CONFIDENTIAL

Mr Wilford

PS/Mr Royle

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A.R.

DISCUSSIONS WITH THE GOVERNOR: RELATIONS WITH HONG KONG

1. We had thought of submitting a draft DOPC paper, which

might be discussed with Sir Murray MacLehose during his visit

next week, about relations between HMG and Hong Kong in the

light of the many issues on which there are conflicts of

interest. We have now discussed this with Mr Wilford and

Sir Duncan Watson. It would be difficult to get into the DOPC

a paper which does not ask for specific answers. It accordingly

seems more appropriate to suggest that the Secretary of State

should instead write to the Prime Minister (and other senior

colleagues), asking for his support in a more balanced attitude

towards the UK and the Hong Kong interest when individual issues

come before Ministers.

2. We accordingly submit a draft letter which Mr Royle will

doubtless wish to see before he meets the Governor on

11 September.

3. The draft will need refining in certain details, notably

the Sterling Guarantee, before it finally issues.

M. Stuud

6 September 4973 11/9.

CC:

Planning Staff

Sir D Watson

D. h. Lemon.

R B Crowson

Hong Kong & Indian Ocean Department

submit this direct with Sir D. Watem's

approval.

CONFIDENTIAL

Kun hilfew

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