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RESTRICTED

We recognise that this is an important matter and the Foreign Secretary and Lord Caithness are taking a close interest in developments.

We are not aware of any issues relating to Cable & Wireless's interests in China that Lord Young might raise. They have a substantial network of telecommunications joint ventures and projects

particularly in South China, including the Shenzhen Special Economic Zone telephone system, Canton-Hong Kong telecommunications links, and shared interests in

telecommunications satellite operations.

RESTRICTED

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