SECRET

-2-

Clewly

we need to

2. We should consider whether we can do more to

convince the Chinese that there is a practical

problem over leases and that it is in their

interest as well as ours to solve it. We are agreed

on a possible role for S Haddon-Cave (paragraph

14 of your letter of 22 February).

Would

there also bel

merit in briefing Sir Y K Kan to speak to the/

Guangdong authorities in similarly limited terms

in May?

}

3. On substance, we agree that we should concen-

trate on the leases question and not at/this stage

seek any understanding from the Chinese on

continued British administration.

Sail

for

There is unch the We are attracted

the step-by-step approach outlined in paragraphs

At

9-13 of your letter. However we have difficulty

stat

Cradock's comments

comfitia

Rur

au freem

jump

my Hulin

Nat

reit The real would in reconeiling/your paragraph 11 and 12

add might well have to brace pragraph 12 presumably not be able to ask the Chinese for.

w whether pragraph 12 would follow

whether it

assurances on leases running past 1997 in the would be subsumed in this

New Territories before we had

our widens clear at this stage,

get

on the issue of such leases.

one point on which we queing got their agreement

At present, an

subject to

In any ease we believe

it would be useful if the Secretary of State could

initially concentrate on getting the Chinese to

expand Deng's assurances in a form that could be

publicly quoted. Whether he would go beyond that

would depend on the Chinese attitude.

4. On a possible political quid pro quo,

that the formala described in paragraph 6 of

Lie de covering leases troughout the Cradock's letter of April Would

a

I

e agree

real gain? most we could get. We are examining the legal

alous with the implications of implications of this, and other possible Chinese

demands. Meanwhile we would be grateful for your

SECRET

/views

not

تقلة

your joint views with

Cradock

in line)

to thank Hat

axeand

of the lesser

solution of

only

NOTHING TO BE WRITTEN IN THIS MARGIN

andrŝivid

on New Territories leaves balance) by statement

shivererguty,

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