HK shares hit record high

THE HONG KONG stock market soared yesterday in response to China and Britain agreeing to talk about electoral arrangements in Hong Kong. But the day also showed how sensitive the talks will be.

The New China News Agency (NCNA), China's de facto embassy in the colony, told some Hong Kong journalists that they would not be allowed to travel to Peking to cover the 'confidential' talks. The question of how much will be made public about the talks once they have begun had been a sticking-point between the two sides and remains unclear. But both sides agree the content of negotiations will be confidential until there is a result. A Hong Kong government official said it was up to China to decide whether to issue visas to reporters.

There were further rumblings on the the membership of the two teams. The NCNA's deputy director, Zhang Junsheng, criticised Britain for releasing its full line-up for those who will take part in the talks, after the official joint announcement had mentioned only Sir Robin McLaren, the ambassador in Peking, and his Chinese counterpart, Jiang Enzhu, the Vice-Foreign Minister. The other four on the British team, said Mr Zhang, would have the status only of advisers or experts.

Britain insists that all, including the Hong Kong officials, will be full members of the British team and will attend all the meetings.

Hong Kong's financial community yesterday felt the apparent commitment from both sides to start talks was more important than definitions of the participants' status. The Hang Seng index closed 371 points higher at 6,789, a record.