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Private property would be respected and China wanted to see the institutions of Hong Kong remain; business confidence would be maintained.
China had no experience of the concept of a 'free port'; the Law Institute of CASS had been charged with collecting information and studying the question.
The question of Hong Kong would be discussed with the British over the next
the changes two to three years;
last five years of the New would take place in the Territories lease.
China had in mind some sort of council to be elected proportionally and representing the various populations of Hong Kong.
I asked Huan if a recognition of Chinese sovereignty by the UK with continued British administration would satisfy China's requirement that it exercise its sovereignty. Huan said that that would make nonsense of the concept of sovereignty. I asked if he saw a role for a continuing British presence after 1997. Huan said yes, for those resident in the colony; there could not however be a situation where Britain 'sent
I asked if people' to Hong Kong to hold positions of authority. this meant China would take control of the security forces, customs and the police. Huan said yes. I noted that Huan's remarks meant that the present Macao model was not Hong Kong. question;
an
option for
Huan
course said Macao was of
not а pressing however the settlement for Hong Kong would be a model for Macao.
I recalled that in the past China had always said that the question of Hong Kong would be resolved after the issue of Taiwan was settled. What if the Taiwan question was not settled before 1997? Huan said that formulation had been used when it was thought that the Taiwan question would be resolved at an earlier date.
I asked Huan whether the party would exercise leader-
Huan said no; that would ship over the judiciary and the media. not be appropriate, however they would be subject to regulation. I commented that business and investment confidence was adelicate and indeed irrational thing and could be easily imperilled. Huan did not reply directly.
Subsequently at a lunch with academics at Wollongong University Huan was asked what would happen to Hong Kong after the lease expired. Huan said there was no doubt that China would exercise its sovereignty; he said he did not, however,
The think that Britain would easily relinquish its interests. implications of these remarks did not appear to register with anyone at the table.
Shortly before Huan left I asked if I might clarify certain remarks he had made in our previous discussion. I led in by saying that Hong Kong presented a very interesting political situation. I asked if the council of which Huan had spoken would be an advisory body like the CPPCC or an executive body (I was aiming to find out if Huan had meant, in saying that China would take control of the army, customs,
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