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(III)

On the subject of "HK people ruling HK", Mr Lu reiterated that this was China's established policy. When drafting the Basic Law, the spirit of "HK people ruling HK" would be written down in legal language. He sald: "The four words of (HK people ruling HK) are verbal expression.

They are not written into the Joint Declaration but it is stated there that HK will be run by local people. The contents of Annex I to the Joint Declaration (Elaboration by the Government of the People's Republic of China of its basic policies regarding HK) have fulfilled the spirit of 'HK people ruling HK'. On the subject of the Central Government's HK policy, we have conducted an extensive study and reached a 12-point conclusion. They have formed part of the contents in Annex I. people in HK summarised the 12-point formula as resumption of sovereignty, the preservation of prosperity, HK people ruling HK and a high degree of autonomy. Later we felt that the term "HK people ruling HK" is easy to visualise. Therefore the term of 'HK people ruling HK' is used. We do not mean that we now don't need 'HK people ruling HK' and

don't talk about it.'

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Some

Turning to some people's worries that cadres sent here to work would become HK people after 1997, Mr Lu made it clear that Chinese cadres came to HK holding Chinese passports. They were not HK people. Only those who had been living here seven years and had obtained a HK identity card and the right to abode would be considered as HK people. HK would continue to have a capitalistic system while China would continue to practise socialism after 1997. The two were different systems. There was no point in sending people from China to run HK because HK had its own talents.

(IV)

On the question of different interpretations of the Joint Declaration, Mr Lu said that the Joint Liaison Group could study the matter and come up with an interpretation if there were ambiguities in the contents of the Joint Declaration. There are areas in which there is no concrete stipulation in the Joint Declaration. For example, there are different understandings of the question of accountability of the executive organ to the legislature. How is it to be accountable? This is a question that has to be resolved in drafting the Basic Law. Discussion is needed. And then provisions will be drafted by the BLDC which will then be submitted to the NPC for approval. Another example is the question of elections to the legislature and whether there should be direct or indirect elections, the political system for the future SAR and how it should be worked out. All these will be laid down in concrete terms in the Basic Law. Consultation work on the drafting of the Basic Law will be a "two ups and two downs" process. There are experts both in HK and in China to do the drafting work. But, there is no objection to listening to the views of foreign experts.

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