8507 D.073939 200M. 11/74 Cr.P.C. Gp.839/3

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(a) As at (c) with freedom to move towards an

elective system for the Legislative Council.

Prospects: Less promising than (c) but greatly to HMG's advantage in making us less answerable for Hong Kong's internal policies. Tolerable for Hong Kong.

(e)

Process of evaluation whereby China gradually increases to cultural economic and political activities leading to appointment of an official Chinese representative.

Prospects: Possible but Hong Kong laws and

administration would have to continue indefinitely

and appropriate confidence building resources for investors taken by the Chinese. Not as satisfactory

from UA point of view as formal arrangements.

Probably tolerable for Hong Kong.

(f) UK/Chinese joint administration for a pre-determined (or indefinite) future.

Prospects: Possible, provided ultimate Chinese

sovereignty was recognised: but no real advantage to the UK and probably intolerable situation diplomatically. Very precarious and unlikely to maintain confidence in Hong Kong.

(g) UK withdrawal and recognition of Chinese sovereignty in exchange for Chinese recognition of a "special status" for Hong Kong with local Chinese accruing responsibility for internal government.

Prospects: Less promising than (c) or (d) but a possibility if pragmatic considerations are uppermost in Peking. Solution perhaps most acceptable to HMG but careful explanation would be necessary in Hong Kong and elsewhere if confidence is not to be eroded.

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/(h)

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