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Hong Kong SAR will have high degree of autonomy, not absolute autonomy or independence. Inevitable that certain powers will be

reserved to central authorities, as they are today.

[For general use]

Glad that full opportunity has been given to Hong Kong people

to comment on draft Basic Law over next four months. Chinese

Government have said they welcome views from all quarters. Hope

Hong Kong people will take full advantage of this.

Drafting of Basic Law is of course responsibility of Chinese

Government. But we will wish to satisfy ourselves that Basic Law

accurately reflects provisions of Joint Declaration.

We are studying draft Basic Law carefully. Will also be paying close attention to views of Hong Kong people. We have already made

it clear we shall ensure that concerns of Hong Kong people are

brought to attention of Chinese Government. And where there are

provisions in draft Basic Law which may not be consistent with Joint

Declaration we shall be ready to take this up with Chinese

authorities. We will make our views known clearly and firmly.

Virtually all provisions of Joint Declaration are reflected in

draft Basic Law, a number word for word. But as I stated in

Parliament, some parts are not yet right.

acknowledge that.

Chinese spokesmen readily

CONTACTS WITH CHINESE?

Variety of channels open to us. Basic Law has already featured

in range of exchanges with Chinese authorities (ey Foreign Secretary

with former Foreign Minister Wu; Governor with Chinese officials).

Exchanges will continue. But do not think it would assist our

objectives to conduct these exchanges in public.

ASSESSMENT OF BASIC LAW

Draft is outcome of considerable effort, commendably open

drafting process. But as Chinese officials point out, it is by no means perfect. There are particular areas which are already focus of discussion in Hong Kong. If there are provisions in draft which

need revision, Hong Kong people should put to Chinese Government

CONFIDENTIAL

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