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BACKGROUND

CONFIDENTIAL

References:

A:

Tokyo telno 185.

Houston telno

8

B:

C:

Note of the meeting between Secretary of

State and Mr Waldegrave on 10 July 1990.

Note of meeting on 20 February between

Mr McLaren and Mr Satoh, Director General

of the Information, Analysis, Research and

Planning Bureau at the Japanese Foreign.

Ministry.

D: List of PADS contracts awarded and British

interests.

E.

BTC Hong Kong telegram Otter 184 on PADS

competitors.

International Support

1.

We accept that the Japanese are unable to assist in granting citizenship or residency permits to key Hong Kong people to give them the confidence to remain in the territory (they doubt whether our own scheme will have the

desired effect). However, equally important is the

maintenance of confidence through continued investment and

business opportunities in the territory. The Japanese have

made clear to the Chinese that it is vital that in the lead

up to 1997 Hong Kong maintains business confidence and

continues to attract investment.

2.

The Japanese have said that they will take every

opportunity with the Chinese to make these points and that it is also in China's interest to keep Hong Kong stable and

prosporous. The Japanese have hinted that they might help

to influence the Chinese over PADS.

ALDAEY/4

CONFIDENTIAL

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