L)
M)
SECRET
Legal System: The present arrangements could
be maintained more or less intact although the
PRC might demand some adjustments, eg the
ending of appeals to the Privy Council.
External Trade: Hong Kong's trade would be
seriously damaged if its present participation
in international trade arrangements through the
UK was ended.
N)
Civil Aviation:
Britain's responsibility for
Hong Kong in civil aviation negotiations, which
brings us considerable advantage, could be
maintained provided that China agreed to
continued British responsibility for external
affairs. Some concessions might have to be made
to the Chinese on the use of Hong Kong but we
should aim to retain the right to treat the
territory as part of our civil aviation assets
in dealing with third countries.
Conclusions
33.
A
B
Independence will not be acceptable to the Chinese.
Some other obvious options are likely to prove either-
impracticable or unacceptable.
Nevertheless, a solution must be found quickly in
order to maintain confidence in Hong Kong, and to
avoid serious difficulties for HMG and a dangerous
sense of frustration on the part of China.
21 SECRET
/C
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