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6.
If however EXCO recommended that an arrangement, which we saw
as reasonable, was unacceptable, or if EXCO were divided in their
own views the Governor considers that they should be confronted with
three choices:
(a) to accept what we believed was the best deal to which
China would agree;
(b) to continue to seek improved terms;
(c) to adjourn the negotiations.
EXCO would need to be left in no doubt that we were pessimistic
about (b) and that (c) would probably lead to a stand off and a major slide in confidence in Hong Kong. Given the terms of the 1898 Convention we could not in any case hold on to the New Territories
and the practical consequence would be a Chinese take over. If EXCO
chose that route we should have to consider it. The important point
would be that we should not conclude an agreement with China which
EXCO would not endorse, but that EXCO would accept the consequences
that might follow from this.
7.
Beyond this is the problem that we cannot be sure that the
views of EXCO are totally representative of the people of Hong Kong. The Governor believes in the light of his meetings with the
Unofficial Members of the Legislative Council, who are briefed
regularly in general terms, and of the assessments of public opinion
made by the Hong Kong Government, that they are broadly representative. He recognises however that this will not
necessarily remain so.
8.
There are ways of broadening consultation but there are major
difficulties. At the back of the problem is the declared view of
the Chinese Government that the talks are bilateral ones with HMG
and that, while they are prepared to take the views of the people of Hong Kong into account, those do not carry significant weight
against the wishes of the one billion Chinese. This means that an official referendum in Hong Kong would probably lead to repudiation of any agreement. The point is not simply that the Chinese would fear that the electorate would vote against particular arrangements
but that their own nationalist principles cannot allow that a minority group of Chinese "compatriots" should have a veto on how
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