TNAG-1746-FCO40-2465-Visits-by-FCO-officials-to-Hong-Kong-1988 — Page 42

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Kong lies at heart of our relationship with China, gives it unique

extra dimension.

History shows Hong Kong flourishes when our relations with China

are good. Conversely, public perception in Hong Kong that we and

China are at loggerheads causes confidence to plunge (cf September

1983).

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Under

We are urged to "stand up" to China. Profoundly misconceived.

Publicly confrontational posture would not further our aims. such pressure Chinese instinct is to dig in. Public brinkmanship could have devastating effects on confidence. We could give

ourselves satisfaction of noisy opposition to China, but would be damaging to Hong Kong.

Basic Law

Stand back and look at Basic Law. Only three or four years ago who could have imagined that

China would produce detailed constitutional instrument setting

out separate systems for Hong Kong

in a forum where Hong Kong representatives have had every opportunity to feed in their views

and subjected it to exhaustive public consultation in Hong Kong.

First draft is not perfect.

but Chinese have indicated readiness to take account of views

expressed.

I can tell you in confidence that we have played active role

behind the scenes to encourage Chinese to make improvements. Our

contacts over draft have been detailed and intensive, at political

and expert level.

Basic Law cannot exceed bounds of Joint Declaration. TWO