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which it might be unable to achieve. In addition the revised draft

could have been interpreted, to Chinese displeasure, as laying down

a prescription for continued evolution after 1997. We have made

some amendments in the draft to rectify these points, and are

telegraphing these to Hong Kong this evening.

3.

ExCo are considering the revised text on 6 January and may

well suggest further changes. The revised drafts which it is

recommended that the Secretary of State should now circulate to the

Prime Minister and OD (K) colleagues are thus still not definitive.

But they are much closer to the final versions than the ones

submitted to the Secretary of State before Christmas.

4.

I submit a revised draft minute to the Prime Minister

incorporating certain minor consequential changes.

5.

The Secretary of State indicated earlier that he would be

interested in seeing the entire draft White Paper. We have now

received the full draft text from Hong Kong: the relevant telegrams

are attached. The other chapters are still in the form of

preliminary drafts, and it would be premature to circulate the full

text to OD (K) colleagues at this stage.

сбыт

CO Hum

The new draft of Chapter III shows a fair number of changes from the earlier version, but I hope that the Secretary of State will agree that both presentation and wording have beer: improved. From the point of view of the Chinese the key para- graphs are the last one on the second page and the first three on the third.

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