As Hongkong awaits the outcome of the diplomatic moves between London and Beijing, Foreign Secretary Douglas Hurd spells out the British position in an exclusive interview with the Sunday Morning Post. China has repeatedly said it will not accept Governor Mr Chris Patten's proposed reforms. How do you see this impasse being resolved? We regret we have not been able to resolve our differences with China over Hongkong. Hongkong is not the only component in Sino-British relations. We are permanent members of the United Nations Security Council, have important commercial relations and an active programme of high-level visits in both directions. But Hongkong looms large, so the better our co-operation over Hongkong the closer the overall Sino-British relationship will be. We have made it clear all along our commitment to implement the Joint Declaration in full and our willingness to discuss the 1994/95 electoral arrangement with the Chinese side. We continue to hope we can reach a solution acceptable to all sides, but it would have to provide for electoral arrangements that are open, fair and acceptable to the people of Hongkong. What can you do, as Foreign Secretary, to rebuild Sino-British relations? Given China's refusal to talk to Governor Mr Chris Patten unless he withdraws his proposals, are you ready to take a more active role, dealing directly with Beijing when they refuse to talk to the Governor? We continue to believe the best way to resolve differences, whether over Hongkong or anything else, is to sit down and discuss the issues in a mature and considered way. That is the approach we have adopted from the start. The Governor said when he announced his proposals on October 7 that they were for discussion, and we would like to discuss them with China. We have repeated our invitation to the Chinese authorities many times over recent months to join us in talks aboutelectoral arrangements, and we shall continue to follow this sensible course. As you know, the Chinese Foreign Minister [Qian Qichen] and I have agreed to meet twice a year, and I look forward to our next meeting. No dates have been set. Will the British Government positively support 1995 election arrangements put forward by the Governor and Executive Council in the Legislative Council debate, or adopt a neutral stance? Do you accept Beijing is worried the contents of diplomatic discussions with Britain will be disclosed; are you prepared to guarantee they will be kept disclosed, and are you prepared to guarantee they will be kept confidential, even if it brings charges of ''secret talks'' from Hongkong people? The Prime Minister [John Major] and I, and the Minister of State, Mr Alastair Goodlad, have repeatedly said the Governor's proposals have the full support of Her Majesty's Government. Soon after Mr Patten's appointment, I recall him saying that on Hongkong policy in the future, ''you will not be able to put so much as a piece of tissue paper between me and the Prime Minister''. He was right - you can't. And the same goes for me and Mr Goodlad. We hope to hold talks with China to see if we can reach an understanding on these matters which we could honourably recommend to Legco, whose constitutional responsibility it is to enact the legislation. We will stand by Legco's decision. Obviously, the content of diplomatic discussions will have to be confidential, although as I said, if we were able to reach an understanding with the Chinese side, we would recommend it strongly and sincerely to Legco. There will be no secret deals. Does convergence and the through train remain a goal of British policy, and is it a primary goal? How do you react to criticism of present policy from those who played a key role in British policy towards Hongkong in the past (i.e. Sir Percy Cradock, Lord MacLehose)? The Governor's proposals were specifically designed to be compatible with the Joint Declaration and the Basic Law in order to facilitate the through train in 1997. Yes, it remains our policy to seek greater co-operation with China in the interests of achieving a smooth transition. Nothing we have done has deviated from that policy. The distinguished former public servants you mention are entitled to their opinions. But they are not opinions that I share. China's statements on the reform proposals seem designed to undermine support by warning Hongkong prosperity and stability may be threatened. How can you reassure Hongkong people this is not so? What can Britain do to protect those who fear they have exposed themselves to personal risk after 1997 by supporting British policy? Will London consider this in fixing the quotas for various professions in the second tranche of the British nationality scheme? Nothing in the Governor's proposals presents any threat to Hongkong's stability and prosperity. On the contrary, they seek to reconcile, on the one hand, the desire in Hongkong for a modest increase in the pace of democracy, and on the other, China's viewthat the Basic Law cannot be changed before 1997. As such they are a positive contribution to the maintenance of that stability and prosperity. Through the development of southern China, Hongkong and the People's Republic of China are establishing closer relations. For us to make a success of the concept of 'one country, two systems' - which the Governor's proposals firmly support - is in everyone's interest. As for Legco, the constitutional position is clear: Legco is responsible for enacting the legislation for the 1994 and 1995 elections. I have no doubt that when the time comes for Legco members to take a decision, they will have the interests of the people of Hongkong in mind. As for the British nationality scheme, there are no plans to fix the quotas for the second tranche in the way you suggest. But it will be open to Hongkong people who wish to do so, and who meet the rules for eligibility set out in the legislation, to apply in the second tranche. Is it realistic to expect much progress in the Joint Liaison Group given the present political climate? Are you concerned by predictions the JLG will be unable to complete its business by 1997, and should some JLG business be moved to another arena? The Joint Declaration commits our two governments to ''closer co-operation in the second half of the transition period'', and makes the JLG the forum for such co-operation. Naturally, we would like to see a faster pace of work. There is much important work to be done and not much time to do it. It was for that reason the Prime Minister and Premier Li Peng agreed, in September 1991, ''that the two governments would make joint efforts to accelerate work in the JLG so as to ensure the group will successfully complete all the tasks set out in the Joint Declaration''. We would like to see that translated into practice. Is seeking more than 20 directly-elected seats in 1995 a high priority for the British Government, and will you raise the matter with Mr Qichen at future meetings? Is this seen as an alternative, or complementing, the Governor's proposals, and would London support a unilateral increase above 20 in 1995, were this passed by Legco? What we want to do is to make a clear move forward in 1995. One way to do that is to increase the number of directly elected seats. Another way is that set out in the Governor's proposals. In the 1990 diplomatic exchanges you suggest the British might make every effort to encourage people of moderate views, including those in the business community, to play an active part in the political life of the territory? What was the purpose of your reference to ''moderate sensible opinion'' in those exchanges, and how do you react to liberal legislators, now supporting the Governor's political reforms, who see this as an insult to them? As I have said on many occasions, we are committed to maintaining and preserving prosperity and stability in Hongkong. Naturally we would want to encourage moderate and sensible people from all sectors of Hongkong society to participate in political life. What sort of society would benefit by encouraging ''immoderate and non-sensible'' opinions? I seriously doubt that any of Hongkong's legislators would be insulted by such an eminently reasonable proposal. I'm sure none of them regard themselves as ''immoderate and non-sensible'', and neither to I. If Mr Patten's proposals fail to be accepted by China and it refuses to talk about other issues, how can you see him remaining an effective Governor? Can you envisage a situation from now to 1997 where there is only minimal contact between a Hongkong Governor and Beijing? Should such a situation arise, how would Britain answer calls to replace the Governor? Chris Patten is an outstandingly effective Governor, and I have no doubt he will continue to be so until June 30, 1997. The airport and a number of other important business issues are being held up pending agreement by China. How do you see this situation being resolved. As I said earlier, the best way to resolve differences is to sit down and discuss the issues in a mature and considered way. We have discussed the question of airport finance with the Chinese authorities on many occasions, and have made a number of proposals designed to meet their concerns. So far, we have not reached agreement, but we shall continue our efforts to do so. Until then, the Hongkong Government will continue to do what they can, on a step by step basis, to meet their obligations under the Memorandum of Understanding to build as much as possible of the airport before 1997.