j.
Q
SECRET AND PERSONAL
make some general points to Chinese leaders about
continuity in British policy and the fact that no decisions on political issues have been taken (to calm Chinese anxieties); and outline a deal in principle on the Airport financing issue. To be effective, these points would need to be made with the authority of the Prime Minister and the Foreign Secretary.
We propose that the Governor should draw on the following points:
the election result ensures continuity of British policy towards Hong Kong. As The Queen's speech made clear, Britain's policy is based on cooperation with
China on the basis of the Joint Declaration;
the Government has made clear since 1990 that they
will discuss with China all the issues involved in the
1995 elections. The Chinese side should not see this
as a threat. The objective will be, if possible, to agree with the Chinese on the component parts of the 1995 electoral system so as to achieve the continuity
through 1997 that both sides seek;
the Chinese side are imagining changes of policy where there are none. Despite speculation in the press, no
new decisions have been taken;
on the airport, the Hong Kong Government would be
ready to expunge any contingent liability remaining in 1997 from callable equity provided that the Chinese side accepted all other elements in the airport financing package.
SECRET AND PERSONAL