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3. The Chinese have not cleared any of the 100 outstanding treaties since the December JLG.
Localisation of Laws
4.
A part of Hong Kong's statute book is made up of UK statutes extended to Hong Kong by Order in Council. Since 1988, Hong Kong have had a programme to replace these by local laws. In order to ensure survivability beyond 1997, we have consulted the Chinese on each proposed localisation. We have now agreed with them on the localisation of about 30% of the laws which needed localising. We have given them papers on a further 20% of the laws. Again, progress has halted since the December JLG and in some cases (localisation of civil aviation law) a response from the Chinese side has now been outstanding for some four years. There are now only three full legislative sessions left before 1997 and the pace of localisation will need to speed up considerably if we are to get through the remaining agenda.
Adaptation of Laws
5. The aim here is to tidy up Hong Kong's statute book so as to remove imperial and colonial references and thereby to present the Chinese with a set of laws on 1 July 1997 which are compatible with the Basic Law. There will then be no reason for them to seek to use the power they have in the Basic Law to disallow any Hong Kong laws. If necessary, we can pursue this unilaterally. But it will obviously be best to proceed by agreement with China. Work has barely begun as yet. Mr Edwards favours a short piece of legislation, with schedules listing the individual changes to ordinances which would come into force on 1 July 1997. This seems sensible.
Agreements between the UK and the Hong Kong Special Administrative Region
6.
We have been busy negotiating bilateral agreements between Hong Kong and has major economic partners on issues such as protection of investments, extradition, visa abolition, and air services. This is to ensure that Hong Kong will preserve its autonomy in these areas after 1997. But one gap at present is similar bilateral agreements with the UK. The problem here is that while the Chinese have accepted the principle that Hong Kong should negotiate bilateral agreements with third countries and submit them through the JLG for Chinese approval, they would be very unlikely to agree that HKG and HMG should negotiate with each other over bilateral agreements binding the SARG which will enter into force on 1 July 1997.
7. We and Hong Kong have looked at various options for getting around this problem. We believe that it would be difficult politically to justify a position in 1997 where the
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