TNAG-2346-FCO40-3415-Political-relations-between-Hong-Kong--Japan-and-China-1991 — Page 12

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THAN HE HAD EXPECTED. JAPAN WAS THE TOP INVESTOR IN HONG KONG AND

BUSINESS CONFIDENCE WAS AT A HIGH LEVEL. THIS INVESTMENT WAS IMPORTANT ECONOMICALLY BUT ALSO AS A SIGNAL OF JAPANESE

INTEREST AND SUPPORT FOR HONG KONG. THAT INTEREST AND SUPPORT

WOULD CONTINUE.

4.

OWADA THEN LAUNCHED A MORE GENERAL DISCUSSION BY ASKING WHETHER THE CHINESE PARANOIA DERIVED FROM SUSPICIONS OF THE UK MOTIVES OR FROM A TREND FOR HONG KONG TO BECOME MORE AND MORE LIKE TAIWAN. WAS IT DUE TO LEADERSHIP PROBLEMS IN CHINA OR WAS IT A CHRONIC PROBLEM DERIVING FROM HONG KONG'S OWN SITUATION? IN RESPONSE A NUMBER OF POINTS WERE MADE BY BOTH SIDES:-

-

CHINA ITSELF SHOULD NOT BE CONSIDERED AS MONOLITHIC. THE ECONOMY OF SOUTHERN CHINA WAS LOCKED INTO HONG KONG'S AND LEADERS

IN THE REGIONS ENJOYED CONSIDERABLE AUTONOMY FROM PEKING.

THIS MIGHT CAUSE ANXIETY IN PEKING THAT THEY WERE LOSING CONTROL. THE RECALL TO PEKING OF THE GOVERNOR OF CANTON MIGHT BE EVIDENCE OF THAT.

- BUT THE PEKING LEADERSHIP HAD ONLY LIMITED OPTIONS TO RE-ASSERT THEIR CONTROL. IN THE END THEY MIGHT FIND IT IMPOSSIBLE TO DO SO WITHOUT USING THE ARMY AS A POLITICAL WEAPON. (PARADOXICALLY TIENANMEN HAD SHOWN THAT ACTUAL USE OF THE ARMY WAS NO LONGER AN OPTION).

IT WOULD BE DIFFICULT FOR THE LEADERSHIP TO GO BACK ON THE PROCESS OF MODERNISATION. PEOPLE HAD ALREADY ENJOYED THE ECONOMIC BENEFITS FROM IT, AND IDEOLOGICALLY, THE AIM OF THE CHINESE STATE SINCE 1949 HAD ALWAYS BEEN TO MAKE CHINA INTO A MODERN POWER. IN

THE SHORT TERM THE LEADERSHIP MIGHT TRY TO COMBINE ECONOMIC MODERNISATION AND TIGHTER POLITICAL CONTROL BUT IN THE LONG RUN

THAT DID NOT LOOK SUSTAINABLE.

IT

AT ONE POINT OWADA SAID THAT HE WAS OPTIMISTIC ABOUT THE

ECONOMIC FUTURE OF HONG KONG WHATEVER THE POLITICAL SITUATION. WOULD BE VERY HARD TO STOP THE ECONOMIC STEAM ROLLER IN SOUTHERN CHINA. THERE MIGHT BE ARGUMENTS WITH PEKING, BUT HONG KONG WOULD GO ON MAKING MONEY.

5.

THE GENERAL CONCLUSIONS FOR THE UK AND JAPAN WERE THAT WE SHOULD CONTINUE OUR DIALOGUE WITH THE CHINESE, CONTINUE TO TRY TO PERSUADE THEM TO ACT RESPONSIBLY ON INTERNATIONAL ISSUES SUCH AS