CONFIDENTIAL

CONFIDENTIAL

FM PEKING

TO IMMEDIATE F C O

TELNO 281

OF 210921Z FEBRUARY 90

INFO IMMEDIATE HONG KONG, BUDAPEST, UKREP JLG HONG KONG

165005

MDADAN 6649

HONG KONG PERSONAL FOR GOVERNOR.

YOUR TELNO 395 TO HONG KONG.

HUNGARY/HONG KONG.

IMPORTANCE OF PAYING DUE

1. WE HAVE ALWAYS EMPHASIZED THE ATTENTION TO CHINESE SENSITIVITIES ABOUT THE SOVBLOC PRESENCE IN HONG KONG AND SHOULD CONTINUE TO DO SO. HOWEVER, IF WE CAN SATISFY OURSELVES THAT FOLLOWING THE POLITICAL CHANGES IN HUNGARY, INCLUDING CHANGES IN THE COMPOSITION OF HUNGARIAN OVERSEAS REPRESENTATION, THE CHINESE WOULD HAVE NO LEGITIMATE CAUSE FOR COMPLAINT ON SECURITY GROUNDS, WE DO NOT SEE ANY INSUPERABLE OBSTACLES TO THE OPENING OF A HUNGARIAN TRADE OFFICE.

2. WE HAVE, I HOPE, PASSED THE MOST SENSITIVE PERIOD OF OUR DISCUSSION WITH THE CHINESE ON HONG KONG'S CONSTITUTIONAL DEVELOPMENT. THE CHINESE THEMSELVES HAVE AVOIDED COMMENTING ON THE INTERNAL AFFAIRS OF EASTERN EUROPE. FURTHERMORE THERE WOULD, PRESUMABLY, BE A CONSIDERABLE ADVANTAGE TO HONG KONG IN TERMS OF THE PUBLIC'S CONFIDENCE IN THE SAR'S SEPARATE STATUS IN ATTRACTING AS MANY NEW TRADE AND OTHER OFFICES AS POSSIBLE TO HONG KONG BEFORE 1997.

COATES

YYYY

ADVANCE

HD/HKD

HD/EED

NNNN

DISTRIBUTION

MR GILLMORE

MR MCLAREN

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CONFIDENTIAL

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