understanding the framework of the Joint Declaration one has to recognise a

number of points. It does two things. It says that the lifestyle and the

laws then in force in Hong Kong in 1984 shall continue but it also

indicates some points at which there is going to be protection and

development in order in a sense to give effect to the underlying

philosophy, that the Hong Kong Special Administrative Region will be an

area where after 1997 there will be protection for individuals and for the

economic system. Action by the British Government which promotes and

involves engaging in developments that are consistent with the lifestyle

and the arrangements that are spelled out in the Joint Declaration to

govern after 1997 cannot in my view be regarded as incompatible with the

Joint Declaration because they involve certain changes from what had been

there in 1984. In effect the Joint Declaration envisaged that between 1984

and 1997 there would be a period of transition towards the guarantees that

are spelled out in the Joint Declaration. I think that is an important

perspective to bear in mind when looking at ciriticism of measures that

have been adopted or have been proposed.

Mr Gapes

99.

Can I take you back to the Exchange of Letters in 1990? Mr

Keller referred to the Foreign Office position as weak and said that they

had got very close to an agreement. What is your view of the statement in

the paper we received this morning from Mr Chamberlain which says that the

status of the Exchange of Letters in 1990 "is no more than an exchange of

diplomatic correspondence between the two sides"? Do you think it is more

than that? If so, could you you expand? I would be interested in the

comments of the other two on what Mr Keller says.

(Mr Keller) I think the conclusion that is contained in the Foreign

Office paper is a conclusion on the contents, that it "is no more than an

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