CONFIDENTIAL

VISIT OF SIR Y K PAO, JULY 1987

Points to Make

A. REPRESENTATIVE GOVERNMENT

1.

HMG and HKG proceeding cautiously. Must be seen to respond

to public opinion if during review consensus emerges on direct

elections.

2.

Contacts with Chinese going well.

B. NEW GOVERNOR

3.

Sir David Wilson has settled in well and is working hard. He

will be visiting London from 20-22 July then taking a brief period

of leave.

C. BASIC LAW

4.

Hope you are impressing on Chinese importance of a good Basic

Law, fully and accurately reflecting Joint Declaration.

How do you see progress on drafting Basic Law?

D. CIVIL AVIATION DRAGONAIR

5.

Pleased you are now serving Thailand on a regular basis.

6.

Scheduled services to PRC.

Discussed this question with Chinese during talks on 3-5

June. HMG will continue to support Dragonair's aspirations to

operate scheduled services to Chinese mainland during further

governmental consultations.

CONFIDENTIAL

POINTS TO

MAKE

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