TNAG-2707-FCO40-3913-Hong-Kong-political-parties-Cooperative-Resources-Centre-(CR-1993 — Page 18

CONFIDENTIAL

transition. If we had misread China's position, was the CRC

suggesting that we should change that policy?

4.

Selina Chow said that, at their meeting with the Governor

on 6 January, he had suggested that discussions with China

could continue on the basis of the Joint Declaration and the

Basic Law and the 1990 exchanges. The CRC did not understand,

if both sides were saying they could continue on that basis

and the Governor's proposals were flexible, why discussions

were not now taking place. Mr Goodlad confirmed that the 1990

exchanges did not constitute an agreement He could not go

beyond what the Prime Minister had said on the question of

discussions with China. The way was open from our side for

discussions to continue. He was grateful to Mr Lee and his

CRC colleagues for taking the trouble to come to London.

was very helpful to have this very frank discussion in

private. There had always been differences with China in the

past but we had resolved them through cooperation. This remained our policy. (Mr Goodlad handed over a copy of the

Secretary of State's remarks to the press of 19 January)

It

Ps

Distribution

PS/Mr Goodlad

Sir J Coles

Mr Hum

HKD

FED

ck

Mr Bideham, Spécial Advisers

A

record.lee.MORRIS

JEB

CONFIDENTIAL

By Fax:

PS/GH Hong Kong

Mr Cox, Peking