CONFIDENTIAL

5. KE SEEMED READY TO PICK UP MY PROPOSAL FOR INFORMAL DIALOGUE

BUT ONLY (REPEAT ONLY) AS A CONCOMITANT OF CONTINUED DISCUSSION

OF THE CONSTITUTIONAL ISSUE IN THE JLG. HE ARGUED THAT PUBLIC AND

MEDIA OPINION IN HONG KONG WAS NOW PREPARED FOR THIS. PERVERSELY HE ALSOAGREED THAT IT WAS SENSITIVE AND THEREFORE

ARGUED THAT WE COULD AVOID ANY REFERENCE IN THE COMMUNIQUE.

HIS FINAL REMARK, THAT THERE WAS STILL TIME TO FIND A WAY TO SOLVE

THE PROBLEM, DID NOT DETRACT FROM THE OVERALL HPRSH AND DIRECT

SUBSTANCE OF HIS MAIN MESSAGE.

6. KE'S BLUSTERING RESPONSE TO MY STRICTURES AGAINST XU SHOWED

HIM ON THE DEFENSIVE. HE DID NOT ATTEMPT TO EXCUSE XU'S OFFENDING

REMARK. I THINK WZ HAVE NOW MADE OUR POINT (YOUR TELNO 1018).

7. SEE MIFT FOR RECOMMENDATIONS

EVANS

COPIES TO: (VIA ADR)

́HONG KONG AGREEMENT

MR ROBERTS NEWS DEPT

LIMITED HD/HKD HD/FED

HD/PLANNING STAFF HD/PUSD

DEP HD/PUSD

RES (MR WALKER)

PS

PS/MR RENTON

PS/PUS

SIR W HARDING

MR WILSON

SIR J FREELAND

MR J CROWLEY PUSD

MR FIFOOT LEGAL ADVS MR MARTIN ASST STAFF

CABINET OFFICE

MR MALLABY CABINET OFFICE MR DRC CHRISTOPHER

CABINET OFFICE SIR P CRADDOCK NO 10 DOWNING ST. MR WOOD LEGAL ADVISERS

-2- CONFIDENTIAL

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