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DSR 11C
economy and a separate currency. China might accept
this but would find it hard to reconcile with their
need for any new system to underline their sovereignty
over Hong Kong. Economic development in Guangdong
Province could also lead to conflict of interest.
Hong
Kong's position in international economic organisations,
trade and air services agreements would have to be
accommodated.
d) Defence
e)
The role of the British Garrison, in a transition period
and possibly beyond would have to be resolved.
Legal
Problems would depend on the extent of participation by
Britain in the administration of the Territory under the
new system. The range could include:
i) the legacy of the 'unequal' treaties on which
present British rule rests.
How can these be
replaced with a new treaty?
ii) Reconciliation of continuing British adminis-
tration with a recognition of ultimate Chinese
sovereignty.
Dd 0532000 400 M 5/78 HMSO Bracknell
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