---

Assessment from HMA Peking, Mr Galsworthy and Governor of damage

interests and those of Hong Kong should we fail to reach

to our

agreement with Chinese and go for 20 seats in 1991.

Way forward:

(a) Further negotiation (depending on Chinese response to our

latest offer). What should our bottom line be?

(b)

(c)

If we cannot secure satisfactory provisions in Basic Law for 1997 and beyond, do we go for 18 or 20 seats in 1991?

If we opt for 18 seats in 1991, how can decision best be presented to minimise adverse impact in Hong Kong? What if anything do we say about our intentions for 1995?

Other issues:

Grand Electoral College: voting procedures.

SECRET

MOPABN

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