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opened the way to a more cooperative relationship with China over Hong Kong between now and 1997.

This new atmosphere already bearing fruit: meeting of

Sino-British Joint Liaison Group in London (24-26 September)

held in productive and workmanlike atmosphere. Agreed on Court of Final Appeal and a number of other technical

issues.

(In margins)

Pleased that a range of Commonwealth and other countries are taking steps to help maintain confidence in Hong Kong.

Grateful for anything you can do to help ensure/promote Hong Kong's future as international centre of trade and

finance.

ELECTIONS TO THE HONG KONG LEGISLATIVE COUNCIL (Defensive)

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Congratulate Hong Kong on successful organisation of

recent LegCo elections (12 and 15 September). Important step on road to greater democracy in Hong Kong. For first

time a majority of members are elected (18 directly, 21

indirectly).

We have two aims: steady development of more

representative government in Hong Kong; and that it should

be sustainable.

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These two aims need to go together.

(If pressed) It remains our policy to persuade the Chinese to accept a faster pace of democratisation in line with Hong Kong opinion. Need to discuss whole issue with new

Legislative Council.

POPAKK/2

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