TNAG-2493-FCO40-3625-Future-of-Hong-Kong-constitutional-development-Chinese-reac-1992 — Page 143

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rule out that they may be able to engineer a collapse of business confidence in Hong Kong if they push hard enough, or that they may unwittingly create such a collapse by miscalculation.

Even if we succeed in getting legislation through LegCo, we should expect the Chinese to sustain their campaign right up to the LegCo elections in 1995. They might well threaten that anyone who became a member of the 1995 LegCo would be excluded from participation in public life after 1997. They would probably declare that they would set up different electoral arrangements in 1997.

We therefore face a long period of struggle. Calm nerves will be needed. We should continue to show that we are ready to continue a normal relationship with China, both over Hong Kong and more generally. The visit here by Vice Premier Zhu Rongji (16-18 November) will be helpful in that. But inevitably the dispute over electoral arrangements will remain

at the centre of our relations with China. We have emphasised to the Chinese that our ideas are proposals, open to discussion with themselves and in Hong Kong, and urged them to put forward their own counter-proposals. But in practice they

seem very unlikely to do so.

As

At OPD (K) on 15 September, we identified one or two minor concessions which the Governor could make (particularly on the Election Committee) during negotiations with the Chinese. part of sustaining support for the Governor's proposals in the Legislative Council, there are two possible scenarios in which we would need to consider whether to make changes of that

kind:

(i) if a ground swell of support developed within Hong Kong for a specific change which we could accept;

(ii) if a widespread view developed in Hong Kong that some

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