CHINA must be consulted on all Hong Kong Government decisions involving major spending if Britain wants to co-operate in the run-up to 1997, a senior Chinese official said yesterday. The remark followed a statement by Hong Kong and Macau Affairs Office Director Lu Ping on Wednesday that Sino-British relations depended on co-operationfrom Britain. The official said China did not demand prior approval of all transitional matters. 'We are not saying that Britain should consult us on matter as trivial as buying a desk - only those having great financial implications for the Special Administrative Region,' he said. Social policy was the subject China was most concerned about. Co-operation had brought about good results such as the new airport, but more was needed. Government officials should also visit their counterparts in Beijing more often, he said. China had yet to discuss with Britain the details of co-operation between the Hong Kong Government and the Preparatory Committee. Detailed talks would have to wait until after the committee was established. The official said initial thinking was that it would be divided into small working groups handling specific issues listed by the Preliminary Working Class. The priority would be to set up the Selection Committee which would form the provisional legislature and the selection of the chief executive. After that it would examine which laws infringed the Basic Law and would have to be scrapped.