out any residual matters arising from the transition.

The Basic Law will be a law enacted by the Chinese parliament, the National People's Congress, giving effect under the Chinese constitution to the provisions of the Joint Declaration. As it will be a Chinese law, drafting it is the responsibility of the Chinese government. But the Chinese authorities have conducted the exercise in a

commendably open fashion, and with extensive consultation of

Hong Kong people (who are also represented on the drafting committee). The consultation process is still going on, on the basis of a second draft of the Basic Law published in February this year.

The drafting of the Basic Law, as a Chinese responsibility, is not covered by the Sino-British Joint Liaison Group.

Nevertheless the British Government does

have aresponsibility to ensure that the provisions of the Basic Law fully accord with the Joint Declaration. We have therefore been following the drafting process extremely closely, and have had extensive discussions with the Chinese

on a range of channels, including many meetings between myself and the Chinese Foreign Minister. Our chief concern has been to ensure that the Chinese are fully aware of the concerns of Hong Kong people.

In general, the drafting process has been going well. The first draft of the Basic Law, published in April 1988, was itself a satisfactory start. Most of it was fully consistent with the Joint Declaration, and parts of it quoted the Joint Declaration verbatim. It did, however,

contain a number of deficiencies which were identified

during the consultation process and discussed extensively, both in Hong Kong and in the British parliament. The second draft is a considerable improvement on the first, and has clearly tried to take account of Hong Kong opinion. There are still some points that need to be sorted out, but the Chinese have made it clear that they are prepared to make

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