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agreement.
As a result of Douglas Hurd's meeting with Qian, and the
Governor's address to LegCo, the Chinese side will now also
have a clearer sense that time is running out for these
talks. This may bring them to negotiate more seriously.
With the thirteenth round still going on in Peking, there is
not much point in speculating about the outcome. There will
clearly be some important decisions to be taken in the weeks
ahead, and we will attach great importance to your advice.
Thought it might be useful this morning to lift our sights
from the immediate issues and look briefly at wider trends
in Asia which affect Hong Kong.
You may have seen reports that the Prime Minister made a major speech in Tokyo last month. He said there that Asia would have a new place in Britain's national priorities.
This is not a just a slogan. The speech represented the
culmination of a lot of work inside the FCO which brought
out that a fundamental shift is taking place in the balance of global forces in the direction of Asia.
It is most apparent in Asia's spectacular economic growth.
You do not need me to tell you that Hong Kong and China are
at the forefront of this. Many of you are more expert than me on the Chinese economy. But for what it is worth, our
assessment is that Zhu Rongji's measures are having some
success in re-gaining control of the economy. Industrial
growth rates are dropping. Inflation is levelling off
(though it remains high at 22% in the main cities).
Economic policy, like everything else, could be affected by
a struggle for succession in the leadership. But for now,
the 'soft landing' looks feasible.
In any case the message about Chinese economic prospects has
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