CONFIDEN TIAL

of change in the structure

of

government in Hong Kong during this time designed to meet the rapidly changing needs of a society which has undergone in 40 years the kind of development which took most

other societies well over a century to achieve.

6.

We are

committed to ensure smooth transfer of government in 1997.

In the Joint Liaison Group the Chinese side expressed 8 one

concern on recent developments. Would like to make four things

clear.

a)

The first is that the United Kingdom is not abdicating and will not abdicate its responsibility for Hong Kong.

b)

The second

that HMG and the Hong Kong Government remain

is

fully committed to maintaining both the prosperity

stability of Hong Kong.

c)

The third

is that a s

Xueqian in London in

the Secretary of State assured Mr

June we have been proceeding

cautiously and carefully in deciding the modifications which

have made over

the last 18 months.

we

d)

7.

The British side recognisees the

convergence of ideas about reform to

importance

of achievin

governmen t structure for

Hong Kong before 1997 and ideas of government s trucutre of the

SAR post-1997.

We are accordingly very pleased that

that it has been agreed the

there should be informal dialogue between the two sides which believe will be valuable in dispelling any misunderstanding on the points.

8.

determination

We trust that Mr Ji's visit will convince him

to keep Hong Kong prosperous and stable. Our

finances are sound, far sounder than those of most other county

We are continuing to build up the infrastructure of Hong Kong

a manufacturing centres,

a 8

communications centre. Hong Kong

its growth

a 8 a major

better

road

promote

centre, and

in 1997 an

even

system, including

second

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