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DESKBY 13160OZ
after we know the results of the Fanling meeting). It would be
helpful to know who you think should come up to Peking from Hong
Kong in such circumstances. We shall, incidentally, try to
construct the visit programme in such a way that a return to
Peking after the weekend could be arranged at short notice if
that seemed sensible to clinch a deal.
3. The dilemma spelt out in paragraph 3 of Peking Telno 29 is
one which we have all identified in earlier discussions. We
hope therefore that a general message, exploiting the imminence
of the Secretary of State's visit, will do the trick. Even at
Fanling, you may want to talk in Quote illustrative Unquote
terms of the levels to which Hong Kong might commit itself. If
the bait proves insufficient, we should have to think again, but
it is encouraging that Sir D Ford has the sense that Lu Ping is
willing to go to Fanling.
4.
This still leaves the geustion of whether to retain the
offer to consult (paragraph 2 of FCO Telno 68). The language proposed at 3(b) of Hong Kong Telno 6 to you is unacceptable
because, if the HKG were to give this assurance and fail in
practice to meet the obligation, then the responsibility would clearly pass to HMG. That is not on. The formulation suggested
in Hong Kong Telno 7 to you suffers from leaving the nature of
your assurance ambiguous. So too does the formula in
paragraph 1 of Hong Kong Telno 9 to you. The Chinese could
interpret it as in practice a guarantee, since there would be no
hint that the obligation might not be met. For the purposes of your message, it would be sufficient to adopt the formula
in paragraph 1 of Hong Kong Telno 9 to read Quote
Nevertheless, in recognition of your concern, I would be
prepared to discuss a figure which we would aim to leave in
the fiscal reserves in 1997. Unquote. This should adequately
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