RESTRICTED

Mr Darrach

Reference.....

HONG KONG

1. When I called on Mr Takeshi Noda (Nakasone faction) with Mr Hatfull last Friday, I asked whether he was busy with preparations for Hu Yaobang's visit to Japan, as he is Chairman of the Japan/China Association.' Mr Noda said that he had discussed the outline of the programme on a recent visit to China, but that detailed arrangements were now in the hands of the appropriate Ministries. He then said he thought Hong Kong would be an important issue in the talks. I said that we hoped that Mr Nakasone would stress the importance of preser- ving Hong Kong's stability. Mr Noda suggested that he envisaged a solution in which sovereignty was returned to China, while Hong Kong became administratively independent. He thought that Taiwan was a complicating factor in our bilateral negotiations, simply because the Chinese would be very careful about established precedents.

ing

Me Dam

17 October 1983

CODE 18-77

RESTRICTED

RCB Jones

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