SECRET & PERSONAL

With this in mind, I think the next step is to show you the

final version of the Planning Paper which we have produced, and I

therefore enclose a copy. You will see that our views on the

Chinese dimension are virtually identical with those you expressed

in your first Despatch (13 February). All of us (including Lord

Goronwy-Roberts) who have read the Paper and the two Despatches

agree that it would be most unwise to embark at this stage on any

substantive talks with the Chinese about the future of the Colony

or possible adjustments to the status quo. Differences between the

view as seen from the Office and from Government House arise I think

only about domestic policies within Hong Kong. Study of your second

Despatch enabled those involved in preparing the Planning Paper to

identify and clarify these differences - and incidentally to make a

number of substantial improvements to the first draft, which they had

prepared. Laurence O'Keeffe has now set out, in a note a copy of

which forms the second enclosure to this letter, the points which we

feel should be further pursued. I would welcome your comments on

these issues.

I have thought carefully about what you said in your letter

about tension in the Office about this exercise. I do not think that

tension is really the mot juste: it is, however, clear to me that

2.

SECRET & PERSONAL

/those

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