3. SIX PAPERS PUBLISHED EDITORIAL COMMENT, INCLUDING THE TWO MAJOR COMMUNIST PAPERS WEN WEI PO AND TA KUNG PAO. THE WEN WE! PO SAID THAT THE SECOND PHASE MEANT THE TALKS WERE MOVING IN THE DIRECTION OF SOLVING THE PROBLEM OF HONG KONG'S FUTURE. A SOLUTION COULD NOT AVOID THE SOVEREIGNTY ISSUE. TO TALK ABOUT CONTINUED PROSPERITY WITHOUT TOUCHING ON SOVEREIGNTY WOULD RUN COUNTER TO THE MODERN TREND TOWARDS ENDING COLONIALISM AND NATIONAL INDEPENDENCE. IF THE ASSERTION THAT THE BRITISH POSITION ON SOVEREIGNTY WAS WELL KNOWN'' MEANT THAT BRITAIN HAD GIVEN UP ITS CLAIM TO SOVEREIGNGY, THE PROBLEM WAS HALF SOLVED. SOVEREIGNTY AND ADMINISTRATION WERE NOT SEPARATE ISSUES. AFTER
· SOVEREIGNTY WAS SOLVED, OTHER QUESTIONS COULD BE NEGOTIATED. 4. TA KUNG PAO DESCRIBED THE ANNOUNCEMENT IN THE SECOND PHASE AS A MAJOR BREAK THROUGH. IT APPEARED THAT OBSTACLES HAD BEEN OVERCOME AND THAT SUBSTANTIVE TALKS WOULD NOW BEGIN. THE SECOND PHASE WOULD TAKE SOME TIME. IT WAS SELIEVED THAT THE PEOPLE AND GOVERNMENTS OF BOTH COUNTRIES HAD ALL THE NECESSARY CONDITIONS FOR REACHING A SATISFACTORY SETTLEMENT WHICH WOULD BRING HONOUR AND BENEFIT TO THE TWO COUNTRIES. THE FIRST PHASE HAD LASTED NINE MONTHS. THE DELAYS HAD BEEN DUE TO A DIFFERENCE IN THE STANCE OF 30TH COUNTRIES ON SOVEREIGNTY.
5. THE HONG KONG ECONOMIC JOURNAL, THE MING PAO AND THE FINANCIAL DAILY (ALL INDEPENDENT) WELCOMED THE ANNOUNCEMENT AND GOVERNOR'S PARTICIPATION AND CALLED ON PEOPLE TO REFRAIN FROM PANIC OR SPECULATION. THE MING PAO SAID THAT THE NEWS MEANT THAT THE FIRST PHASE HAD BEEN SATISFACTORILY COMPLETED. THE TIN FUNG DAILY (FRINGE LEFT-WING) SAID THAT BRITAIN WAS EXPECTED TO MAKE CONCESSIONS DURING THE SECOND PHASE AND RECOGNISE CHINA'S SOVEREIGNTY IN EXCHANGE FOR EXTENDED ADMINISTRATION.
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