TNAG-2916-FCO40-4191-International-support-from-European-countries-regarding-the--1993 — Page 109

-2-

We

We are determined to maintain and develop Hong Kong's position as an international business centre. have the busiest container port in the world, and we are adding to its capacity. We are building a new airport, which will have a maximum capacity early in the next century of 80 million passengers a year. In spite of our difficulties with the Chinese over the financing of that project, it is going ahead as you will see for yourself when you are here; and there is no doubt that it will be built.

Hong Kong will certainly have the infrastructure to maintain its position as an international business centre. But it will need more than that. It will need to maintain its own legal system, the rule of law and its excellent record against corruption. It is in this area that I see the main challenge for the future. The Sino-British Joint Declaration contains detailed guarantees that Hong Kong will have its own government after 1997, comprising local people and not people sent from China; that it will keep its own laws, its legal system and its individual freedoms; that it will have an elected legislature; and that its way of life should in virtually every respect continue as before. But we are now engaged in difficult negotiations with the Chinese over the way in which the legislature should be elected in 1995; we want an agreement with them so that that legislature can remain in being for a full four-year term, ie. two years into the period of Chinese sovereignty. The difficulties arise over trying to agree arrangements for the elections which are open, fair and credible.

If we do not have open, fair and credible electoral arrangements we shall have a legislature that can be manipulated and the legislative and financial decision-making processes will be vulnerable to abuse. We would then risk having institutionalised corruption, and the rule of law on which all Hong Kong's success depends would be endangered. International business interests in Hong Kong would suffer, not to mention the people of Hong Kong.

I want to emphasise that the argument which we are having with China is not about speeding up the pace of democratisation in Hong Kong, although some people

(including most of the directly-elected legislators) think it should be. The argument centres on whether the steps towards democracy which are already agreed should be credible or not.

/