TNAG-2494-FCO40-3626-Future-of-Hong-Kong-constitutional-development-Chinese-reac-1992 — Page 29

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154461

MDHIAN 1925

BRITISH TRADE WITH CHINA. IN THIS RESPECT SIR M PALLISER WAS ENCOURAGED BY ZHU'S REMARKS. HE RECALLED THAT HE HAD BEEN INTERVIEWED ON BRITISH TELEVISION AFTER ZHU'S CHATHAM HOUSE SPEECH AND HAD BEEN ASKED WHETHER HE HAD BEEN CONCERNED BY ZHU'S 'WAIT AND SEE' REMARK. HE HAD SAID THAT HE INTERPRETED THIS IN A NEUTRAL SENSE, AND THAT HE HAD BEEN ENCOURAGED BY WHAT ZHU HAD SAID ABOUT THE PROSPECTS FOR TRADE MORE GENERALLY.

9.

ZHU SAID HE AGREED WITH SIR M PALLISER'S INTERPRETATION OF HIS 'WAIT AND SEE' REMARK. THE TWO SIDES SHOULD WORK TOGETHER TO DEVELOP ECONOMIC COOPERATION. IF HE HAD SPOKEN ABOUT HONG KONG IT WAS IN RESPONSE TO SIR M PALLISER'S QUESTION ABOUT THE SUCCESS OF HIS VISIT TO LONDON. IT WAS A MATTER BETWEEN OLD FRIENDS, NOT SOMETHING TO BE REVEALED TO THE MEDIA. THE QUESTION OF HONG KONG WAS TOO SENSITIVE FOR THAT TO BE HELPFUL.

COMMENT

.

C

THIS WAS A STANDARD EXPOSITION OF THE CHINESE POSITION, MUCH ON THE LINES OF THE ONE WHICH ZHU GAVE TO YOU AND THE PRIME MINISTER. ZHU PRESUMABLY DECIDED TO DELIVER IT AS A WARNING TO BRITISH BUSINESS THAT HONG KONG IS NOW A MAJOR ISSUE BETWEEN THE TWO GOVERNMENTS AND COULD IN DUE COURSE HAVE AN ADVERSE IMPACT ON TRADE (THOUGH HE WAS DELIBERATELY VAGUE ON THIS LATTER POINT). M PALLISER DECIDED NOT RESPOND ON SUBSTANCE, I THINK RIGHTLY: ZHU'S INTERVENTION ON HONG KONG HAD ALREADY OCCUPIED MUCH OF THE CLEARLY LIMITED TIME AVAILABLE. THE REMAINDER OF THE DISCUSSION WAS PERFECTLY AMICABLE.

MCLAREN

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CHINA TRADE

ECONOMIC ADVISERS

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EASD/ODA

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SIR J COLES

MR MILES

MR HUM

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