IN ESAAT

NOTES FOR SUPPLEMENTARIES

I: CONFIDENCE IN HONG KONG AND RELATIONS WITH CHINA OVER HONG KONG

WHAT ARE HMG DOING TO RESTORE CONFIDENCE?

Work of Joint Liaison Group has resumed.

Working to try to ensure best possible Basic Law for Hong Kong; Looking at pace of democratisation

Pressing ahead with major infrastructure projects, eg new

Airport. £10 billion of investments up to and beyond 1997.

Bill of Rights will be introduced as soon as possible.

Working urgently on a nationality package to counter effects of

emigration of talented people.

WHAT HAVE HMG SAID TO CHINESE ABOUT CONFIDENCE?

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Have welcomed Chinese reaffirmation of commitment to Joint

Declaration

Made it clear to them that they have vital role to play in

restoring confidence by demonstrating this commitment through

concrete actions.

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Above all hope that they will be responsive to Hong Kong's views

when finalising Basic Law.

STATION ING OF CHINESE TROOPS IN HONG KONG

Have always acknowledged right of Chinese to station troops in Hong Kong for defence. Joint Declaration provides for this.

But have pointed out to Chinese that this is a very sensitive

issue in Hong Kong. We hope that Chinese will take full account of these sensitivities in their handling of this matter.

CHINA BLAMES HMG FOR LOSS OF CONFIDENCE?

Effect of events of May and June in China are a matter of

historical record. Have made our views on cause of loss of

confidence in Hong Kong perfectly clear.

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