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desire to tackle outstanding problems: but the aim may be a presentational rather than a substantive one. These are all reasons

for us to approach the talks cautiously, without inflated

expectations.

6.

The Governor agrees that we should accept the offer of talks

without delay (Hong Kong telno 2595). He would favour high-level participation, in large part for domestic Hong Kong reasons. He

suggests that Mr McLaren should lead a team which would also include

two high-level Hong Kong officials. We have some difficulty with

this. Even if it was feasible for Mr McLaren to be away from London this month, leadership of the team at his level would give the talks

a high political profile. It would be relatively easy for the Vietnamese to broaden them to cover political issues. There would

be a risk of arousing unjustified expectations, particularly in Hong

Kong, when contacts with the Vietnamese are really at no more than

an exploratory phase.

7.

We therefore favour adopting the Governor's alternative idea

as a compromise. The team would be led by Mr Clift, the Political

Adviser, who is a Senior Grade DS officer on secondment to the Hong

Kong Government. He would be supported by the Head of SEAD and by

Hong Kong Government officials (we suggest one fewer than the

Governor favours). This would be a slightly unusual arrangement, but a justified one given that Mr Clift is an FCO secondee and a

very experienced one) and would be known to the Vietnamese as such.

This configuration could in fact well make it easier to keep the talks focussed on practical Hong Kong issues.

8.

We would be ready for talks to take place in the week of 18

July. Our posts in ASEAN countries would expect these to be welcome

to their host governments. For their part Thailand and Malaysia are

also expected to take up the offer of talks. UNHCR, whom we have

sounded out informally, understand our wish to respond promptly to

the Vietnamese invitation.

9. We shall need to telegraph further on our strategy in the

talks. On aid our defensive line would be based on the Secretary of

State's view that modest assistance through UNHCR channels to

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