COVERING CONFIDENTIAL
Although this is a matter of foreign affairs and therefore does not fall within any of the express matters where the SAR is to enjoy a high degree of autonomy, it is not a question that the Chinese could not confer competence on the SARG; the question is whether they would do so.
5.
I am not in any way attracted by Hong Kong's Option B. It is an unnecessary complication which would require a two stage agreement. Further, to take up the point in your minute, I do not think this is an area where any difference of interests between ourselves and Hong Kong which is implicit in both of the variations on Option A which I have suggested above, is of a substantial nature or likely to be significant.
6. I therefore think that our answer to Hong Kong should be that we would prefer Option A, to which we see no legal difficulties. The first party could either be Hong Kong under a UK authorisation or the UK in respect of Hong Kong. We think that the latter might be an easier way of facilitating China's succession to the agreement, but the matter would have to be discussed with the Chinese beforehand and we would have no objection to putting forward the former as an opening position leaving the latter as a fallback if that were necessary to attract the Chinese.
of
21 June 1990
Paul Fifoot
Legal Advisers
2 PFABG
COVERING CONFIDENTIAL
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