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agreement is to run until 31 December 1999, ie after the reversion of Hong Kong to Chinese sovereignty.

Argument

4.

Article 4 of the BBC's Charter states that "the Corporation

shall not

enter into any agreement with the Government of any part of the Commonwealth ... without having first obtained the approval of our Secretary of State". The BBC have therefore asked for our agreement. Neither they nor our Legal Advisers see any objection to the text proposed in the letter from Mr Chui to Mr Gillham of the World Service dated 6 December 1990.

5. We have, however, looked into the statement in that letter that the agreement is "subject to the approval of the Secretary of State" and requesting "a copy of the Secretary of State's approval".

We

have established that there is no need for the Hong Kong Government to obtain formal authorisation from the Secretary of State to agree this exchange of letters. We do not therefore intend to provide the Hong Kong authorities with any written notice of approval. The exchange of letters with the BBC should be sufficient.

6. Since the agreement is to run beyond June 1997 on to December 1999, Hong Kong Department have considered the likely attitude of the Chinese. On balance they think the Chinese have little ground for complaint. The relay service which is to be covered by this agreement has already been in operation for some time without attracting any objections. In the longer term we would argue that this is a cultural matter over which, under the Joint Declaration (JD129), Hong Kong is entitled to continue to exercise autonomy after 1997. We would not be in favour of raising this matter with the Chinese now as, on past evidence, it could simply encourage them

to object.

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