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and

DISADVANTAGES

THE

(I) CONTINUITY PRE AND POST-1997 WOULD NOT BE GUARANTEED. CHIEF MINISTER WOULD HAVE TO BE 'PROMOTED'. THE CHINESE MIGHT TAKE THE OPPORTUNITY TO INSTALL THEIR OWN SUCCESSOR TO THE GOVERNOR AFTER 1997, ALTHOUGH THEY HAVE SAID THEY WILL NOT SEND PEOPLE FROM THE MAINLAND TO RULE HONG KONG.

(II) THE CHINESE MIGHT STILL OBJECT THAT WE WERE GOING TOO FAR IN ALLOWING THE LOCAL PEOPLE TO CHOOSE SENIOR OFFICIALS.

(III) THERE COULD BE DISPUTES BETWEEN THE GOVERNOR AND THE CHIEF

MINISTER.

10. OPTION (D) COULD BE COMBINED WITH AN ATTEMPT TO TURN THE PROBABLE EXISTANCE OF A JOINT SINO-BRITISH GROUP IN HONG KONG TO CONSTRUCTIVE USE, AS DESCRIBED IN SUB-PARAGRAPH 10 (D) BELOW.

ADVANTAGES

(A) THERE WOULD BE PROVISION FOR CONTINUITY FROM AN ELECTED GOVERNOR TO AN ELECTED CHIEF EXECUTIVE.

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(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 JOINT GROUP (IF AGREED) COULD BE USED TO DEMONSTRATE HMG'S CONTINUING INVOLVEMENT AND TO PROVIDE A CHANNEL FOR

SINO-BRITISH COMMUNICATION ON THE GROUND IN THE EVENT OF UNREST. IT MIGHT THUS BE ABLE TO HELP DEFUSE ANY MOVEMENT TOWARDS

DISORDER.

DISADVANTAGES

(I) THE CHINESE COULD AIM TO EXPLOIT THE MORE PROMINENT ROLE OF THE JOINT GROUP IN ORDER TO INTERFERE IN HONG KONG BEFORE 1997.

(II) OUR EXPLICIT RETENTION OF RESERVE POWERS MIGHT BE HELD TO ENCOURAGE THE CENTRAL PEOPLE'S GOVERNMENT TO ASSUME THE SAME

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