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Lord MacLehose of Beoch: My Lords, what good does the noble Lord think that sanctions on China by America would do for the people in Hong Kong? Surely it would ruin them.

Lord Willoughby de Broke: My Lords, I agree that sanctions should be very much an instrument of last resort and would be very difficult for Hong Kong. But the real point is that there is action that the international community should be able to take if the need arises. I very much believe that it will not. Nevertheless, I do not believe that saying that we cannot do anything is a valid way in which to tell Hong Kong that we shall be looking after its interests after the hand-over.

After all, China wishes and needs to become a full member of the World Trade Organisation. It wishes to host the Olympic Games at some stage in the future; and I hope it does. All those are perfectly legitimate aspirations. But I believe that they come with a price tag. China must understand and accept the constraints of interdependence with the outside world. It must recognise that it must play by the rules of the international game and abide by the guarantees that it has given to Hong Kong, jointly with us.

I conclude with two questions, one of which has been touched on already by the noble Lord, Lord Thomas of Gresford. Will the Minister tell the House what is the state of play in relation to the reporting on human rights to the United Nations under the Human Rights Convention and the Civil and Political Rights Convention? I do not know how that obligation to report will be fulfilled.

Finally, is it the Government's intention to implement the promise made by the previous Administration to report to Parliament at six-monthly intervals on

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Hong Kong covering the Joint Declaration with special reference to human rights; and that those reports will continue until at least 1st January, 2000?

8.35 p.m.

Lord Moynihan: My Lords, I am in agreement with the noble Lord, Lord MacLehose, this evening that it is difficult to add to the expertise that we have heard this evening. If the noble Lord can add little with all his expertise, knowledge and experience, I can surely add nothing more than a relatively young man's view of Hong Kong's future.

I agree that this debate has rightly struck a note of optimism. There has always been much firmness, strength of purpose and unity in your Lordships' House and another place on the subject of Hong Kong's transfer to China. As we have seen, many of your Lordships have a keen and often personal interest in all matters relating to Hong Kong and certainly your Lordships' House has played its part in writing one of the last chapters about the British presence in the region.

There is consensus to set a smooth and successful transfer of sovereignty. That consensus is underlined by the Government's continuity of policy. Hong Kong remains one of its highest foreign policy priorities, and that is reflected in the expressions of confidence in the work of the Governor, a sentiment which I fully endorse. His outstanding stewardship, his vision and courage in resolutely standing up for Hong Kong and its interests have been second to none. I hope that we shall hear from the Front Bench opposite that that means that there will be no lessening of Britain's commitment to Hong Kong in its new guise as the Hong Kong Special Administrative Region of the People's Republic of China. I hope that Britain will continue to be committed to its stability, prosperity, the support of its representative government, its rules of law and, of course, its rights and freedoms.

The paramount importance of the interdependence between China and Hong Kong was recognised in the Sino-British Joint Declaration of 1984, of which we have heard much this evening. In that international treaty, registered with the UN, there is a remarkable series of detailed and binding arrangements which were laid down to guarantee key issues--the rule of law and the rights and freedoms of the Hong Kong people--in exchange for Chinese sovereignty.

As a result, Hong Kong will and must continue as an international business centre with complete financial autonomy. It needs to continue to have its own government and legislature composed of Hong Kong people. Its capitalist economy, freedoms, currency, customs, legal systems and its financial markets must, and I hope will, remain intact.

As we know, it will continue to be a member of many international organisations from the WTO to the IMF and will be able to develop its own economic and cultural relations. Its cosmopolitan way of life will remain unchanged for 50 years beyond 1997. That was the debt of honour owed to Hong Kong by Britain and the Joint Declaration pays it. It underpins the important Chinese principle of one country, two systems and of

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Hong Kong people ruling Hong Kong. It is a framework within which the people of Hong Kong can continue to build on their achievements and can work for a secure and prosperous future.

The Joint Declaration was welcomed in 1984 both in Hong Kong and internationally as the best achievable basis for a secure future for Hong Kong. Its success in that regard has been demonstrated by the fact that the predictions of media prophets of doom, who have been referred to this evening and who foresaw the imminent economic death of Hong Kong have been proved to be utterly without foundation.

Together with the Joint Liaison Group, it has been the cornerstone of British policy since its origin 17 years ago and I am glad to say that it will continue to be so under the new Government. The Joint Declaration is a staggering achievement and it is an honour for me to pay tribute to all those who shaped that document, not least noble Lords present this evening and, notably, my noble and learned friend Lord Howe of Aberavon.

Central to the topic of today's debate, the Joint Declaration is unambiguous in its vision of the upholding of the rule of law and the protection of the rights and freedoms of the Hong Kong people. There is strong recognition that the only vehicle for a successful and prosperous future is freedom under the rule of law. The nexus of agreements of laws and treaties, rules and regulations covers almost every sphere of human activity and reflects Britain's greatest and most enduring legacy to Hong Kong and its future success; that is, the rule of law.

The Joint Liaison Group has worked hard to ensure that there will be judicial continuity--the independent exercise of judicial power, the fair appointment of judges--and that the work of the courts will remain free from political interference. The JLG has worked hard to ensure domestic autonomy and jurisdiction of the final Court of Appeal which will replace the Privy Council. This creates legal history in Hong Kong, by allowing it to have its final appellate court within its territory for the first time.

I echo the sentiments expressed by my noble and learned friend Lord Howe, who referred to the appointment of Andrew Li last month as first Chief Justice of the Court of Final Appeal. It was greeted enthusiastically by all sections of the Hong Kong community. I am sure that your Lordships' House will join me in wishing him well as he undertakes the pivotal role that he will play in navigating the Hong Kong judiciary into the next millennium and, above all, in ensuring that existing rights and freedoms are safeguarded by the fair, efficient and independent administration of justice. The JLG has also worked hard to ensure that Hong Kong's laws will be consistent with the Basic Law, and some 150 United Kingdom Acts have been localised in full consultation with the Chinese. Therefore, by 1st July, the Hong Kong people will possess a comprehensive body of laws which owes its authority to its own legislature.

In the last two minutes available to me, I should like to concentrate on what the Government need to do. The Government face diplomatic minefields ahead.

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Politically, ethically and economically the British Government, as co-signatory to the Joint Declaration, with 3.5 million British passport holders resident in Hong Kong, our 12th largest export market, must keep the emphatic promise made by the government of,

    "never allowing Hong Kong to walk alone,"
after the handover. Britain's Consulate-General in Hong Kong is its largest in the world. It is a physical symbol in bricks and mortar of our continuing commitment to Hong Kong, which cannot and does not end with the transfer of sovereignty at the end of this month.

Having tasted democracy, Hong Kong expects nothing less than open, transparent and accountable government. Public demand for the democratic process to stay on course and develop after 1997 will be irresistible. I should, therefore, like to know the Government's policy towards the provisional legislature after the handover. I should particularly like to hear answers to the admirable questions posed by the noble Lord, Lord Thomas of Gresford.

In his opening address to the Legislative Council last year, the Governor laid out a series of eminently sensible benchmarks by which to judge events in Hong Kong after the handover. These benchmarks provide a standard by which the human rights performance as well as the legal and judicial autonomy can be measured. I urge the Government to adopt and apply them and to make a firm guarantee that action will be taken if China fails to meet them.

The Government admirably put human rights at the heart of their foreign policy. They correctly point out that China's modern dynamic economy is paralleled by a very unmodern, static attitude to human rights which is sometimes inappropriate for a member of the United Nations. They have indicated that policy towards China will not be one of economic exclusion or cultural isolation, as these options will not be the best way to influence China politically, as the noble Lord, Lord MacLehose, stated in his intervention. However, there is an inherent tension in that policy. With Hong Kong in mind, I must ask how the Government will seek to walk the fine line between non-isolation of China and appropriate action taken in protest at human rights violations.

In conclusion, I should like to take this opportunity to wish the Foreign Secretary and the Prime Minister, who will be in Hong Kong for the handover, a very successful trip. This debate has turned on Hong Kong's future. For 17 years, the Joint Declaration has ensured that no gamble has been taken with the lives of millions of Hong Kong men, women and children. The Government must ensure that that continues to be the case through the implementation of the treaty. June 30th 1997 is one of the key dates of this century, a date imbued with both past and future significance. It represents a leap of faith for Britain, for China and for Hong Kong. I look forward to hearing from the Minister what part the Government will play in ensuring that that leap of faith is vindicated.

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