TNAG-1863-FCO40-2643-Future-of-Hong-Kong-Basic-Law-1989 — Page 8

(d)

(e)

new

include in Chapter V, Section 1 of the Basic Law a Article: "The Hong Kong Special Administrative Region shall decide its economic and trade policies on its own."

Monetary and Financial Policies

The

second paragraph of Article 109 gives effect to the second paragraph of Section VII of Annex I to the Joint Declaration. The first paragraph of Article

109, however, is not provided for in the Joint Declaration and its requirement to prescribe the monetary and financial systems by law not only goes beyond the requirement in the second paragraph of Section VII of Annex I, but is not consistent with the present basis of Hong Kong's financial system (which is regulated, but not prescribed, by law). It is, therefore, suggested that the first paragraph of Article 109 be deleted.

Air Services Agreements

You may recall that in the detailed notes which the British Embassy delivered to the Ministry of

Foreign Affairs on 26 February 1988, we drew

attention to the fact that what is now Article 132 (1) (Article 139(1) in the 1988 text) does not reflect the provision in the Joint Declaration (first indent of the third paragraph of Section IX of Annex I) that on the renewal or amendment of air services agreements and arrangements, existing rights may in principle be maintained. That is still the case.