TNAG-1491-FCO40-2049-Future-of-Hong-Kong-General-Agreement-on-Tariffs-and-Trade-(-1986 — Page 184

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SOVEREIGNTY IN 1997, AND TO ENSURE THAT IT DOES NOT BECOME BOUND

UP IN ANY WAY WITH CHINA'S OWN POSITION IN THE GATT. WHAT IS

LIKELY TO BE APPROPRIATE FOR A STATE-TRADING COUNTRY LIKE CHINA WILL REMAIN WHOLLY DIFFERENT FROM WHAT IS APPROPRIATE TO A FREE

TRADING ENTITY SUCH AS HONG KONG. IT IS ESSENTIAL THAT THIS BE SETTLED QUICKLY, TO REASSURE THE HONG KONG BUSINESS COMMUNITY,

WHOSE CONTINUED CONFIDENCE IS VITAL TO THE SUCCESS OF THE

SINO-BRITISH AGREEMENT ON HONG KONG.

HOWE

HONG KONG AGREEMENT : RESTRICTED

LIMITED

HD/HKD

HD/FED HD ECD (E)

RESEARCH D'(FE)

D/HD PUSD

MR WILSON

COPIES TO:

MR FIFOOT, LEGAL ADVISERS MR WOOD LEGAL ADVISERS

MR MADELIN

DT

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