IN CONFIDENCE

SECTION 1: CONSTITUTIONAL AND POLITICAL BACKGROUND

Hong Kong consists of:

1.1

(a)

(b)

(c)

Hong Kong Island, ceded by China in perpetuity by the Treaty of Nanking (1842);

the Kowloon peninsula and Stonecutters' Island,

similarly ceded in 1860 by the First Convention of

Peking;

and

the New Territories, which China leased to Britain for

99 years in 1898 by the Second Convention of Peking.

Its total land area is 1,064 square kilometres and it has a population of 5.3 million, of whom 98% are Chinese. The New Territories account for approximately 92% of Hong Kong's total area

and more than 50% of its total population.

1.2 Hong Kong is a Dependent Territory and the Secretary of State for Foreign and Commonwealth Affairs is responsible to Parliament

for its government. The Territory is administered by a Governor, with the help of an Executive Council and a Legislative Council.

1.3

The Governor, who represents the Crown, is the head of government and has the power to make laws (called "ordinances") for the "peace, order and good government" of Hong Kong. His authority

derives from the Letters Patent and the Royal Instructions. The

Crown reserves the power to disallow ordinances enacted in Hong Kong

and to legislate for the Territory by Order in Council. practice, no post-war British Government has exercised this power.

English common law and the rules of equity are in force in Hong

Kong, extended and modified as necessary by local legislation.

In

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IN CONFIDENCE

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