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suggest alternative ways of handling the Chinese, and of

ensuring that there is no suggestion of a breakdown.

4.

The Governor and Hong Kong and HM Ambassador to Peking

have been consulted throughout the preparation of the paper. The

FCO Legal Advisers have been involved in the drafting, as have

the Hong Kong Political Adviser and the Attorney-General, who

have been in London this month. Planning Staff have been kept

Departments within the FCO and Whitehall have been

informed.

consulted on a number of the Annexes as follows:

Annex I

Currency and Finance

ESID Treasury

Bank of England

Annex J

Defence and Internal Security

Ministry of Defence

Annex K

Citizenship, Nationality and Immigration

NTD

MVD

Home Office

Annex M

External Trade

ECD (E)

Department of Trade

Annex N Civil Aviation and

MAED

Shipping

Department of Trade

5.

All departments have been reminded that the subject

must be treated on a very restricted basis. Within the FCO

knowledge of the main paper is restricted to those directly

involved. In Hong Kong, the group is confined to the Governor

and Private Secretary, Chief Secretary, Commander British Forces,

Attorney-General and the Political Adviser.

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/6.

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