TNAG-1462-FCO40-1988-Visits-by-Chinese-officials-to-the-UK--including-visit-by-Hu-1986 — Page 53

CONFIDENTIAL

(Background: Around 1200 Chinese students in Britain. Sir Y K Pao's

scholarship scheme will make major additional contribution.

Over

ten years, we will contribute equivalent of US$10m on basis of

£700,000 pa Sir Y K and private sector friends US$20m, Chinese

US$20m. Now discussing with Chinese and Sir Y K a memorandum to

formalize the scheme).

Claims

5. Given excellence of bilateral relations, anachronistic that

claims remain unresolved. Hope for rapid progress at talks in

Peking in May. Should make the the problem to be

1988. Icco mestowed difficulty it accem to

seltted

(Background: First round of formal negotiations on our claims

and Chinese counterclaims in Peking from 5-6 May. Will be

difficult. Our total claim £480m; Chinese exclude 80% on principle;

and counterclaim £100m.)

Hong Kong

handon capital. market if clans

not sellläd

6. Pleased at arrangements now agreed for Hong Kong to be

separate contacting party to the GATT.

7. (Defensive: Nationality). Considered all representations carefully. Government's decision taken in the light of these. Believe the right one in the circumstances.

CONFIDENTIAL