TNAG-1840-FCO40-2615-House-of-Commons-Select-Committee-on-Foreign-Affairs-enquiry-1989 — Page 151

manage the Exchange Fund (which provides the backing for the note issue and is used to regulate the exchange value of the currency).

Section VIII: Shipping

This section preserves Hong Kong's position as a major shipping

centre by providing for the continuation of the existing systems of

shipping management and regulations. It stipulates that Hong Kong will have its own Shipping Register, and provides that merchant

shipping will have free access to Hong Kong ports.

Section IX: Civil Aviation

This Section provides for the maintenance of Hong Kong's role as a

major centre of regional and international air services. An

important provision is that all scheduled air services touching the

Hong Kong SAR which do not touch the mainland of China will be

regulated by separate agreements concluded by the SAR Government.

The SAR Government will be given specific authorisation by the

Central People's Government to negotiate its own bilateral air

services arrangements. It will enjoy autonomy in many civil

aviation matters (e.g. licencing local airlines, maintaining its own

aircraft register).

Section X: Culture and Education

This section makes clear that Hong Kong will continue to be able to

operate its own distinct system of education separately from that in

other parts of China. It ensures that Hong Kong will continue to

enjoy a varied cultural and intellectual life after 1997.

Section XI: External Relations

The importance of this section is that it brings out the fact that,

while defence and foreign affairs are the responsibility of the

Central People's Government, the Hong Kong SAR will manage on its own certain aspects of its external relations. In particular, SAR would be able, authorised as necessary

cessary by the CPG, to negotiate agreements and participate in international organisations in

the