TNAG-2989-FCO40-3575-Future-of-Hong-Kong-constitutional-development-talks-betwee-1992 — Page 57

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CONFIDENTIAL

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J S Wall Esq LVO No 10

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13 November 1992

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HONG KONG : CALL ON THE PRIME MINISTER BY SIR PERCY CRADOCK

1.

2.

Sir Percy Cradock will be calling privately on the Prime Minister on 17 November.

bat is Whily to argue) We understand that Sir Percy unsiders that we now face a serious crisis with China over Hong Kong; that the Chinese regard us as having breached the agreement in the Joint Declaration on closer cooperation with them in the final years of the transition; and that they will not back down. He believes that we face a long drawn out/campaign by the Chinese in which they will seek to disrupt the 1995 Legislative Council (LegCo) elections, and to begin making preparations soon for alternative arrangements in 1997. He may suggest that we need to find a way of resuming private dialogue with the Chinese on these issues, and that this would in practice mean a willingness to change them.

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Say:

The Prime Minister might wish to take the following line in response:

3.

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we are not underestimating the strength of the Chinese reaction. Ministers had no illusions about the difficulties when they took a collective decision to endorse the Governor's constitutional proposals;

we recognise that the Chinese feel they should have been consulted privately first. But it was not politically

(impossible conceivable for the Governor to do that on an issue of this

importance before explaining his thinking to the people of Hong Kong;

there remains strong support in Hong Kong for the Governor's approach despite reckless Chinese efforts to undermine him. For example, the markets are proving resilient and LegCo voted last week by 32-21 to support a motion giving general support to the Governor's package;

NO.

we are not complacent. We are aware of the signs of concern in the business community in Hong Kong and among some Cof the legislators (not surprising in view of Chinese

intimidation tactics). We realise too that even if LegCo

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CONFIDENTIAL

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