CONFIDENTIAL

CALL ON LORD CAITHNESS BY MME AVICE, 6 DECEMBER

HONG KONG

Points to Make

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Conscious that our ability to cooperate effectively with China over implementation of Joint Declaration is crucial to

Hong Kong's future.

- Visit of Mr Maude to Peking in July and visit last month

of Deputy Foreign Minister, Mr Tian Zengpei, was important

step in process of establishing a better working relationship with China over Hong Kong. Although there were no major breakthroughs, atmosphere during Tian's visit was

good. I had over four hours of talks. Now a question of

how to translate good will into concrete results.

For example, we would welcome expression of support from

Chinese Government for PADS. In view of scale and

importance of this project, natural that Chinese should be

taking a close interest; their experts have been given a detailed explanation of what is proposed. Am sure that after further study, they will realise that, far from being

a burden on the future Hong Kong Government, airport and

associated development will be valuable asset that will hold

Hong Kong in good stead well into next century.

- Welcome interest shown by some French firms in PADS. International business community can make important contribution to confidence by continuing to invest in Hong

Kong.

Mood in Hong Kong now much calmer and more realistic than

it was a year ago.

General determination to make a success

ASHAFB/1

CONFIDENTIAL

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