SECRET

UK EYES A

(c) There could be a large gap which there is little hope

of bridging during the visit.

If, unhappily, we are in the last position it will probably

be better to break off the talks at a fairly early stage before

This could be done, more in sorrow

relations become embittered.

than anger, on the basis that the Minister is disappointed that

Hong Kong does not feel able to respond to HMG's reasonable

demands and that he has no alternative but to go back and

report to his colleagues. If, on the other hand, there seems

to be the makings of an agreement on a graduated basis, which

is outside the terms of our mandate but might well be acceptable

in London, the Minister could indicate more hopefully that, having

heard the Hong Kong views, he must now return and discuss the

matter further with his caleagues.

PR Line

25. The announcement of the Minister's visit has intentionally

been couched in very general terms. It is suggested that he

should not make any statement to the Press on arrival in Hong

Kong; but there will probably be a Press Conference at the end

of the visit. If the negotiations have been successful this can

be used to announce the conclusion of a new agreement.

If not,

the line will have to be that while in Hong Kong the Minister

has had preliminary discussions on a new defence agreement but

that no agreement has yet been concluded. The point could be made

that the existing agreement does not expires until next spring.

The two sides have had a useful exchange of views; the Minister

is now going back to report to his colleagues in London; and

there will probably be further talks in due course. The aim

should be to play down any hint of breakdown or crisis. The

talks were only one reason for the Ministers coming to Hong Kong:

he has also been visiting units in the garrison.

SECRET

-10-

UK EYES A

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