CONFIDENTIAL
Annexure 'D'
NARCOTICS
In Beijing
The Chinese side expressed concern over the increase in cases where drugs, mainly heroin, were seized in China. They said intelligence had suggested that heroin was smuggled from the Golden Triangle into China and then to either Macau or Hong Kong for onward transmission to other countries. The Hong Kong side was then told of the arrest of 2 Hong Kong residents and a Thai national in Yunnan Province in late 1986 for smuggling heroin into China from Burma. They were sentenced to death, two being executed in February 1987, one having the sentence suspended.
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2.
CP appreciated the concern of the Chinese side and assured that continuous efforts would be made to combat this crime. He commented that because drug trafficking was a lucrative business, criminals were willing to run the risk but consistently changed their methods and routes to avoid apprehen- sion. The Commissioner briefly explained the factors that cause the rise of prices of heroin. It was noted that the rise of heroin prices usually led to other problems with law enforcement.
3.
Both sides agreed that there was a need for constant exchange of intelligence regarding the activities and movement of criminals. Should there be evidence showing a Hong Kong/ China connection in major drug cases in future joint investi- gations would be considered.
4.
The Commissioner referred to an article recently in HK newspapers to the effect that the Chinese authority had announced a crack down on the manufacture and distribution of Mandrax tablets with intent to stop the smuggling of the drug to Hong Kong. Mr Liu Wen confirmed that a directive had been circulated in October 1986 by the Ministry of Health stipulating that with immediate effect all production of methaqualone and its preparation had to be ceased. The directive also contained restrictions on supply, sale and use of methaqualone which was still in stock. It further indicated that whoever violated the stipulations was to be punished.
5.
CP commented that cases of smuggling Mandrax into Hong Kong from the mainland had significantly dropped which might be the result of control of this drug in China. Both sides shared a common view however that vigilance still had to be maintained in the 2 territories. At the request of CP, Mr Liu provided a copy of the directive to the Hong Kong delegation.
In Guangzhou
6.
Unlike the meeting during CP's previous visit to Guangzhou, the Chinese side admitted this time that Guangdong Province was becoming a transit area for drugs being conveyed from Thailand to
CONFIDENTIAL
/Hong