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to including in the review the question of direct elections. At the

same time the Chinese Government and the BLDC

BLDC will be considering

the structure of government for the SAR in 1997. The first draft of

the Basic Law will be published in 1988. It is very important that

there should be no conflict between the outcome of these two

exercises. Particular difficulty would be caused if a decision

taken by the British side at the end of

the end of 1987 was inconsistent with

the provisions in the draft Basic Law published by the Chinese Government in the following year. This would call into question

convergence" and a smooth transition in 1997: greatly damage confidence in Hong Kong: and weaken the basis for our necessary

cooperation with the Chinese Government.

The Chinese attitude

22.

known

Over the past year the Chinese have on many occasions made

their concern at the direction and pace of constitutional

development in Hong Kong.

In November 1985 their de facto

representative in Hong Kong publicly accused us of "deviations from

the Joint Declaration", a statement which

seriously jolted

Although we have

over

now done much to re-establish a

these issues, Chinese nervousness

confidence.

relationship of mutual trust

remains.

23.

The Chinese concerns appear to be twofold. The Chinese do not want us to announce decisions about major constitutional change

(in particular over direct elections to the Legislative Council) in advance of the promulgation of the Basic Law in 1990. They fear

that the impression could be given that important provisions in the

Basic Law had been imposed on them by our pre-emptive action through

the review. They want to avoid a choice between making stipulations

in the Basic Law which are in actual or potential conflict with the

prevailing constitutional structure in Hong Kong and incorporating

stipulations which they do not desire. On at least one occasion

they have said explicitly that, if faced with such a choice, they

would go for the former option. On the substance, they fear (as do

many in Hong Kong itself) that too rapid an evolution of representative government could lead to instability and the divisive effects of party politics.

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