British Sell Out

CONFIDENTIAL

14. Any such suggestions are harmful and untrue. We have been

trying and will continue to try throughout the talks to obtain the best possible deal for Hong Kong which will preserve its prosperity and stability. We are unwavering in seeking a settlement acceptable not only to Britain and China but also to Hong Kong.

SOVEREIGNTY [DEFENSIVE)

15. The charge has been made that sovereignty over Hong Kong has already been conceded to China. This is certainly not the case. HMG are fully aware that it is not in their power acting alone to concede sovereignty. This could only be done with the consent of Parliament. Legislation would be required. The issue of sovereignty will be dealt with fully in the proposals that the government hope to put to this House later in the year. The package of arrangements which we bring to the House then must be judged and will be

decided upon as a whole.

When Will Draft Agreement be Published?

16.

Too soon to say precisely. But we are working to a timetable in

the talks which takes account of Chinese wishes and of all our own

requirements. We are aware of the Chinese desire for an

announcement in September. At same time we recognise that any arrangements negotiated must subsequently be debated by Parliament taking into account Hong Kong's views.

Nature of Agreement

17. We are seeking a binding and detailed agreement in which a framework of arrangements providing for the maintenance of

Hong Kong's systems, laws and way of life will be formally recorded.

Basic Law

18. The question has been raised of whether the essentials of the

Basic Law that the Chinese have said they will enact for Hong Kong

CONF ENTIAL

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