TNAG-1601-FCO40-2194-Hong-Kong-1987-Review-of-Representative-Government-1987 — Page 16

CONFIDENTIAL

Co-operation over Hong Kong's future lies at heart of present close

and cordial relationship between UK and PRC. Many contacts between

the two sides at various levels (Ministerial and official).

Important steps in recent months:

(a)

(b)

(c)

(a)

Agreement on Hong Kong's future position in various international organisations (ILO, FAO, ESCAP, UNCTAD). Nationality related matters (introduction of British

National (Overseas) passport etc).

Good progress in discussion of defence of Hong Kong and

the maintenance of public order.

Continuing discussions with aviation partners to conclude

separate air service agreements for Hong Kong.

Line to take: British and Chinese Governments are committed to full

and faithful implementation of the JD. Both recognise the

importance of this in maintaining Hong Kong's stability and

prosperity.

Drafting of the Basic Law (BL)

6. Under the Joint Declaration, the policies of the PRC regarding

Hong Kong will be stipulated by China's National People's Congress

in a Basic Law. A Drafting Committee (appointed by the NPC and

including people from Hong Kong) is at work. A first draft of the Basic Law is expected to be published in early 1988. Line to

take: HMG take the closest interest in the drafting of the Basic

Law. We welcome the fact that Hong Kong people are able to

participate in this important task. We have expressed the view to the Chinese government that Hong Kong people will attach the greatest importance to the Basic Law clearly and unambiguously reflecting all the provisions of the Joint Declaration.

British Trade with Hong Kong

7.

UK exports to Hong Kong in 1986 comprised about 1.3% of total UK exports, and about 3.4% of total Hong Kong imports.

The Hong

Kong Government welcomes British exports to Hong Kong but takes the view that they must compete with those of other suppliers on their

CONFIDENTIAL