CONFIDENTIAL Covering SECRET

8. One awkwardness of timing is that we would be leaving things very late if we took no action on a visit by the Secretary of State to Peking on 9 July until OPD (K) on 1 July. As proposed, we should therefore review this option in mid-June after the Fifth Round. If Ministers judged that such a visit was likely to be useful, we would need to take some preliminary soundings of Qian at that stage, leaving a final decision until OPD (K).

9. A possible sequence of events is therefore as follows. We would establish in mid June Qian's availability on 9 July. OPD (K) would be invited to consider whether we should offer some carefully calibrated changes to the Governor's proposals. If it was agreed that we should, the Secretary of State's visit would be the occasion to unveil our offer and launch a new phase of negotiation aimed at reaching an early agreement. The negotiators would then tackle the detail. If, on the other hand, OPD (K) judged that the time was not right to move 'forward in this way, the Secretary of State's visit would be an opportunity to put Qian on notice that our patience was running out and that negotiations risked losing all momentum unless the Chinese side gave us their views.

PF Ricketts

hum4.6strategy

CONFIDENTIAL Covering SECRET

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