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© Miss Marsten

OFFICE OF THE BRITISH SENIOR REPRESENTATIVE, SINO-BRITISH JOINT LIAISON GROUP

St John's Building

33 Garden Road

PO Box 528

Hong Kong

Telephone 5-8682171.5-8682416, 5-8682431, 5-8682435

CD S Drace-Francis Esq, CMG

LISBON

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Mr Leitester

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Our reference 400/5

Date 25 July 1989

the Cannan

Dear Charles,

MACAU

1. Thank you for your letter of 11 July which arrived at the same time as your telno 209' announcing that the next Portuguese/ Chinese JLG meeting was to take place in Lisbon on 31 July/

1 August. Since the Macanese press had only days before excitedly announced that it would not now take place, I presume the final decision was fairly controversial for the Portuguese. Perhaps the fact that the venue is to be Lisbon rather than Macau as planned is an attempt to lower the profile. It would be helpful in terms of our JLG resumption (likely to be late September or October) to know if the meeting covers routine topics or concentrates on the aftermath of the Peking massacre.

2. Meanwhile the scene has been set for a stormy meeting by a controversy between the Macau Government and the Bank of China over arrangements for the issue of currency. This reportedly led to a formal accusation by the Chinese of a breach of the Joint Declaration. The Portuguese reaction has been uncharacteristically strong in rejecting Chinese pretensions.

3.

I am afraid I can cast little light on the reference in Correia da Manhã to the Ambassador, which is probably just sloppy reporting. My best guess is that Melancia is claiming that Macau is already more democratic than Hong Kong, and hence will remain so after 1999. He thus ignores both reality and the potential for change here in the intervening period. The reference specifically to Peking naming "its Ambassador" may be to China insisting that the Chief Executive should be a Chinese national acceptable to them and appointed formally by the CPG, but the position is to be the same for Macau. Alternatively this may be something to do with the MFA Office the Chinese are to open in Hong Kong under Article 13 of the draft Basic Law, but again I assume Macau will be treated the same.

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