TNAG-2913-FCO40-4188-International-support-from-the-USA-regarding-the-future-of-H-1993 — Page 35

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the issue was not the pace of democracy, but the failure of the British to consult adequately before making the proposals public. The Chinese accused the Governor of abandoning the commitment to intensified Sino-British consultation and cooperation during the second half of the transitional period specified in the Joint Declaration. The Chinese insisted they favored democracy at the measured pace set out in the Basic Law.

The Chinese also accused the British of contravening past agreements and understandings, pointing to an exchange of correspondence between their Foreign Ministers in January-February 1990. In particular, they cited a February 12, 1990 letter from Foreign Secretary Douglas Hurd to his Chinese counterpart Qian Qichen which stated that the UK "agree(d) in principle with the arrangements which (were) proposed for an Electoral Committee, which could be established in 1995."

The British disagreed that any agreements had been breached, arguing that the Basic Law is not specific on the point of the Election Committee; and did not spell out fully the five principles agreed between the two sides as a framework for an Election Committee system. The British argued that Annex II to the Basic Law specifically stated that the Election Committee model for the 1999 Legco election will not apply to the case of the first HKSAR legislature,

The Chinese responded that if the 1995 election arrangements do not comport to the Basic Law they would hold new elections after 1997, They also hinted that they might establish a new organization before 1997 to ensure a smooth transition. During a November London visit, Vice Premier Zhu Rongji hinted that China might repudiate the Joint Declaration.

(D) Chinese Threat to Cancel Contracts after 1997

On November 27, 1992, the senior Chinese JLG representative warned that the future HKSAR government would not honor a contract for Container Terminal Nine on the grounds that the Hong Kong government had not consulted the Chinese at the JLG. (On November 10, the Hong Kong government had offered the Container Terminal Nine development contract to two private consortia, one with a major US partner, Sea-Land.) Subsequently, on November 30, 1992, the Hong Kong and Macau Affairs Office of the PRC State Council announced that, except for certain land leases, "other contracts, leases and agreements signed and ratified by the Hong Kong British government which are not approved by the Chinese, will be invalid after June 30, 1997." The statement explained that since British rule over Hong Kong will terminate on June 30, 1997, the current government will have no right to handle any affairs after that date. Reiterating that the Chinese government continues to welcome investments in Hong Kong, the statement said that the PRC will take a "positive attitude" in examining and approving contracts, leases and agreements after June 30, 1997, on behalf of the future HKSAR.