TNAG-2103-FCO40-2995-Future-of-Hong-Kong-exchanges-with-the-Chinese-on-the-Basic--1990 — Page 53

CONFIDENTIAL

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020641 MDHIAN 9342

CONFIDENTIAL

FM HONG KONG

TO DESKBY 02130OZ FCO

TELNO 795

OF 021145Z MARCH 90

AKCO12

ALICRIVES

IN D

ISTRY

12 MAR 1998

GISTRY Action Taken

INFO PRIORITY PEKING, UKREP JLG HONG KONG

TOP COPY Q DIST ?

/

(47)

YOUR TELNO 470: BASIC LAW: ARTICLE 106

1. WHILE THE TEXT WE HAVE PROPOSED TO THE CHINESE ON ARTICLE 106 REMAINS OUR PREFERRED SOLUTION, WE MUST ASSESS HOW LIKELY ITS ADOPTION WOULD BE AT THIS LATE STAGE. IF WE JUDGE THE CHANCES ARE SLIM TO NON-EXISTENT, THEN WE SHOULD PUT FORWARD WHATEVER SOLUTION WE BELIEVE HAS A REALISTIC PROSPECT OF SECURING AN IMPROVEMENT. THE LINE WE PROPOSED IN OUR TELNO 711 WAS DEVISED AS SUCH AN ALTERNATIVE.

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2. IF WE TAKE THE LINE IN YOUR TUR WITH NO FALL BACK, YOU WILL NEED TO CONSIDER WHAT LINE TO TAKE IN PUBLIC IF THE APPROACH IS SUCCESSFUL. IS IT YOUR THINKING THAT WE WOULD THEN SAY THIS ARTICLE IS INCONSISTENT WITH THE JOINT DECLARATION?

3. SO FAR THERE HAVE BEEN NO SIGNS THAT THE CHINESE WILL BE WILLING TO CONSIDER OUR PROPOSED TEXT. BUT THERE HAVE BEEN INDICATIONS THAT THEY WOULD BE PREPARED TO GIVE THE CHINESE TEXT A BROADER INTERPRETATION COUR TELNO 646) AND TO REFLECT THIS IN THE ENGLISH TEXT CE.G. LU PING'S OFFER TO AMEND THE TRANSLATION CONVEYED TO ME IN PEKING). WE BELIEVE WE SHOULD TAKE FULL ADVANTAGE OF THIS POSSIBLE OPENING.

4. WE HAVE THEREFORE CONSIDERED FIRST APPROACHING THE CHINESE SIDE ONCE MORE ON OUR PROPOSED TEXT AND THEN IF THAT FAILS, REVERTING TO PRESS FOR CHANGES TO THE ENGLISH TEXT. HOWEVER, THE NPC PLENARY IS LESS THAN THREE WEEKS AWAY AND WE FEAR A TWO STAGE APPROACH NOW WOULD NOT/NOT ALLOW ENOUGH TIME TO ACHIEVE EVEN A LIMITED IMPROVEMENT TO THE ENGLISH VERSION.

5. WITH THESE POINTS IN MIND, WE SUGGEST THAT PEKING SHOULD NOW REITERATE OUR VIEW THAT OUR PROPOSED TEXT WOULD SOLVE THE PROBLEM, BUT ALSO REQUEST THE CHINESE TO REVIEW THE ENGLISH TEXT. A REVISED SPEAKING NOTE ALONG THESE LINES IS IN MIFT.

6. ON THE POINTS RAISED IN PARA. 2 OF TUR, WE HAVE THE FOLLOWING

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CONFIDENTIAL