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as the key figure and adviser to Deng about Hong Kong. The way in which Deng referred to Liao at our meeting confirmed this. We had asked to see Liao as som as possible after our arrival but were told this was not possible and that we would only see him with one of the leaders". Immediately after our meeting with Deng (which was on our last day in Peking) we asked for a separate meeting with Liao later in the day, and this was arranged at remarkable speed. They sent a VIP Trident to Lanzhou for our return flight to Canton in order to enable us to see through the purely touristic programme in Lanzhou and still give a farewell dinner in Guangzhou. It would have been a simple matter to cut out the visit to Lanzhou to enable us to travel by scheduled flights but for some reason they thought this, to my mind ridiculous, expense justified. Perhaps more significantly, on arrival in Guangzhou the newly appointed Chairman of the Municipality Revolutionary Council Yang Shangkun, sent emissaries to ask to be included in our dinner. As you know he has only recently been rehabilitated, but for some 11 years before the Cultural Revolution he worked in the Central Committee Secretariat under Deng and supposedly closely connected with him. He has obviously been put into Guangzhou as Deng's man, and his standing with his colleagues was apparent. It was significant that he wanted personally to be associated with this Guangzhou/Hong Kong occasion in the light of his reading of what had passed in Peking.
5. The meeting with Deng produced a new statement on the future of Hong Kong of great clarity which should be carefully studied. In the short term obviously no move of any sort is contemplated and they were vague as to whether me might be made before or after 1997. This is what one would expect though not necessarily what one would have expected to be said so clearly at a formally recorded meeting.
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6. But in the long term and this is nev Deng sees Hong Kong's future as being under Chinese sovereignty and with some political change, but with its economic life and security of investment assured by a special status.
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Since this is new its implications must be carefully considered. If China maintains a sufficiently consistent and acceptable political and economic course over a sufficiently long time to give confidence, Deng's scenario might work. Moreover such a statement of Hong Kong's
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