TNAG-2451-FCO40-3568-Future-of-Hong-Kong-constitutional-development-1992 — Page 6

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CONFIDENTIAL

In carrying out this instruction, Chinese officials are concentrating in the short term on undermining support in

Hong Kong for the Governor's proposals, in particular through: - a sustained campaign of intimidation against members of the

Legislative Council (LegCo), with the aim of denying the

Governor a majority when he puts his proposals to LegCo early

next year.

We have already seen evidence of crude threats

involving members' business interests in China, and their

hopes for preferment in Hong Kong post-1997;

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a similar effort to frighten members of the business

community.

quarter;

-

We have already heard the first jitters from that

a continuing refusal to agree financing arrangements for the new airport;

a freeze on progress in the Joint Liaison Group.

In the longer term, Chinese tactics will depend on whether

LegCo are prepared to enact the Governor's proposals. If they

do so largely unamended, I would expect the Chinese to sustain and possibly intensify their campaign, with the aim of disrupting the LegCo elections in 1995. They might well

threaten that anyone who became a member of the 1995 LegCo

would be excluded from participation in public life after

1997. Other actions they could take include an increase in

the flow of illegal immigrants into Hong Kong, and more

aggressive anti-smuggling patrolling around Hong Kong waters. Agreement on the airport would be most unlikely.

But the Chinese also need to bear in mind their own

significant economic interests in Hong Kong, and will want to

try to drive a wedge between the Hong Kong Government and the

people of Hong Kong. I therefore doubt that they will disrupt

trade or financial links with Southern China, or turn to the

more extreme forms of pressure, such as interference with supplies across the border. They also seem ready so far to

CONFIDENTIAL