4. HN CONCLUSION, THE GOVERNOR SAID THAT HMG WERE FULLY COMMITTED

TO FINDING A SOLUTION WHICH WAS ACCEPTABLE TO THE PEOPLE OF HONG

KONG. SINCE THE PROBLEMS WERE COMPLEX, THE PROCESS WAS BOUND TO

TAKE TIME. IN THE MEANTIME, WE HAD JUDGED IT BEST NOT TO

RESPOND TO THE CHINESE PROPAGANDA CAMPAIGN BY INITIATING A CAMPAIGN

OF OUR OWN. THERE WAS A NATURAL TEMPTATION TO DO SO, BUT A

PUBLIC CONFRONTATION WITH THE CHINESE WOULD BE MORE LIKELY TO

DISTURB THAN TO REASSURE PEOPLE IN HONG KONG.

5. WE INBERGER ASKED A FEW QUESTION, NONE OF THEM TOO SEARCHING.

THE NEAREST HE CAME TO PROBING OUR NEGOTIATING OBJECTIVES WAS WHEN

HE ENQUIRED OVER BREAKFAST WHETHER WE WERE SEEKING SOME KIND OF

MANAGEMENT CONTRACT TO RUN HONG KONG AFTER 1997. THE GOVERNOR SAND

THAT WE HAD NOT YET GOT DOWN TO THAT SORT OF DETAIL.

1

6. AM REPORTING SEPARATELY SOME POINTS WHICH EMERGED ON THE

CHINA TRIP.

SIGNED R JT MCLAREN

N N N N

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