Mr MOL

MyLaren

M. Exwary

Many thanks. I entirely

agree

wilk

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CONFIDENTIAL

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$40/340/18.

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From:

fru

Date:

DM Edwards

Legal Advisers

27 November 1989

Mr Paul, HKD

Mr Morris, HKD

> My Moni

6 su

Enteropa U

CC:

30/11

See

title

File for

· Papes at front. 1. Thank you for your note on my minute of 12 May (attached). while minte. I take all three of your points. The problem is, however, that the Chinese may choose to argue that:

2.

(a)

(b)

(c)

The JD, its annexes and the Memoranda constitute

a package (whatever the source of the individual bits and pieces) upon which both sides relied when they signed up;

it is not possible for one side to change the rules of the game in relation to any part of the package;

Ja

for us now to give a right of abode to some or all of those people identified in our Memorandum is not consistent with the package and (contra our argument that we are trying to maintain confidence

para 3 of your note), we are, by giving people a way out, destroying it. Our argument is a question of judgment, of course. But so would theirs be.

We have a reasonably good case here and we must deploy it to the best of our ability in the OD paper. But I think it important to try to forecast what the Chinese may seek to argue and to understand that theirs is not a bad argument, and holds out some real problems for us. If things were otherwise, we would not be contemplating acting in this way, inconsistent as it is with what we said in our Memorandum.

D M Edwards

CONFIDENTIAL

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