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welcomed.

Most leaders of Hong Kong opinion want Britain

both to stand up for them with Peking and to work for a smooth cooperative relationship: in their eyes we rarely

get the right balance between these objectives. There remains much suspicion that Britain has its own agenda, ie a bilateral interest in good relations with

China, irrespective of Hong Kong concerns. There are

also doubts about Hong Kong Government (HKG) and Foreign

Office competence in handling Peking.

Some people feel that the Airport MoU compromises Hong Kong's autonomy and gives Peking too much say in a Hong Kong project. More regret that the MoU is a London/Peking deal and that there was little visible Hong

Kong involvement in the final stages of the negotiation. But the general mood, if not euphoric, is one of

considerable satisfaction with the MOU and with the boost

it has given to confidence. For ease of reference I

enclose copies of the airport briefing prepared for the visit to Peking (Annex E).

Against this background and as opportunities present

themselves, the Prime Minister may wish:

to make clear that Hong Kong was the central reason

for his visit to Peking and is at the heart of

Sino-British relations;

to point out that some in Britain have criticised

his decision to go to Peking, two years after Tiananmen,

but that he understood most people in Hong Kong thought him right to do so, to work for their future and the

success of the Joint Declaration;

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