TNAG-1373-FCO40-1819-Ministerial-visits-from-the-UK-to-Hong-Kong-1985 — Page 5

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INDE.

IN REGISTRY

3 0 OCT 1985

Da iker:

VISIT OF MR. RENTON: MEETING WITH EXECUTIVE COUNCIL,

MR. RENTON HAD A WIDE-RANGING DISCUSSION WITH CXCO YESTERDAY

MORNING LASTING ONE AND A HALF HOURS. FOLLOWING IS A SUMMARY RECORD.

GENERAL

2. MR. RENTON ASSURED MEMBERS THAT THERE WOULD BE NO DIMINUTION OF

THE BRITISH COMMITMENT TO HONG KONG UP TO 1997. SIR S.Y. CHUNG

EXPRESSED APPRECIATION, BUT HOPED THAT HMG WOULD NOT OVERLOOK THE

FACT THAT THE JOINT DECLARATION COVERED A PERIOD OF 50 YEARS AFTER

1997. IT WAS INCUMBENT UPON HMG TO ENSURE THAT THE AGREEMENT WAS HONOURED BY THE CHINESE. MR. Q.W.LEE HOPED THAT SOME MEANS COULD BE FOUND, OTHER THAN NORMAL DIPLOMATIC CHANNELS, FOR CONTINUING THE SINO-BRITISH DIALOGUE ON HONG KONG AFTER THE JLG WAS DISBANDED IN THE YEAR 2000, BUT SAID HE APPRECIATED THIS WOULD BE DIFFICULT FOR

THE CHINESE. MR. RENTON SAID HMG WOULD BEAR THESE POINTS IN MIND,

SUT THAT THE TWO MAIN PILLARS WHICH WOULD UPHOLD THE AGREEMENT

AFTER 1997 WOULD BE CHINA' SELF-INTEREST AND THE FACT THAT THE

PROVISIONS OF THE JOINT DECLARATION WOULD BE EMBODIES IN THE BASIC

LAW.

STATE OF CONFIDENCE IN HONG KONG

3. SIR S. Y. CHUNG SAID THAT THERE HAD BEEN A GRADUAL RETURN OF CONFIDENCE IN HONG KONG SINCE THE JOINT DECLARATION WAS INITIALLED IN SEPTEMBER LAST YEAR. HOWEVER, THIS HAD BEEN MORE EVIDENT AMONGST FOREIGN INVESTORS THAN LOCAL INVESTORS, PARTICULARLY THOSE IN THE MANUFACTURING INDUSTRY WHO WERE STILL DOUBTFUL ABOUT THE CHINESE COMMITMENT AFTER 1997. MR. Q.W. LEE DREW ATTENTION TO A RECENT INCREASE IN THE SWITCHING OF HONG KONG DOLLARS TO US DOLLARS. WHILST THIS WAS PARTLY ATTRIBUTABLE TO INTEREST RATE DIFFERENTIALS, IT WAS AN INDICATION THAT THINGS WERE NOT AS ROSY AS THEY SEEMED. MR. ALLEN

LEE MENTIONED THAT QUITE A FEW LOCAL INVESTORS WERE MOVING THEIR

FAMILIES ABROAD AS A FORM OF INSURANCE AGAINST THE FUTURE. MISS LYDIA DUNN SAID THAT THE OUTFLOW OF YOUNG PROFESSIONAL AND MANAGERIAL TALENT HAD RECENTLY ACCELERATED. MR. S.L. CHEN ECHOED THIS.

CONSTITUTIONAL DEVELOPMENT

4. MR. RENTON EXPLAINED THAT HMG HAD NO INTENTION OF IMPOSING A DOCTRINAIRE WESTMINSTER MODEL ON HONG KONG. THERE WOULD BE A VOCAL MINORITY IN PARLIAMENT WHO MIGHT DEMAND THE EARLY INTRODUCTION OF FULL-SCALE DIRECT ELECTIONS, BUT THE MAJORITY WOULD SEE THE NEED FOR HONG KONG TO DEVELOP A UNIQUE SYSTEM SUITED TO ITS OWN NEEDS. HE HAD ALREADY HEARD DIFFERENT VIEWS ON THIS SINCE HIS ARRIVAL IN HONG KONG, BUT HE WAS CONFIDENT THAT THERE WOULD BE A MAJORITY HERE WHO WOULD ADVISE CAUTION. MR. ZHAO ZIYANG HAD ALSO SPOKEN OF THE NEED FOR CAUTION AT HIS MEETING WITH THE PRIME MINISTER ON 24 OCTOBER.

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