summer.

CONFIDENTIAL

- Basic Law Drafting Committee Special Groups on the political system and CPG/SAR relationship met their opposite numbers from Basic Law Consultive Committee in Canton on 21 November. Special

Groups began meeting 11 December. Shall continue to monitor

progress carefully.

Dismissal of Martin Lee and Szeto Wah

(Defensive)

- NPC appointed BLDC. Matter between Chinese authorities and

members concerned.

-

Very much hope that Chinese authorities will continue to take account of views of that sector of Hong Kong community which Mr Lee

and Mr Szeto represent.

Stationing of PLA in Hong Kong

Fact is that Joint Declaration provides for China to station military forces in Hong Kong SAR for defence purpose. Committee accepts that cannot begin to unravel Joint Declaration. However, Joint Declaration also stipulates that those military forces shall

not interfere in SAR's internal affairs.

Chinese are in no doubt about importance of this question for

confidence in Hong Kong. We have urged the Chinese Government to take Hong Kong's sensitivities fully into account in their handling

of this issue.

NES ADD

CONFIDENTIAL

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