B

CONFIDENTIAL

PS/PUS

Private Secretary

т

Mr. Williamon

HICK

026/14

RECEIVED IN SCARY MO, 51

-3 DECI

DESK OFFICUS INDEX

2

SIGISTRY

--ion Taken

12

SIR Y-K PAO

PROBLEM

1.

attached to

(9)

How should the Prime Minister reply to Sir Y-K Pao's

letter of 12 November taking into account his subsequent

letter of 24 November to Lord Carrington ?

RECOMMENDATION

2.

I recommend that the Prime Minister should reply on the lines of the attached draft telegram. (The text would need

to be sent by telegram via the Governor, Hong Kong, to ensure that Sir Y-K Pao receives it before his departure for China.)

I attach a draft covering letter to No 10.

HKGD agree.

BACKGROUND AND ARGUMENT

3.

7

Relevant background is in our submission of 4 November. We have sought the views of Peking and Hong Kong on Sir Y-K Pao's ship-launching proposals and await their reply. We have not begun to discuss with the Chinese details of the Prime Minister's proposed visit to China next year.

In

Sir Y-K

is therefore jumping the gun and it could confuse the Chinese if he were to mention his idea to them at this stage. More- over, the sense of his letter to the Prime Minister is not consistent with that of his letter to Lord Carrington. the former he appears to be thinking of the Prime Minister launching one of his ships in this country, although in the latter it is clear he has a launch ceremony in Shanghai in mind

for her.

4.

Sir Y-K's letter to Lord Carrington does not appear

to require a separate reply.

5.

The PUS has asked to see the reply in draft.

2 December 1981

copied to:

PS/LPS HKGD

Markshist

Mark Elliott

Far Eastern Department

CONFIDENTIAL

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