CONFIDENTIAL

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MDLOAN 101

BACKGROUND FOR YOUR INFORMATION

7. THIS SUBSTANTIVE PROGRESS ON SPECIFIC HONG KONG POINTS WAS WELCOME, PARTICULARLY THE TOP-LEVEL COMMITMENT TO SPEEDING UP THE WORK OF THE JLG AND THE AGREEMENT ON THE COURT OF FINAL APPEAL.

8.

THE POSITIVE ATMOSPHERE OF THE DISCUSSIONS SHOULD FEED THROUGH INTO FUTURE HONG KONG BUSINESS AND MAY MAKE FOR A MORE CONSTRUCTIVE CHINESE CONTRIBUTION THAN WE HAVE SEEN SINCE 1989. BUT SOME IMPORTANT UNDERLYING DIFFERENCES REMAIN, AND THE INEFFICIENCY OF THE CHINESE BUREACRACY REMAINS A PRACTICAL OBSTACLE.

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457

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KINGSTON NASSAU

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