PUS

SPEAKING NOTE: DINNER WITH UK-JAPAN 2000 GROUP

British policy towards Hong Kong, South East Asia and the Far East

For HMG, Hong Kong is the key issue in the region our single

largest commitment there. The key fact - that China "resumes sovereignty of Hong Kong on 1 July 1997. The principles behind the transition are already firmly in place ("one country, two systems").

Acute worry around the time of the Tiananmen massacre. But

the world has changed since 1989. Recent signs that China may be changing too. Liberals making a come-back? What prospect is there

for a reverse take-over in 1997? That if one of the two systems is

endangered, it is Peking rather than Hong Kong? Meanwhile how should

Western governments handle relations with Peking? Criticized by media

for any contact, nevertheless constructive dialogue more likely to

yield long term results. Any alternatives?

Japan has been helpful in support of our Hong Kong/China policy. Reinforces our message in Peking. How can we build on that regional cooperation? How do Japanese see ASEAN developing in trade, security and political terms. What are the consequences for Japan, Europe and other partners.

Among Europeans, Britain has some of the oldest links and the

biggest commercial interests in South-East Asia. How can we ensure

cooperation rather than antagonism and rivalry as we each develop our

relations with the ASEAN countries?

Britain and Japan at the economic top table. Increasing importance of the international economy for international politics

seen after last year's G7 Summit in London, when Mr Gorbachev made an

appearance. vital to support economic reform under Yeltsin. How to develop the G7?

Should Japan be satisfied with a higher profile for the G7? Ever louder talk in Japan of permanent membership of the UN Security Council. But membership not determined by economic strength alone.

Problem that Council membership cannot be opened for just one country however desirable. Other less desirable candidates in the wings.

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