CONFIDENTIAL PERSONAL

123160 MDTTAN 3797

WISH, EXPRESSED THROUGH ME, FOR A LOW KEY VISIT.

HONG KONG WAS NOT RAISED IN HIS DISCUSSIONS AND HE WAS FAIRLY FIRM IN FENDING OFF THE ATTENTIONS OF THE HONG KONG JOURNALISTS (WHO SEEM TO HAVE GOT VERY LITTLE ABOUT THE VISIT INTO THEIR PAPERS).

5.

AT THE STATE ECONOMIC AND TRADE COMMISSION A DEPUTY DIRECTOR (VICE-MINISTER) TREATED PERCY TO A GOOD, STRONGLY REFORMIST BRIEFING, ON WHICH HE GAVE US A READ-OUT. WE HAD SUGGESTED CERTAIN POSSIBLE LINES OF QUESTIONING ABOUT ECONOMIC POLICY AND ORGANISATIONAL MATTERS, AND HE GOT SOME USEFUL ANSWERS FOR US.

6.

HIS TALK WITH JIANG ENZHU RANGED WIDELY OVER THE INTERNATIONAL SCENE. JIANG PROVIDED NO NEW INSIGHTS INTO CHINESE FOREIGN POLICY (EXCEPT THAT HE SEEMED FAIRLY RELAXED ABOUT THE CONDITIONALITY OF PRESIDENT CLINTON'S RENEWAL OF MFN), BUT PERCY WAS ABLE TO LODGE SOME USEFUL POINTS EG TO PRESS FOR THE CHINESE TO TAKE A MORE ACTIVE ROLE IN CURBING THE NORTH KOREAN NUCLEAR PROGRAMME HE TOLD JIANG THAT HE ACCEPTED THAT CHINESE DEFENCE MODERNISATION WOULD NOT LEAD TO AN EXPANSIONIST CHINESE FOREIGN POLICY BUT ENCOURAGED HIM TO THINK MORE ABOUT THE MEDIUM-TERM HANDLING OF THE GEO-STRATEGIC RELATIONSHIP WITH JAPAN. AT THE END OF THE MEAL PERCY STRESSED THE IMPORTANCE WHICH HE ATTACHED TO THE DEVELOPMENT OF SINO-BRITISH RELATIONS AND EXPRESSED OPTIMISM THAT THINGS WERE NOW BACK ON TRACK: HE TRIED TO IMPRESS ON JIANG WHAT A HEAVY RESPONSIBILITY LAY ON JIANG'S AND MY SHOULDERS AND URGED JIANG TO EXERT HIMSELF TO MAKE A SUCCESS OF OUR TALKS. THERE WAS NO MORE SPECIFIC MENTION OF HONG KONG, EXCEPT IN THE CONTEXT OF A WRY REMARK ABOUT THE ASSIDUITY OF HONG KONG JOURNALISTS. JIANG WAS IN HIS MOST RELAXED AND URBANE FORM (WHAT PERCY CALLED HIS URIAH HEAP STYLE). AS SEPARATELY REPORTED HE GAVE NO HINT OF ANY POLITICAL CLOUDS HANGING OVER SINO-BRITISH TRADE. HE WAS NOT VERY

FORTHCOMING ABOUT LI PENG'S HEALTH.

7.

PERCY TOLD ME THAT HE HAD FELT OBLIGED TO CARRY ON WITH HIS VISIT FOR TWO MAIN REASONS. FIRSTLY, BECAUSE HE WAS A PRIVATE INDIVIDUAL AND DID NOT FEEL THAT HE SHOULD BE OFFICIALLY WARNED OFF

A VISIT CARRIED OUT IN THAT CAPACITY: AND SECONDLY BECAUSE HE WANTED TO DEMONSTRATE THAT HE COULD CARRY OUT SUCH A VISIT WITHOUT CAUSING DIFFICULTIES FOR ANYONE. HE HAD MADE IT CLEAR TO THE CHINESE IN ADVANCE THAT HE WOULD NOT DISCUSS HONG KONG, AND THE

CHINESE HAD RESPECTED HIS WISH.

THE CHINESE MADE NO ARRANGEMENTS AT ALL FOR PERCY'S VISIT, NOT EVEN TO THE EXTENT OF MEETING HIM OR MAKING A CAR AVAILABLE. NIGEL

8.

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