25 JAN '93 13:29 M & CO 3 LOMBARD ST.
P.4/5
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The crucial judgement is whether the tougher American approach will work. If the Administration can avoid putting the Chinese on the spot too publicly, they may well extract some useful concessions. It is therefore important for both Hong Kong and the UK to avoid appearing as a wet blanket on American efforts. Instead of trying to stop them doing anything - which is doomed to failure - we should concentrate on steering them towards conditions/demands which are selective and gradual, and pursued in a conciliatory rather than a hectoring manner.
W
CHARLES POWELL
25 January 1993
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