Background

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1.

By paragraph 3(12) of Joint

Joint Declaration the

the policies in

Chinese Government undertakes that

the Joint Declaration and in Annex I will be stipulated in a Basic Law of the Hong Kong SAR and will remain unchanged for 50 years.

2.

Article 31 of the Chinese Constitution enables the State to create Special Administrative Regions, and to prescribe the sy stems to be instituted in these SARS by laws enacted by the National People's Congress (China's Parliament) in light of the specific conditions. This Article was included in the Chinese Constitution in 1982 with the reunification of Taiwan, Hong Kong and Macau with mainland China in mind. The object legal basis by which the concept of "one

wa s to create

country, two systems" could be put into practice. The Chinese made it clear that the "Basic Laws" to be enacted under this article would be mini-constitutions for the SARS concerned (the Hong Kong

Kong SAR is the only one agreed so far). There is no precedent for Basic Laws. Some areas of China have a degree of regional autonomy, eg Tibet, but this is largely restricted provisions allowing for the continuation of local customs and culture. Politically and economically areas such as

such as Tibet

are closely integrated into China. Their situation i s thus quite different from Hong Kong's, where the concept "one country, two systems" will be practised.

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The Chinese Government have said that they intend to the Basic Law by 1990. They have appointed a Basic Law Drafting Committee, chaired by Ji Pengfei, Head of the Hong Kong and Macau office of the State Council, and which includes 23 Hong Kong representatives among its 59 members. They have also agreed to the formation of a 150 member Basic Law Consultative Committee in Hong Kong, members of which are to be nominated by representative organisations in various fields. believe that most of the actual drafting work will be done

by officials of the Hong Kong and Macau Office, but it is

encouraging that the Chinese have SO far shown themselves reasonably sensitive to Hong Kong opinion.

We

CONFIDENTIAL

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