TO PROCEED WITH THE ONE COUNTRY, TWO SYSTEMS'' CONCEPT WAS NOT ONE OF EXPEDIENCY. IT WAS A TRADITION OF THE CHINESE NATION TO ACT IN GOOD FAITH AND ALWAYS TO ABIDE BY AND IMPLEMENT FAITHFULLY INTERNATIONAL AGREEMENTS. THIS HAD BEEN THE CASE EVEN

DURING YEARS OF DOMESTIC TURMOIL. THERE WERE NO GROUNDS FOR MISGIVINGS ABOUT A FUTURE CHANGE IN CHINESE POLICY. CHINA WOULD

PROVE HER WORDS BY DEEDS.

TRANSITIONAL PERIOD

8. THE PRIME MINISTER ASSURED ZHAO THAT THE MAINTENANCE OF STABILITY AND PROSPERITY WAS OUT PRINCIPAL AIM AND THAT HONG KONG WOULD CONTINUE ITS CAUTIOUS AND PRUDENT FINANCIAL POLICIES. THE UK DID NOT AND WOULD NOT DERIVE INCOME FROM HONG KONG.

9. ZHAO SAID THE CHINESE WERE CONCERNED ABOUT THE TRANSITIONAL PERIOD. IT WOULD BE VERY IMPORTANT. IF ALL WENT SMOOTHLY AND

ECONOMIC DIFFICULTIES WERE AVOIDED A SOLID FOUNDATION FOR

CONTINUED STABILITY AND PROSPERITY WOULD BE LAID. DIFFICULTIES WOULD OTHERWISE OCCUR. CHINA SHARED THE WISH TO MAINTAIN STABILITY AND PROSPERITY IN THE TRANSITIONAL PERIOD TO ENSURE A

SMOOTH TRANSFER OF GOVERNMENT IN 1997. HOWEVER, WE SHOULD BE

PREPARED FOR DIFFICULTIES AND TAKE EFFECTIVE COUNTER MEASURES.

IT WAS IMPORTANT TO INCREASE MUTUAL TRUST AND INTENSIFY COOPERATION.

BASIC LAW

10. THE PRIME MINISTER SAID THAT DRAFTING THE BASIC LAW WOULD BE

A PARTICULARLY IMPORTANT TASK. SHE WAS SURE THAT CHINA WAS AWARE

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CONFIDENTIAL

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