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Some Members expressed concern that the Preparatory Committee might develop into a second power centre or that civil servants might be placed in a situation where their loyalties were divided. I would like to reassure Members that we too are aware of these potential problems. In co-operating with the Preparatory Committee, we will ensure that whatever we do is fully consistent with the Joint Declaration and the Basic Law, that the Hong Kong Government's power of administration is not compromised in any way and that civil servants are not subject to conflicting loyalties. Within these parameters, however, we are prepared to be flexible and we stand ready to offer any assistance necessary to ensure a smooth and efficient transition.

We have, in fact, already begun to discuss with the Chinese side what sort of assistance the Preparatory Committee will require. I can assure Members that our dealings with the Preparatory Committee will be based on the important principles of openness and transparency, and that members of the community and Members of this Council will be briefed regularly on our exchanges.

Let there be no misunderstanding. This Administration will continue to govern Hong Kong until 30 June 1997. There can be no question of a parallel government, or of the Hong Kong Government shirking its responsibility. We are fully committed to taking all action necessary to ensure that after 1997 the Hong Kong SAR enjoys the high degree of autonomy pledged to it in the Joint Declaration and the Basic Law.

The civil service

I turn now to the civil service. Only a few members felt it necessary to comment on the civil service in last week's debate. I very much hope that this was because Members of this Council recognise that the civil service is performing well, and that it is maintaining its high standards of service to the community. Indeed some Members spoke highly of the civil service's professionalism.

A few Members also referred to the need to maintain morale in the civil service, and I was grateful that this issue was recognised. I am sure that Members agree that maintaining a strong civil service is critical to achieving a smooth transition in 1997. We recognise of course that many civil servants are worried about 1997. One way to alleviate these worries is for them to get to know their Chinese counterparts better - at all levels. Some Members still seem to believe that there is limited contact between Hong Kong and PRC officials. The truth is very different. At working level, many departments have literally daily contact with the Chinese side on both day to day and more important issues. And a large and increasing number of officials from both sides visit the territory of the other on familiarisation tours, fact finding missions and sponsored visits.

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