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counter-productive; it is better to proceed by means of encourage-

ment and persuasion so that proposals for reform can be seen to come

from Hong Kong. In this process the Governor remains our strongest

ally.

4.

When he visited Hong Kong in April, together with Mr M Stewart, my predecessor gave the Governor a short paper outlining the main social developments which we should like to see take place in Hong Kong in the years after 1980. A copy of this paper, which was approved by Lord Goronwy-Roberts, is attached. The Governor's initial reaction was one of great reluctance to commit his Government to any plan which would be subject to approval by Ministers, but he subsequently agreed to put down his own ideas, drawing on our outline paper, in the form of a draft brief for use during a possible visit by the Secretary of State to Hong Kong in the autumn. (Mr J Stewart's minute of 21 April.)

5. Sir M MacLehose will be coming into the Office for consultations during his annual leave and will be calling on Lord Goronwy-Roberts on 19 July. This would provide a very good opportunity to ascertain the Governor's reactions to the list put to him by my predecessor, and to discuss the ideas in Mr M Stewart's paper. If the Minister of State agrees, we will arrange the agenda accordingly; we have confirmed that Mr Stewart will be available at the time of the Governor's call on Lord Goronwy-Roberts.

6. In the meantime, I think we should warn the Governor of what we have in mind and, as he is due to leave Hong Kong on 5 July, should do so by telegram. I submit a self-explanatory draft

telegram accordingly.

29 June 1978

Cc: PS PS/PUS

Mr Cortazzi

Mr M Stewart

OLA

1

agree

with this

RJT McLaren

Hong Kong & General Dept

telegram (copy attached).

Mr Smith (Economists)

2

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and have despatched the

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