7.
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Action on this limited and practical front, if agreed with the Chinese, would itself be enough to dispose of the problem of confidence now posed by the significance of the date 1997, at any rate for the 80s, which is the immediate problem, and could offer a basis for getting through the 90s if that is what the Chinese Government and HMG want. We therefore enclose a draft Order-in-Council to meet the requirements in para 6(b) above, attached at Annex A.
We are preparing draft legislation which we will forward once the text of the Order-in-Council
is agreed.
8. Since the text at Annex A was agreed with Percy Cradock I have received the alternative text enclosed with your letter of 1 December. For everyone's convenience I attach a copy of this at Annex B. I still prefer that at Annex A because it is shorter and simpler and, I am advised, adequate. However for the sake of a quick decision, and subject to Cradock's views, I would accept your draft, if you still prefer it, subject to the following comments:-
a)
b)
c)
The preamble should omit reference to 1997 and start at the third paragraph.
The saving device in paragraph 4 of the Hong Kong/Peking draft at Annex A should be retained so as to preserve the legality of the present position under the Lease Agreement.
In paragraph 2 of the FCO draft at Annex B I would prefer to substitute "hold" for
occupy
11
11
.
9.
I note that the question of post-1997 jurisdiction, to which we attach importance, is covered obliquely by the saving clauses 4(a) and (b) in the FCO draft at Annex B. So long as you are satisfied that this is adequate, I have no comment. The point is covered more directly, and therefore to my mind more satisfactorily, in para 3 of the Hong Kong/Peking draft at Annex A. Please let me know your decision on these texts in the light of Percy Cradock's comments and your own further consideration.
Tactics
10. Cradock and I are agreed that we should adopt a step-by-step approach. Our move on the leases is the first step. The Chinese might be prepared to deal with
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/ the