SECRET

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2.

about Chinese policies and he hoped that the Chinese side had

also learned something of British thinking. What both sides

were seeking to do in the world coincided in many areas. Briti and Chinese feelings about the Soviet Union were particularly

convergent: both countries were doing what they could to

curtail Soviet efforts to extend their influence.

4.

The Lord Privy Seal continued by saying that there were

three specific issues he wanted to raise. Firstly he would

like to have the Premier's view on current relations between

China and Hong Kong. He believed that these were very good in

many areas, and were progressing well with many practical forms

of co-operation. He noted that a Chinese Visa Office had

recently opened in Hong Kong. The Lord Privy Seal said he was

interested in developments in the Shenzhen Special Economic

Zone (SEZ). He understood that the Premier had been there

last November: the Governor of Hong Kong had also visited the

SEZ a few days earlier, under arrangements made with the local

authorities. He believed that Sir Murray MacLehose had had

talks with the Mayor of Shenzhen about co-operation in

infrastructure questions, and other matters. The Lord Privy

Seal asked for Mr. Zhao's views on developments in that area,

and also on the prospects for the construction of a nuclear

power station in Guangdong. He understood there were some

differences of opinion about the merits of French and US

proposals; Britain was willing to cooperate with either, as the

Chinese wished, and to make a contribution to the project. He

asked for Mr. Zhao's ideas on co-operation between Britain, Chi

and Hong Kong, not just about the nuclear power station, but in

other respects also.

5.

Premier Zhao said there were now no deep problems

between Hong Kong and China. Economic co-operation was good, as was exchange of personnel. Co-operation had helped the

maintenance of order in Guangdong, and was, he thought, helpful

also to Hong Kong. Premier Zhao said that he had worked

/ in the Guangdong

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