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MESSAGE FROM MR LYNE TO HERR BITTERLICH

1. I know that the Governor of Hong Kong, Chris Patten, has written to the Chancellor about the situation in Hong Kong,

and that Nigel Broomfield has discussed with you the sort of

points which it would be helpful for the Chancellor to get

across to his Chinese hosts on the Hong Kong problem.

2. I thought that you might also find it useful to have a

personal account of the conclusions reached at a review of our

strategy in the talks which the Prime Minister held here with

Chris Patten and Douglas Hurd earlier this week.

3. The background is that there have recently been some signs of movement in our difficult and complex negotiations with the Chinese Government about electoral arrangements in Hong Kong. In particular, the prospect has opened up that we may be able

to reach an interim agreement in the next few weeks dealing

with the more urgenic issues. The Prime Minister's mecting

concluded that we should now move on to a more intensive phase

of the negotiations and as a first priority try to reach an interim agreement by early December. It was agreed that if we

could achieve that, it would give us a little more time (but

not much) to concentrate on the more difficult issues. The

gap here remains wide, and we would need a great deal more

flexibility from the Chinese side if we are to reach an

agreement.

4. We are frankly not yet clear whether the Chinese leadership are willing to accept election arrangements which

are open, fair and not subject to manipulation from Peking.

It was agreed that this should remain our objective and that

while we should try hard to reach agreement, it would not be

in Hong Kong's interest to settle for a deal at any price.

The Governor's letter explains the crucial importance of a credible legislature in upholding the rule of law in Hong

Kong.

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