CONFIDENTIAL
MDHIAN
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4.
PRACTICALITIES INVOLVED IN IMPLEMENTING THE THIRD
YEN CREDIT OF YEN 810 BILLION (OFFERED BY TAKESHITA
IN AUGUST 1988).
I NOTED THAT, ALTHOUGH CIRCUMSTANCES WERE DIFFERENT, RECENT EVENTS IN ROMANIA HAD IF ANYTHING INCREASED CHINA'S POLITICAL ISOLATION. ALTHOUGH THE MFA CLEARLY WANTED IMPROVED RELATIONS WAS THIS VIEW SHARED AMONG THE MEDIA OR POLITICIANS? HOW WOULD THE YEN LOAN HELP IMPROVE THE POLITICAL SITUATION IN CHINA (APART FROM SIMPLY MOLLIFYING
THE HARD-LINERS)? TANINO UNDERLINED THE NEED NOT TO PUSH
CHINA BACK IN ITS SHELL (A POINT STRONGLY EMPHASIZED BY KWIZAME AND TANINO WHEN GILLMORE WAS HERE EARLIER THIS MONTH).
THERE HAD BEEN A PAINSTAKING WESTERN EFFORT OVER THE PAST
15 YEARS TO THAW THE PREVIOUS FREEZE. THIS SHOULD NOT BE WASTED.
HONG KONG
5.
TANINO EMPHASISED JAPANESE WILLINGNESS TO HELP IMPROVE CONFIDENCE IN HONG KONG ON USUAL LINES. IT WAS NOW APPROPRIATE TO RESUME AIR SEPARATION TALKS. THE MOT WERE
STILL OBDURATE BUT HE HOPED THEY WOULD BE BROUGHT ROUND
WITHIN THE NEXT FEW DAYS. JAPAN WOULD NOT HOWEVER BE ABLE
TO HELP WITH THE SPECIFIC MEASURES OF INTRODUCING AN
ASSURANCE SCHEME (YOUR TELNO 2364 TO WASHINGTON).
PASSPORTS COULD NOT BE GIVEN TO NON-JAPANESE CITIZENS NATIONALITY WAS AN EMOTIONAL AND IMPORTANT ISSUE IN JAPAN. IT WOULD BE BETTER IF MRS THATCHER DID NOT RAISE THIS IN
TERMS SINCE KAIFU WOULD HAVE TO REFUSE.
6.
I UNDERLINED THE IMPORTANCE OF EARLY RESUMPTION OF AIR SEPARATION TALKS (YOUR TELNO 1008 NOT TO WASHINGTON OR PEKING). IF DATES COULD BE AGREED BEFORE PRIME MINISTERS MET THE ATMOSPHERE FOR OTHER TOPICS COULD ALSO BE IMPROVED. I ALSO DREW ATTENTION TO THE CONTINUING DIFFICULTY WE FACED WITH MOT ON IMPROVING ACCESS BY HONG KONG CARRIERS TO JAPANESE REGIONAL DESTINATIONS. I UNDERSTOOD THE PARTICULAR
DIFFICULTIES THAT THE PROVISION OF PASSPORTS TO HONG KONG RESIDENTS WOULD POSE FOR JAPAN. WE WERE NOT LOOKING FOR THEM TO BE FIRST IN LINE BUT THE MORE OTHER COUNTRIES THAT COULD BE ASSOCIATED WITH A PACKAGE OF ASSURANCES (OF VARIOUS KINDS) THE BETTER WOULD BE THE PROSPECTS FOR HONG KONG CAND THUS THE LESS THE LIKELIHOOD THAT ASSURANCES WOULD NEED TO BE CALLED IN). I EMPHASIZED IN THIS PART OF THE CONVERSATION
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