China hints at HK reform talks

GROWING signs that China might at least agree to discuss the political reform plans put forward by Hong Kong's Governor, Chris Patten, have sent the colony's stock market sharply higher.

Since October, when Mr Patten revealed his proposals to widen the franchise for next year's municipal elections and the 1995 Legislative Council (Legco) poll, China has insisted that they be withdrawn in their entirety. But according to reports in Hong Kong newspapers controlled by Peking, China is now willing to have talks without pre-conditions.

The reports caused a jump of 191.29 points, or 3.3 per cent, in the stock market's Hang Seng index on Monday. Yesterday, despite attempts by the same newspapers to damp down speculation, the index weathered a bout of profit-taking to close another 16.18 points higher, amid rumours that there was heavy 'informed' buying from Chinese interests.

Earlier this month Hong Kong's Executive Council, the colony's highest advisory body, drew up legislation to implement Mr Patten's proposals almost unchanged. Sources confirmed, however, that before publishing the legislation - the prelude to its consideration by Legco - Peking was told of its contents. The head of China's Hong Kong and Macao Affairs Office, Lu Ping, is understood to have asked for more time to study it, and to have indicated a desire to discuss the issue of political development before publication. Mr Patten has agreed to a delay, but one source said the legislation would have to go before Legco during its current session.

Peking continues to repeat that it regards Mr Patten's proposals as unacceptable, and a violation of understandings that political and constitutional developments in Hong Kong would 'converge' with China's plans for the colony after it regains control in 1997. Since the beginning of the year, however, there has been a somewhat less strident tone to Chinese pronouncements.

'The imminence of the Legco debate appears to have concentrated their minds,' said one official. 'They have been in two minds for some time.' China's behaviour was following the 'classic pattern' of remaining inflexible until the last possible moment.

There is no indication so far of what form any talks would take, or at what level they would be held, but one source said there could be developments 'in the next day or two'. An agreement to meet Mr Patten himself would be a significant concession as Peking has sought to ostracise him since he made his proposals last October. The most likely forum, however, is the Joint Liaison Group, which exists to discuss Hong Kong's transition to Chinese rule in 1997.

If significant progress is made, the Foreign Secretary, Douglas Hurd, might agree to meet his Chinese counterpart, Qian Qichen, in Peking in the next few weeks. The two, who are supposed to meet twice a year, last did so in New York in September. With the previous talks having been held in London last spring, Peking is the logical venue for the next encounter, but Mr Hurd is unwilling to go there without some improvement in Sino-British relations.