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3.
THEY WILL WITHDRAW THEIR SUPPORT IF THE GOVERNOR WATERS DOWN THE DEMOCRATIC CONTENT. THE PRO-BUSINESS AND PRO-CHINESE GROUPS (ROUGHLY 20) ARE OPPOSED. A GROUP OF ABOUT 10 INDEPENDENT MEMBERS WILL THEREFORE BE CRUCIAL TO THE OUTCOME. SOME LEGCO MEMBERS HAVE ALREADY PUT FORWARD ALTERNATIVE PROPOSALS ON PARTS OF THE ELECTORAL PACKAGE. OTHERS ARE INTENDING TO DO SO. THESE WILL BE CONSIDERED BY LEGCO ALONGSIDE THE GOVERNOR'S PROPOSALS, WHICH WILL BE INTRODUCED IN FEBRUARY. THE PROCESS IN LEGCO COULD TAKE SEVERAL MONTHS.
INTERNATIONALLY, THE PROPOSALS HAVE STRONG SUPPORT IN THE US, CANADA AND AUSTRALIA AND (IN PRIVATE) FROM JAPAN AND SOME EC
IN THE UK THERE WAS SOME ADVERSE COMMENT IN THE RECENT LORDS DEBATE. BUT THERE HAS BEEN NO SERIOUS CHALLENGE TO THE GOVERNMENT'S POLICY FROM WESTMINSTER OR THE MEDIA.
THE CHINESE TOOK AN INCREASINGLY HARSH POSITION IN THE PERIOD
BEFORE CHRISTMAS. THEY SAID THAT THE GOVERNOR MUST WITHDRAW HIS PROPOSALS AS A PRECONDITION FOR ANY DISCUSSIONS. THEY KEPT UP A VIRULENT PROPAGANDA CAMPAIGN AGAINST THE GOVERNOR PERSONALLY AND HIS PROPOSALS, AND SUBJECTED BUSINESSMEN AND LEGCO MEMBERS TO BRUTAL PRESSURE. THEY CAST DOUBT PUBLICLY ON THE CONTINUING VALIDITY OF CONTRACTS AND FRANCHISES SPANNING 1997, AND DENOUNCED JARDINES. WORK IN THE JOINT LIAISON GROUP CAME TO A STANDSTILL. THERE WERE SUGGESTIONS IN THE PRESS AND FROM OTHER SOURCES THAT THE STANDING COMMITTEE OF THE NATIONAL PEOPLE'S CONGRESS (MEETING FROM 22 TO 28 DECEMBER) WOULD ESTABLISH A COMMITTEE WITH REPRESENTATION FROM CHINA AND HONG KONG TO MAKE UNILATERAL PREPARATIONS FOR HONG KONG'S POST-1997 INSTITUTIONS. SOME REPORTS SUGGESTED THAT THIS BODY COULD BE GIVEN A ROLE TO INTERFERE IN PRE-1997 MATTERS SUCH AS CONTRACTS AND FRANCHISES. THERE WERE ALSO SIGNS THAT CHINESE OFFICIALS HAD BEEN TOLD TO DRAW UP CONTINGENCY PLANS FOR EVEN MORE SEVERE MEASURES, INCLUDING IN EXTREMIS AN EARLY TAKEOVER.
5. SINCE MID-DECEMBER, THERE HAVE HOWEVER BEEN SIGNS OF A SOMEWHAT MORE MODERATE APPROACH GAINING GROUND ON THE CHINESE SIDE:
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