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Hong Kong capital investment in Shenzhen.

He appreciated the Governor's approach. The Lord Privy Seal commented that this had HMG's support.

14.

The conversation then turned to the Guangdong nuclear power station project. Discussion is recorded separately in Peking tel no. INDUS 001 to the DOI.

15.

Before the meeting ended, The Lord Privy Seal told Premier Zhao that he would have to speak to the press both in

Peking and elsewhere about his visit to China. He would like

to be able to report his understanding of the Chinese Government's

position on Hong Kong, namely that they were committed to the

continued prosperity of Hong Kong as a free port and a commercial and financial centre. After conferring with Vice Foreign Minister

Zhang Canming, Premier Zhao said Mr. Atkins could use words to

the effect that his understanding of the Chinese Government's position was that, when they addressed themselves to the question

of the future of Hong Kong, they would take into consideration

the prosperity of Hong Kong as a free port and as a commercial and financial centre.

16.

The Lord Privy Seal said that he had originally wanted to ask the Premier for details about the Chinese plan to reduce bureaucracy in China - but time was running out. He hoped that Premier Zhao Ziyang could explain this to him on a future occasion because the British Government was seeking to do the same thing.

17..

In conclusion Premier Zhao said that relations between

Britain and China were currently very good and that the Chinese side were very satisfied. On major international issues and especially how to cope with Soviet hegemonism they had many points in common. In the trade and economic field, China would adhere to its open-door policy. Co-operation between Britain and China was good; the Chinese economy had improved in 1981

and was in a healthy condition. He was sure it would continue

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/to improve.

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