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let Sino/British contacts in other areas continue largely
unaffected.
But we do not know how long this will last.
The immediate issue is whether support for the Governor's package will hold up in Hong Kong. At present, the Hong Kong
Government think they can count on the firm support of about half of LegCo. It will be helpful to have the Governor's
assessment on 18 November. So far the markets are resilient
(suggesting that investors are taking a long term view). But
members of the conservative grouping in LegCo, and some parts of the business community, are already backing away from
support for the Governor's proposals. We cannot rule out the
Chinese engineering a collapse of business confidence in Hong
Kong if they push hard enough, or that they may create such a
collapse by miscalculation.
We therefore face a long period of struggle. Calm nerves will be needed. We should continue to show that we are ready
to continue a normal relationship with China, both over Hong
Kong and more generally. The visit here by Vice Premier Zhu Rongji (16-18 November) will be helpful in that. It will give
us the chance to show robust support for the Governor's
proposals, and urge the Chinese to put forward counter proposals rather than just criticise. But given Deng Xiaoping's instruction, they will almost certainly refuse to do so, and rely on outright opposition.
One option in these circumstances would be to make no
serious effort to engage the Chinese in discussions, and to
put all our efforts into sustaining the support in LegCo for
the Governor's proposals in their present form. We would be
playing for very high stakes and the Chinese have many forms
of economic and political blackmail at their disposal.
Rejection of the proposals by LegCo would be a serious blow to
the Governor's authority.
There he is also
Hong Kong that
general expectation in
we will be open
to further
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discussion of our proposals with the Chinese.
No comments yet.
Private notes are available after approval.