TNAG-2044-FCO40-2914-Visits-from-China-to-Hong-Kong-1990 — Page 147

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HONG KONG TELNO 722. CHINESE VISITS TO HONG KONG.

1. I WELCOME IN PRINCIPLE THE IDEA OF BUILDING ON ANY IMPROVEMENT IN THE ATMOSPHERE. THE RECENT AGREEMENT ON THE DEVELOPMENT OF HONG KONG'S POLITICAL STRUCTURE WILL HAVE HELPED TO THE EXTENT THAT THE ISSUE IS NO LONGER A MATTER FOR DEBATE BETWEEN US AND THE CHINESE, ALTHOUGH WE SHOULD BE UNDER NO ILLUSION THAT THE CHINESE FEEL ANY SENSE OF SPECIAL GRATITUDE TOWARDS US OVER THE OUTCOME. AGAINST THIS, I AM CONCERNED THAT THERE ARE A NUMBER OF ISSUES ON THE HORIZON WHICH ARE LIKELY TO CREATE CONTINUING OR FURTHER DIFFICULTIES IN OUR RELATIONSHIP WITH THE CHINESE: THE NATIONALITY PACKAGE, THE BILL OF RIGHTS, AIR SERVICES TALKS, CHINA'S APPLICATION TO REJOIN GATT AND HMG'S POLICY ON CONCESSIONARY FINANCE FOR CHINA ALL HAVE POTENTIAL TO KEEP THE GENERAL ATMOSPHERE FROSTY. THE CHINESE SEE THE UK AS A LEADER

OF THE PACK IN TERMS OF EC POLICY TOWARDS CHINA.

2.

IN A TRANSITION PERIOD FOR CHINA'S AGED LEADERSHIP, AND WITH SO MANY POST-JUNE 1989 TENSIONS STILL UNRESOLVED, IT IS PARTICULARLY DIFFICULT TO IDENTIFY UP-AND-COMING CHINESE LEADERS WHO WILL OCCUPY THE LEADING POSITIONS IN THE RUN-UP TO 1997. IN ANY CASE, THE FORTHCOMING N P C MAY STILL MAKE A FEW CHANGES. IT FOLLOWS FROM ALL OF THE FOREGOING THAT I WOULD PREFER TO PLAY THINGS LONG AND NOT TO PROCEED WITH ISSUING ACTUAL INVITATIONS

UNTIL THE CLIMATE HAS CHANGED FOR THE BETTER.

3. THAT SAID, ONCE THE TIME IS RIGHT, IT WOULD BE BETTER, AS HONG KONG HAVE SUGGESTED, TO CONCENTRATE INITIALLY ON THOSE AREAS IN THE ECONOMIC AND TECHNICAL FIELDS WHICH CONTAIN THE PROSPECT OF MUTUAL BENEFIT, AVOIDING TO BEGIN WITH SENSITIVE AREAS (E.G. DEFENCE AND SECURITY). WE ALSO SEE VALUE IN ENCOURAGING EXCHANGES WITH CHINA'S DIRECTLY ADMINISTERED CITIES. IN SIZE AND COMPLEXITY, THOUGH NOT IN CONSTITUTIONAL STATUS, THEY WILL OFTEN SHARE SIMILAR CONCERNS TO THOSE OF HONG KONG IN DEALING WITH A RELATIVELY INFLEXIBLE CENTRAL GOVERNMENT BUREAUCRACY.

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RECEIVED IN S

--5 MAR 1990

SK OFFICE

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