CONFIDENTIAL

06 26

MDLIAN 1327

THE

DIFFICULTY OF SPECIFYING IN A FEDERAL CONSITUTION THE RELATIONSHIP BETWEEN A FEDERAL AND A SUBORDINATE GOVERNMENT. HOWEVER, IN HONG KONG'S CASE, WE NOW HAD MANY EFFECTIVE CHANNELS FOR RECONCILING OUR DIFFERENCES: WE WOULD USE THESE AS TENACIOUSLY AND AS OFTEN AS NECESSARY. ONE DIFFICULTY WAS TO RECONCILE CHINA'S DESIRE TO DEMONSTRATE THE NOVELTY OF THE SITUATION WHICH WOULD ARISE IN 1997 WITH OUR OWN DESIRE FOR CONTINUITY.

WILSON

YYYY

DISTRIBUTION

51

ΜΑΙΝ

50

.HONG KONG AGREEMENT

. (RESTRICTED)

-

LIMITED

HKD

HD/FED

RESEARCH (FE)

PUSD

PS/LORD GLENARTHUR PS/MR EGGAR

PS/PUS

MR MCLAREN

MR GILLMORE

ADDITIONAL

1

MR FIFOOT, LEGAL ADVISERS

NNNN

4

PAGE CONFIDENTIAL

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