hkd16-4
CONFIDENTIAL
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The Secretary of State raised what would happen if there was no agreement. Sir R McLaren said we must anticipate from the Chinese: an angry public reaction; the early establishment of their own preparatory committee; difficulties over the airport, JLG, land issues etc. On balance the Chinese were unlikely to proceed byond that to active harassment because of wider Chinese interests (over MFN, the 2,000 Olympics etc). Mr Hum added that the Chinese might also cease cooperation on civil service issues. Governor was fairly sanguine about these dangers. In the past, the Chinese had always drawn back from the brink when the point of real damage to Hong Kong or Chinese interests was reached. But we should aim at least for agreement to disagree from the talks.
JLG Issues
The Secretary of State asked for a list to be drawn up of the main JLG issues with an assessment of their relative importance to Hong Kong. The meeting agreed that it would be bad tactics for us to pursue the Chinese too eagerly on these issues, but we should be clear in our own minds what were our priorities.
Trade Issues
The meeting noted that the Chinese had been effective in stirring up anxiety among the British business community. But it was unclear whether they would go on from this to penalise British companies for a failure to reach agreement in the talks. Over French sales to Taiwan, they had not done
We had a certain amount of leverage over Chinese
aspirations for GATT membership, MFN etc.
The Governor added that China's explicit threats against Jardines were more worrying. It was for consideration whether we made representations to the Chinese about this, either in London or in Peking. The Secretary of State said he would be willing to talk to Lord Keswick or Sir Charles Powell, if that would be helpful.
International Dimension
The meeting agreed that we should maintian a policy of discreet internationalisation, e.g. with China's neighbours. The Governor's visit to Washington raised particular handling difficulties. We did not want the Americans to make MFN renewal conditional on Chinese good behaviour, but we did
CONFIDENTIAL
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