CONFIDENTIAL

SECRETARY OF STATE'S VISIT TO HONG KONG:

30 JUNE

BRIEF NO 8: MEETING WITH THE EXECUTIVE COUNCIL POINTS TO MAKE

FUTURE OF HONG KONG

1.

Understand that the Governor had a successful visit to China

and that Deng Xiaoping stressed the importance of confidence and

investment. Chinese clearly have a realistic appreciation of

the part Hong Kong can play in their drive for modernisation.

Sino-British relations excellent. So the outlook for the next

ten years or so must be very good.

NEW TERRITORIES LEASES

2.

There is clearly a practical problem about the land leases

in the New Territories. We are looking into ways of dealing

with it which would remove the significance of 1997. The

Executive Council will be consulted at the appropriate stage.

In the meantime, the less speculation the better.

CHINESE OFFICIAL REPRESENTATION IN HONG KONG

3.

Understand that the Chinese raised this with the Governor

in Peking. British position is the same as the Governor's:

an official Chinese representative is neither necessary nor,

at present, appropriate. In the meantime glad to learn that

unofficial arrangements working so well.

VIETNAMESE REFUGEES

4. Much sympathy in the UK for Hong Kong's predicament, and

admiration for maintenance of humane attitude towards refugees.

Solutions can only be found through concerted international

action, for which we have been pressing vigorously. Because of

other commitments, very difficult for UK to accept many more

Vietnamese refugees permanently: We accepted 730,000 people

/for

CONFIDENTIAL

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