TNAG-2566-FCO40-3751-Agreements-between-the-Hong-Kong-Special-Administrative-Regi-1992 — Page 11

Mr Bunten HKD

TKC 370/9

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AGREEMENTS BETWEEN UK/HKSAR

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Thankyou for copying to me Mr Edwards' letter of 4 September to Mr Ricketts. I think that it contains a lot of good sense. would certainly be easier if the various agreements which we considered necessary were dealt with in in the same way, and probably greater confidence would be given if the understandings were framed in the form of international agreements rather than devices such as parallel legislation. I think that it is right at least to explore the possibility, as suggested by Hong Kong, of trying to persuade the Chinese that we should proceed along lines similar to those followed by other countries. It would certainly not be an unreasonable argument to present to the Chinese, and its force would be strengthened if it were made clear that we were not seeking any more favourable treatment than that accorded to other countries. It stands to reason that the UK government and the Hong Kong government will have in practice to discuss the post 1997 treaty arrangements between us and Hong Kong. The important matter for the Chinese is presumably one of principle, relating to the transfer of sovereignty. Since we would make it clear that the agreements could not come into force before 1997 or before they had been signed by the Hong Kong SAR, we would be able to argue that that aspect had been taken into account. For those agreements where a model is already in existence, this approach has a chance of succeeding. The Chinese are likely to object to any arrangement we make along these lines (ie in areas where Hong Kong is concluding agreements with other states) that has not been subject to their scrutiny. Thus they would probably be unwilling to endorse straightaway (or perhaps also without modification) any MOU that the UK government signed with the Hong Kong government now. The point is that we are not trying to deceive the Chinese or extract undue advantage from Hong Kong while we remain the sovereign power. The only we can really convince them of this, and thus be reasonably certain of the arrangements remaining in place, is if we inform the Chinese of what we are doing and offer to let them have the same rights with respect to agreements with the UK as they enjoy with those for other countries. If they then respond with politically unattractive demands (eg by saying that we have to negotiate with them as a proxy for the SARG), we can then decide at that time whether to go for one or other of the alternative devices set out in Mr Ricketts' letter of 24 July. The Chinese will inevitably, sooner or later, enquire what sort of treaty arrangements we are contemplating with the future HKSARG, if at that time we respond that we have already fixed everything up, they are likely to be highly suspicious and might threaten to undo whatever we had arranged. In any case, such a row would very likely unsettle confidence over the future relationship between Hong Kong and the UK which is precisely what we are trying to avoid.

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I agree also that the timing of any approach to the Chinese will always be a problem. There is never likely to be an ideal time. We should certainly not do so until we have a very clear idea of what we want, probably in the form of draft texts of the

CONFIDENTIAL