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14.

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CONFIDENTIAL

Page

While

our

economy

is

self-evidently

sound, what about Hong

Kong's political and social stability?

There are people who will say that Hong

Kong has been crippled by uncertainty over

its future.

Not so. In many ways

No.

Hong Kong can be more

future than many other

certain of its

communities in a

rapidly changing and unpredictable world.

15.

It is worth remembering that the

framework for Hong

Kong's future is set

out in the Joint

Declaration signed by

Britain and China in 1984. The underlying

of the Joint Declaration is that

principle

of "one

principle

country two systems".

This

has been given tangible form by

China's Basic Law which will be, in

effect,

Hong

constitution.

Kong's

post

1997

16.

Together, these

two

documents

guarantee that after 1997 Hong Kong will:

continue

its capitalist,

free

market way of life;

CONFIDENTIAL

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