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CONFIDENTIAL

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STATEMENT ON CHINA : MACAO

1. Your minute of 28 June. To the best of my knowledge, we did not know of the "positive signals from the Chinese" about Macao which the Portuguese Foreign Minister mentioned to the Secretary of State. Sir A Donald, however, had a recent conversation with his Portuguese colleague, during which the latter gave the impression that the Portuguese might well want to postpone the next meeting of their Joint Liaison Group (Peking Telno 1248).

2.

We have not kept particularly closely in touch with the Portuguese over Joint Liaison Group matters, largely because the Portuguese started the process much later than we did and have approached it in a pretty unsystematic way. We have taken the view that there is not a lot we could learn from them. But there may be a case for comparing notes rather more frequently in the present circumstances. I will consider how best this might be done.

3. I hope that Sir Hal Miller will be able to put across the vital need for the Chinese to do everything possible to restore confidence in Hong Kong. I doubt whether it would be helpful to him to refer to the Portuguese example; Sir Hal's interlocuters are unlikely to be aware of the details.

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CONFIDENTIAL

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