c) If pressed on Chinese leaks (eg Hu Yaobang's
remarks to Japanese journalists on 15 August)
you should speak as in para 10 of guidance TUR.
But you could add that the Japanese should not
place too much reliance on Chinese public remarks
particularly about HMG's position. They are
familiar with Chinese negotiating tactics.
d) The Chinese are taking a tough line on sovereignty
and do not appear fully to understand why continuity
is necessary.
But the atmosphere remains friendly.
We hope that as the talks go on their understanding will increase
of the complex practical basis of Hong Kong's
stability and prosperity.
e) Generally UK/China relations remain in good order.
British companies have won major licences to explore
for and develop offshore oil in the current round of
bidding. Talks on the Guangdong nuclear project
continue. The Chinese Petroleum Minister (Tang Ke)
is visiting Britain next month. Mr Walker and
Lord Cockfield are likely to make separate visits to
China later in the autumn.
NOTHING TO BE WRITTEN IN THIS MARGIN