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21.

IS DESCRIBED IN THE BASIC LAW. IF CONVERGENCE CANNOT BE ACHIEVED

THERE WILL BE A DISRUPTIVE BREAK IN 1997 AND/OR OPEN CONFLICT

BETWEEN THE BRITISH AND CHINESE GOVERNMENTS BEFORE 1997, WITH

POTENTIALLY DISASTROUS RESULTS FOR THE STABILITY OF HONG KONG.

THE GENERAL PROBLEM IS COMPOUNDED BY PARTICULAR

COMPLICATIONS OF TIMING OVER THE NEXT TWO YEARS. THE REVIEW TO

BE CONDUCTED BY THE HONG KONG GOVERNMENT DURING 1987 WILL ADDRESS

THE FURTHER DEVELOPMENT OF REPRESENTATIVE GOVERNMENT. WE ARE

COMMITTED TO INCLUDING IN THE REVIEW THE QUESTION OF DIRECT

ELECTIONS. AT THE SAME TIME THE CHINESE GOVERNMENT AND THE 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 NOT BE 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 1987 WAS INCONSISTENT WITH PROVISIONS IN THE

DRAFT BASIC LAW PUBLISHED BY THE CHINESE GOVERNMENT IN THE

FOLLOWING YEAR. THIS WOULD CALL INTO QUESTION QUOTE CONVERGENCE

UNQUOTE 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.

OVER THE PAST YEAR THE CHINESE HAVE ON MANY OCCASIONS

MADE KNOWN 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 QUOTE

DEVIATIONS FROM THE JOINT DECLARATION UNQUOTE, A STATEMENT WHICH

SERIOUSLY JOLTED CONFIDENCE. ALTHOUGH WE HAVE NOW DONE MUCH TO

RE-ESTABLISH A RELATIONSHIP OF MUTUAL TRUST OVER THESE ISSUES,

CHINESE NERVOUSNESS 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

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