TNAG-2243-FCO40-3224-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 174

INEN (19)

030102

MDHOAN 3590

CONFIDENTIAL

HW3.040/4

TOP COPY Q DIST?

CONFIDENTIAL

FM FCO

TO IMMEDIATE WASHINGTON

TELNO 870

OF 1515OOZ MAY 91

INFO IMMEDIATE HONG KONG, PEKING, ROME

FROM PRIVATE SECRETARY

FOR SECRETARY OF STATE'S PARTY

MIPT: MESSAGE TO THE ITALIAN FOREIGN MINISTER

BEGINS

I KNOW THAT YOU WILL SHORTLY BE SETTING OFF ON A VISIT TO CHINA. I THOUGHT YOU MIGHT APPRECIATE A BRIEF ACCOUNT OF THE PRESENT STATE OF OUR RELATIONS WITH CHINA OVER HONG KONG.

IN THE REMAINING YEARS OF BRITISH ADMINISTRATION IN HONG KONG WE WILL NEED TO INTENSIFY OUR COOPERATION WITH CHINA OVER HONG KONG, IN ORDER TO BRING ABOUT A SMOOTH TRANSITION IN 1997. THIS IS CLEARLY STIPULATED IN THE SINO-BRITISH JOINT DECLARATION. THAT AGREEMENT ALSO STIPULATES THAT BRITAIN WILL BE RESPONSIBLE FOR THE ADMINISTRATION OF HONG KONG UNTIL 30 JUNE 1997. IT IS THEREFORE VITAL TO ENSURE THAT CLOSER COOPERATION WITH CHINA DOES NOT UNDERMINE THE AUTHORITY OF THE HONG KONG GOVERNMENT, NOR HINDER ITS ABILITY TO ADMINISTER THE TERRITORY EFFECTIVELY.

THESE CONSIDERATIONS HAVE BEEN REFLECTED IN OUR DISCUSSIONS WITH THE CHINESE OVER THE AIRPORT. IT IS IMPORTANT THAT THE HONG KONG GOVERNMENT HAS THE ABILITY TO MANAGE THE PROJECT EFFICENTLY. THE CHINESE GOVERNMENT HAVE CONCERNS ABOUT THE EFFECT OF THE PROJECT ON THE FINANCIAL POSITION OF HONG KONG AFTER 1997: WE HAVE MADE PROPOSALS WHICH SHOULD MEET THESE CONCERNS. OUR NEGOTIATORS WILL BE IN PEKING FOR TALKS SCHEDULED TO TAKE PLACE ON 18-22 MAY.

I HOPE THAT IN PRIVATE CONTACTS WITH YOUR INTERLOCUTORS IN CHINA, YOU WILL TAKE THE OPPORTUNITY TO EMPHASISE TO THEM THAT THE INTERNATIONAL COMMUNITY ATTACH GREAT IMPORTANCE TO THE SUCCESS OF THE JOINT DECLARATION AND TO THE MAINTENANCE OF HONG KONG'S LONG-TERM PROSPERITY AND STABILITY: AND THAT INVESTOR

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