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THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT UNDER

SECTION 3 (4) OF THE

PUBLIC RECORDS ACT 1958

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MDHIAN 4272)

FEARED THAT DISCRIMINATION WOULD BE EXTENDED TO THEM (INDEED THERE WAS SOME EVIDENCE THAT THEY WERE DISCRIMINATED AGAINST IN THE AWARD OF NEW BANKING LICENSES IN GUANGDONG IN EARLY DECEMBER). THERE THUS SEEMED A REAL LIKELIHOOD OF A GENERAL CAMPAIGN OF DISCRIMINATION AGAINST BRITISH FIRMS.

- THERE WERE STRONG RUMOURS THAT THE CHINESE WOULD ANNOUNCE THE

EXPANSION OF THE SHENZHEN AIRPORT AT HAUNGTIAN TO SERVE AS HONG KONG'S FUTURE AIRPORT AFTER 1997.

FROM THE WAY IN WHICH THE CHINESE URGED CHINA LIGHT AND POWER TO APPLY QUICKLY FOR A SUPPLEMENTARY LAND GRANT FOR THEIR BLACK POINT PROJECT, THERE WAS REASON TO BELIEVE THAT SOME AT LEAST ON THE CHINESE SIDE WERE PLANNING TO CEASE COOPERATION THEREAFTER IN THE LAND COMMISSION, DESPITE THE TERMS OF ANNEX III OF THE JOINT DECLARATION.

TS LO WAS SAYING

IN HONG KONG, THAT SOME ON THE CHINESE SIDE CONSIDERING SUSPENSION OF COOPERATION ON THE RECEPTION OF ILLEGAL IMMIGRANTS, ON THE SUPPLY OF WATER AND ON CRIMINAL MATTERS.

THERE WERE FREQUENT REPORTS THAT THE CHINESE, AND DENG XIAOPING IN PARTICULAR, SAW MY PROPOSALS AS PART OF A WESTERN CONSPIRACY AGAINST CHINA.

3. THE MESSAGE SINCE 23 DECEMBER HAS BEEN MODERATED:

-

THE CHINESE HAVE SAID THAT THEY WILL STICK BY THE JOINT DECLARATION AND THE BASIC LAW WHATEVER THE BRITISH DO.

A SEPARATE STOVE HAS BEEN DEFINED IN TERMS OF THE ESTABLISHMENT OF THE FIRST GOVERNMENT AND FIRST LEGISLATURE OF THE SAR. LU PING OMITTED TO INCLUDE THE JUDICIARY IN HIS TVB INTERVIEW.

- THE CHINESE HAVE SAID THAT THEY WILL NOT ADVANCE THE

ESTABLISHMENT OF THE PREPARATORY COMMITTEE FROM 1996, NOR WILL THEY SET UP A SHADOW GOVERNMENT OR SECOND CENTRE OF POWER.

THEY ARE PREPARED TO ESTABLISH AN ADVISORY COMMITTEE BUT ITS FUNCTIONS AND THE TIMING OF ITS ESTABLISHMENT ARE UNCLEAR.

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