TNAG-2494-FCO40-3626-Future-of-Hong-Kong-constitutional-development-Chinese-reac-1992 — Page 167

CONFIDENTIAL

CONFIDENTIAL

FM HONG KONG

TO IMMEDIATE FCO

TELNO 2794

OF 010308Z DECEMBER 92

INFO IMMEDIATE PEKING, UKREP JLG HONG KONG

TOP COPY DIST?

120130

MDHIAN 0040

ch.r.

ра

POSSIBLE FURTHER CHINESE MEASURES AGAINST HKG

1. SHIU SINBOR OF THE ONE COUNTRY TWO SYSTEMS ECONOMIC RESEARCH INSTITUTE IS REPORTED BY MING PAO ON 30 NOVEMBER TO HAVE SAID THAT CHINA WOULD DISCLOSE AROUND THE NEW YEAR A SERIES OF ARRANGEMENTS FOR HONG KONG'S TRANSITION, ONE OF THE PURPOSES OF WHICH WAS TO PREVENT THE IMPLEMENTATION OF MY POLITICAL REFORMS. VINCENT LO HAS TOLD US THAT ONE PARTICULAR MEASURE WILL BE TO SET UP A PREPARATORY COMMITTEE FOR THE SAR AT ONCE.

2. WE HAVE REPORTED SEPARATELY THE CHINESE STATEMENT ON CONTRACTS (MY TELNO 2793). THE CHINESE MADE STATEMENTS LIKE THIS TO US DURING THE AIRPORT TALKS, BUT THIS IS THE FIRST TIME THAT THEY HAVE MADE THEIR POSITION PUBLIC IN SUCH A STARK MANNER. AS YOU KNOW, THEIR ARGUMENT IS THAT ANY GOVERNMENT CONTRACT WITH A VALIDITY BEYOND 1997 AND NOT AGREED WITH THEM CONTRAVENES THE

BASIC LAW SINCE THE UK HAS NO POWER OF ADMINISTRATION BEYOND

1997. IF THE CHINESE DO DECIDE TO SET UP A PREPARATORY COMMITTEE STRAIGHT AWAY, WE IMAGINE THEY MIGHT GIVE IT THE JOB OF DECIDING WHETHER INDIVIDUAL CONTRACTS STRADDLING 1997 WERE ACCEPTABLE. THE PREPARATORY COMMITTEE FORESEEN IN THE BASIC LAW WOULD HAVE BOTH MAINLAND AND HONG KONG MEMBERS, WITH HONG KONG MEMBERS CONSTITUTING NOT LESS THAN 50 PERCENT.

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