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3.

Li had asked Mueller about US policy towards Hong Kong and in particular whether the US was hand-in-glove with the British. Mueller said that the US had large interests in

It believed that the Hong Kong which it wanted to protect. maintenance of the rule of law was crucial for Hong Kong's economic well-being. The US supported the development of democracy around the world including in Hong Kong and was

It was not however supportive of the Governor's proposals. involved in any way in the bilateral negotiations between China and Britain. Li claimed that there was a perception in China that the US was involved. There were a number of reasons for this, such as the Governor's visit to Washington just before he announced his proposals and the Hong Kong Policy Act in Congress. Lee Kwan Yew's remarks about the US and Britain ganging up on China had also been taken seriously, given his knowledge of both countries.

4.

He

On the through train Li Chuwen told Mueller that the Chinese could never allow Emily Lau to serve in Legco after 1997 because she had called for independence for Hong Kong. asked whether it would really be so bad if three or four people did not ride the through train.. Mueller said that three or four might be a small number but the principle involved was a large one. Li Chuwen indicated to Mueller that he was in close touch with Zhu Rongji, and also in touch with Jiang Zemin and Qiao Shi.

5.

The Japanese told me that Hosakawa had raised Hong Kong with Jiang Zemin in Seattle and we have seen reports

I was told that Hosakawa told of that from London and Tokyo.

Jiang that Japan hoped that China and Britain would reach agreement. Japan believed that satisfactory solution of the issue was important for the world economy.

The Japanese

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