CONFIDENTIAL

leave Hong Kong in

in 1997.

We have an

historical

We are

good shape

mission to complete

and we wish to do i t well. Failure to do 8 0 would be damaging to us both politically and economically. thus prepared put great effort in to achieving the success of your enterprise of

re-unification under one country, two systems. think that you

that you should recognise our willingness to

to do this.

16.

We

Hong Kong can only continue to thrive if its own people have confidence in the future. We have the strongest interest in their

believing that the agreement will be fully implemented in

in letter and

spirit, and will work. But we cannot convince them of

this by Hong Kong will

be an SAR of the PRC after 1997. It is

of the Chinese Government

ourselves.

in

the mean time which will

the actions

make the difference between faith in the agreement and lack of faith in it. People cannot be forced to believe some thing: they will draw their own conclusions from concre te actions. Newspapers here are already suggesting that the slogan "Hong Kong people rule Hong Kong" is no longer being used. Have to say frankly we are a little worried that progress on some key issues, eg GATT, has been 80 slow. Have feeling that China is showing herself reluctant

to go as far 48 agreement provides

in some respects

in allowing Hong Kong the degree

is to remain a separate and

the People's Republic. We must

of autonomy it will need if it

prosperous capitalist system within

avoid giving rise to any impression that there is a retreat from the

spirit of the Joint Declaration.

17.

Fully understand that on e

two systems.

But one country

country

is

is

as important to you

assured already: under Join

Declaration Ho~ Kong will be an SAR of the PRC after 1997. That

already assured. We too are fully committed to it. There can be

question of Hong Kong becoming an independent entity. One could

that the Joint

Joint Declaration ha basically achieved "one country"

far a 8 China and Hong Kong are concerned: we now need to make sur

that the other part

of Chairman Deng's far-sighted concept works Hope you will accept that

this is what we are trying to do, and to diminish the "one country".

18.

you.

Welcome this opportunity to speak frankly and informally

Believe that this dialogue should continue.

Will

CONFIDEN TIAL

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