CONFIDENTIAL
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sympathy for the demonstrators.
It had become worried,
too, about the development of a very large trade deficit with Japan. But, as in the case of the United States, more was said in private than in public and great efforts were made to head off further demonstrations. Towards
the end of the year, senior Chinese were saying that a
corner had been turned.
Sino-British Relations
14. At No 10 in June, Zhao Ziyang said that relations between the United Kingdom and China had never been better. I think this is true. Yet, if hong kong is taken away, there is limited substance to political relations. The Chinese see Europe, East and West, as a potential political counterweight to both of the superpowers. But they are not prepared to go much beyond general formulae in discussing geopolitical issues with us. Besides, the international problems which concern. them most operationally are regional problems. Afghan- istan excepted, these are not near the top of our agenda.
15. Hong Kong remained at the heart of political relations.
Subsequently, after
the Joint Declaration had entered into force, there were two meetings of the JLG and six meetings of the Sino- British Land Commission. These latter meetings went well.
16.
CONFIDEL.TIAL