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3 -

-

(c)

(a)

trade union activity), communication and the right to

move into and out of the territory.

The drafting committee on the "Basic Law" will be set up in Peking but it will invite representatives from

Hong Kong.

The SAR will be able to issue its own travel

documents.

(e)

Maintaining law and order will be the responsibility

of the SAR government.

Xu also said that China's policies were aimed partly at looking after the interests of people from different quarters in Hong Kong. China would maintain Hong Kong's capitalist system for 50 years after 1997. Policies would be prescribed by law and be made known

to the public. A draft Basic Law would be drawn up and then passed to Hong Kong compatriots for discussion. After amendment it would be submitted to the National People's Congress for approval and promulgation. It would take a relatively long time to complete. The SAR government would be able to handle independently its own

future within the limits prescribed "by law."

affairs

Comment

5. Both these sets of remarks are clearly aimed at reassuring the

people of Hong Kong. To some extent they may do so, though most people will remain sceptical. Chinese thinking in a number of areas is still not clear but as time goes by they seem to be revealing more of their plan for Hong Kong. One encouraging aspect is that

they appear to be more aware of the need for continuity of systems eg in the civil service. We shall be considering separately the question of the relationship between the SAR and central government,

as well as Ji's remarks about a Consultative Council.

This appears

to be a new idea. We do not think Ji is referring to this Council as the government of Hong Kong but as an adjunct to it, perhaps on

the lines of the existing Chinese People's Political Consultative

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/Conference

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