CONFIDENTIAL

independent of the Governor and had a status and power base

of his own, this could have advantages other than those

envisaged in paragraph 8, i.e. he would take responsibility

in place of the Governor (and HMG) for unpopular policies

and inefficiency. It is also possible that the Chinese

would be more prepared to deal with a PCE who comes from the

class who will provide the successor prominenz after 1997

rather more than they would deal with a Governor.

12.

In addition to paragraph 8, encouragement of the

development of local Hong Kong institutions which owe their

origin to local initiatives and comprise predominently those

who will provide the successors could constitute a forum in

which the Chinese would be prepared to discuss measures

implementing the Basic Law more readily than they would be

to discuss them with British officials (whether or not

within areas within the competence of the JLG) and also

remove appr

sions about changes or ossible changes

coming about 1 July 1997. In this connection a 'proto

L

Basic Law Committee' could well be a welcome development

nearer to 1997 to deal with transitional provisions and take

the threat out of Article 159.

FB5AAR/5

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