CONI IDENTIAL

8. Mr Adley said that the problem was that UMELCO were dead against democracy. They were appointed and would oppose any

measures to bring it in.

9.

The Secretary of State reminded Mr Adley of the reasons why

normal representative government had not been established in Hong Kong, because of the Chinese attitude. He also thought that there

were serious doubts in Hong Kong as to whether the Chinese concept of democracy was the same as theirs. How far did democracy really

work in Shanghai for instance? He mentioned the work that had

already been done in Hong Kong at the local Government level, for

instance through the District Boards. Mr Adley acknowledged that

there had been reasons why Hong Kong had not developed democracy up

to now but believed that the position had changed and that the

Chinese would welcome genuine elections. He dismissed the District

Boards as having no power to do anything other than debate.

10. Mr Adley said that the Chinese had clearly indicated to him

that if a democratic system were to produce representatives of

British or other expatriate origin who fulfilled the normal seven

year residents' qualification they would be prepared to accept such people in a position of responsibility in Hong Kong. This would be

a useful way of encouraging confidence in Hong Kong.

Senzhen Special Economic Zone

11.

Mr Adley described his visit to the zone at which he had been warmly received. He had been struck by the way in which the Hong

Kong press had free access to the zone and by the border which was

being constructed between the north of the zone and the rest of

Guangdong province. He had had a strong hint from the NCNA that

they could foresee a time at which Hong Kong would expand

northwards into the zone.

Hong Kong's Concerns

12. The Secretary of State asked if it was not the case that people

in Hong Kong were genuinely anxious. Mr Adley said yes, they were petrified. The Secretary of State asked what ideas Mr Adley had to

provide reassurance. Mr Adley said that his recipe was early

recognition of China's sovereignty and more democratisation which

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