CONFIDENTIAL

no doubt about the commitment of the Chinese Government to realise

the concept of two systems within one nation.

Is HMG Seeking International Guarantee of An Agreement?

22.

An agreement would by itself create a legal and political obligation binding the two Governments involved. that is a strong guarantee of observance. It would be recognised as such by the

international community.

What Attention is Paid to Views of Hong Kong People?

23. The views of Hong Kong people will continue to be fully taken

into account. There is a continuous process of consultation with

the people of Hong Kong on all matters relating to the territory's

future. A wide range of channels has evolved in Hong Kong through

which people make their views known. We particularly value our regular discussions with the Governor and the Unofficial members of

the Executive Council who are well placed to reflect the opinions of

Hong Kong people. In addition, ministerial visits to Hong Kong and

the reception of Hong Kong delegations to London provide useful

opportunities to further the consultative process.

When and How will HMG Conduct Test of Acceptability?

24.

We are actively considering this. There will be an opportunity for people to express their views on a package. There is already a

continuous process of consultation.

What is Britain's "Moral Obligation" to Hong Kong?

25.

While we have no intention of shirking our obligations, we must show realism in the way we define them. Put simply, our obligation is to seek arrangements for the territory's future appropriate to the circumstances and acceptable to its people.

Stock Market and Exchange Rate Fluctuations?

26. Of course uncertainty over the future periodically affects the

CONFIARAUETA E

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