CONFIDENTIAL

(b)

Although the Chinese grumbled a little about the showing of

the two previous films, they did so in passing and in a low key way.

The decision to allow the second of the previously banned films to be shown was taken after the events of 3/4 June (ie after the

ascendency of the hardliners in Peking). As the Ambassador in

Peking has pointed out (Peking telno 1459), it would be

inconsistent, and would give the wrong signal to Peking, if we were

to ban this one. It would at most be a minor irritant.

(c) Banning the film would provoke a very adverse public

reaction in Hong Kong, particularly given the current mood there.

It would be seen as yielding to pressure from the hardliners in

Pek ing. It would be a further blow to confidence.

Timing

8.

Under the legislation, the Hong Kong Government have to give a response by 14 August. I should be grateful to know if Mr Maude is content with the recommendation, if possible by 10 August.

ARPanc

CONFIDENTIAL

A R Paul

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