CONFIDENTIAL
17.
want them. In the review promised for 1987 we shall need to address difficult and controversial issues, such as the relationship of the future Chief Executive and his Executive Council: the relationship between that Council and the legislature, and whether we should move to direct elections. The attitudes of the Chinese, who are highly suspicious already of our moves towards representative government will be crucial. Things are already moving fast on their side too. They have established a Committee to draft the Basic Law (in effect the mini-constitution) for the Special Administrative Region, and promised that it will be completed by 1990. It will start its consultations this autumn. The extent to which they incorporate in it a structure of government which gives promise of true autonomy for Hong Kong will determine how far they will be able to maintain the confidence of the community in the agreement. If we on our side can, over the next few years, demonstrate that the kind of system we have in mind will not affront Chinese interests or threaten Hong Kong's stability, then there is at least a chance that the Chinese will incorporate something like it in the Basic Law. The problem is that they do not recognise any role for the UK in drafting that law. Keeping the political development processes in line on their side and ours will not be an easy task.
35.
The fourth essential need will be to achieve international acceptance of the practical arrangements which will be required to sustain Hong Kong's autonomous status. There are over 500 treaties and other international arrangements applying to Hong Kong as a British Territory. Means will have to be found to maintain the applicability of those arrangements, particularly the GATT, to this territory as a Special Administrative Region of China and perpetuate Hong Kong's membership, full or associate, of a large number of
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