TNAG-1640-FCO40-2287-Economic-situation-in-Hong-Kong-1987 — Page 114

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HARDCASTLE & COMPANY LIMITED Tanks

3 Gracechurch Street, London EC3V OAB

Telephone: 01-283 4141 Telex 887255 SHARD G

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RECEIVED IN REGISTRY

R.T. Renton Esq2 FEB1987

Minister of State

Foreign and peommonwealthRGERY

London SW1AD2AH ?A

Action Taken

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DEAN MIE

Crateful for advice

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No answww.

Thank you for troubling to reply on January 23rd to my letter to you on the line I was given on Hong Kong.

My purpose in writing again is that my Chinese colleague had also in fact put the same views to various people she deals with in Tokyo at a senior political level, whose business it is to interpret such signals from China. I was told on separate evidence that at least one senior Japanese official, who knows China well, agreed with her interpretations of events. It was this further report that first prompted me to pass all this on to you. I should add that she has recently repeated her view of the political effect of the Hong Kong situation on Chinese foreign exchange problems.

At the risk of being semantic, you did perhaps put in your reply the wrong stress to my use of "in turn". I am not an expert on Hong Kong, but I think most outsiders saw that the negotiations with Beijing had "in turn" led to problems of confidence in the Colony: I was not suggesting that these problems followed the conclusion of negotiations in time, although some difficulties I understand rumbled on for a while. she is at all right, however, such action as the Chinese authorities took would of course have had consequences for them which might well have outlasted the period of the actual negotiations by a considerable period.

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It is, of course, nice to think that the Queen can be a mythmaker in China too.

Your fun

Clive Hardcastle

Minister PSIS Reston

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but admudelgent we shall be horst left.

J.R. Lacey

Directors: C.P.B. Hardcastle (Managing) K.W. Waller Registered in England 1240351 Registered Office as above

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