But hopes remained slim for a breakthrough on the proposals by the Governor, Chris Patten, to widen democracy in Hong Kong, as China's negotiator refused to budge on the first day of a three-day meeting of the Sino-British Joint Liaison Group.
'We will not discuss the Hong Kong-British government's proposal on political reform,' Guo Fengmin said before the talks - the chief forum for issues concerning the colony's transition to Chinese sovereignty in 1997. 'Neither will we make any counter-proposals,' he said.
The half-day talks ended on schedule with both sides describing them as frank, but reporting no progress. Nervous investors who had feared China might walk out of the talks heaved a sigh of relief. 'This is a good start,' said a member of a securities firm.