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Chinese indicated at an earlier stage that we could do this. We

should try to oblige them to deliver on this.

4. As Sir R McLaren suggests, I think we all agree that there is no question of us moving to the stage of compromise proposals until the Chinese have put their ideas on the table, and there

would be no point in a visit by the Secretary of State before

the Chinese had done this. But if we wait until we see whether

the Chinese move at the sixth round it could be too late to set

up a visit. I believe that Sir R McLaren's proposal that he

take informal soundings (as it were on his own initiative),

stands the best chance of making clear that such a visit would be conditional on progress, without provoking the wrong response

from the Chinese.

5.

There is some risk that the Chinese may connect an approach

by Sir R McLaren with recent press reports of the OPD (K) meeting

on 1 July, and conclude that a visit would bring concessions.

This thought may encourage them to sit tight until 9 July. But

without an approach we could not be sure of keeping open the

option of a visit. On balance I think we must bear the risk.

6.

It also makes sense to try to fit in a seventh round of

talks between the OPD (K) meeting and 9 July. This would be

valuable whether or not we make progress at the sixth round.

7.

There has already been some press speculation that the

OPD (K) meeting may be preparing for compromises. But we have briefed the press to avoid this conclusion, recalling the note

of impatience in the Secretary of State's PQ reply of 10 June,

and the majority of press reports reflect this line. There will

be further opportunities to doctor the spin as necessary.

Then

J C Morris

poss.vis.JM

SLM

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