1

WINAAK (3)

D, E

Regulation of the Security Industry

6.

A background note and a recent newspaper article on the

regulation of the securities industry are attached. This is a very

large subject and it is difficult to predict which aspect Mr Li is likely to raise.

Investment Climate

7. On the investment climate in Hong Kong, Mr Li will probably argue that it is important for China and Britain to settle their differences in order for the economy to continue to prosper.

F Background briefs on Hong Kong's economy and financial markets are

attached.

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