TNAG-1876-FCO40-2667-Relations-between-Hong-Kong-and-Japan-1989 — Page 17

CC MAED

CONFIDENTIAL

HKD

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р.а.

p.G. 5/ China

RJ 20712

CONFIDENTIAL

FM FCO

ΤΟ PRIORITY TOKYO

TELNO 999

OF 18113OZ DECEMBER 89

INFO ROUTINE PEKING, HONG KONG, CANBERRA, WASHINGTON

135340 MDLOAN 9904

OTSUKA'S CALL ON MCLAREN, 15 DECEMBER: CHINA, HONG KONG AND APEC

1.

OTSUKA, (DEPUTY DIRECTOR-GENERAL FOR ASIAN AFFAIRS, JAPANESE MFA), CALLED ON MCLAREN ON 15 DECEMBER FOR AN HOUR OF TALKS ON

ASIAN SUBJECTS.

CHINA

2.

OTSUKA OBSERVED THAT CHINA'S RELATIONS WITH THE WEST WERE NOT HEALTHY. THE BALL WAS IN THE CHINESE COURT, BUT IT WAS NOT CLEAR HOW THEY WOULD ADEQUATELY RESPOND TO THE WEST'S CONCERNS. LIFTING MARTIAL LAW IN PEKING WOULD BE A STEP IN THE RIGHT DIRECTION, BUT INSUFFICIENT FOR RELATIONS TO BE NORMALISED. SOME WINDOWS OF COMMUNICATION SHOULD BE KEPT OPEN: JAPAN HAD FOR EXAMPLE RECENTLY SENT A CULTURAL OFFICIAL TO CHINA. JAPAN WAS ALSO CONSIDERING WHEN IT MIGHT IMPLEMENT THE 810 BILLION YEN THIRD LOAN PACKAGE (ORIGINALLY AGREED IN AUGUST 1988). JAPAN'S POLICY ON THIS WAS VERY CAUTIOUS, BUT THEY RECOGNISED THE HUGE IMPORTANCE OF THE PACKAGE FOR THE CHINESE ECONOMY: THERE WAS MOUNTING FRUSTRATION OF THE CHINESE SIDE. ONE SOURCE OF FRICTION BETWEEN JAPAN AND CHINA WAS THE PLAN OF THE CHINESE DEMOCRATIC FRONT, CURRENTLY BASED IN PARIS, TO SET UP A HEADQUARTERS IN TOKYO: CHINA WANTED JAPAN TO REFUSE VISAS, BUT THIS WOULD NOT BE LEGALLY POSSIBLE.

3.

MCLAREN DESCRIBED THE CHINESE REGIME AS REPRESSIVE, WEAK AND DIVIDED. IT WAS UNLIKELY THAT IN THE MEDIUM TERM WE WOULD SEE A SUBSTANTIAL RELAXATION OF CURRENT INTERNAL POLICIES ALTHOUGH THERE WOULD PROBABLY BE SOME: THE LIFTING OF MARTIAL LAW IN PEKING WOULD BE OF RELATIVELY MINOR SIGNIFICANCE. THE EC MEASURES

(RECENTLY MODIFIED AT STRASBOURG) WERE LIKELY TO BE KEPT IN PLACE FOR SOME TIME YET.

HONG KONG

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