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ESSENTIAL FACTS

NOT FOR USE

1. Lady Young is aware of the background to the Future of Hong

Kong.

2. The next round

of Sino-British talks is in Peking on 22/23

September. It is likely to prove difficult. The Chinese are

insisting on the recovery of sovereignty over Hong Kong in 1997 and that sovereignty and administration are indivisible. They have said that there is no room for flexibility on this point and have urged

us to approach the talks afresh in a 'realistic' spirit.

LORD RHODES VISIT TO CHINA IN EARLY OCTOBER

A,B 3. My submissions of 19 and 26 August gave the background to the

visit which will come soon after the next round of Sino-British

talks. They explained inter alia:

(a) why we wish to dissuade Lord Rhodes from canvassing 'solutions'

to Hong Kong's future and;

H

(b) why we considered it inappropriate for Mr Alistair Goodlad MP to

accompany him.

4. Our views on (a) are unchanged. On (b) Lady Young is aware

that following their discussions with Mr Luce, neither Mr Goodlad

(Government whip) nor Mr Renton, the Secretary of State's Parliamentary Private Secretary (whom Mr Goodlad had suggested be included in the party) will now accompany Lord Rhodes to China.

Goodlad has suggested two Conservative backbenchers, Mr Roger Sims

MP and Mr Bill Benyon MP as suitable alternatives. (Both are members

of the Hong Kong Parliamentary Group).We understand that they will now be included in Lord Rhodes party.

c 5.

Mr

Lord Rhodes is unhappy that Mr Goodlad and Mr Renton have been discouraged from accompanying him to China. He has tried to give the erroneous impression that his visit has official British Government backing and will no doubt wish to salvage a degree of credibility. Lady Young may wish to point out to Lord Rhodes that

although his visit comes at a difficult time for us and we should

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