COHAKY (5)
CONFIDENTIAL
VII CHINESE ATTITUDE TOWARDS HONG KONG
Would be totally against China's interests to disregard obligations under Joint Declaration after 1997. To do so would undermine stability and prosperity of Hong Kong in which Chinese have major stake both economically (substantial 2-way trade and investment links) and politically: would rule out prospect of eventual unification with Taiwan). Would undermine whole concept of "one country/two systems".
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Hong Kong useful to China as point of contact with Taiwan both for economic contacts (transit point for goods) and for "political"
contacts.
Chinese authorities conducting very open drafting and consultation process over Basic Law, giving opportunity for HMG and Hong Kong Government (as well as Hong Kong people) to advance opinions. Who would have thought, even 5 years ago, that the PRC would be willing to enshrine detailed capitalist principles and fundamental human rights in a legally binding way?
The establishment of their JLG Office in Hong Kong has given Chinese officials the chance to gain a better understanding of how Hong Kong works and of the concerns of Hong Kong people.
Co-operation across wide range of areas, exchange visits in both directions enables Chinese and Hong Kong officials to learn more about each other (eg legal systems, operation of civil service etc).
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Scale of Chinese investment in Hong Kong shows extent of
commitment to its prosperous future. Scale of Hong Kong investment in China proof that mainland and Hong Kong can do business together. Viability of capitalist and socialist systems working in tandem. Hong Kong and China now each other's foremost trading partners.
Chinese quick to help out with funds following collapse of Futures Exchange in October: further evidence of their concern that Hong Kong should maintain its position as an international financial
centre.
CONFIDENTIAL
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