3.

CHINA RELATED

RELATIONS WITH CHINA

Want a businesslike and effective working relationship

with China. Need to overcome the misunderstanding and mistrust that have bedevilled the relationship.

RATE OF PROGRESS OF JLG

We still want to see a faster rate of progress in the Sino-British Joint Liaison Group. I raised this when I met

the Chinese Foreign Minister last March. Nevertheless the

JLG has made some good progress and has reached important

agreements on, for example, Hong Kong's participation in the

GATT and the application to Hong Kong of International Labour Organisation Conventions.

AIR SERVICE AGREEMENTS (ASAs)

- There has been some delay recently in the progress of

formally separating Hong Kong's ASAS from those of the UK,

but we are confident that this problem can be resolved. We

have recently made proposals to the Chinese, which we hope will enable the process to resume.

DEFENCE LANDS

-

Negotiations are taking place with the Chinese on Defence

Lands in the Joint Liaison Group. Details must remain

confidential. The Chinese are aware that land is a valuable

commodity in Hong Kong and that some of the land previously used for military purposes must be made free for

redevelopment.

KS1ADZ/8

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