BACKGROUND

CONFIDENTIAL

Hong Kong

1. The Secretary of State has invited Sir Edward Heath to

call on the eve of his visit to Hong Kong and China, 21

-

September 2 October (draft programme attached). He will be staying with the Governor in Hong Kong. The Chinese see him

as an "old friend of China". They may also be particularly keen to show that this visit is a success. because they will

not have relished Lady Thatcher's recent visit to Taiwan and her public enthusiasm about Taiwan's success-story. He is likely to see senior figures in China, certainly Li Peng and Jiang Zemin and conceivably Deng Xiaoping.

2.

We do not wish Sir Edward to carry any specific messages to the Chinese. But it would be helpful if he could play his part in trying to ensure that the Chinese both recognise the importance of establishing a good relationship with the

Governor and give his proposals on constitutional development

as fair a wind as possible. The Governor will be making his LegCo speech on 7 October. The Governor will spend some time with Sir E Heath during his visit to Hong Kong so there is no need for the Secretary of State to go into details eg of the difficulties with the Chinese over the Airport financing proposals.

heath.steer/VISITBRIEF/rb

CONFIDENTIAL

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