SECRETAL

Governor goes to Peking, even if the subject is raised in very general terms. It will also be necessary to provide careful briefing on subjects which the Chinese might raise in the context of a discussion

about the leases. Here again, a good deal of work has been done, but more will be needed. Finally, there will be a need to prepare for discussion on other current topics, unrelated to the leases question, for example immigration. All this will entail a good deal of work here, in Hong Kong and in Peking, but I see no reason why we should not be ready in time for a visit in March.

5. precise timing of the visit. From the point of view of the Embassy in Peking it would probably be best if the visit did not take place too soon after the one which the Secretary of State for Industry is planning from 24 February to 5 March. There should also be an interval of at least three weeks between the Governor's visit and that

by the Secretary of State in order to give the Chinese time to reflect on the Governor's approach and to enable us to consider any initial Chinese reactions to it. This suggests a timetable on the following

lines:

There are a number of considerations which will affect the

(a) Late February: Mr Cradock gives the Chinese advance

indication of the subjects which the Governor will

wish to raise during his visit. The same message is

also given to the NCNA in Hong Kong;

(b) mid-March: the Governor's visit;

(c) during the period 7-17 April: Secretary of State's visit. Depending on Chinese reactions, further discussion might then take place in Hong Kong and/or Peking. The pace will be largely dictated by the Chinese, but I am sure that the Governor and Mr Cradock are right in

their assessment that it could take several months to achieve a

settlement (assuming that the Chinese do not reject what is proposed out of hand).

6.

I submit a self-explanatory draft telegram to Hong Kong. As requested in Mr Walden's minute of 26 January, I also submit a draft minute to the Prime Minister. FED concur.

2 February 1979

Copies to:

PS/PUS

Mr Cortazzi o r

Mr Rushford, Legal Advisers. Mr Samuel, FED

2

SECRET

Revingum

R JT McLaren

Hong Kong and General Department

For view f

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