CONFIDENTIAL

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(How

required, rather than fix a date six months ahead. much this is due to what we have perceived as a minor clamp- down on Chinese official visits to Hong Kong, I cannot really judge).

The three economic papers already copied round the houses were the subject of a lively debate. The meeting agreed that all three papers indicated a Chinese message to Hong Kong: that there were important gains to be made in the economic/commercial areas by both sides if no-one upset the applecart.

The last paper discussed by the meeting was a review of

the KCRC freight performance in 1985.

The Committee will next meet on 31 July. I hope it will not take me quite so long to report that meeting!

Your ever,

c.c.

(C T Wood)

Assistant Political Adviser I

J Ashton, Esq.,

Far Eastern Department, FCO

D G Blunt, Esq.,

British Embassy, Peking

CONFIDENT...

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