SECRET
options open to HMG would then be either to accept the Hong Kong view or to impose direct rule. The latter course is hard enough in any late colonial situation where power has been devolved to locally elected Ministers. It would be infinitely harder in the situation envisaged for Hong Kong where there would be no alternative directly appointed focus of authority (eg a Governor-General) to take over the Government. The practical effect of the proposals in the Green Paper is thus that, during the very difficult last few years before Hong Kong reverts to China, HMG will have responsibility but no effective power. We have seen over the last few months how diffi- cult it is to manage affairs in Hong Kong when HMG's views diverge from those of EXCO, even when we can call on all the influence and reserves of power available to a directly appointed Governor under the present system. There are likely to be occasions in the final years before 1997 when HMG's foreign policy considerations and obligations towards China will conflict with wishes in Hong Kong. These problems will be extremely difficult
to manage without effective power.
(ii) Chinese reactions
The proposed arrangements pre-judge the question of how the post-1997 Chief Executive of Hong Kong is to be chosen. This is of course part of the purpose of the exercise. Such indications as we have had suggest that, although the Chinese talk about a willingness to see greater democracy in Hong Kong, in practice they would prefer the Chief Executive to be selected (and therefore to have a greater say in the process) rather than elected. As the submission points out, the Chinese may well therefore react against publication of these proposals, coming as they do in the midst of negotiations about both pre and post 1997. They are also likely to react against what they will see as withdrawal by HMG from direct responsibility for the Government of Hong Kong prior to 1997. They may accuse us of trying to set up a quasi-independent Hong Kong. As we know from their handling of the negotiations as a whole, and their proposals for arrangements prior to 1997, they are determined to see HMG, and not the Hong Kong Govern- ment, as the only valid interlocutor on Hong Kong matters.
(iii) Reactions in Hong Kong
Hong Kong public opinion is having to withstand a great many shocks now and in the immediate future. The appoint- ment of a locally elected Chinese Governor in 1992 is likely to arouse intense interest. I do not share the view in para 3 of the covering commentary that public attention will focus on elections for the Legislative Council with the implication that the proposals about the Governor will receive little attention. I note that the EXCO discussion at an earlier stage apparently had nothing whatsoever to say about the future position of the Governor (Hong Kong
SECRET
/ Tel No