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Arising from the above, I would judge the balance, which you put in favour of talks in your para 8, the other way round.

5.

in

However, I suspect that this judgement is going to become somewhat academic. It seems to me that we could only introduce the matter to Legco if we were reasonably sure of having sufficient political support in Hong Kong. others are better placed than I to judge this, but personally I am now rather doubtful it this will be the case: we shall get a better idea the next few weeks. If we conclude that we will not have sufficient support, then the only option would be to seek talks.

6. I have a number of other points on your draft:

Para 2: You might add to your trade-offs the questions whether through train from which some current Legco members were excluded would be acceptable, how far the community itself want to achieve the objective of a cooperative relationship with China, and how would the community react to the prospect of four years of non-cooperation. I think it is particularly pertinent to ask how the bulk of the civil service would react to a situation in which it had become clear that a choice had to be made between loyalty to the present administration and the chance of a career after 1997. So long as there is some possibility of a through train civil servants can tell themselves that they can avoid this choice. Will they be able to if we reach the point of definitive non-cooperation?

Para 6:

am not sure that the Chinese are unlikely to take the initiative to resume contact. I think this will depend on their perception of whether or not we are about to introduce the bill to Legcu. If they conclude that we are, I would think it quite likely that they will take an initiative shortly before we are planning to do so, in order either to pre-empt us, ог alternatively to make us look particularly evil and uncompromising in the eyes of the Hong Kong community.

Pard 7(ii): It is hard to see how the Chinese can take ' firmer grip on post-1997 contracts and franchises, since their grip is already virtually total.

In para (iv) it might be worth recording as a strong disadvantage of this course that HKG would no longer have much control of what happened to the bill. It is perhaps also worth inserting the most nightmare scenario of all, which is that the Legislative Council became paralysed and decided, as a way out, to put the bill on hold and to request the Governor to carry out further talks with the Chinese. In these circumstances the Chinese would virtually be able to dictate to us.

/ Para 9

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