1997: a Hong Kong in which the necessary investment has been made for tomorrow or a Hong Kong which has become

static and has lost the confidence to face the challenges

of the next century.

The only way to tackle these problems is to talk to the Chinese. Most people in Hong Kong understand that:

they, after all, have been living on China's doorstep for

their whole lives. At the same time, people in Hong Kong

want Britain to stand up for their rights, but to do so in a way which preserves good relations with Peking. This remit, which could be summarised as "Protect us, but

please do so without causing waves", is not easy to

fulfil.

We must aim for as smooth a transition as possible.

in 1997 and the protection of Hong Kong's position in

China. I am sure that the one goes with the other. То

achieve this we need to try to change gear in our

dealings with China over Hong Kong. I am not sure if this is yet possible, but I am sure that it is worth the

effort. I do not believe that there is a fundamental

difference in the interests of China, Hong Kong and

Britain. All three want to make a success of two systems

in one country. But the Chinese have not yet shown that

they understand in practice how this principle should

guide their words and actions between now and 1997.

Hong Kong is like a fragile and immensely valuable piece of porcelain: it cannot be buffeted about like everyday

tableware without the risk of it breaking and becoming

worthless.

We have no intention of abdicating our

responsibility to Hong Kong during this period. The

Nationality Act, the first introduction of democracy into

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