TNAG-1711-FCO40-2389-Future-British-Consulate-General-in-Hong-Kong-HMS-Tamar-1987 — Page 38

CONFIDENTIAL

PRINCESS MARGARET'S VISIT TO CHINA: 18-27 MAY 1987

BRIEF B (d)

UK-CHINA RELATIONS

1.

Contacts between China and Britain are increasing in

breadth, and gaining greater warmth and substance.

State Visit in October 1986 and the 1984 Joint

Declaration on Hong Kong have done much to stimulate

The

this, and continuing good relations will in turn aid a

smooth handover in 1997.

2.

Hong Kong remains a key element in Anglo-Chinese

relations. Both governments are committed to maintaining

the stability and prosperity of Hong Kong until the

handover in 1997. Superficially Hong Kong's confidence

in its future is strong. However, the economy is

vulnerable to Western protectionist moves, and prosperity

and optimism in Hong Kong are extremely susceptible to

internal and external developments. The development of

representative government in Hong Kong has been a source

of friction. The Chinese fear that a Westminster-style

system may develop, which in their view would lead to

party politics and instability. Close contact on Hong

Kong issues is maintained through the Joint Liaison Group

(set up in accordance with the Joint Declaration), which

FC6AAL

CONFIDENTIAL