FIRMLY STATED BY MINISTERS, THE GOVERNOR AND SENIOR OFFICIALS ON SEVERAL RECENT OCCASIONS. IT WILL UNDOUBTEDLY BE INTERPRETED BY THE CHINESE AS A SIGN THAT THEY HAVE ACHIEVED THEIR AIM OF GETTING US TO PUT OFF THE REVIEW. A FURTHER DANGER IS THAT THE CHINESE MIGHT USE THE OPPORTUNITY OF POSTPONEMENT OF THE REVIEW TO PUBLISH A DRAFT BASIC LAW WHICH SPECIFICALLY PRECLUDES DIRECT ELECTIONS TO THE LEGISLATIVE COUNCIL.

13.

DEPARTURE TO THIS EXTENT FROM THE PUBLICLY ANNOUNCED TIMETABLE WOULD ALSO PROVOKE VERY SERIOUS CRITICISM IN HONG KONG, AND ALMOST CERTAINLY ALSO IN PARLIAMENT. WE WOULD BE ACCUSED OF GIVING IN TO PRESSURE FROM THE CHINESE AND DELAYING THE REVIEW BECAUSE OF THEIR KNOWN OBJECTIONS. IT IS THE VIEW OF THE ACTING GOVERNOR AND HIS ADVISERS, IN THE LIGHT OF INFORMAL CONSULTATION WITH EXCO, THAT SUCH A DELAY WOULD NOT BE PUBLICLY ACCEPTABLE IN HONG KONG, AND THAT THE EFFECT ON CONFIDENCE WOULD BE SERIOUS. HE IS CERTAIN THAT NEITHER EXCO NOR LEGCO WOULD AGREE TO IT.

14.

IT SHOULD BE NOTED THAT, IF THE REVIEW IS DELAYED BY A YEAR, IT WOULD BE NECESSARY TO EXTEND THE LIFE OF THE PRESENT LEGISLATIVE COUNCIL AND POSTPONE THE ELECTIONS SCHEDULED FOR SEPTEMBER 1988 TO SEPTEMBER 1989. THERE MIGHT BE OBJECTIONS, IN PRINCIPLE FROM ELECTED MEMBERS AND THEIR CONSTITUENTS TO DEFERRING ELECTIONS. LEGCO COULD DECLINE TO ENACT THE AMENDMENTS TO LEGISLATION NECESSARY TO PERMIT EXTENSION OF THE LIFE OF THE COUNCIL.

(C). A LIMITED DELAY.

15.

THE ACTING GOVERNOR DOES, HOWEVER, POINT OUT THAT THERE IS A DEGREE OF FLEXIBILITY IN THE TIMETABLE TO WHICH WE ARE PUBLICLY COMMITTED: AND THAT THIS MIGHT, IN ITSELF, SIGNIFICANTLY IMPROVE THE CHANCES OF ACHIEVING COMPATIBILITY BETWEEN THE DRAFT BASIC LAW AND THE TERMS OF THE WHITE PAPER. THE GREEN PAPER COULD, CONSISTENT WITH OUR DECLARED TIMETABLE, BE PUBLISHED AS LATE AS THE END OF MAY. PUBLICATION OF THE WHITE PAPER COULD BE SLIPPED TO JANUARY OR EVEN FEBRUARY 1988. THIS WOULD ENABLE DISCUSSION AT THE DECEMBER 1987 BLDC PLENARY TO BE TAKEN FULLY INTO ACCOUNT, ALTHOUGH THIS WILL NOT NECESSARILY GIVE US SUFFICIENTLY CLEAR POINTERS AS TO CHINESE INTENTIONS. MOREOVER THE LEGCO DEBATE ON THE SURVEY OFFICE REPORT COULD BE TIMED TO ACHIEVE THE BEST INTERACTION WITH THE BLDC PLENARY WE COULD ARRANGE FOR IT TO BE HELD EITHER FIRST, SO THAT HONG KONG VIEWS HAD BEEN MADE CLEAR TO THE BLDC, OF AFTERWARDS SO THAT THE BLDC DISCUSSIONS WERE FULLY REFLECTED IN LEGCO DEBATE.

WHICH OPTIONS?

16. THE POTENTIAL DANGERS IN DELAYING THE REVIEW FOR A YEAR CLEARLY OUTWEIGHT THE POSSIBLE ADVANTAGES OF SUCH AN OPTION. IT WOULD CAUSE A MAJOR POLITICAL STORM IN HONG KONG, WHICH WOULD UNDOUBTEDLY SERIOUSLY DAMAGE CONFIDENCE LOCALLY AND POSSIBLY OVERSEAS. WHILE THERE ARE ALSO POTENTIAL RISKS TO CONFIDENCE IN THE

-4- SECRET

/ALTERNATIVE

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