CONFIDENTIAL

of the People's Republic of China regarding Hong Kong as stated in

the Joint Declaration will be stipulated in the Basic Law. The

Preamble to the Basic Law (which was adopted by the National

People's Congress on 4 April 1990 and promulgated on the same day) in turn states that the basic policies of the People's Republic of China regarding Hong Kong have been elaborated in the Joint

Declaration and that the Basic Law is enacted in order to ensure the

implementation of those basic policies. Thus there is a clear link

between the obligations assumed by the People's Republic of China in

the Joint Declaration and the Basic Law. Our concern throughout the

drafting process was to ensure consistency between the Basic Law and

the provisions of the Joint Declaration. On the whole we are

satisfied that this has been achieved. But there are some

provisions which we would have preferred to have seen drafted

differently.

4.

The Committee drew attention to doubts as to whether the

provisions of Article 31 of the Chinese constitution override other

articles in the Constitution and took the view that the Preamble of

the Basic Law should set out clearly which articles of the Chinese

Constitution would apply to the Hong Kong Special Administrative

Region. The Hong Kong Special Administrative Region will be an

integral, if special, part of the unitary state of the People's

Republic of China. Certain provisions of the Chinese Constitution

will therefore apply in or in relation to Hong Kong, even though

they may not have direct effect as law. It would not be realistic

to dismiss all but Article 31 as having no relevance. But Article

11 of the Basic Law makes clear that the systems and policies

practised in the SAR "including the social and economic systems, the system for safeguarding the fundamental rights of its residents, the

executive, legislative and judicial system" will be based on the

Basic Law and Article 5 specifically states that the socialist

system and policies shall not be practised in Hong Kong but that the

capitalist system and way of life shall remain unchanged for 50

years. The Government would further draw the Committee's attention

to a decision also adopted on 4 April which affirms the view of the National People's Congress that Article 31 of the Chinese

CATAAU (2)

CONFIDENTIAL

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