SECRET

1117

MDLOAN 9749

SENSITIVE ONE - BOTH HERE AND WITH THE CHINESE AUTHORITIES. THE CHINESE KNOW THAT THE RN IS LIKELY TO BE MOVED TO STONECUTTERS ISLAND AND IT IS UNREALISTIC TO THINK THAT WE CAN SIMPLY IGNORE THIS AND NOT DISCUSS THE POTENTIAL OF STONECUTTERS ISLAND WITH THE CHINESE.

Q4. HOW DO YOU SQUARE THIS WITH HMG'S STRONG STATEMENTS ON NOT STATIONING PLA TROOPS HERE?

A4. AS I HAVE SAID, WE ARE URGING THE CHINESE TO CHOOSE NOT TO STATION TROOPS HERE. WE SHALL CONTINUE TO DO SO. BUT WE CONSIDER THAT IT IS CORRECT AND IN THE INTERESTS OF HONG KONG, TO INFORM THE CHINESE OF WHAT WE ARE DOING AND TO SET OUT WHAT ALTERNATIVE ARRANGEMENTS MIGHT BE POSSIBLE. THE TWO APPROACHES ARE NOT INCONSISTENT.

Q5.

A5.

SO THERE WILL NOT BE A NAVAL BASIN ON THE RECLAMATION? THE PRECISE DETAILS OF THE RECLAMATION HAVE STILL TO BE FINALISED BY THE ADMINISTRATION. BUT CURRENT INDICATIONS ARE THAT IT WOULD BE VERY DIFFICULT TO LOCATE A NAVAL BASIN ON THE

RECLAMATION.

Q6

A6.

WHAT WILL HAPPEN TO THE PRINCE OF WALES BUILDING?

THE BUILDING WILL NOT BE DIRECTLY AFFECTED BY THE RECLAMATION.

Q7. WHAT USE WILL IT BE PUT TO?

A7. NO DECISION HAS YET BEEN MADE NOR FOR THAT MATTER HAS THE PRECISE USE OF OTHER PARTS OF THE RECLAMATION BEEN DECIDED. MAJOR

YYYY

DISTRIBUTION

62

MAIN

59

.HONG KONG AGREEMENT

. (RESTRICTED)

LIMITED

HKD

HD/FED

RESEARCH (FE)

NEWS D

PS/MR MAUDE

PS/LORD BRABAZON

MR GILLMORE

MR MCLAREN

MR MOSS

PUSD

ADDITIONAL

3

MR EDWARDS LEGAL ADV

MR FIFOOT HKD

MR WHOMERSLEY LEGAL ADV

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