CONFIDENTIAL

8.

In answering the earlier PQs we gave no hint at all of our objectives. At that stage, however, we had not formally initiated Now that we have, and discussion of the subject with the Chinese.

since the subject is clearly generating much interest within the Liberal Party, I believe it would be appropriate to give a general

The draft reply has been prepared indication of our intentions.

accordingly.

9.

The draft reply has been agreed with the Hong Kong Government, the Embassy in Peking and Legal Advisers.

Tom Smith

T W M Smith

CONFIDENTIAL

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