Source: Xinhua news agency, Beijing, in English 1425 gmt 9 Jan 96

China's foreign minister and British Foreign Secretary Malcolm Rifkind have held a wide-ranging discussion covering bilateral relations, trade ties, Taiwan, Tibet and the reversion of Hong Kong to Chinese control. The following is the text of the report, as carried by Xinhua news agency:

Beijing, 9th December: Chinese Vice-Premier and Foreign Minister Qian Qichen said here today that China has always attached importance to its relations with Britain. China hopes to see that China and Britain increase cooperation in the international arena and in bilateral relations, Qian said in his talks with British Foreign Secretary Malcolm Rifkind. Extending a welcome to Rifkind, Qian said he hopes the current visit would help promote the cooperation between China and Britain in various areas, particularly on the Hong Kong issue.

Rifkind said he was happy to have the opportunity to confer with Qian, saying that bilateral relations can move forward on the basis of Qian's visit to Britain last October.

Qian commented that China and Britain, both permanent members of the UN Security Council, shoulder the responsibilities of maintaining world peace and promoting economic growth.

He said that bilateral relations have seen progress since he visited Britain last October. "The exchange of important visits between China and Britain has been scheduled for this year and the contacts between the armed forces of the two countries are going on," Qian said, adding that he hopes these would help further improve and develop bilateral relations.

The talks were held at the Diaoyutai State Guest House.

Rifkind said that establishing long-term relations with China is a strategic approach of the British government. Britain is willing to develop relations with China in all areas and is willing to push for developing partner ties between the European Union and China.

Speaking on economic and trade ties, Qian said that Britain is an important trading partner of China's and bilateral trade has been increasing yearly. He added that Britain has the greatest amount of investment in China among EU members, and that there is immense potential for Sino-British economic and trade cooperation. "We hope that political relations become better in order to develop economic and trade ties, and hope that British products become more competitive and its loans more flexible," he said. He also expressed hope that the EU will cancel restrictions on imports from China so as to benefit the development of economic and trade ties between the EU and China.

Rifkind told Qian that Britain is willing to cooperate with China in its economic development, and added that Britain has always been in favour of free trade and would continue to urge the lifting of restrictions on EU imports from China.

When Qian visited Britain last October, the British side reiterated that Taiwan is a province of China and that Britain will not develop political ties with Taiwan. Qian expressed his appreciation for this position, noting that he hopes Britain will keep the promise it made in the joint communique on exchanging ambassadors and continue to deal with the Taiwan issue with caution.

Rifkind said that Britain's "one China" position will not change.

Qian said he also appreciates the British government's position of not recognizing the so-called Tibetan authorities in exile, and that he hopes the British government will not allow Tibetan separatists to conduct activities aimed at separating China, on British territory.

Rifkind said Britain will maintain its traditional position, that is, that Tibet is a part of Chinese territory.

On the issue of Hong Kong, Qian said that, according to the Sino-British Joint Declaration, Hong Kong will return to the motherland in 18 months and that China will act in accordance with the principle of "one country, two systems", high-degree autonomy and "Hong Kong people governing Hong Kong" after it resumes the exercise of its sovereignty over Hong Kong on 1st July 1997. The Basic Law is clear about the specific issues and will be beneficial not only to the smooth transfer of power but also to boosting Hong Kong residents' confidence in the future, he said.

Rifkind said that a smooth transition is a goal common to the two countries, and added that Britain is willing to cooperate with China in a friendly and constructive spirit so as to make this work successful. This is of great importance to Britain at present and in future, he added.

During the talks, the two sides reviewed issues concerning the meetings between Chinese officials and senior Hong Kong civil servants, cooperation between the British Hong Kong government and the Preparatory Committee of the Hong Kong Special Administrative Region (SAR), preparations for issuing the SAR Passport, and the signing of the Hong Kong Civil Aviation Agreement, as well as the construction of the container terminal.

The two foreign ministers expressed satisfaction with the progress achieved on these issues and exchanged views on other issues to be resolved during the transitional period.

After the talks, Qian gave a banquet in honour of Rifkind and his party, who arrived here on a three-day visit this afternoon as Qian's guest.