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situation in Hong Kong, in particular, the rise of an increasingly sophisticated middle-class which was demanding greater potential involvement, and the recognition of a need

for a change in approach in dealing with China. Mr Patten had

the firm support of British Ministers. There was also firm

support in Hong Kong for the spirit of Mr Patten's proposals.

Legco could probably be expected to endorse any understanding

which we were able to reach with the Chinese.

12. Dr Zeller said that Hong Kong was not generally an issue in Sino-German relations although Germany had on occasion

spoken quietly to the Chinese about the need to preserve the system there. Mr Hum emphasized that UK policy of "quiet internationalisation" of the Hong Kong question was centred on

encouraging others to emphasise to Peking their own national commercial interests in the territory. Dr Zeller acknowledged that former Governor Wilson had stoked up a good deal of

interest in Hong Kong among German business and political

circles.

EC/China

13. Mr Davies mentioned UK concern that China seemed

increasingly prone to using discriminatory commercial policies

to political ends, as in retaliation over French aircraft sales to Taiwan, and threats to take similar action against the UK

over Hong Kong. (The Germans confirmed however that there had

been no talk of retaliation over their earlier rumoured arms

sales to Taiwan which Dr Zeller felt would not be on the

agenda again). The UK had asked the Commission to raise this

informally in the margins of the forthcoming EC/China trade

talks. The flaw in the argument might be, of course, the EC's post-Tiananmen measures against China.

ECcooptalks2004

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