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Background

1.

The Secretary of State met his Chinese counterpart, Qian Qichen

in Paris on 30 July when it was agreed that JLG XIII, postponed at our request, should be held in London from 27-29 September. These

dates have yet to be formally announced. In the run up to the meeting the Chinese have been conducting a press campaign in Hong Kong and in China attacking HKG and HMG's "interference" in their internal affairs by aiding the supporters of the pro-democracy

movement in Hong Kong and by making comments in public about what we

think Ching should do to restore confidence in Hong Kong. Their

line has been to blame any loss of confidence on these actions by

HMG and HKG.

2.

The nationality package is yet to be finalised. No decision has

yet been taken on when the package will be announced. One important consideration is the forthcoming visit of the Prince and Princess of

Wales to Hong Kong in early November.

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