TNAG-1753-FCO40-2473-Future-of-Hong-Kong-Parliamentary-debates-1988 — Page 113

AIDAFI

RESTRICTED

10. Provisions on the economy

We are inclined to agree that some provisions in the draft (eg on a low tax policy, a balanced budget and open financial and monetary policies) appear to be inconsistent with the Joint Declaration provisions stipulating that the handling of policies in these areas will fall within the autonomy of the Hong Kong SAR Government. It can be argued that it is inappropriate to enshrine such provisions in the Basic Law. We feel sure that the Chinese authorities will take account of criticism of these articles.

11.

Formation of the first SAR Government

This is a matter which is understandably generating much interest in Hong Kong. We are listening carefully to all views. recognise that it is right for the arrangements for the first SAR Government clearly to mark the change of sovereignty. But it is equally important that there should be continuity and a smooth transfer of government, so as to maintain confidence, both in Hong Kong and internationally.

12. Is LegCo entitled to debate the Basic Law?

We

It is natural and understandable that members of the Legislative Council should wish to express their views on such an important matter. The Chinese authorities have made clear that the debate is a matter for LegCo to decide. They have also made it clear that they welcome views from all quarters, including of course members of LegCo. A debate is to be held in LegCo on 13 and 14 July.

RESTRICTED