123. Before concluding, I want to say something about consultations with the Chinese side. Last March, my predecessor outlined a four stage programme for the purpose. In essence, this programme involves a steady intensification of work from a general background briefing in stage one, to the specific subject-related seminars in stage two, the detailed introduction of the budgetary cycle in stage three, and full consultation in the preparation of the 1997-98 Budget in stage four. An Expert Group has since been set up under the Sino-British Joint Liaison Group to carry this forward. This Expert Group has gone through the first three stages of the programme of work in a pragmatic and co-operative manner. We expect this to continue in the final stage of the programme. As previously envisaged, we will strengthen co-operation with the Chinese side in the preparation of the Budget for 1997-98 to ensure a smooth transition.

124. I have outlined this afternoon a bold range of proposals, particularly for developing the manufacturing and service industries. In the near future, we shall consider these proposals in greater detail. In doing so, the views of Members of this Council and of the community as a whole will be invaluable. But obviously many of the proposals have financial implications beyond 1997. They will have to be considered and, if appropriate, carried forward by the future Hong Kong Special Administrative Region Government. As our consideration progresses, I will ask the Secretary for the Treasury to discuss those proposals having expenditure implications for the 1997-98 Budget in the Expert Group. I also stand ready to explain these proposals personally to the Chief Executive (Designate) as soon as he or she is appointed.