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(2)

(B)

(1)

(2)

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PROCESS, AND IT WOULD BE HELPFUL TO KNOW CHINESE THINKING

ON BASIC LAW. PAO DID NOT DISSENT BUT MADE NO REAL

COMMENT.

PAO SCHOLARSHIP FUND: THE SECRETARY OF STATE WELCOMED THE

SCHEME, UNDERLINED THE NEED FOR PROGRESS, AND SUGGESTED EARLY TECHNICAL DISCUSSIONS IN LONDON BETWEEN BRITISH, CHINESE AND PAO'S EXPERTS. PAO AGREED, AND SAID HE

INTENDED TO PURSUE THIS IN MORE DETAIL WITH MR RAISON.

WITH MR RENTON:

SCHOLARSHIP FUND: PAO EXPLAINED THAT THE CHINESE HAD AGREED TO FUND THE SCHEME, LIKE HMG, THROUGH ANNUAL PAYMENTS. HE HOPED IT WOULD PROVIDE SCHOLARSHIPS FROM

THE START OF THE 1987 ACADEMIC YEAR. HE HOPED THE TITLE

OF THE SCHEME COULD COMMEMORATE THE JOINT DECLARATION.

REPRESENTATIVE GOVERNMENT: PAO SPOKE ON FAMILIAR LINES

ABOUT THE NEED TO MAKE HASTE SLOWLY. HE BELIEVED IT

WOULD BE ESSENTIAL TO HAVE A STRONG BRITISH GOVERNOR UP

TO 1997.

WITH PRIME MINISTER: RESUME OF PAO'S OTHER DISCUSSIONS.

HE SAID THAT HE HAD HAD USEFUL DISCUSSIONS WITH MR RAISON

ON THE SCHOLARSHIP SCHEME, AND WITH THE BRITISH COUNCIL ON THE PROVISION OF ENGLISH TEACHERS FOR NINGBO.

3.

PAO ALSO LUNCHED WITH DAVID WILSON ON 21 MARCH. THE SAME

GROUND WAS COVERED ON SCHOLARSHIPS. ON DRAGON AIR, WILSON REITERATED THAT THE CHINESE SHOULD FULFIL THEIR OBLIGATION TO

ALLOW CPA ON TO THE PEKING ROUTE: CAAC HAD BEEN PLAYING HARD TO

GET ON THIS AND OTHER MATTERS. PAO SAW NO PROBLEM ABOUT CATHAY:

AND SAID CAAC SENIOR MANAGEMENT WERE NOW BEING REORGANISED. HE COMPLAINED THAT CAD HAD YET TO AUTHORISE HIS CHARTER TO TRANSPORT

BLDC MEMBERS TO PEKING. WILSON REPLIED THAT HONG KONG WERE

AUTONOMOUS IN SUCH MATTERS, AND WERE DOUBTLESS FED UP WITH CAAC. ON REPRESENTATIVE GOVERNMENT PAO SAID HE HAD ALWAYS OPPOSED

DIRECT ELECTIONS. WILSON SAID THAT THE ISSUE MUST BE FLOATED IN THE REVIEW, AND IF THERE WAS THEN CLEAR PUBLIC DEMAND FOR DIRECT ELECTIONS, HKG WOULD DOUBTLESS NEED TO RESPOND: WORST SCENARIO WAS CHINESE INTERFERENCE AT THAT STAGE. PAO THOUGHT CHINESE

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