CONFIDENTIAL

recent weeks has been the tendency of the Chinese authorities to

lash out in anger at Hong Kong for what they see as undue

interference in Chinese internal affairs. It is clear, as the

Governor rightly points out, that Hong Kong's continuing active

involvement in the democracy movement in China risks provoking a hostile reponse from the PRC. There would be great peril for Hong Kong in such a course. We must hope that wiser counsel will

prevail.

4.

Finally, it is worth noting the Governor's observation that

from now on, more than ever, Hong Kong must stand on its own feet.

But he is surely right to stress that Hong Kong will continue to

depend on the help and support of HMG. I see profound dangers for

both Hong Kong and Britain, should that commitment be seen to weaken

between now and 1997, or should our formal links with the territory diminish in the crucial transition period.

him

5. I shall be writing to the Governor to thank him formally for

his despatch, and to let you have our comments on it, after his (and

my) return from leave in September.

CONFIDENTIAL

AR Park

A R Paul

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