CONFIDENTIAL

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MDLIAN 4524

SUCH IT CAN BE ARGUED TO DEFINE BEST THOSE COMMITTED TO HONG KONG

AND THEREFORE ACCEPTABLE AS OWNERS OF ITS MEDIA. WE ARE THEREFORE

CONSIDERING A REVISIONOF THE DEFINITION OF ELIGIBILITY TO ONE WHICH

INCLUDES ALL THOSE WHO ARE ORDINARILY RESIDENT IN HONG KONG AND HAVE BEEN SO FOR A CONTINUOUS PERIOD OF SEVEN YEARS.

6. THIS DEFINITION HAS A SLIGHTLY WIDER SCOPE THAN JD159 ON THE KEY

POINT ON NON-CHINESE NATIONALS IN THAT NO DECLARATION OF PERMANENT RESIDENCE' IS REQUIRED. THE INTRODUCTION OF SUCH A REQUIREMENT IN THE PRESENT LEGISLATION WOULD NOT ONLY BE INAPPROPRIATE IN THIS CONTEXT, BUT WOULD ALSO INEVITABLY PRECIPITATE CONSULTATIONS WITH THE CHINESE

WHICH WE DO NOT WANT AT THIS STAGE. IT WOULD ALSO BE LEGALLY DIFFICULT BECAUSE EITHER THE REQUIREMENT WOULD HAVE TO BE IMPOSED

ON EVERYONE (I.E. INCLUDING CHINESE NATIONALS' ') WHICH WOULD BRING

DOWN MORE VIGOROUS CRITICISM: OR IF WE ATTEMPTED TO EXEMPT CHINESE NATIONALS WE WOULD HAVE TO DEFINE THEM.

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7. HOWEVER, TONG IS LIKELY TO PICK ON OUR REVISED DEFINITION AND PROTEST THAT IT IS EVEN WORSE IN ITS IMPLICATIONS THAN THE PREVIOUS

ONE IN THAT IT BRINGS FORWARD IN TIME THE POSSIBLILITY OF OWNERSHIP

BY FOREIGN NATIONALS.

8. YOU WILL APPRECIATE THE DIFFICULTIES OF THIS TIGHTROPE: WE ARE STILL THRASHING IT OUT HERE AND WILL ALMOST CERTAINLY NEED TO GO BACK TO EXCO. UNTIL WE DO SO WE CANNOT FINALIZE A DEFENSIVE LINE TO TAKE. THE CHINESE HAVE NOT, HOWEVER, MADE ANY FORMAL APPROACH YET. CONCEIVABLY THEY TOO ARE STRUGGLING TO FORMULATE A SATISFACTORY

DEFINITION TO OFFER AS AN ALTERNATIVE.

WILSON

YYYY

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17

MINIMAL

ADDITIONAL

1

HKGO LONDON

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DISTRIBUTION

18

HKD

2

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