EVELOPMENTS IN CHINA: HONG KONG

General

The Sino-British Joint Declaration is an internationally binding

Agreement. It guarantees that Hong Kong's existing economic and

social systems will remain unchanged for at least 50 years.

No reason to suppose that recent events in China will affect

Hong Kong's future.

Confident that any future Chinese Government will stick

faithfully to the Agreement and will respect all its provisions.

It remains very much in China's long term interest to make the

Agreement work and to ensure that Hong Kong remains stable and

prosperous.

Demonstrations in Hong Kong

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as we are

about

Natural that Hong Kong people are concerned developments in China and that they should wish to express their opinions.

Hang Seng Index

Understand that Hang Seng Index closed 342 points down on

Friday's close. This was only to be expected, under the

circumstances. By no means a panic reaction.

Resignation of Louis Cha (Basic Law drafter)

Am aware of these reports. Have no information about the reasons

for his resignation.

Need for provision in Basic Law prohibiting imposition of martial

law

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This is for the Basic Law drafters to decide.

ALRABF

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