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PRIME MINISTER'S QUESTIONS, 25 MAY

CHINA/HONG KONG: SUPPLEMENTARIES

IMPACT OF RECENT EVENTS ON CHINA'S REFORM PROGRAMME AND FOREIGN

POLICY

Situation still uncertain.

But all leadership agree that reform

should continue. No reason why foreign policy should change.

IMPACT ON HONG KONG: HANG SENG INDEX (HONG KONG SHARE VALUES)

Am aware that Hang Seng Index has been affected by recent events. But this does not reflect underlying stability and strength of Hong Kong economy. Confident that market will fully recover.

IMPACT ON DRAFTING OF HONG KONG'S BASIC LAW

Basic Law of crucial importance to Hong Kong's future for at least 50 years after 1997. Essential to get the Basic Law right. Hope that Hong Kong people will continue to put their views fully and frankly to the drafters. HMG will play its full part in this.

IMPLICATIONS FOR REPRESENTATIVE GOVERNMENT IN HONG KONG

Will

Our aim has always been to introduce representative government at pace which will command widest possible support in Hong Kong. listen carefully to views of Hong Kong people about this.

NATIONALITY

Unrealistic to give all Hong Kong British passport holders right to settle here. Will of course consider any recommendations made on this subject by Foreign Affairs Select Committee, which is expected to report in July.

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