SECRET
FM PEKING
SECRET
(TELNO SUBJECT TO CORRECTION)
TO DESKBY 131200Z F C O
TELNO 29
OF 131039Z MARCH 91
INFO IMMEDIATE HONG KONG
157635
MDHIAN 7780
PERSONAL FOR BURNS, A USS FROM COATES.
HKD PLEASE TRANSMIT URGENTLY TO GOVERNOR.
YOUR TELNOS 67 AND 68. PADS: THE WAY FORWARD.
1.
THE FOLLOWING REPRESENTS THE CONSENSUS VIEWS OF HEAD UKREP JLG, POLITICAL ADVISER, HEAD OF HONG KONG DEPARTMENT AND MYSELF.
2. WE THINK THAT EVERY EFFORT SHOULD BE MADE TO TIE UP THE DETAILS OF AN AGREEMENT BEFORE THE SECRETARY OF STATE'S VISIT OR, FAILING THAT, THROUGH PARALLEL TALKS WHICH COULD TAKE PLACE DURING IT, CF THE NEGOTIATIONS DURING SIR G. HOWE'S TWO VISITS IN 1984. THIS WOULD OF COURSE MEAN TAKING THE NECESSARY PERSONNEL FROM HONG KONG TO PEKING. THE PRESSURE WILL BE ON THE CHINESE BETWEEN NOW AND THE END OF THE VISIT TO REACH A DEAL. THEREAFTER OUR LEVERAGE WILL BE SERIOUSLY DIMINISHED. FURTHER EXPERT TALKS COULD THEN BE VERY DIFFICULT, AND IF THE IMPORTANT DETAILS ARE NOT ALREADY COMPLETELY TIED UP THEY COULD EASILY UNRAVEL.
3.
WE NOTE MINISTERS' VIEWS THAT THE MESSAGE TO LU PING SHOULD BE CAST IN MORE GENERAL TERMS. EARLIER DRAFTS HAVE BEEN PREDICATED ON THE NEED TO GIVE LU PING A SUFFICIENTLY ATTRACTIVE BAIT TO PERSUADE HIM TO COME TO HONG KONG FOR FURTHER TALKS. BUT NOW THAT THE SECRETARY OF STATE'S VISIT HAS BEEN PUT TO THE CHINESE, THE LINE IN PARA 2 OF FIRST TUR MAY IN ITSELF BE ENOUGH. THERE IS ALSO THE DIFFICULTY IN PUTTING A DEFINITE FIGURE FOR THE 1997 FISCAL RESERVES IN A MESSAGE. IF PITCHED TOO LOW, IT RUNS THE RISK OF OUTRIGHT REJECTION AND A REFUSAL TO TALK ON THAT BASIS. IF PITCHED AT OR NEAR THE LIMIT TO WHICH HONG KONG CAN GO, THE SUBSEQUENT NEGOTIATION WOULD BE HARD.
THE CHINESE WILL CERTAINLY SEE ANY FIGURE AS AN OPENING BID. LU PING MAY OF COURSE ASK FOR A SPECIFIC FIGURE BEFORE COMMITTING HIMSELF TO TALKS AND WE WOULD THEN NEED TO RECONSIDER. BUT WE
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