CONFIDENTIAL

DIRECTLY ELECTED DEMOCRATIC GOVERNMENT (INCLUDING THE GOVERNOR) AS A

"SAFEGUARD" OF HONG KONG'S CONTINUED AUTONOMY?

164. Agreement provides for the future Hong Kong SAR to enjoy a

high degree of autonomy, except in foreign affairs and defence and

for there to be an elected legislature composed of local

inhabitants. Exact direction and pace of democratic evolution

between now and 1997 will be a matter for continuous study by

British and Hong Kong Governments, taking full account of views of

people of Hong Kong.

CONFIDENTIAL

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