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SCMP Reporter

IF the Hang Seng Index remains a barometer of public confidence, the bullish response to Tuesday's announcement of the resumption of Sino-British talks mirrors the truth - there is great relief in the community over the cease-fire in the political row.

  The news not only delighted Hongkong people fed up with the war of words, but also relieved nervous businessmen desperate for some positive news.

  Officials from the two sides can be excused a sense of elation after the struggle to reach an agreement to go back to the negotiating table to discuss the 1994-95 electoral arrangements.

  However, they are extremely cautious over what can be achieved - and with good reason.

  The reason is clear: no one should underestimate the difficulties involved.

  As soon as the announcement was made, officials including the Deputy to the Governor, Sir David Ford, were quick to dispel any illusion that there could be a quick agreement.

  At stake is not merely a matter of how the additional seats for the functional groups elections are allocated and whether those above the age of 18 will be given the right to vote.

  The status of Hongkong officials in the negotiating team and China's staunch position that Mr Patten's package is out of step with the Joint Declaration, the Basic Law and previous agreements, are not the most important issues either.

  The ''make or break'' part of the agenda will be detailed arrangements for the so-called through train model.

  The two sides have skirted around the question of status and the Patten proposals' alleged violation of previous agreements by simply ignoring the existence of such problems. But neither the Chinese nor the British negotiators can neglect the through train arrangement.

  Just hours before the Tuesday announcement, one of the Governor's top advisers, Executive Councillor Professor Edward Chen Kwan-yiu, said in explicit terms that the through train - that those elected in 1995 should serve through the four-year term to 1999 - was a bottom line for the British.

  HE maintained that there was no point in having talks if legislators elected in 1995 could not ride the through train to the post-1997 administration and that China would start all over again after 1997.

   In the past six months, the question of the through train has not been on the public agenda although both sides are well aware that it is a major problem. It was not until early this month that Mr Patten raised the matter, claiming that it would be one of the ''simple'' questions China would ''certainly want to answer''.

   The Governor reiterated the need to address the question immediately after the announcement of the re-opening of talks, making it clear that the British side intends to discuss the subject during next week's negotiations.

  This drew immediate criticism from Chinese officials. They said the Governor was creating a new obstacle to talks.

  China is correct in thinking that the question of the through train could be a sticking point, but they have gone too far in claiming that it is a new problem.

  What Mr Patten did was simply to expose one of the main stumbling blocks likely during the negotiations, although there is a suspicion that the revelation was a deliberate part of the negotiating tactics.

  It would be unthinkable for the British to exclude the subject. They say clean, fair and acceptable elections would be tarnished if in 1997 some elected members of the legislature were thrown off the train.

  It is argued that if China agrees to electoral arrangements, it would be only reasonable to expect anyone elected under that formula to be acceptable to the Chinese. Hence they should serve after 1997.

   If such an agreement could not be reached, there would be no point in holding talks, or cutting any deal with Beijing, sources close to the British side said.

  But from Beijing's point of view, it is equally unthinkable for China to automatically accept anyone elected in 1995 as a member of the first Special Administrative Region (SAR) legislature.

 THOSE almost certain to be denied a seat then are liberal activists such as United Democrats leaders Mr Martin Lee Chu-ming and Mr Szeto Wah.

  Accepting such people, branded as subversive elements by the Chinese Government because of their leading roles in the Hongkong Alliance in Support of Patriotic Democratic Movement in China, would be one of the biggest concessions China could offer.

   Beijing is adamant that there is no room for compromise over matters of principle, such as its right as the sovereign power of the future SAR to determine who can take part in the post-1997 political structure.

  A Hongkong Affairs adviser, Dr Lau Siu-kai of the Chinese University, says that it would be impossible for China to agree to abandon its right to screen members of the last Legco before they were accepted on the post-1997 legislature. It would be unacceptable to China if any agreement over-rode the Basic Law.

  ''It will be futile if Britain sees a through train as its bottom line,'' he said in a warning that may be heard again next week.

  Inside the Chinese camp, officials and the left-wing media remained cautious about the outcome of the talks, maintaining that they were hoping for a fruitful result.

  Privately, they are well aware that the chance of a full agreement remains in the balance and remained puzzled by London's ''real motives''.

  Beijing's accusations that London was ''playing little tricks'' as soon as the resumption of talks was announced was a clear sign that it was too early to say the icy relations are warming.

  This is despite the fact that officials on both sides are making optimistic noises about a possible compromise on details for the 1994-95 electoral arrangements through ''give and take''.

  ''Of course, the Chinese side has its own bottom line. But that is not non-negotiable,'' a Chinese official said.

  Difficult as it is, both China and Britain have cleared a number of obstacles before agreeing to return to the negotiating table and the experience of the past few months clearly demonstrates that where there is a will, there is a way.



Make or break: who can stay on the train?