CONFIDENTIAL

of the Defence Costs Agreement is also incomplete, but that can now be drafted given the impossibility of concluding negotiations before the end of the year. A certain amount of additional fine tuning

might be required to take account of any other developments between

now and the end of the year.

6.

The Report was in part drafted by the Hong Kong Government and

has been agreed with them in full. ExCo has been consulted and is

content. The Embassy in Peking and Legal Advisers concur. It remains only for Parliamentary Relations Unit to seek the necessary permission for publication of the report.

7.

We aim to lay the Report before Parliament in the first week after the Christmas adjournment, before the proposed debate on Hong

Kong expected to take place on either 20 or 27 January. This will

permit the debate to be on a motion to take note of the Report.

with previous reports, the text will be published in parallel in

Hong Kong in English and Chinese.

As

Coltun

CO Hum

CONFIDENTIAL

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