CONFIDENTIAL
through universal suffrage. We welcome this.
The machinery for the selection of the first Chief Executive is one of the points we intend to discuss with the Chinese Government.
Relationship between the Executive and the Legislature
18. The Committee took the view that the Legislative Council should be sovereign and that the Chief Executive should resign if there is an irreconcilable conflict (paragraph 3.22). Article 73 (9) of the Basic Law provides for a procedure whereby the legislature can impeach the Chief Executive if he or she refuses to resign when charges of a serious breach of law or dereliction of duty have been found substantiated by an investigation committee chaired by the Chief Justice of the Court of Final Appeal. Other provisions of the Basic Law, while making provision for the accountability of the Executive to the Legislature (Article 64) establish a separation of powers between them. Although the Chief Executive may dissolve the legislature once during each of his terms of office if there is
disagreement between them as to certain Bills (Article 50), he is
required to resign if the same disagreement persists after a new
legislature is elected (Article 52).
BRITISH POLICY AND ACTIONS
British Interests in Hong Kong
19. The Government welcome the Committee's analysis of British economic interests in Hong Kong (paragraph 4.3). Britain has an enormous stake in terms of trade, investment and jobs in Hong Kong's continuing success. Britain's visible exports to Hong Kong are worth more than £1 billion a year. In addition, Britain earns over £l billion every year from invisible exports. British exports to Hong Kong grew by over 10% in the 1980s, compared to growth of only 8.7% for Britain's exports worldwide. Hong Kong is Britain's largest export market in Asia, after Japan. More than 1000 British
companies have operations there and produce significant returns for
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