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when the Governor's proposals were put to us in August for comments, we also failed to recall the 1990 exchanges. This was essentially for the same reason. No-one now working on the subject in Hong Kong Department (myself included) was in post at that time. Nor was Mr Hum. We have no comprehensive index of Ministerial exchanges with the Chinese which would have revealed the fact that the 1990 messages covered the Election Committee issue;

in Peking, Sir R McLaren, who was closely involved in 1990, was on leave in August. He saw the Governor's proposals in London in late August, and pointed out that they would be difficult for the Chinese. But he too did not recall that there had been specific exchanges on the

· Election Committee issue;

just before the Governor's visit to Peking, Mr Ehrman researched papers in Government House and found the exchanges. He prepared a defensive line for the Governor on them (although he did not report this to us). The Governor was therefore able to show awareness of the exchanges when Lu Ping raised them.

6.

The second main reason for this collective failure of memory was, I think, that at the time this had been a secondary issue to the much more controversial question of directly elected seats, and had by common consent not produced a conclusive outcome. Lord Wilson was corresponding with us earlier this year in terms which indicated that he still regarded the composition of the Election Committee as an issue to be discussed with the Chinese. The Chinese side as well seem to have lost sight of the 1990 "understanding" We have several reports of Lu Ping discussing earlier this year possible compositions for the Election Committee (we were able to make effective use with the press of these reports). So it looks as if the Chinese only came across the 1990 exchanges shortly before the Governor's visit.

1.

None of this excuses our failure to ensure that the 1990 exchanges were properly considered in developing the Governor's policy. But the fact that this was at the time a secondary issue, and never clearly resolved, goes some way to explaining how the point came to be neglected.

8. I have considered what action should be taken to ensure that such lapses do not happen again. This episode has shown that we need a comprehensive compendium of agreements and key Ministerial exchanges on Hong Kong with the Chinese since 1984. Hong Kong are now assembling that, and RAD here will check it carefully when we receive it. In addition, RAD are

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