TNAG-2990-FCO40-3574-Future-of-Hong-Kong-constitutional-development-talks-betwee-1992 — Page 96

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MDHOAN 129

SHOULD WE DEDUCE FROM THIS THAT MUTUALLY-BENEFICIAL HONG KONG/CHINA ECONOMIC AND TRADE COOPERATION WILL BE LARGELY UNAFFECTED? WE ALSO NOTE THAT LI PENG GAVE LORD PRIOR, MR NEEDHAM AND MEMBERS OF THE CBTG TRADE MISSION AN HOUR ON 26 OCTOBER (YOUR TELNO 1480). LI PENG APPEARED THEN TO TREAT THE ROW OVER HONG KONG CONSTITUTIONAL DEVELOPMENT AS SOMETHING SEPARABLE FROM THE SUBSTANCE OF THAT MEETING. PLANNING FOR THE VISIT TO LONDON OF VICE-PREMIER ZHU RONGJI (WHOSE PARTY INCLUDES JIANG ENZHU OF THE MFA) IS ALSO GOING AHEAD APPARENTLY UNAFFECTED. CAN WE TAKE IT FROM THIS THAT THE WIDER SINO/BRITISH RELATIONSHIP INCLUDING TRADE, VISITS, ETC, WILL BE KEPT LARGELY SEPARATE?

4. FINALLY IT WOULD BE HELPFUL TO HAVE ANY ASSESSMENT YOU CAN MAKE OF LONGER TERM CHINESE STRATEGY. WOULD IT BE RIGHT TO ASSUME THAT THIS WILL BE DIRECTED AT SECURING AMENDMENT TO THE CONSTITUTIONAL PROPOSALS (THROUGH PRESSURE ON OURSELVES AND ON PUBLIC OPINION IN HONG KONG, AND ULTIMATELY BY SEEKING TO BRING ABOUT A NEGATIVE VOTE IN LEGCO ON THE ELECTORAL LEGISLATION) SO LONG AS THIS POSSIBILITY IS STILL OPEN? ARE THE CHINESE LIKELY TO HOLD BACK UNTIL THEN ON THEIR THREAT TO ESTABLISH THE PREPARATORY COMMITTEE EARLY AND START WITH AN ALTERNATIVE STRUCTURE FOR 1997? IS THERE ANY OTHER SANCTION DIRECTLY RELATED TO THE CONSTITUTIONAL PROPOSALS WHICH THEY COULD EMPLOY, OR THREATEN TO EMPLOY, IN THE LONGER TERM?

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SIR J COLES MR APPLEYARD MR HUM

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