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Advantages

(a)

There would be provision for continuity from an elected

Governor to an elected Chief Executive.

(b) HMG would retain specific reserved powers. They would aim not to employ these except in an emergency when they might have to

exercise them directly. In emergencies affecting internal or

external security this might involve sending instructions to

the Commander British Forces. In a "political" emergency (for

example in circumstances where a locally elected Governor sought to pursue policies inconsistent with the Sino-British

agreement), it might be necessary for HMG to remove him from

office.

(c) The Chinese might accept the arrangement of an elected Governor

in return for our acceptance of a joint group.

(d) The presence of the joint group in the territory would

demonstrate HMG's continuing involvement and provide a channel

for Sino-British communication on the ground in the event of

unrest. In both ways it could help defuse any movement towards

disorder.

Disadvantages

(i) The establishment of a joint group could hit confidence in Hong

Kong.

(ii) The Chinese would aim to exploit the joint group in order to

interfere in Hong Kong before 1997.

(iii) Our explicit retention of reserve powers might be held to

encourage the Central People's Government to assume the same

powers after 1997 but already these would either be explicit in

the agreement (defence and foreign affairs) or implicit in the

provision that the Chief Executive of Hong Kong would be

appointed by the President of the PRC.

(iv) If the existence of the joint group was not enough to

discourage disorder there would be obvious difficulties in exercising our reserve powers at long range.

ARGUMENT

9.

There are obvious problems in going for either of the extremes

of an appointed British Governor on the present basis (Option A) or

of an elected, Governor to take over from him with no reassurance to the Chinese but we could keep effective control in Hong Kong. the same time the incentive for us to set up a system with some kind

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At

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