SECRET

IMPLICATIONS

5.

Existing constitutional instruments relating to Hong Kong (eg the Letters Patent and the Royal Instructions) would be revoked. The provisions of those instruments which are relevant to the Government of the Hong Kong SAR would be replaced by similar provisions in the Basic Law to be enacted by the National People's Congress for the SAR or in my SAR legislation, with such amendment as might be necessary. The new provisions would enshrine the maximum degree of autonomy for Hong Kong (China) in respect of the exercise of executive, legislative and judicial functions. Continuing provision would be made for the separation of executive, legislative and judicial powers.

6. By virtue of the provisions of the Basic Law, the Government of the SAR would have powers to conduct autonomously all matters relating to the internal affairs of the SAR and to conduct autonomously economic and cultural external relations. The Central People's Government would be responsible for foreign policy and defence questions affecting Hong Kong, but would consult with the SAR Government on such matters.

7. In order to preserve stability and prosperity in Hong Kong, it will be necessary to preserve confidence. The preservation of confidence will require the maximum possible continuity of institutions and these institutions will need to be seen to exercise freely the autonomy provided for in the Basic Law. This implies that, while provision for Government structures will be made by the National People's Congress of the PRC as part of the Basic Law of the SAR of Hong Kong (China), this should involve a high degree of continuity.

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Hong.

The general structure of the Government that existed in Kong immediately prior to 1 July 1997 would therefore remain essentially unchanged. This implies that there would be a Chief Executive, an Executive Council, a Legislative Council, Regional Councils and District Boards.

Executive

9. The functions of the Chief Executive as they existed immediately prior to 1 July 1997, would also remain largely unchanged, although

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