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could note that we hope for good practical results from

the next JLG meeting in London from 24-26 September.

If questioned by non-ExCo members on specific items of JLG business, the Prime Minister could say that JLG

business is always confidential but add a few remarks:

Court of Final Appeal. Raised this in Peking. Hope

for early progress. No question of compromising principle of judicial independence;

Defence Lands. Also raised this complex subject. Hope for faster progress now. Not helpful to discuss

publicly yet;

-

Air Services Agreements.

Rather a slow process:

need to press on;

British Consulate-General.

Continuing discussions

with HKG and Chinese: should be easy to settle. We

intend to build a fitting Consulate-General, which will

mark our confidence in Hong Kong's continuing success

after 1997. (Note: the choice of the Colvin House site

has leaked in the press but is little-known.)

Hong Kong Government

Some erosion of HKG credibility and morale was no

doubt always likely in the approach to 1997. Since 1989

the effect has increased because of negative developments

in China and in Sino-British relations, Chinese

propaganda campaigns and the long deadlock over the

airport.

Not all British politicians or businessmen take

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