TNAG-2493-FCO40-3625-Future-of-Hong-Kong-constitutional-development-Chinese-reac-1992 — Page 22

ODE 18-77

Mr Davies, FED

Reference.

CONFIDENTIAL

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74

1.

I suggest that Warwick Morris might speak on the following points to the Asia Bureau on Korean MFA.

(i) We are clearly entering into a difficult time in our relations with China over Hong Kong. Chinese appear to misconstrue our intentions and the nature of the Governor's proposals. He is not trying to present any faits accomplis and would welcome counter proposals for the 1995 elections providing they were fair, open and acceptable to the people of Hong Kong. These are criteria which the Chinese have themselves agreed in the past.

(ii) The Chinese are unwilling at present to negotiate seriously with us and are continuing to mount a propaganda campaign in Hong Kong. They have accused us of breaching the Joint Declaration and the Basic Law. This is untrue, Governor's proposals were specifically designed to be compatible with both.

(iii) The open confrontation with China is starting to have an affect on business confidence in Hong Kong which up until now had been remarkably resilient. This is bad for Hong Kong, China and others in the region. Hope that if an opportunity arises you will point out to the Chinese that dialogue is better than confrontation and that Korea is concerned about any effects the latter might have on the economy of Hong Kong and its implications for Korean trade and investments there.

AJBE

RAJ Bunten

Hong Kong Department

WH 305 270 2655

нкс

HKC 012/4

19 November 1992

dav.min.FU

CONFIDENTIAL

SLM