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MENTS WILL NOW BE ALL THE MORE OPEN TO ATTACK IF CHINESE PLANS

EMERGE IN AN UNSATISFACTORY FORM, WITH ADVERSE EFFECTS ON

CONFIDENCE IN HONG KONG. WE SHALL COME UNDER PRESSURE TO

DEMONSTRATE THAT WE ARE TAKING A FIRM STAND.

5.

SECOND, OUR PREPARATION OF A PAPER FOR THE CHINESE HAS ACQUIRED

GREATER URGENCY. (I NOTE THAT YOU DRAW THE SAME CONCLUSION

FROM THE CONVERSATION WITH MAO JUNNIAN REPORTED IN YOUR

TELNO 602.) THE GESTATION PROCESS HAS BEEN RATHER A LONG ONE. I

SAW FIRST DRAFTS OF DISCUSSION PAPERS WHEN I WAS IN HONG KONG IN

NOVEMBER: WE HAVE TRIED TO RESPOND AS FULLY AND AS HELPFULLY AS

WE CAN TO YOUR SUBSEQUENT DRAFTS: BUT I AM NOT EVEN CERTAIN

WHETHER THE ISSUE HAS YET BEEN PUT TO EXCO FOR THE FIRST TIME.

WE UNDERSTAND THE COMPLEXITY OF THE ISSUE: BUT WE MUST WORK

URGENTLY TO FINALISE A DRAFT THAT CAN BE SUBMITTED TO MINISTERS. 6. THIRD, WE NEED TO RECONSIDER VERY CAREFULLY WHETHER ALL THE

ELEMENTS IN OUR THINKING REMAIN VIABLE. IN EARLIER TELEGRAMS WE

HAVE ASKED WHETHER THE CONCEPT OF THE GRAND

ELECTORAL COLLEGE REMAINS ONE WHICH CAN BE MADE ACCEPTABLE IN

HONG KONG. MARTIN LEE IS PORTRAYING IT IN AN INCREASINGLY

HOSTILE LIGHT, AND THIS IS ALREADY BEING REFLECTED IN THE PRESS.

AND PARLIAMENT HERE. THE OPTION IN THE BASIC LAW WHICH WOULD

ALLOW 50 PER CENT OF THE SEATS IN THE SAR LEGISLATURE TO BE

ELECTED BY THE GEC IS PARTICULARLY OPEN TO CRITICISM.

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7. FOURTH, WE MUST PUT THE MAXIMUM PRESSURE ON THE CHINESE. IT SHOULD BE EXPLAINED TO THEM VERY STARKLY IN AN APPROPRIATE CONTEXT, THAT WE HAVE USED UP A CONSIDERABLE AMOUNT OF POLITICAL CAPITAL, BOTH IN WESTMINSTER AND IN HONG KONG, IN DEFENDING OUR DECISIONS ON THE TIMING OF DIRECT ELECTIONS. FROM NOW ON OUR

ACTIONS WILL BE UNDER EVEN CLOSER PUBLIC

THAT THEY

SCRUTINY. THE IDEAS FOR THE FIRST SAR GOVERNMENT WHICH ARE AT

PRESENT BEING PURSUED ON THE CHINESE SIDE RISK AROUSING

CONSIDERABLE POLITICAL OPPOSITION: HENCE OUR SUGGESTION

SHOULD BE REMOVED FROM THE CURRENT DRAFT OF THE BASIC LAW AND

CONSIDERED WITH US IN SLOWER TIME. THIS IS A MESSAGE WHICH THE SECRETARY OF STATE WOULD NEED TO PUT FORCEFULLY TO WU NEXT MONTH,

AND WHICH MIGHT BE REINFORCED BY ROBIN MCLAREN IN PRIVATE WITH KE ZAISHUO. SIR R EVANS ALREADY HAS A VERY FIRM, IF LESS POLITICAL, LINE TO DEPLOY AT DINNER WITH WU TOMORROW.

8. INTERESTINGLY THERE ARE SIGNS THAT THE CHINESE ALREADY

EXPECT US TO SEEK TO TRADE OFF OUR ACTION ON DIRECT ELECTIONS FOR

CONCESSIONS ON THEIR SIDE ON THE FIRST SAR GOVERNMENT. (SEE FOR

EXAMPLE THE MIRROR ARTICLE SUMMARISED IN YOUR TELNO 569.) IT

REMAINS THE CHINESE SUSPICION, HOWEVER, THAT OUR MOTIVE WILL BE

TO PRESERVE OUR INFLUENCE AFTER 1997: WE MUST DO ALL WE CAN TO

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