CONFIDENTIAL

3

SCMP had a sensible National Day editorial on 2 October (copy attached).

8.

The reception was not an occasion for business. The Governor spoke warmly to Wang about Chinese help over water, emphasising the importance of long-term supplies. Wang said that China had "much to learn from Hong Kong", with a specific mention of housing policy. In a separate coversation, Chu Yi, one of the Deputy Directors of NCNA, told David Wilson that he had been in Peking when the suggestion had arrived from Wang that the Governor be invited. The MFA had reacted favourably and sent instructions accordingly. David said that he had been in London at the same time and that the FCO had reacted similarly.

9.

The NCNA had been pleased to learn that protocol for the occasion allowed the Governor and the First Director to shake hands. I enclose a photograph.

Yours ever,

CC

(I C Orr)

R C Samuel Esq

Far Eastern Department

ET Davies Esq

Peking

Research Department (Far Eastern Section) FCO

COMEDENTIAL

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