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British side would take preventative measures to avert the possible occurrence of troubles. It was very important for the two sides to enhance their mutual trust and to intensify their cooperation.

13.

Premier Zhao referred to the Prime Minister's expression of concern about the drafting of the Basic Law. For their part, the Chinese would make efforts to expedite its drafting. It should give expression to the agreement which had been reached and should be widely welcomed by the people of Hong Kong. In accordance with the Chinese Constitution, the NPC first had to authorise the establishment of a Hong Kong Special Administrative Region. Then a Basic Law drafting committee would be set up. These measures would be taken by the Third Session of the Sixth The drafting committee would then start its work as as possible. The committee's composition and working procedures were matters for the Standing Committee of the NPC, but the Prime Minister could rest assured that in the course of drafting the views of the people of Hong Kong would be solicited on a wide basis. The Basic Law would be promulgated no later than 1990.

14.

Turning to questions of constituional development in Hong Kong, which the Prime Minister had touched upon, Premier Zhao said that the Basic Law would define the government structure, the form of legislature and the method of selection of the Chief Executive of the future Special Administrative Region. The Chinese Government was not prepared to make any comment on constitutional development during the transitional period. In principle, like us, they wanted to see more and more Hong Kong people working in Government departments in Hong Kong and playing an even greater role than hitherto. But any measures to this end should not adversely affect the stability and prosperity of Hong Kong or the smooth transfer of government in 1997. He said that he was sure the British Government was well aware of these Chinese concerns and would take them fully into consideration.

15. The Prime Minister thanked Premier Zhao for his remarks. She wished to comment on one or two points. The first was on implementation. Could she repeat Premier Zhao's assurances to the people of Hong Kong? They were facing what for them was a great change. People were always a little bit fearful of change. They needed constant reassurance. Premier Zhao said that he would welcome it if the Prime Minister were to repeat his

assurances.

16. The Prime Minister said that she agreed with Premier Zhao that if there were preparations then troubles would be averted. There was a similar saying in Britain: "Be prepared". Premier Zhao had been wise to mention this point because undoubtedly there would be some troubles (she would be very surprised if there were no troubles) during the next 121⁄2 years. It would be absolutely vital that we stay totally calm and decisive and that we remain in consultation through the Joint Liaison Group. She had always found that calmness and knowing what to do was critical in any period of trouble, as was staying in close touch. If we were prepared for the fact that there might be trouble then we would be able to handle it well.

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