CONFIDENTIAL

4.

We have now proposed to the Chinese that the next opportunity to pursue our dialogue on these issues might be the Governor's private visit to Peking at the end of

August. It is not yet clear whether theywill press for

discussion at JLG IV.

5.

ExCo is about to be

consulted on the planning

assumption of Ministers that a resident British Governor

should be retained in Hong Kong until 1997.

III Basic Law

6.

The second BLDC meeting took place in Peking between

18 and 22 April. It approved a draft structure for the Basic Law, following a debate in which the Chinese appeared

to show responsiveness to

to the views of Hong Kong members.

All the Hong Kong members voted for the amended text, which

provides a reasonable framework in which all the provisions

in the Joint Declaration should be satisfactorily

accommodated. At the meeting five special groups were also

established: the two most important cover the relationship

the Central Peoples' Government and the SAR; and

the political system of the SAR. These groups will report

to the next BLDC meeting in October.

between the

IV

Nationality

7. The Hong Kong (Nationality) Order in Council was made on 5 June. LegCo welcomed HMG acceptance of two of their

three requests, and overall the issue seems to have become

quiescent in Hong Kong. We are now preparing for our

campaign to secure international acceptance of the BN (0) passport, to be introduced on 1 July 1987.

CONFIDENTIAL

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