AUTHORITIES WOULD BE BETTER QUALIFIED TO TALK TO YOU ABOUT AND IF

YOU ARE WITH ME IN A COUPLE OF WEEKS TIME WHEN WE GO INTO CHINA THE

CHINESE AUTHORITIES BECAUSE WHEN I GO THERE I WILL CERTAINLY BE

RAISING KAMPUCHEA AS ONE OF THE MAJOR ISSUES OF CONCERN APART FROM OUR BILATERAL RELATIONSHIPS BUT I WILL ALSO BE RAISING THIS MATTER ONCE AGAIN.

QUESTION: MR HAYDEN, KI KNOW YOU HAVE NOT ADDRESSED THE PROBLEM OF A POSSIBLE REFUGEE OUTFLOW BUT IS IT POSSIBLE IN A GENERAL WAY TO SUGGEST WHAT THE CONSEQUENCES COULD BE IF THE TRANSITION DOES

NOT GO SMOOTHLY?

MR HAYDEN: IF I WAS CONCERNED THAT THIS WAS A PROBABLITY THAT SHOULD BE ADDRESSED SERIOUSLY AT THIS POINT I WOULD. I DONT BELIEVE THAT THAT IS SO. I BELIEVE TO TALK ABOUT THAT IT WOULD ONLY ADD

TO INSTABILITY AND YOU WILL NOTE FROM WHAT I HAVE SAID THAT I HAVE

SOUGHT TO SHORE UP CONFIDENCE IN THIS REGION. HONG KONG WENT THROUGH

A PERIOD OF UNCERTAINTY WHICH WAS REFLECTED IN THE PLUMMETING EXCHANGE RATE. NOW THAT IS A COST THAT PEOPLE HAVE TO BEAR. ONE WAY OR ANOTHER WE DONT WANT THAT TO HAPPEN AS A RESULT OF ANYTHING THAT

I SAY BECAUSE I DONT THINK IT IS JUSTIFIED IN OCCURING.

QUESTION: ARE YOU SATISFIED ABOUT THE AMOUNT OF INFORMATION YOU

ARE RECEIVING FROM BOTH SIDES ON THE NEGOTIATIONS?

MR HAYDEN: WELL WHAT WE HAVE BEEN RECEIVING HAS BEEN HELPFUL BUT

I DONT KNOW JUST HOW MUCH MORE EITHER SIDE MIGHT HAVE BUT HAS NOT

DECIDED TO TELL US. WE DONT TELL OTHER PEOPLE EVERYTHING THAT WE

KNOW. FOR INSTANCE, THERE ARE QUITE A FEW THINGS I KNOW FROM THIS

TRIP THAT I HAVENT TOLD YOU PEOPLE. UNQUOTE

HADDON-CAYE

FUTURE OF HONG KONG

LIMITED

HD/FKD

SIR I SINCLAIR LEGAL ADVISER

COPIES TO:

HD/FED

MR BURROWS

HD/PLANNING STAFF

MR MARTIN

HD/PUSD

PS

MR FLOWER

MR COLES

HO/SPD

PS/LADY YOUNG

PS/MR LUCE

PS/PUS

SIR J BULLARD

MR GIFFARD

MR DONALD

MR WRIGHT

LEGAL ADVISERS ASSESSMENTS STAFF CABINET OFFICE

PUSD

NO 10 DOWNING ST

SIR A PARSONS

MR WALKER,

11

RESEARCH DEPT (GOGGS)

MR ROBERTS NEWS D

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