dicial and legislative fields;

provisions for the protection of human rights and

basic freedoms in the draft;

which

the provisions on the economy in the draft, while

desirable in themselves, are widely considered to

be inappropriate in a constitutional document of

this kind;

- the interpretation of the Basic Law;

the political system of the HKSAR.

We are now focussing on these concerns in our

continuing contacts with the Chinese. They for their

part have admitted that the draft is less than perfect

and have made it clear that they are willing to consider

amendments. Our aim in the coming months will be to

ensure that the draft fully and faithfully reflects the

principles enshrined in the Joint Declaration.

At the end of the day, however, a degree of judgement

and interpretation will be involved. We shall impress

upon the Chinese the need to produce a Basic Law that is

credible and reassuring to Hong Kong and the

international community. But we must also recognise that

China has ultimate sovereignty over Hong Kong and that a

'high degree of autonomy' does not mean independence.

The outcome of

The key will be to get the balance right.

this exercise will certainly have an important effect on

confidence in Hong Kong and on the way in which people in

the territory regard their future.

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