(B) CONSTITUTIONAL DEVELOPMENT

GREEN PAPER

SECRET

1. Think general approach probably about right. Have been calls in Hong Kong for direct elections to LEGCO, but some clearly fear that these would lead to instability. Will be interesting to see response to proposals for indirect elections.

By then

2. EXCO are keen to retain flexibility. No firm proposals therefore beyond 1988. Review to be carried out in 1989.

will have much clearer idea of suitability of this system for Hong Kong and prospects for development up to 1997.

3.

Particularly important not to make specific statements about Governor. Propose small textual amendment to paragraph 63 to keep method of appointment open (referring to selection by an elected process being "one possible development" rather than "the natural development").

ROLE OF GOVERNOR IN 1990'S

4. Difficult to devise method of appointing Governor that meets all our aims.

Must also bear in mind realities of situation, in

particular Chinese ability to make any proposals unworkable.

5. Believe either option (c) or (d) would be best approach. Governor strongly supports idea of an elected governor but opposes concept of joint group located in Hong Kong. Ambassador also

prefers option (d). Both feel retention of British Governor would allow Chinese to put their man in post in 1997. Both are opposed to the idea of a Chief Minister. Danger that the Chinese would take

over the Governors position in 1997. There would be a new and complicated division of powers between Governor and Chief Minister for the few years before 1997.

CONSULTATIONS WITH CHINESE

6.

Propose to tell Chinese what is in Green Paper before issue.

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