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CONFIDENTIAL

Mr Donald

Thank you And mo

HONG KONG: RECENT DEVELOPMENTS

1.

Res 1/4

Little of major significance has happened during your absence. The most important is that the Prime Minister has called a meeting on 2 April with the Secretary of State and officials to discuss the future of Hong Kong. No 10 has asked that the number of FCO representatives be limited to four. I therefore have in mind the Secretary of State, the Lord Privy Seal, Mr Giffard or you, and myself as note-taker. We should perhaps also have a Legal Adviser present, probably Sir Ian Sinclair. I am considering whether we should make a case for this. We are preparing a brief for the Secretary of State.

2.

Parliamentary interest continues in the Vertucci case. Four Labour MPs have asked to see the Lord Privy Seal about it and Mr Tony Benn MP has written to the Secretary of State about it. The Secretary of State has asked for more information on the case which Hong Kong have provided.

3. Your should also know that the recent Air Service talks in China were, as predicted, unsatisfactory. All the CAAC agreed to was continued CPA flights to Shanghai until 31 October with an increased (but not full) capacity. DOT, will, therefore, be recommending that we give, before the end of April, one year's notice of termination of the Confidential Memorandum of Understanding which covers regional service to Hong Kong. I think this is right - CAAC have got away with too much for too long but we shall need to consider this action very carefully particularly in view of the Prime Minister's forthcoming visit.

Бир

19 March 1982

R D Clift

Hong Kong and General Department

cc Mr Giffard

CONFIDENTIAL

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