CONFIDENTIAL

he had held a meeting of his China Policy Group on 3 December to develop thinking on a strategy for the next three months. There would be a further meeting next week. (In a subsequent conversation with me the Governor added that he hoped that ideas would be taking shape by the time of my visit to Hong Kong at the end of next week, that these could be worked out further while I was there, and could then be put to

Ministers here for reflection over Christmas. He did not

think that anything much could be done in a shorter timescale than that);

opinion in Westminster and the British media seemed to be holding up well.

3.

The Minister confirmed that there was no cooling of feet

at this end. He himself had not been lobbied particularly hard so far by the British business community. He would be recording an interview for BBC World Service Radio later in the day and would aim to put out a steadying message. The Secretary of State had said to him that we should "batten down

the hatches".

4. No operational points for action arose. The Governor plans to call the Minister again on 4 December. His main point in calling seems to have been to check that nerves.

remained steady at this end.

дим

PF Ricketts

governorcall.FUT.kr

CONFIDENTIAL

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