CONFIDENTIAL

135340 MDLOAN 9904

MCLAREN DESCRIBED THE POST-JUNE CHINESE VIEW OF HONG KONG AS A BASE FOR SUBVERSION, AND THE PERCEPTION THAT THE UK MIGHT BE ATTEMPTING TO ALTER THE JOINT DECLARATION. THE UK WAS

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GRATEFUL FOR JAPANESE FOREIGN MINISTER NAHAYAMAS HELPFUL VISIT TO HONG KONG IN NOVEMBER: JAPAN HAD A BIG STAKE IN HONG KONG ON AIR SERVICES, IT WAS MOST IMPORTANT THAT BY 1997 HONG KONG SHOULD HAVE A SET OF AGREEMENTS IN PLACE WHICH WOULD CONTINUE WITH MINOR ALTERATIONS, AFTER THAT DATE JAPAN WAS HONG KONG'S MOST IMPORTANT PARTNER IN THE REGION: AN AGREEMENT WITH HER WAS THEREFORE CENTRAL JAPANESE AGREEMENT WOULD BE SEEN AS AN IMPORTANT POLITICAL GESTURE. THE FORTHCOMING JAPANESE GENERAL ELECTION AND ITS AFTERMATH WERE NOT GOOD REASONS FOR. DELAYING TALKS: GIVEN THE NEED TO SHOW INITIALLED TEXTS TO THE CHINESE IT WOULD INEVITABLY BE SOME TIME BEFORE AN AGREEMENT COULD BE PUT BEFORE THE JAPANESE DIET

APEC

JAPAN

5. OTSUKA SAID THAT JAPAN SUPPORTED HONG KONG'S PARTICIPATION IN APEC. JAPAN WAS GLAD THAT APEC HAD FINALLY COME INTO BEING AFTER A LONG GESTATION PERIOD. ASEAN WERE STILL NERVOUS WOULD BE LOW-KEY ON ANY APEC INITIATIVES, BUT WOULD GIVE POSITIVE SUPPORT MOVES ON SUBSTANTIVE COOPERATION (EG THE HUMAN RESOURCES DEVELOPMENT PROJECT) JAPAN SUPPORTED THE PROPOSAL THAT EC HAVE OBSERVER STATUS AT APEC

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NT PROJECT)

MY TWO IFTS (NOT TO ALL) COVER THE PHILIPPINES AND CAMBODIA/ VIETNAM BURMA AND BOAT PEOPLE

HURD

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ΜΑΙΝ

139

DISTRIBUTION

181

.JAPAN POLITICAL AND ECONOMIC

.(BACKGROUND)

LIMITED

FED

ECD (E)

ECD (I)

ERD

PUSD

ECONOMIC ADVISERS

PS

PS/MR MAUDE

PS/LORD BRABAZON

PS/MR SAINSBURY

PS/PUS

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