OUTGOING Financial Secretary Sir Hamish Macleod has lashed out at China for its change of mind over talks on the 1997-98 budget and questioned whether Beijing was agitating for a fresh dispute. In the swift response to China's position on budgetary talks, Sir Hamish said he was 'very disappointed and puzzled' that China had altered its stance by demanding a say in the 1996-97 budget, rather than the 1997-98 blueprint as it originally proposed. The Government, he said, had done exactly what the former Chinese team leader of the Joint Liaison Group (JLG) Guo Fengmin had proposed when he raised the issue for the first time in June last year. Sir Hamish said it was agreed that the Government would only need to 'brief Beijing on the procedures' in formulating the 1996-97 plan and it would only have to 'consult' China on the 1997-98 budget. Mr Guo's successor, Ambassador Zhao Jihua denied any back-tracking. 'Our position remains the same . . . There has to be continuity over the budget. We have to discuss any matters that are related to the smooth transition of the budget. We have our own views,' Mr Zhao said. He declined to elaborate on the role of China in the next two budgets, but emphasised that it was a good to start the expert talks. A British source, however, said Mr Zhao's argument was 'extremely thin'. The source said that the British JLG leader Hugh Davies would seek to clarify the Chinese demand at the next full meeting starting on Tuesday. On Thursday, China's budget expert team leader Chen Zuo'er demanded at the JLG talks in Beijing that the Government 'fully consult' China before the final draft of any major parts of the 1996-97 budget. He said China should play the leading role but work with the British side when drafting the 1997/98 budget. Sir Hamish said at an impromptu press briefing: 'I am very disappointed that even after the talks, again doubt is being thrown by the Chinese side on what the talks should be about . . . I am extremely disappointed that this unnecessary argument has emerged at this late date. 'The Chinese side will have to explain why they have suddenly changed their view. The fact is, they didn't ask for consultation on the 1996-97 budget, they asked for a briefing on the procedures. 'That is what we are giving them,' he said.