CONFIDENTIAL

060477 MDHIA 3365

NOTEWORTHY THAT EVEN AT A VERY BAD TIME THEY CONTINUED TO COOPERATE OVER BLACK POINT, BECAUSE CLP HAVE AN ESPECIALLY GOOD RELATIONSHIP WITH THEM. IN THE CASE OF THE WENT, THEY MAY EVENTUALLY BAULK AT THE IDEA OF PRECIPITATING A REFUSE CRISIS FOR WHICH THEY WOULD CLEARLY SEEN TO BE RESPONSIBLE, PARTICULARLY AFTER THEY HAVE CONSTANTLY SAID PUBLICLY THAT THEY WOULD COOPERATE ON FRANCHISES IF THE BRITISH SIDE ADOPTED A COOPERATIVE POLICY.

NEVERTHELESS SANITY HAS NOT ALWAYS PREVAILED IN THE PAST, AND WE SHOULD CERTAINLY BE PREPARED WITH CONTINGENCY PLANS FOR CHINESE NON-COOPERATION.

6.

OTHER JLG BUSINESS WILL CERTAINLY REMAIN AT A STANDSTILL IN THE FORESEEABLE FUTURE, INCLUDING DEFENCE LANDS AND THE VARIOUS TECHNICAL AREAS INVOLVING LEGAL AND INTERNATIONAL TREATY WORK.

7.

IT IS ALMOST CERTAIN THAT THERE WILL BE NO SOLUTION TO THE

AIRPORT FINANCING PROBLEM IN THESE CIRCUMSTANCES. HKG HAVE SET OUT IN THEIR TELNOS 340 AND 395 THE LIKELY CONSEQUENCES.

8.

GALSWORTHY

YYYY

DISTRIBUTION

71

ΜΑΙΝ

65

.HK POLICY

HKD

PUSD

FED

LEGAL ADVISERS//MS BARRETT

LEGAL ADVISERS//MISS BROOKS LEGAL ADVISERS//MR GILES

NEWS D

NTCD

PLANNERS

RAD

PS

PS/MR GOODLAD

SIR J COLES

MR HUM

ADDITIONAL

6

CAOFF//SIR R BRAITHWAITE (DIO)

CAOFF//MISS NEVILLE-JONES

PS NO 10.

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