Classification and Caveats

SECRET

OUT TELELETTER

HEKOLol!

RECEIVED HE PEORIA MO

22 JUL 1980-

DESK

INDEX

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SECRET

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TELELETTER

6 FROM R J T MCLAREN, FED

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17 JULY 1980

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(63)

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Mr Welte

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FOLLOWING FOR T J B GEORGE ESQ, PEKING

MR CALLAGHAN'S REMARKS ABOUT LEASES AND THE FUTURE OF HONG KONG

1.

In your teleletter of 10 June you suggested that we might

make discreet enquiries about the basis for Mr Callaghan's

remarks on this subject at his press conference in Hong Kong

Kong (Hong/telno 677).

2.

3.

I asked both Roderick MacFarquhar and Sir T McCaffrey about

this. Neither could throw any light on it but both said they

16 would ask Mr Callaghan himself if a suitable opportunity arose.

MacFarquhar has now told me that he was able to raise the

matter with Mr Callaghan on 16 July at an informal get together

of those who took part in the China trip. The answer is that

Mr Callaghan's remarks were based on a a conversation with Zhao

3 Xingzhi, Vice Mayor of Shanghai (your teletter of June).

Zhao apparently said to Mr Callaghan that he had heard of the

latter's conversations in Peking and there were

two points

which he wished to develop further. Hong Kong was one of them.

There is no record of exactly what he said but Mr Callaghan had

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teleletter

BLANK

File number

Dept

FED

Drafted by (Block capitals)

RJ T MCLAREN

Telephone number

5542

Lu

Authorised for despatch

Comcen reference Time of despatch

Catchword

the

XY 49

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