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discussions with Chinese, particularly in Joint Liaison Group.

VIEWS OF PEOPLE OF HONG KONG?

* 17.

Report of Assessment Office established to collate and assess

views of people of Hong Kong published on 29 November and laid

before the House. Concludes, after careful analysis of all the

information it received from wide range of opinion in the territory

that most of the people of Hong Kong consider the draft agreement to

be acceptable.

SIGNIFICANCE OF AGREEMENT FOR SINO-BRITISH RELATIONS

* 18. Believe that succesful conclusion of Hong Kong negotations

provides firm basis on which our good relations with China can be

maintained and further developed.

ABSTENTIONS IN HONG KONG'S LEGISLATIVE COUNCIL (LEGCO) DEBATE ON

AGREEMENT

* 19. LEGCO debated draft agreement on 15 and 16 October. Only two

of the 27 Unofficial Members who spoke felt unable to commend it. LEGCO opinion thus overwhelmingly in favour.

HONG KONG BAR ASSOCIATION OBJECTIONS TO AGREEMENT?

* 20.

Meeting of Association on in November attended by 50 of its 250 members. Those present could not reach a consensus on a motion supporting ratification of the draft agreement. A key concern appeared to be seeming conflict between Articles 1 and 31 of Chinese Constitution. Former provides for practice of socialism in PRC. Latter provides for establishment within PRC of Special Administrative Regions with systems to be prescribed by laws enacted by the National People's Congress (NPC). Draft agreement on Hong Kong makes clear that Basic Law passed by NPC will stipulate Chinese policies for future SAR spelt out in Joint Declaration and Annex I. Stipulates in particular that socialist system and policies shall not be practiced there.

ARRANGEMENTS FOR SIGNATURE?

* 21.

If draft agreement acceptable to Parliament, it will be signed in Peking on 19 December by the Prime Minister, and Chinese

Premier Zhao Ziyang.

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