It is in Hong Kong's interests that we should have a cooperative relationship with China over Hong Kong. There is

much work to be done, if we are to achieve a smooth transition.

We, for our part, are ready to get on with that work.

Hope agreement to discuss electoral issues will enable work to

go forward in other areas. Some welcome signs of a slight thaw:

eg. agreement in the Land Commission to release 1993/94 quota.

of land for development; the next JLG meeting now looks likely

in June.

Governor in Washington/MFN

- Mr Patten had useful talks with President Clinton and senior

members of the American administration. He emphasised the importance for Hong Kong of the renewal of China's Most Favoured

Nation trading status.

gedd.call.PR

SLM

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