CONFIDENTIAL

the line that the Governor proposes to take in his talks with Zhou

Nan in early March. We shall also need to decide what line to take

in public about any articles which may contravene the Joint

Declaration. This was covered in my submission of 13 February.

(Brief C).

7.

It would be helpful if discussion of future constitutional

structure could focus on the line to be taken at the Governor's

meeting with Zhou Nan, about which I have submitted separately.

(Brief D).

8. Under nationality and passport matters, the Governor could give his views on the subject of settlement/citizenship for wealthy

investors. It would be helpful to have his comments on the guidance

for officials and statement for enquirers which the Home Secretary

recently circulated. It would be desirable also to discuss the

scope and nature of the exercise to make our rules more clearly

understood. The Governor has told us that he wishes to raise

Section 4(5) cases. (Brief F).

9.

We face a possible row with the Chinese over disposal of the

military estate. Talks are now deadlocked in JLG. We are

recommending that the Secretary of State raises the matter with

Qian Qichen. It would be useful if he could go over the ground

with the Governor. (Brief G).

CONFIDENTIAL

ARPenc

A R Paul

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