Hong Kong in order to ensure the maintenance and preservation of its economic prosperity and social

stability. I have emphasised prosperity in my comments

today, because stability cannot be relied upon should prosperity fail.

This has been one of the key principles in our approach to

political decisions in the transition to 1997. Much has

been said about the 'smooth transition'. The ideal is to

achieve a comfortable, undramatic transfer of power to the

Government of the HKSAR without trauma and with all Hong

Kong's institutions, social, political, judicial and

economic systems intact and functioning at full strength.

We are certainly working to make that transition as smooth as possible. Let noone be under any illusion. We do not intend to give way on everything simply to achieve

convergence. We have been willing to stand up for Hong

Kong's interests in the past and will do so again when necessary. Hong Kong has to change and grow. The key thing is that these should be as little disruption as possible in

1997.

the agremet

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China

Court of Final Appeal

It is important to have a good working relationship with

China and that is what we have been working to rebuild. reaching agreement in diplomatic negotiations is not synonymous with kowtow.

Which brings me to the British Chamber's letter about the Court of Fial Appeal. I was grateful for your views. You

But

I have replied fully to your

letter I

suggested that the agreement reached with the Chinese in the toke

Joint Liaison Group on the membership of the Court of Final Appeal contravenes the Basic Law and the Joint Declaration. We do not accept this view. We are satisfied that is consistent with both the Joint Declaration and the Basic

Law.

Futhermore we believe that early establishment of the

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should just

the

loppertunity

point.

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