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BRITISH EMBASSY

No 1 Ichiban-Cho Chiyoda-ku Tokyo

Telex J22755 (A/B PRODROME) Telephone 265-5511

x, y l

John Morris Esq

Hong Kong Dept FCO

Dear John

HKD 0211

DESK

INDE

021/3

29 JUL 1991

INTERNATIONAL SUPPORT: CANADA/HONG KONG

1.

Your reference

Our reference

Date

3

16 July 1991

urland Wast

Mr. Jox or. in 29/in His Major o.r.

Mr Hegre. My noted

C der

2

x, y + z look

promising. We should respond (after consulting HK) to para A.

Thank you for sight of the Canadian paper on confidence-building measures for Hong Kong. (FCO telno 312 to Ottawa refers).

As you rightly note, the Japanese are already fully behind our efforts to underpin confidence in the territory (reaffirmed, we note, at Mr. Kaifu's recent bilateral with the Prime Minister) and we have not as yet drawn on Canadian ideas in seeking to carry our dialogue further.

2. At first glance, there does not seem to be much on the Canadian 'menu' that we could reasonably expect the Japanese also to offer. As you will know from our reporting at the time of our right of abode package, there is no enthusiasm here for allowing Hong Kong citizens to enter Japan, for example. Much more important

to us seems to be the potential political influence that Tokyo is prepared to use direct with Peking.

I

3. On the other hand, if there is anything specific that you would like us to explore we would be very happy to do so. Two things that struck us were foreign investment protection and an economic and trade agreement. We do not know any of the details of either but given Japan's economic importance there may be something here. note also the reference to cooperation on drug enforcement. At present, legislation which would enable Japanese international cooperation to be extended is before the Diet and will be passed z (probably) early next year: again we wonder whether there would be

benefit in a bilateral Japan/Hong Kong arrangement?

4. Please let us know if these or other ideas may be worth pursuing.

Yours

Dand Powell

DH Powell Chancery

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