XN000022-1984-08-01 — Page 5

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WEDNESDAY, AUGUST 1, 1984

THE GROUP'S TERMS OF REFERENCE HAVE BEEN PRECISELY DEFINED. THE GROUP WILL HAVE THREE FUNCTIONS: LIAISON, CONSULTATION ON THE IMPLEMENTATION OF THE AGREEMENT, AND EXCHANGE OF INFORMATION. IT HAS ALSO BEEN AGREED IN THE TERMS OF REFERENCE THAT:

THE GROUP WILL NOT BE AN ORGAN OF POWER :

IT WILL HAVE NO SUPERVISORY ROLE $

IT WILL PLAY NO PART IN THE ADMINISTRATION OF HONG KONG.

THE CHINESE LEADERS HAVE GIVEN ME FIRM AND SPECIFIC ASSURANCES ON THESE POINTS.

LIAISON AND CONSULTATION WILL CONTINUE TO BE NECESSARY AFTER 1997. THE GROUP WILL, THEREFORE, CONTINUE ITS WORK UP TO THE YEAR 2000,

I SAID IN APRIL THAT WE WERE WORKING TO A PROGRAMME WHICH TAKES ACCOUNT OF CHINA'S WISHES AND OF OUR OWN REQUIREMENTS. UNDER THIS PROGRAMME, WE AIM TO COMPLETE OUR WORK AND INITIAL AN AGREEMENT BEFORE THE END OF SEPTEMBER.

THE PEOPLE OF HONG KONG WILL WANT TO SEE THE FULL TEXT OF THE AGREEMENT AND ANNEXES AS EARLY AS POSSIBLE, SO THAT THEY HAVE TIME TO CONSIDER IT. THERE WILL BE A PERIOD FOR EXPLANATION, DISCUSSION AND DEBATE. ARRANGEMENTS FOR THE ANALYSIS AND ASSESSMENT OF HONG KONG OPINION WERE ANNOUNCED A FORTNIGHT AGO, THIS IS A VITAL PART OF THE PROGRAMME,

WHEN THIS ASSESSMENT HAS BEEN MADE, IT WILL THEN BE FOR PARLIAMENT TO DEBATE THE AGREEMENT, TAKING FULL ACCOUNT OF THE VIEWS EXPRESSED IN HONG KONG. IF PARLIAMENT AGREES, THE AGREEMENT WILL BE SIGNED BEFORE THE END OF THE YEAR.

FROM WHAT I HAVE SAID YOU WILL SEE THAT SOMETHING VERY IMPORTANT HAS BEEN ACHIEVED. I BELIEVE IT HOLDS OUT THE PROSPECT OF AN HISTORIC AGREEMENT: AN AGREEMENT WHICH WILL PROVIDE FOR A HIGH DEGREE OF AUTONOMY: UNDER WHICH ADMINISTRATION WILL BE IN THE HANDS OF THE HONG KONG PEOPLE THEMSELVES; AND UNDER WHICH HONG KONG'S ECONOMIC AND SOCIAL SYSTEMS, ITS DISTINCTIVE WAY OF LIFE AND ITS POSITION AS A FINANCIAL TRADING AND INDUSTRIAL CENTRE WILL BE SECURED.

THOUGH THERE IS STILL A LOT OF WORK TO BE DONE, I AM CONFIDENT THAT WE ARE ON COURSE FOR A CONCLUSION WE SHALL BE ABLE TO COMMEND BOTH TO THE PEOPLE OF HONG KONG AND TO THE BRITISH PARLIAMENT.+

QUESTION ONE,