**
Y.E.
CONFIDENTIAL
DISCUSSION WITH ZHOU NAN
I had quite a long chat with Zhou Nan at the airport
last night.
2.
Macau
Zhou was on his way to the inauguration with the Health Minister (silent throughout, unsurprisingly). This had a
business aspect as well as a ceremonial one. He would touch
base with the MFA. I pointed to Hong Kong's legitimate curiosity about the Macau negotiations; they would need to be properly managed since they had potential consequences for confidence here. Zhou entirely took the point. The Hong Kong negotiations had of course set a good example for others. However, he did not, in all honesty, expect the negotiations with the Portuguese to run for 22 rounds. The sovereignty question had already been settled. Nevertheless there was
one particular problem the lack of a local administrative infrastructure - nothing much below the Portuguese.
3. I commented that the Portuguese did not yet seem to have their ducks in a row. To this, Zhou did not react. However, earlier and separately, the NCNA representative told me that he thought that the negotiations might begin in about August, preceded by an informal phase (when agenda etc would be
settled). There was speculation, although it was no more, that the Portguese team might be led by their existing Ambassador in Washington. On the next Governor of Macau, there was again nothing but speculation; but this tended to focus on Soares' campaign manager. The NCNA man also hoist very readily the importance for Hong Kong that this negotiation should go well.
Philippines
Zhou (and the NCNA man) both expressed relief that this had turned out well. It would not have been good for the region had things gone wrong. When I said to Zhou that the transition had been well managed, he added immediately "by the Americans". I said I had not said that, whereupon
CONFIDENTIAL
./he countered
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