EC/JAPAN SUMMIT AND UK/JAPAN SUMMIT, 4 JULY 1992

Contribution to Steering Brief

Our relations with China are in an unsettled phase as they

await the arrival of Mr Patten. It is now widely known in

the markets that the Chinese are linking resolution of the

airport financing to reassurance on the political issues. The Japanese have in the past been willing to tell the

Chinese of the importance they attach to the maintenance of Hong Kong's existing way of life. This is useful coming

from a major investor in both China and Hong Kong.

JH4ABG/1

SLM

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HiCD Q21/1

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