TAIPEI is expected to finish drafting a set of regulations governing relations with Hong Kong and Macau later this year. The head of the Mainland Affairs Council, Huang Kun-huei, said Taipei was committed to boosting ties with Hong Kong and maintaining the territory's free lifestyle. Mr Huang indicated that regulations on relations with Hong Kong would be similar to the Mainland Relations Act, which sets out guidelines for exchanges with mainland China. Mr Huang said his elevation to the policy-setting Central Standing Committee reflected the importance the Kuomintang (KMT) was attaching to policies on the mainland and Hong Kong. However, the senior minister would not comment on whether the Taiwanese Government supported a set of proposals endorsed by the Central Advisory Committee (CAC) of the KMT yesterday. The proposals, which were tabled by CAC member Chen Yu-yuan, characterised Hong Kong as a ''political warfare zone''. Mr Chen said senior KMT cadres in Hong Kong, as well as the territory's socialleaders who were ''loyal'' to Taipei, should be given permits to enter Taiwan at any time. He also suggested that the KMT start a newspaper in Hong Kong ''to expand on propaganda and [KMT] ideology''. Mr Huang said last night, however, that Mr Chen's ideas were only a set of proposals, ''that would undergo further research'' by relevant authorities in the Government and the legislature. He said that because non-state-run Taiwan newspapers such as the United Daily News were already circulating in Hong Kong, party authorities had to think twice about whether to shoulder the financial burden involved with starting another newspaper.