ment and the Hong Kong people - it should con- stitute a basically open, democratic and responsible government under checks and restraints of the law. (d) As regards the relationship between the old system and the new system, the Basic Law should adequate- ly provide for the continuation of the social, eco- nomic, administrative and other systems of Hong Kong which are to be preserved.
Mr. Ji Peng Fei has succinctly summarized the position: The Basic Law should take care of the four principles of national unification, automony, democracy and con-
tinuation.
II. Practical problems that must be considered and dealt with in the course of the drafting and making of the Basic Law-
(1) How should China regain sovereignty over Hong Kong or how should its sovereignty over Hong Kong be adequately and concretely maifested in the system of HKSAR?
(a) As regards the affairs of Hong Kong, all those administrative powers only exercisable by a sov. ereign state shall be reserved by the Central Govern- ment of China, including powers in relation to poli- tical diplomacy, defence and all problems related to the Constitution or Basic Law of this self-governing
territory.
(b) There should be a clear distinction drawn between the exercise of diplomatic powers in the political arena and all those other powers of external relation- ship in other arenas related to economic and cultural affairs. The Central Government should reserve powers in the former category while the latter should be delegated to the Hong Kong Government. In order to avoid misunderstandings in the separate exercise of powers in the two categories, it may be advisable to particularise more clearly, in the Basic Law or other official documents, those activities that may be classified as "political diplomacy", such as the re- cognition of the independence of a state or the legit- imacy of a foreign government, the exchange of ambassadors or diplomatic officials with other states,
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