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Kong's future and certainty to Hong Kong people.

5.

Annex II to the Joint Declaration provides that from 1 July

this year the Joint Liaison Group will have Hong Kong as its principal base. In practical terms this means that each side will open an office for its Senior Representative in the territory; and that experts meeting under the auspices of the Group will generally come together in Hong Kong. But the full meetings of the Group will continue to be held in rotation between Hong Kong, London and

Peking, as the Joint Declaration provides.

6.

When the Joint Declaration was first published there were some misgivings in Hong Kong about the role and functions of the Joint Liaison Group. I am happy to say that these have very largely been dispelled. It is an accepted feature of the diplomatic landscape, as it will soon be on the Hong Kong landscape. It performs a necessary task. It does so discreetly and efficiently. Both the British and the Chinese Governments attach importance to the clear statements in the Joint Declaration that the Joint Liaison Group is not an organ of power, and will play no part in the administration of Hong Kong.

7.

Your Lordships last discussed Hong Kong on 10 February, the day on which the Hong Kong Government published its White Paper on the development of representative government in the territory.

8. The reaction in Hong Kong was generally positive. The White Paper was widely seen as a balanced and well-judged response to the views which had been expressed by the community during an extensive exercise of public consultation. It was overwhelmingly endorsed by the Legislative Council. A proposed amendment regretting that direct elections were to be introduced in 1991 rather than this year was rejected by 42 votes to 7. And it is particularly noteworthy that in that vote each element making up the Legislative Council, including those members themselves directly elected to lower levels of government, was opposed to the amendment.

9.

It is important to remember that we have come a considerable distance over the past four years in responding to the aspirations

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