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In this connection people have expressed particular concern

about the relationship between Hong Kong and the National People's Congress in Peking in legislative and judicial matters, as well as in the interpretation of the Basic Law itself. This is a particularly crucial and sensitive area: it will be vital to confidence in Hong Kong to define the relationship in a way which properly meets the interests not only of the central authorities but

also of the Special Administrative Region.

There is also understandably much concern about the extent to

which the provisions in the draft designed to protect the rights and

freedoms of Hong Kong people will work in practice. We hope that

the drafters will listen to these concerns and refine the draft

accordingly.

Many people have expressed reservations about the desirability of provisions in the draft on the economy, which appear to bind the

future SAR Government to pursuing certain economic or fiscal

policies. There would appear to be good reason for such

reservations, since on drafted the provisions seem to encroach on

the autonomy in these areas which the future SAR Government is to

enjoy.

The chapter on the political system covers an area in which there are particularly strongly held and divergent views in Hong

Kong. It is to be hoped that a consensus will emerge which seeks to

preserve those elements of Hong Kong's present system which have

always served it well, while responding to people's aspirations for

a greater degree of involvement in government. A particularly important aspect of the political system is the arrangements for the

formation of the first Government after 1 July 1997. We attach

importance to achieving arrangements which while clearly marking

the change of sovereignty as they must - allow for continuity of

administration and the legislature across 1997.

19. I cannot conclude my opening remarks without touching on a

matter which has been a source of the greatest concern in Hong Kong

and to Her Majesty's Government: the problem of the Vietnamese boat people. The House was informed of the decision of the Hong Kong

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