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Committees investigating issues which were unwelcome to us.

They

have reconnonded that a hatte- proach might be to provide a 1. ster

setting out the UK approach, supplemented by an informal

off-the-record briefing of the Committee by a UK official outside

the formal hearing.

HONG KONG/CHINA RELATIONS

The

5. Chinese public accusations about subversion and

internationalisation have died down. But the Chinese remain deeply

suspicious about our motives over Hong Kong. They still believe we

are seeking to force concessions on China following the Tianenmon

Square incident, by playing the "public opinion card" and that we

are plotting to maintain our influence in Hong Kong after 1997.

visits by Sir Percy Cradock and the Governor to Peking have

re-engaged the Chinese in serious discussion of Hong Kong issues.

But they also continue to have recourse to "megaphone diplomacy".

The latests blasts have been about our assurances scheme and the

Basic Law. On the former, they strongly denounced the scheme on

30 December as a violation of the Joint Declaration and a

destabilising influence on Hong Kong. These accusations were

repeated at a meeting of the BLDC Sub-group on 17-20 January.

introduction of nationality restrictions on Legislative Council

members at this meeting is clearly one of the threatened

"corresponding measures" in reaction to our scheme. Also, at the Sub-Group meeting, Chinese drafters spoke of having made concessions: it was now up to the British to make some concessions.

The

6. The next meeting of the Joint Liaison Group takes place on

24-27 April in Peking. The last meeting in December in Hong Kong

showed some signs of a return to normal business: agreement was

reached on some minor JLG matters. We have tried to keep up the

momentum of JLG work through our offices in Hong Kong. However, the

success otherwise of JLG XV will essentially depend on the wider

political relationship and, in particular, the outcome on

constitutional development.

MAXAEW (5)

CONFIDENTIAL

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