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Y

UK companies led by Davy McKee and supported by Sir

K Pao has since been established to pursue the

project. Since the project was first proposed, the

Chinese authorities have expressed the hope that HMG

would provide financial support and we expect it to

feature on the list of projects we have asked the

Chinese to prepare for the ATP Soft Loan talks due

to start in Peking in October.

FUTURE OF HONG KONG

JOINT LIAISON GROUP

4.

In accordance with Annex II to the

Sino-British agreement, a Joint Liaison Group has

been established. It will meet at least once a year

in Peking, London and Hong Kong until the year 2000.

From 1 July 1988 it will be based primarily in Hong

Kong. The Group met for the first time in London in

July

The JLG will meet again

again in Peking from

26 to 29 November.

BASIC LAW

5.

Law

Under the Joint Declaration the Chinese have

agreed that the policies set out in paragraph 3 and

elaborated in Annex I will be

I will be stipulated in a Basic

of

the Special Administrative Region and will

remain unchanged for 50 years.

The Chinese have

begun work on this law and plan to complete it by

1990. They have appointed a Basic Law Drafting

Committee consisting of

of 59 members (23 of whom are Hong Kong representatives) and including Sir Y K Pao one of its Vice Chairmen, and a larger Basic Law Consultative Committee is being established in Hong Kong. We believe that the real drafting work will be done by the Chinese Hong Kong and Macau Office,

but it is encouraging that the Chinese are prepared

as

THIS IS A COPY THE ORIGINAL HAS BEEN CLOSED FOR

40YEARS UNDER FOI EXEMPTION NO........ 27-6-6).a

CONFIDENTIAL

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