I believe

Kong prosperity will, as I said, proceed at pace.

that we are in for a very very turbulent time. The Chinese

will make it as difficult as they possibly can. But at the end

of the day I think Chris Patten has taken a series of moves

which ought to be supported, are supported within Hong Kong,

should be supported in Britain and in the long-term have the

best chance of providing the best interests for Hong Kong

itself.

Q

A

But as I was suggesting to David Howell this morning, that's

interesting if you are a politician, the political equation but the business community is actually losing confidence. The

stock market has been falling and they are very worried about

the future because of this political struggle.

Yes, and I have no doubt whatsoever that the Chinese will make

that even more difficult for them in the weeks and months ahead.

The question for the Chinese, however, at the end of the day is

do they want a Hong Kong which is vibrant, prosperous and

contributes a huge amount to the Chinese purse and is a major

entre... for China to use for its goods to go abroad or do they

want to inherit a China that's broken-backed. That's the

long-term question. I think we have to try and provide the best mechanisms we can for the Chinese to find a way out of this but

at the end of the day the business confidence and prosperity for Hong Kong will probably be much more significantly undermined if

we do not allow the Hong Kong people to have some system of

democracy that gives them the assurance of freedom after 1997.

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