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How it was related to the rule of law;

How we had developed our proposals since last October.

ACTION HKD to draft in collaboration with HKG.

It was agreed that we would consider in the light of the 9th Round (and possibly the 10th) whether the Secretary of State might need to send another message to Qian Qichen. We should ask the JIC to produce monthly assessments from September to

December on how developments in China were likely to affect

the outcome of the talks. Private consultations scheduled for

October with the US, France and Japan would be a good opportunity to exchange views.

APEC meeting in Seattle

7.

The Governor confirmed that HKG had decided some time ago that an official should attend, probably the Financial

Secretary.

If it was portrayed as a "Heads of State" meeting, he thought China's position was not unacceptable. The problem was that the Americans had handled it so badly publicly that it was difficult for Hong Kong to bow out gracefully without appearing to kowtow. It was agreed that the Embassy in

Washington should contact the State Department in August to

put down a marker requesting plenty of notice before

invitations were issued, so that we could ensure that Hong

Kong's attendance at official level could be presented in the

most favourable light.

Garrison Withdrawal

8. The Governor thought the announcement had been handled

very well (until CBF had revealed that the PLA would occupy

HMs Tamar in 1997). The only problem ahead would be handling

the first spending bid to LegCo after withdrawal. This would

not show the first savings and might need massaging with the

MOD.

recordgov.29.MORRIS

JEB

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