I hope this helps to explain where we are. The present position is not a particularly comfortable one, but I have say that it is more comfortable than it would have been if the talks on first stage issues had dragged on, or if we had been pushed to concede so much that our credibility to govern was seriously undermined. There was also a strong sense in ExCo, LegCo and the community as a whole that enough was enough. We are fairly confident that the first stage legislation will get through LegCo all right. The second stage - assuming the Chinese do not come back to the negotiating table - will be more difficult. But the level of support that we have maintained encourages me to think that it will be manageable.
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There will be side-effects of Chinese non- cooperation. It is too early to judge what they will be. But the Chinese reaction so far suggests that they may now recognise that their main task over the next three and a half years is to win hearts and minds; and that they will not do that by bullying. hope that non-cooperation will not last indefinitely. It is by no means cost-free
the Chinese for themselves. It has a negative impact internationally - at a time when they have a number of important trade issues on their agenda. Closer to home, they need our cooperation over the key civil service appointments, for example, and in the financial dialogue.
A row of the kind we are having was probably inevitable after Tiananmen. All things considered it is probably better to have it now, when there is time to recover from it, than in 1996.
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bort.
Governor
Lord Wilson of Tillyorn GCMG
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