CONFIDENTIAL
the Governor and ExCo therefore concluded on 30 March that they should take a decision after Easter on when to introduce the legislation into LegCo. The Governor considers that it will be difficult to resist pressure for introduction of the legislation on 21 April (LegCo's first day back after the Easter recess) unless we are in a position to announce talks by then;
Mr Goodlad has underlined to Ambassador Ma our continuing interest in holding talks.
The Foreign Secretary is considering ways to break this logjam (we will update, as necessary).
the dispute with China is holding up agreement over the financing of the airport project, and technical work in the Joint Liaison Group. But despite anxieties in the business community, Hong Kong's economy remains robust, with 5.5% growth forecast for this year.
It should soon become clear whether the Chinese are willing to finesse the question of participation by Hong Kong representatives in the British team, and therefore allow talks to start. If they are, the talks themselves will be tough, and the Chinese will try to spin them out as long as possible. Our interest is to establish quickly whether the Chinese are prepared to talk seriously about arrangements for the 1995 elections, and to give assurances that all those elected in 1995 can in practice continue as members of LegCo beyond 1997 (the "through train"). is some evidence that the Chinese intend to use provisions in the Basic Law requiring members of LegCo to "uphold the Basic Law" as a means of weeding out Martin Lee and other liberals in 1997. We will not want the talks to get bogged down: the Governor wishes to get the legislative process underway in time for LegCo to enact legislation by the summer recess. But our tactical handling of the issue will need to take account of the strong community pressure in Hong Kong to give talks every chance of succeeding in the hope of returning to a cooperative relationship with China, and the reluctance of some members of LegCo to debate a bill in parallel with Sino/British talks.
The Governor's next official visit to London will be in November. The Prime Minister has agreed to speak at a conference in the City, which the Governor will also be attending, on Investment in Hong Kong.
Roderic Lyne Esq CMG 10 Downing Street
sever
Yours Christianer Frontrie
(CN R Prentice) Private Secretary
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