CONFIDENTIAL

5. EXCO SAW NO MERT IN THE PROPOSAL 'N PARA 4 OF YOUR THIRD TUR THAT THE PRESENT TIMETABLE FOR THE 1987 REWHEW MIGHT BE ALLOWED TO

SLIP. FOR PURELY PRACTICAL REASONS THE GREEN PAPER MUST BE ISSUED

EARLY IN 1987, SO THAT THE WHITE PAPER CAN BE PUBLISHED NO LATER

THAN DECEMBER 1987 TO ALLOW SUFFICIENT TIME FOR THE NECESSARY

LEGISLATION TO BE IN PLACE BEFORE THE 1988 ELECTIONS. TO RETAIN

THIS TIMETABLE IS NOT BEING "INFLEXIBLE: T #'S NECESSARY IN ORDER

TO MAINTAIN CONFIDENCE AND TO ALLOW SUFFICIENT TIME FOR THE

VARIOUS PROCESSES INVOLVED.

6. NOR DID EXCO SEE ANY ADVANTAGE IN ASKING THE CHINESE TO ACCELERATE THEIR OWN BASIC LAW DRAFTING PROGRAMME. ON THE CONTRARY,'

THEY BELIEVED THAT THIS COULD ONLY LEAD TO PRESSURE IN HONG KONG

ON US TO ADVANCE OUR GREEN PAPER TO KEEP AHEAD OF THE CHINESE. **

ANY CASE, ASSUMING THE BLDC ADHERE TO THEIR CURRENT TARGET DATES,'

ITS SPECIAL GROUP ON THE POLITICAL SYSTEM WILL MAKE HTS

RECOMMENDATIONS ON SAR GOVERNMENT STRUCTURE IN SUMMER 1987. PUBLIC

DISCUSSION ON THESE RECOMMENDATHONS AND ON THE GREEN PAPER WILL

THUS TAKE PLACE CONCURRENTLY. MOREOVER, THE BLDC HITSELF IPS LIKELY TO CONSIDER THESE RECOMMENDATIONS IN AUTUMN 1987. THERE IS

THEREFORE REASON TO BELIEVE THAT CONVERGENCE AND COMPATIBILITY

BETWEEN THE WHITE PAPER TO BE PUBLISHED ## DECEMBER 1987, AND THE RELEVANT PROVISIONS OF THE FIRST DRAFT OF THE BASIC LAW, CAN BE ACHIEVED IN THE PROCESS. THE POINT OF DECISION FOR US ON THESE

MATTERS IS THE PUBLICATION OF THE WHITE PAPER.

7. IN ANY DISCUSSIONS WITH THE CHINESE IN THE MEANTIME, I SUGGEST THAT WE SHOULD REPEAT VERY CLEARLY AND FIRMLY WHAT MR RENTON HAS

SAID TO ZHOU NAN (AND WHAT THE SECRETARY OF STATE SAND TO WU XUEQFAN ON 23 MAY), M.E. THAT HMG iS COMMITTED TO THE 1987 REVIEW, LEADING TO A WHITE PAPER IN DECEMBER 1987 WHICH MUST TAKE CAREFUL ACCOUNT OF LOCAL ASPIRATIONS AND CONSENSUS. MOREOVER, AS SUGGESTED IN PARA. 2 OF MY TELNO 1812, WE SHOULD MAKE THE POINT

THAT, GIVEN THEIR RESPONSIBILITIES TO PARLIAMENT FOR THE ADMINISTRATION OF HONG KONG UP TO 1997, HMG WILL HAVE TO COME TO

THE HR OWN DECISIONS ON THE BASIS OF THEIR OWN REVIEW. (THUS

INDICATING EXPLICITLY OR IMPLICITLY THAT WE DO NOT INTEND TO ALLOW

THE BLDC ALONE TO DETERMINE THESE MATTERS OR TO SIMPLY FALL IN

WITH WHAT THEY DECIDE). WE WILL KEEP AN OPEN MIND ON THE FINAL

OUTCOME OF OUR REVIEW AND NATURALLY HOPE THAT THE RESULTS OF INT

WILL ACCORD WITH THE RESULTS OF THE BASIC LAW DRAFTING EXERCISE. THAT IS THE OBJECT OF THE PAPERS THAT WE HAVE PUT TO THE CHINESE AND THE DISCUSSIONS THAT WE HAVE PROPOSED. ATTEMPTS TO SUPPRESS OR

DELAY A DECISION ON A CRUCIAL PART OF THE REWEW WILL HAVE THE

MOST SERIOUS CONSEQUENCES FOR HMG AND HKG. PUBLIC CONFIDENCE IN

AND WITHIN HONG KONG WILL BE SHAKEN AND THIS WILL NOT BE IN THE INTERESTS OF CHINA.

8. WITH REGARD TO JLG KV, I DOUBT HE IT WOULD BE WISE TO RAISE THIS SUBJECT IN THE WAY SUGGESTED N PARA 6 OF THIRD TUR. THIS WOULD

CONFIDENTIAL

IRON

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