CONFIDENTIAL

HONG KONG: THE WHITE PAPER AND THE WAY FORWARD

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Mr Wood

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Initial reactions to the White Paper in Hong Kong are reasonably encouraging, and I suspect that the Parliamentary consensus will begin to re-form once the dust has settled. But the media will remain a problem. We will have to do our best to instill better-informed and more realistic attitudes. It will not be easy.

2. I share Mr Hum's view that we shall need to make a major effort with the Chinese over the Basic Law provisions on the formation of the first SAR Government. Ministers have rightly laid great stress on the importance of continuity through 1997. The Secretary of State, for example, said in the House on 10 February that "our key objective throughout has been to design a structure which will not be temporary or fallible, but one that will endure beyond 1997". We should indeed come under strong criticism, in Hong Kong and in the UK, if it became apparent that the Chinese intended to establish quite new structures immediately after 1 July 1997. I am sure we should use the last real opportunities we have before the publication of the first draft of the Basic Law the Secretary of State's discussions with Wu and JLG IX to put across a very firm political message.

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CONFIDENTIAL

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