CONFIDENTIAL

Both sides tabled draft agreements.

I visited Peking 15-18 April

and agreed to negotiate from basis of both drafts. timetable for talks viz:

Also agreed

Initial agreement in September;

2/3 months for consideration in Hong Kong and debate in

Parliament;

Signature in December.

I made statement in Hong Kong on 20 April explaining our approach to negotiations.

I visited Peking again in July to resolve several issues. Substantial progress made. Agreed framework and key clauses of a binding agreement and satisfactory provisions for a Joint Liaison

Made statement to this effect in Hong Kong on 1 August.

Group.

7.

Negotiations continued thereafter on remaining unresolved issues. Following approval by British and Chinese Governments, texts of documents comprising the agreement initialled

26 September and subsequently published.

8.

Agreement comprises:

A Joint Declaration in which the UK declares that it will return Hong Kong to China in 1997, Chinese Government declares in broad outline its policies towards Hong Kong, and the two Governments agree to implement these declarations and the annexes;

Annex I in which Chinese Government expands on different aspects of its policies towards Hong Kong;

Annex II setting out terms of reference and outline working arrangements of Joint Liaison Group through which the two sides will continue to operate up to the year 2000;

Annex III providing for protection of existing land rights and for future land grants.

/Also

CONFIDENTIAL

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