Secretary Hu Yaobang who came as a Guest of Government in

June 1986. Since then as well as the State Visit to

China there has been a visit by Princess Margaret in

1987; and The Prince and Princess of Wales are visiting

China from 1-6 November. The proposed visit would be an

occasion to continue this pattern of exchanges and to

nderline a the highest

bilateral

ziona

could be helpful in the context of Hong Kong and give a

boost to our flagging export performance in the Chinese

market. President Yang became President in 1988.

Although he is now 82, he seems in good health and has

maintained an active programme as Head of State.

Accepting a visit by President Yang would, however,

necessitate a reconsideration of our priorities for 1990.

The Foreign Secretary considers that it would be possible.

to postpone issuing a formal invitation to the Sultan of

Brunei; who has been a leading candidate for a visit in

1990. You will recall that Her Majesty had earlier

accepted in principle an invitation from the Sultan to

visit Brunei after this year's CHOGM. Although the

Sultan subsequently had to withdraw his invitation,

honour has been satisfied. There is, therefore, no

longer the same pressure for an inward visit.

Furthermore, in the light of the continuing uncertainty

over the Al-Fayed/House of Fraser affair, the Foreign

Secretary believes that it would be wise to wait until

2

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CONFIDENTIAL

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