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The proposals which we put forward in October 1992 which, subject to our reaching an overall agreement with China, we are prepared to change - were fully consistent with the Joint Declaration, the Basic Law and the relevant understandings and agreements between Britain and China. This point was confirmed only this week by a panel of independent lawyers testifying before the Foreign Affairs Select Committee of the House of Commons.

I very much hope it will be possible for us to reach agreement in the talks, which have already lasted 150 hours. But we are getting short of time and we have very little room left to manoeuvre.

Given Germany's Herculean struggle with the challenge of reunification (and I have the greatest admiration for the way in which Germany has met this challenge), you will understand better than anybody the difficulty of building bridges between a society built on the basis of the rule of law, and one which has no such basis. That is the nub of our problem. We have to develop the links between Hong Kong and China while safeguarding the distinctness of the legal and other systems of Hong Kong. The "one country, two systems" concept is the basis of the Sino-British Joint Declaration. Our challenge is to ensure that it is implemented. If Hong Kong's systems are undermined, everyone will be losers Hong Kong and China in particular, but also the rest of the region and the trading world. But if we succeed, Hong Kong will continue to develop well into the next centry as a great international city and an engine of East-West trade.

I wish you a most successful visit to China, and look forward to welcoming you to Hong Kong.

Z

Dr Helmut Kohl

Governor

Chancellor of the Federal Republic of Germany

Bundeskanzleramt

Adenauer Allee No 139

53113 Bonn

Federal Republic of Germany

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