SECRET

6. IF WE COULD BE CERTAIN THAT SUCH A SYSTEM WOULD SURVIVE,

I AM SURE THAT THE ADVANTAGE OF CIRCUMSCRIBING THE SECRETARY

OF STATE'S AND THE GOVERNOR'S POWER IN 1992 AS PROPOSED WOULD

OUTWEIGH THE DISADVANTAGE IDENTIFIED IN PARAGRAPH ↳ ABOVE.

BUT WE CANNOT BE AT ALL CERTAIN OF THAT. INDEED WHAT SCANT INDICATION

WE HAVE, IS THAT THE SAR GOVERNMENT WOULD BE UNDER THE DIRECT

CONTROL OF THE CPG, SUGGESTS THAT, NO MATTER WHETHER WE

RENOUNCE THE VETO POWER OF THE GOVERNOR OR NOT, PEKING WILL

INSIST ON RESERVING ULTIMATE POLITICAL CONTROL TO INSELF AFTER

1997 AND THAT THIS WILL BE SPELLED OUT IN THE BASIC LAW.

7. ONE WAY ROUND THIS DILEMMA MAGHT BE TO AMEND PARAGRAPH 63 AS PROPOSED BY THE GOVERNOR IN PEKING TELMO 99 TO HONG KONG.

THIS WOULD EXCLUDE THE BULK OF FOREIGN AFFAIRS AND ALL OF DEFENCE

FROM EXCO'S COMPETENCE, THE FUTURE OF HONG KONG IS UNDOUBTEDLY

A FOREIGN AFFAIR. WITH THIS FORMULA THE GOVERNOR'S POWER AND

BY EXTENSION THE POWER OF THE SECRETARY OF STATE, WOULD BE PRESERVED IN THIS AREA, AND NOTHING WOULD HAVE BEEN LOST, SINCE

PEKING WILL IN ANY CASE HAVE POWER AFTER 1997 IN THESE FIELDS.

PRESENTATION

3. IF YOU AGREE WITH THESE PROPOSED AMENDMENTS THE PAPER COULD,

I WOULD HAVE THOUGHT, STILL CONTAIN THE SECTION ON THE GOVERNOP.

EVANS

LIMITED HD HKD HD FED

MR WILSON

COPIES TO

SIR PCRADOCK

MR BURROWS,

LEGAL ADVISERS

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FUTURE EGRET

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