TNAG-1171-FCO40-1452-Future-of-Hong-Kong-1982 — Page 92

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He talks at some length about the improvements in recent years and particularly about such things as the value to China of its exports to Hong Kong and the deal between China Light and the Guangzhou Authorities over electricity supplies. He goes into some ecstasies about the present leadership in China and what a realistic bunch they are, demonstrated by the emphasis on "domestic economic management, foreign trade and economic exchange". He refers to the recent visit by British MPs led by Edward Du Cann which gives him a lead into reviewing the unequal treaties and events leading up to 1997. Describing the current scene in Hong Kong, he talks of recent undes- irable speculation in properties etc., (this must be real 'tongue-in- cheek' stuff!) and he goes on:-

Such business activities, which may enrich a few individuals, bring no real wealth into the community and provide little employment to the local population. Could activities of a high speculative nature survive in a new "Hong Kong Order"?

If Hong Kong's future is as I perceive it, the event will signal new approach to international relationship. The foundation of this relationship will be based on the mutual respect of the two Governments with the interest of the local population in mind. China has already stated her case in general and if Britain agrees in principle, details will have to be worked out which will take several years. Many people want to know the form of Government as well as the legal and monetary systems of Hong Kong after 1997. I have no crystal ball but am willing to suggest some of the possibilities in order to stimulate discussion.

I venture to suggest that the Government of Hong Kong will be a modified form of the present system with a Governing Council. It will be an "Independent Special Zone" within China under the Chinese flag. The Chairmanship of the Governing Council to be taken in turn by a Chinese and a Briton, say, every three years. The modification should be introduced gradually before 1997 to prevent any shocks due to abrupt changes. The early introductión of the modification would also give time to test the system and make any changes that might be necessary. The Legislative Council would continue with some appointed members as an interim measure for a few years, after which the entire Council could perhaps be elected. Hong Kong has already started the election of District Committees from the beginning of this year. It looks likely that the election of Legislative Council members could be evolved from this system.

Assuming that the present laws of Hong Kong, which have world- wide recognition, will continue to be enforced after 1997, then where is the final appeal for court cases to be taken? If China claims

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