TNAG-2473-FCO40-3600-Asian-Development-Bank-liabilities-of-Hong-Kong-1992 — Page 59

CONFIDENTIAL

Democracy

- Our aim is to establish in Hong Kong before 1997 a system of government which includes a substantial element of democracy and which can endure and develop further after

1997.

-

Present arrangements provide for steady progress towards eventual full direct elections, in line with the Basic Law.

New Governor

-It was announced on 24 April that Mr Christopher Patten (Chairman of the Conservative Party) will take over as : Governor of Hong Kong sometime during July 1992.

Mr Patten said he was delighted to have the privilege. to: serve as. the 28th Governor of Hong Kong.

Hong Kong and Shanghai Bank

(Treasury have emphasised this line should be strictly followed)

--Any bid is initially a matter for the two companies and their shareholders.

--Takeover: needs approval: of Bank of England (under ther _Banking, Act: 1987) and the competition authorities (almost-

certainly the European Commission under the European-Mérger Regulation).

*

-We continue to attach great importance to the HSBC- remaining a healthy Bank and continuing to play its important role within Hong-Kong's financial system:

-We know of HSBC's longstanding interest. in expanding their operations into Europe. They already have a scloser

ALKACZZ22–

CONFIDENTIAL