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DECIDE. COLES POINTED OUT THAT THE SPEECH ITSELF MADE CLEAR HOW INTERRELATED THE POLITICAL AND ECONOMIC ASPECTS WERE. THE CHINESE REACTION HAD BEEN INTEMPERATE. HE HOPED THE JAPANESE WOULD ENCOURAGE THE CHINESE TO SEEK DIALOGUE RATHER THAN CONFRONTATION OVER THIS ISSUE.
5. SATO EXPRESSED SOME CONCERN AT THE PROBABLE CHINA POLICY OF THE CLINTON ADMINISTRATION. IT WOULD BE IMPORTANT TO GET THEM TO UNDERSTAND THE COMPLEXITY OF MANY ISSUES IN ASIA, AND THE EFFECT ON HONG KONG OF REMOVING MFN STATUS FOR CHINA WOULD BE AN IMPORTANT POINT TO GET ACROSS. HE SAW SCOPE FOR CLOSE COOPERATION BETWEEN JAPAN AND THE UK/HONG KONG. COLES AGREED ON THE IMPORTANCE OF THE ISSUE AND THE NEED TO KEEP IN CLOSE CONTACT. THIS ISSUE WAS LATER RAISED WITH ME BY THE FOREIGN MINISTER WHEN I PAID AN INTRODUCTORY CALL ON 12 NOVEMBER. WATANABE SAID THAT REMOVING MFN STATUS WOULD BE EXTREMELY BAD FOR US/CHINA, FOR HONG KONG AND FOR REFORM POLICIES INSIDE CHINA.
6.
THIS TELEGRAM IS A RE-CONSTITUTED VERSION. THE ORIGINAL HAS VANISHED FROM OUR ELECTRONIC SYSTEMS. MANY APOLOGIES FOR THE DELAY THIS HAS CAUSED.
7. BY WAY OF POSTSCRIPT, HONG KONG WAS INCLUDED AT THE REQUEST OF THE MFA IN THE AGENDA FOR THE UK/JAPAN POLICY PLANNING TALKS HELD IN TOKYO TODAY (20 NOVEMBER). SUZUKI (DIRECTOR-GENERAL, INFORMATION ANALYSIS, RESEARCH AND PLANNING BUREAU) SAID THAT CHINA WAS LESS INTERESTED IN WHO WOULD RUN HONG KONG THAN IN THE POTENTIAL INFLUENCE OF A DEMOCRATIC HONG KONG ON MAINLAND POLITICS. HE THOUGHT THE CHINESE WERE WELL AWARE THAT IN PRACTICE THEY WOULD HAVE MANY WAYS OF INFLUENCING THE COMPOSITION AND POLITICAL TENDENCY OF LEGCO AFTER 1997, EVEN IF THE GOVERNOR'S PROPOSALS WERE IMPLEMENTED. HE THOUGHT THAT CHINA WOULD NOT RISK LOSING THE ECONOMIC CONTRIBUTION OF HONG KONG. JAPAN WAS IN FAVOUR OF PROMOTING DEMOCRACY IN ACCORDANCE WITH THE BASIC LAW. THE PRECISE PROPOSALS FOR THIS WERE A MATTER FOR THE UK AND CHINA RATHER THAN JAPAN, BUT WE HAD JAPAN'S QUIET SYMPATHY.
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