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to

practice, given the increasing polarisation of opinion in Hong Kong and the sensitivity and innate conservatism of the Chinese, it is likely to prove very difficult. We have made some progress, and our success in establishing the informal dialogue provides the means

make more. But time is short and the gap between us still large.

The problem of direct elections, and how to deal with them in the

1987 review, will be at the same time the most difficult and the

most important issue in

months.

Sino-British relations

over the next 12

34.

introduction of

proportion.

a

In

At the same time the practical significance of the

directly elected element should be kept in

the immediate future only a small

the number of

seats on the Legislative Council would be involved. Although they may be seen in Hong Kong as a symbol of autonomy, in practice this autonomy cannot be guaranteed by such a device and must be achieved in a variety of different ways. On the other hand there is a real

possibility that the introduction of direct elections might in

instability. generate

practice

These

considerations

will

need to be kept very firmly in mind when the time comes to consider whether a directly elected element should be introduced in 1988.

We

35.

In the meantime we must continue and intensify our exchanges

with the Chinese on all the issues connected with "convergence". must emphasise why the 1987 review must be seen to be genuine and open, with both the British and Chinese Governments keeping an open mind over the outcome. We must seek to create conditions of trust within which problems can be discussed and solved.

we

But

36.

Until the state

state of opinion in Hong Kong crystallises, cannot foresee precisely how these problems might be tackled. the closer our informal dialogue with the Chinese on all the issues connected with "convergence" and the Basic Law, the better will be least reduce the our chances of finding a way forward which will at dimensions of the problems involved and present an outcome which

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