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Evident during my visit that there was a real election

campaign underway in Hong Kong. This too marks start of a new phase for Hong Kong. For first time, directly elected members. Rising curve of directly-elected members continuing beyond 1997.

- short passage on results (elections are on 12 and 15 September)]

Look forward to working with new LegCo and, as Prime

Minister made clear in Hong Kong, discussing with them wide range of issues.

- Believe JD is best basis for Hong Kong's future. We need all to pull together to make it work.

As Prime Minister said, this is a top priority for the British Government: reason for visit and for intensified

contacts.

But you have crucial role to play.

Beyond 1997 we shall no longer have historic responsibilities for Hong Kong. But Britain will remain a major part of Hong Kong's economic success story. "British-owned, managed or controlled" companies are significant: stock market capitalisation estimated at over £20 bn: Swires, Jardines, Hong Kong Bank, C & W.

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Will be building worthy new Consulate-General to symbolise our continuing commitment to Hong Kong's success.

Before and after 1997 Britain and China will have shared interest in success of Hong Kong. Illustration of that is the way Hong Kong's success spread into Southern China: Guangdong transformed in last 10 years. Cross border

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