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HKG not yet at the limits of its flexibility but close to them. Cannot predict whether the talks will succeed.
- If the talks fail, both sides will probably have an interest in avoiding public acrimony. We can say that
contacts will continue; the project may be delayed, not
cancelled. Hong Kong opinion at present seems fairly
philosophical. But delay will send a negative signal to
international investors etc. We shall need to consider the
implications. But must go on trying to make Joint
Declaration work, cooperating with China to ensure smooth transition while maintaining authority of HKG.
Future handling of relations needs further thought.
ACMAAT/2
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