UNCLASSIFIED
077120
MDHIAN 6543
MODERNIZATION DRIVE ON PROSPERITY IN HONG KONG, THAT DECISION WOULD BE WRONG. PEOPLE ARE ALSO WORRIED ABOUT THE POSSIBLE WITHDRAWAL OF FOREIGN CAPITAL FROM HONG KONG. BUT SO LONG AS WE ADOPT APPROPRIATE POLICIES THERE, CAPITAL THAT LEAVES HONG KONG WILL RETURN. THEREFORE, WHEN WE ANNOUNCE OUR DECISION TO TAKE OVER HONG KONG IN 1997, WE SHOULD AT THE SAME TIME ANNOUNCE THE SYSTEMS AND POLICIES THAT WILL BE IN FORCE THERE AFTER THAT DATE.
SOME PEOPLE ARE APPREHENSIVE THAT ONCE CHINA DECLARES ITS INTENTION TO RECOVER HONG KONG IN 1997, THERE WILL BE DISTURBANCES THERE. I BELIEVE THAT WHILE MINOR DISTURBANCES AR INEVITABLE, MAJOR ONES CAN BE AVOIDED IF CHINA AND BRITAIN APPROACH THE QUESTION IN A COOPERATIVE SPIRIT. I WANT TO TELL YOU THAT THE CHINESE GOVERNMENT TOOK ALL POSSIBILITIES INTO ACCOUNT WHEN IT MADE THIS POLICY DECISION. WE EVEN CONSIDERED THE POSSIBILITY OF SOMETHING WE WOULD HATE TO SEE HAPPEN - THAT IS, WE CONSIDERED WHAT WE SHOULD DO IF SERIOUS DISTURBANCES OCCURRED IN HONG KONG DURING THE TRANSITION PERIOD OF 15 YEARS. THE CHINESE GOVERNMENT WOULD THEN BE COMPELLED
TO RECONSIDER THE TIMING AND MANNER OF THE TAKEOVER. IF THE ANNOUNCEMENT OF THE RECOVERY OF HONG KONG HAS, AS YOU PUT IT, DISASTROUS EFFECTS, WE WILL FACE THEM SQUARELY AND MAKE A NEW DECISION. I HOPE THAT BEGINNING FROM YOUR CURRENT VISIT, GOVERNMENT OFFICIALS OF THE TWO COUNTRIES WILL CONDUCT EARNEST CONSULTATIONS THROUGH DIPLOMATIC CHANNELS TO FIND WAYS OF AVOIDING ANY DISASTROUS EFFECTS.
I AM CONVINCED THAT WE CAN WORK OUT POLICIES THAT SHOULD BE APPLIED AFTER THE RECOVERY OF HONG KONG AND THAT WILL BE ACCEPTABLE TO ALL QUARTERS. I HAVE NO CONCERN ON THAT SCORE. WHAT I AM CONCERNED ABOUT IS HOW TO MAKE A SMOOTH TRANSITION OVER THE NEXT 15 YEARS. I AM WORRIED THAT THERE MAY BE MAJOR DISTURBANCES IN THIS PERIOD, MAN-MADE DISTURBANCES. THESE COULD BE CREATED NOT JUST BY FOREIGNERS, CHIEFLY BRITONS, BUT ALSO BY CHINESE. IT IS VERY EASY TO CREATE DISTURBANCES. THIS IS PRECISELY THE PROBLEM OUR CONSULTATIONS WILL BE DESIGNED TO SOLVE. THE GOVERNMENTS OF THE TWO COUNTRIES SHOULD NOT ONLY REFRAIN FROM DOING ANYTHING THAT WOULD HAMPER THE PROSPERITY OF HONG KONG, BUT SHOULD ENSURE THAT ENTREPRENEURS AND PEOPLE IN ALL OTHER LINES OF WORK DO SO AS WELL. THERE MUST BE NO MAJOR DISTURBANCES IN HONG KONG DURING THE 15 YEAR TRANSITION PERIOD, AND AFFAIRS THERE MUST BE ADMINISTERED EVEN BETTER AFTER THE CHINESE TAKEOVER IN 1997.
WE SUGGEST THAT AN AGREEMENT BE REACHED THAT THE TWO SIDES WILL BEGIN CONSULTATIONS ON THE QUESTION OF HONG KONG THROUGH DIPLOMATIC
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