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continue beyond 1997. We can know only if we raise it with
them, but we, HKG, UKREP JLG and Peking agree that to do so would risk stimulating an unhelpful response.
4. In the absence of any clear view of the likely attitude of the Chinese authorities, the Council have considered two
options:
(a) to do nothing and hope to be able to continue
after 1997 with their status "undefined"; or
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(b) to establish a new legal status under local legislation which will survive the transition.
Both the Alliance Francaise and the Goethe Institute have
registered under the Companies Ordinance, the former as a Hong Kong company in its own right, the latter as a branch of an overseas body. The Council have decided on balance
that they should register under the Companies Ordinance
(as a branch of an overseas body) at an early stage. (The
risks of doing nothing are too great and emulating the Alliance would make them subject to a local borfad of management, which they would not wish). By creating a fait accompli in this way it would be surprising if the Chinese acted to put it in reverse. But if the Chinese insisted on doing so the Council are prepared to adapt as necessary, (and the fact of having registered will in any event do no
harm).
5. The Council have also carefully considered the idea
that such close association with HMG that colocation would
bring might damage their interests (and/or impede their operations), if relations with China deteriorated after 1997, or Hong Kong people became hostile to Britain. They have concluded that the balance of advantage lies in
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