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HIZIZ

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18 DEC1961

INDEX

PA

L8lid

17 December 1981

Dear John,

See HRK

Prime Minister's Meeting with Sir Y K Pao: 1630

17 December

040/1 (A

I sent you yesterday a brief for this meeting. Among other points this covered the question of the future of Hong Kong in which Sir Y K naturally takes a close interest.

1982

The brief mentions that Sir Y K has recently been in Peking where he saw Chinese leaders, including Deng Xiaoping. In strict confidence Sir Y K has told the Governor of Hong Kong a little about his discussions in Peking. He took the opportunity of mentioning the likely effect on confidence in the Territory of the approach of 1997. He also had a general dis- cussion with Deng covering a number of international matters, including relations between China and the United States. He claims to have got the impression that, because of disenchantment with the United States, China would be interested in achieving a closer relationship in the political and commercial fields with the UK.

We hope that Sir Y K will expand on this when he sees the Prime Minister. He may well throw in his own ideas on possible implications for Hong Kong and its future. It would be very helpful if you could let us have a fairly full record of what he says on these points and in particular of exactly what line the Chinese leaders took with him. I imagine that the Prime Minister will wish to be fairly non-committal in expressing to Y K Pao our thoughts on the future of Hong Kong, and our reactions to whatever suggestions he brings from China.

yours over

Roderic Lyno

(R MJ Lyne) Private Secretary

John Coles Esq

10 Downing Street

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