CONFIDENTIAL
2
-
would have to be embodied in a form which would work in Hong Kong's courts. The Basic Law and Hong Kong's legal system had to
be compatible. The Prime Minister underlined the great import- ance of the drafting for also ensuring that the transition in 1997 would be, as we wanted it to be, totally smooth.
5. Thirdly, the Prime Minister assured Premier Zhao that pre- serving Hong Kong's stability and prosperity during the remain- ing years of British administration would be a principal British aim. The Hong Kong Government was well aware of the necessity of this. She could assure the Premier that financial management in the territory would remain as prudent and cautious in the future as it had been in the past. Hong Kong already exercised full control over its budget and over the exchange fund, as it would continue to do after 1997. Land leases would be dealt with in accordance with the Joint Declaration. The Prime Minister said that she wished to assure the Chinese Government again that Britain derived no direct revenue from Hong Kong. Nor would she derive any in the future.
6. The Prime Minister said that it was important not just that we should act in the manner she had outlined but that we be seen to do so in the eyes of the world. The British Government had been very pleased at the statements which the international community had made about the agreement. They had been most helpful. The US, Japan, Canada, Australia - all countries of great importance had expressed their pleasure in the agree- ment and their confidence in Hong Kong's future.
7. The Prime Minister said that she wished to add one final point. The Chinese Government would be aware of proposals for constitutional development in Hong Kong. We were anxious to give the people the experience which they needed to run their own administration after 1997 to a greater extent than they did
We would go steadily and surely. It was important to build securely, brick by brick. We would move forward in very close consultation with the people of Hong Kong in order to carry them with us. This would ensure the smoothest possible
now.
transition.
8. The Prime Minister concluded by expressing appreciation for the detailed consideration given by Zhou Nan, under the watchful eye of Wu Xueqian, to the agreement, and for the efforts of all the Chinese officials who had so ably supported him.
9. Premier Zhao thanked the Prime Minister for her comments on the agreement. Most of the views which she had expressed were shared by the Chinese Government. It was not improper to describe the conclusion of the agreement as a great event in contemporary world history. It had not only successfully solved the question of China's resumption of the exercise of sovereignty over Hong Kong, but it was also conducive to the maintenance of the territory's long-term stability and prosperity and to peace in Asia and the world as a whole. It had opened a new chapter in the history of Sino-British cooperation and friendship. It had also provided fresh experience for the resolution of issues left over from the past.
E
CONFIDENTIAL
/ 10