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would not support the necessary legislation) than not to have

tried at all. If LegCo refused to pass the legislation, this would be a shot in the leg but not a fatal injury. If LegCo did pass the legislation, the Chinese might continue their

barrage at its present level. People would then have to decide whether they were prepared to stand in the 1995

elections. He thought that on balance it would still be

possible to run a good election then. People in Hong Kong were already starting to say two things:

it would not have been possible to have a full through train anyway (because the Chinese would not have allowed members of the Hong Kong Alliance who were elected in 1995 to continue serving after 1997);

the Chinese were making a fuss now because they thought that it would in practice be difficult to undo arrangements in 1997 which were seen to be working.

10.

The Secretary of State asked what our line should be on a

referendum. The Governor commented that a referendum would be

immensely provocative and decisively divisive. If his

proposals were to be defeated in a referendum, this would also

undermine his credibility much more than if they were voted down in LegCo. The Secretary of State agreed.

11. The Secretary of State then raised the question of MFN

for China, and the Clinton factor. The public presentation of

this point was not straightforward. On the one hand, we and

the Governor had to be seen to be pressing for MFN to be renewed, in the interests of Hong Kong. On the other hand, we

had to make clear to the Chinese that if they tried to stifle democracy in Hong Kong, that would not help the prospects of

MFN renewal. The Governor noted that the Americans were

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