CHINA yesterday commented for the first time on the proposed legislation on the Court of Final Appeal. It said ''many aspects'' of the law did not comply with the Sino-British agreement reached on the court in 1991. Guo Fengmin, Chinese team leader of the Sino-British Joint Liaison Group (JLG), said a brief study of the bill found that it did not fully satisfy the accord reached by the JLG. Although he refused to disclose which part of the bill he was referring to, he hinted that one discrepancy was over the nationality requirement of the five judges. Under the 1991 agreement, only one overseas judge is allowed at each trial. The Chief Justice has to be an ethnic Chinese without a foreign passport. The deal has been criticised by legislators and the legal profession as curbing the flexibility guaranteed in the Basic Law. In April, Britain submitted the draft bill on the setting up of the court to China. The Government hopes the court can be established by 1996. Officials admitted the nationality of the Chief Justice was not stipulated in the bill, because it was laid down in the Basic Law. Mr Guo said: ''The composition was very clearly stated in the joint agreement. It must be carried out very strictly.'' There were other aspects China would seek to clarify with Britain at the JLG meeting, but dates and agenda had yet to be fixed, he said. The Preliminary Working Committee (PWC) agreed yesterday that the court should be studied by the powerful Preparatory Committee for the Special Administrative Region. The PWC's political affairs sub-group said the Preparatory Committee should be set up in January 1996 to look into transitional matters. Mr Guo, also a member of the sub-group, would not say whether the committee would be empowered to make changes to the court if it did not fit China's requirements. He denied there would be conflict even if both the PWC and the Preparatory Committee discussed the issue at the same time.