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be customary for a return banquet to be given, probably at the Ambassador's residence.

There are two awkward points to be addressed on

which it would be useful to have the Prime Minister's

views.

(i)

Accommodation: the Chinese will certainly expect the Prime Minister, as their guest, to stay in their State Guesthouse, the Diaoyutai. It would undoubtedly cause some offence if we turned this down, and the Chinese may insist; both HM The Queen and the former Prime Minister stayed there during their visits. The Guesthouse is of a perfectly acceptable standard and has ample room for Private Offices and all accompanying staff, but speech there is

not secure; it is also 40 minutes drive from the Embassy and safe communications. alternative is to stay, as the Foreign Secretary did in April, at the Residence - but

the room for private offices etc is very

limited.

The

If the Prime Minister felt strongly that he would prefer the latter we shall put it

to the Chinese.

(ii)

Guard of Honour: The Chinese practice is for Heads of Government to review a guard of honour outside The Great Hall of the People in Tiananmen Square. No western leader has been

to Peking since the 1989 events and, whatever

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