TNAG-2456-FCO40-3577-Future-of-Hong-Kong-constitutional-development-presentation-1992 — Page 111

CONFIDENTIAL

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MDHIAN 2282

BECAUSE OF UNCERTAINTIES IN THE WORLD TRADING ENVIRONMENT. IF WE RAN DOWN THE SURPLUS, AS SOME HAD SUGGESTED, WE WOULD LOSE THE CUSHION THAT WE HAD CREATED TO MEET FUTURE CONTINGENCIES. THUS, FOR EXAMPLE, A TRADE WAR BETWEEN CHINA AND THE US WOULD FORCE US· TO MAKE CUTS IN EXISTING SERVICES.

4. I EXPLAINED THAT I HAD DECIDED TO SEPARATE THE NON OFFICIAL MEMBERSHIP OF EXCO AND LEGCO. THE NEW EXCO WOULD CONTAIN PEOPLE WHO WERE WIDELY RESPECTED IN THE COMMUNITY, INCLUDING ONE OF THE 44 CHINESE ADVISERS ON HONG KONG. THIS WOULD SHOW THAT I WANTED TO HAVE THE BEST AVAILABLE IMPARTIAL ADVICE. I WOULD ALSO RESIGN AS PRESIDENT OF LEGCO, ATTEND LEGCO REGULARLY TO ANSWER QUESTIONS FROM MEMBERS AND LET LEGCO BE RESPONSIBLE FOR ITS OWN AFFAIRS, AS PROVIDED FOR TIN THE ROYAL INSTRUCTIONS AND THE BASIC LAW.

5.

I SAID THAT I ALSO SAW THE NEED FOR A HINGE-BODY' TO HELP THE ADMINISTRATION MANAGE ITS BUSINESS IN LEGCO. WITH A MORE DEMOCRATIC LEGCO, MORE EFFORT WAS NEEDED TO ENSURE THAT THE GOVERNMENT'S PROPOSALS WERE ACCEPTED. THIS WOULD NOT MEAN A LEGISLATIVE-LED GOVERNMENT. THE NEW COMMITTEE WOULD CONSIST OF MEMBERS OF THE ADMINISTRATION AND LEGCO MEMBERS CHOSEN BY THE COUNCIL ITSELF. I WAS AWARE THAT THE CHINESE SIDE HAD EXPRESSED CONCERN OVER THIS PROPOSAL, BUT WAS NOT CLEAR WHY THIS WAS THE CASE. LEGCO ALREADY CONTROLLED PUBLIC FUNDS. I DID NOT SEE HOW THE INTRODUCTION OF THE NEW COMMITTEE, OR EVEN STANDING COMMITTEES, WOULD POSE A GREATER THREAT FOR THE CONCEPT OF EXECUTIVE-LED GOVERNMENT.

6. I SAID THAT I WOULD ALSO BE MAKING PROPOSALS ABOUT THE 1995 ELECTIONS. I THOUGH IT WAS NOT POSSIBLE NOT TO SAY ANYTHING ABOUT THESE UNTIL THEY HAD BEEN AGREED WITH THE CHINESE SIDE. THIS WOULD CREATE MASSIVE UNHELPFUL SPECULATION IN HONG KONG. I WAS BETTER TO SAY WHAT I PROPOSED TO DO AND TO MAKE IT CLEAR THAT THESE PROPOSALS WERE FOR DISCUSSION WITH THE CHINESE AND WITHIN HONG KONG. I WAS VERY KEEN TO RESOLVE THE SITUATION AS QUICKLY AS POSSIBLE. OTHERWISE THERE WOULD BE CONSIDERABLE INSTABILITY OVER THE NEXT COUPLE OF YEARS. IN MY PROPOSALS, I HAD TRIED TO FIND AN ALTERNATIVE TO AN INCREASE IN THE NUMBER OF DIRECTLY ELECTED SEATS, WHICH THE CHINESE SIDE HAD SAID WAS UNACCEPTABLE. I BELIEVED THAT MY PROPOSALS WERE CONSISTENT WITH THE BASIC LAW AND HOPED THAT IT WOULD BE POSSIBLE TO HAVE A CIVILISED, IF ROBUST, DIALOGUE ABOUT THEM. I WAS LIKELY TO BE CRITICISED BY THE LIBERALS AND BY INTERNATIONAL OPINION FOR NOT GOING FAR ENOUGH, BUT I WAS LOOKING FOR THE POINT OF BALANCE IN THE COMMUNITY

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