Basic Conditions    |      Hong Kong Special Administrative Region

Macao Special Administrative Region   | Taiwan Province

Hong Kong Special Administrative Region

On July 1, 1997, Hong Kong returned to the embrace of the motherland after 150 years of British colonial rule and entered into a new historical era of "one country, two systems" and "Hong Kong governed by the Hong Kong people with a high degree of autonomy."

Over the six years since the handover, the policies of "one country, two systems" and "Hong Kong governed by the Hong Kong people with a high degree of autonomy" have been fully implemented in the region. Hong Kong people enjoy all basic rights and their freedoms have been fully guaranteed by law. The Government of the Hong Kong Special Administrative Region (HKSAR) administrates Hong Kong in the light of the HKSAR Basic Law, sternly fulfills its pledges to the international community and actively participates in international cooperation. Hong Kong still maintains the characteristics of a free port and its status as a center of international trade, finance and shipping. It is regarded as one of the most dynamic regions in Asia and the world. In 2003, Hong Kong's GDP increased 3.3 percent over the previous year.

The practices in Hong Kong since its return have fully testified to the fact that the policy of "one country, two systems" is completely correct and has strong vitality, that the HKSAR Basic Law conforms to the reality of the region and is an important guarantee of its prosperity and stability, and that the people of Hong Kong are fully capable of administering Hong Kong well.

Chief Executive of the HKSAR. The HKSAR Basic Law stipulates that the chief executive is the head of the HKSAR and represents the region. The chief executive shall be selected by election or through consultations held locally and be appointed by the Central People's Government. The incumbent chief executive of the HKSAR is Tung Chee-hwa, who was elected with an overwhelming majority in the poll by an election committee on December 11, 1996, and was formally appointed by the Central People's Government on December 16. He was sworn into office on July 1, 1997, becoming the first chief executive of the HKSAR with a term of five years. Tung was reelected in July 2002.

Executive Council. The Executive Council of the HKSAR, composed of 14 principal officials of the executive authorities and members of the Legislative Council and five public figures, is an organ for assisting the chief executive in policy-making. The Executive Council is presided over by the chief executive every week. The chief executive shall consult the executive council before making important policy decisions, introducing bills to the legislative council, making subordinate legislation, or dissolving the legislative council.

Mainland and Hong Kong Closer Economic Partnership Arrangement signed. On June 29, 2003, in the presence of Premier of the State Council Wen Jiabao and HKSAR Chief Executive Tung Chee-hwa, Vice Minister of Commerce An Min and then Financial Secretary of the HKSAR Government, Antony Leung, signed the Closer Economic Partnership Arrangement (CEPA) between the mainland and Hong Kong respectively representing the Central Government and the HKSAR Government. The CEPA document comprises 23 articles, regarding trade in goods, trade in services and trade and investment facilitation measures. According to the agreement, the mainland agrees to apply zero tariffs for exports from Hong Kong in 273 product codes from January 1, 2004.

At the same time, the mainland will open wider to Hong Kong in the service field. Experts pointed out that the arrangement almost covers all service sectors, including medical, audiovisual, tourist, legal, banking, securities, insurance and other services closely related with people's life. Besides, management consulting, convention and exhibition, advertising, accounting, construction and real estate, distribution, logistics, storage, transport, freight forwarding agency and other services are also included.

An Individual Visit Scheme was started on July 28, 2003, to allow travelers from the mainland to visit Hong Kong on an individual basis, which not only facilitates mainland people's traveling in Hong Kong, but also greatly boosts Hong Kong economy. Opening measures in the field of telecommunications were also implemented in October 2003, which permits Hong Kong telecommunications service providers to establish joint ventures with mainland enterprises dealing in five kinds of value-added business. In November, banks in Hong Kong were approved to deal in individual RMB business, undoubtedly strengthening Hong Kong's position as an international financial center.

Basic Law on Hong Kong interpreted. The Eighth Meeting of the 10th National People's Congress (NPC) Standing Committee approved, in April 2004, the Interpretations for Clause 7 of Annex I and Clause 3 of Annex II of the HKSAR Basic Law. Wu Bangguo, Chairman of the NPC Standing Committee, stressed that the development of Hong Kong's constitutional system has a bearing on the implementation of the policy of "one country, two systems" and the Basic Law, on relations between the Central Government and the HKSAR, on interests of all walks of life in Hong Kong and on the lasting prosperity and stability of the region. The Central Government has long attached high attention to the development of Hong Kong's constitutional system.

The NPC Standing Committee Chairman pointed out that there has been extensive discussions on the development of Hong Kong's constitutional system in the region for a while, which indicate that there are still different understandings to the relevant provisions of the annexes of the Basic Law among the locals and they have affected the normal work of the SAR Government. According to the Constitution and the HKSAR Basic Law, the standing committee has the right to interpret the Basic Law, added the chairman. He noted it is necessary and timely for the interpretations to be made to ensure the correct understanding of the Basic Law and the healthy development of Hong Kong's constitutional system in line with the Basic Law.

The HKSAR Basic Law, enacted by the NPC, China's top legislature, is superior to other laws in the region. That is to say, any law made by the HKSAR legislative body should not go against the Basic Law. In light of the Constitution and the "one country, two systems" policy, the Basic Law writes down all principles and policies of the Central Government to Hong Kong in the form of legal stipulations and provides legal guarantees for the implementation of the policies of "one country, two systems" and "Hong Kong governed by the Hong Kong people with a high degree of autonomy." The legal interpretations on provisions of the Basic Law, made by the NPC Standing Committee, take the same effectiveness with the Basic Law. In his remarks on this question, Chief Executive of HKSAR Tung Chee-hwa said that if the dispute on the understanding of the provisions on Hong Kong's constitutional system in the Basic Law continues, the relevant work would not be assuredly carried out and completed strictly in accordance with the Basic Law.

The NPC Standing Committee's interpretations of the HKSAR Basic Law have not only been the most authoritative legal ground for future discussions on constitutional development in Hong Kong, but also provided a solid legal basis for the work of the HKSAR Government in the next step. The action is in line with the Constitution and the Basic Law, with an aim to clarify some legal questions, so as to enable concerned parties to understand and enforce the Basic Law more precisely and carry out the "one country, two systems" principle more successfully.

RMB business granted in Hong Kong. Chief Executive Tung Chee-hwa announced on November 18, 2003, that, following approval from the State Council, the People's Bank of China had agreed to provide clearing arrangements for all licensed banks in Hong Kong to deal in personal RMB business on a trial basis. This marks the first step for Hong Kong to become an offshore RMB clearing center and is of great significance to the banking sector in Hong Kong.

It is believed to consolidate Hong Kong's status as an international financial center and also constitutes an important measure of the Central Government to support Hong Kong's economic recovery. Furthermore, Hong Kong banks conducting RMB business will facilitate the travel and consumption of people of both mainland and Hong Kong in each other, boost Hong Kong's retailing and tourism, enable Hong Kong banks to open new services and create more jobs in relevant trades in Hong Kong. The personal RMB business that was offered on a trial basis includes four areas--deposit taking, Hong Kong dollar and RMB exchange, RMB remittance and RMB credit cards. Mainland residents can use RMB debit cards and credit cards issued by mainland banks for spending in Hong Kong. The credit cards business was opened on a trial base since the beginning of 2004. Investors held that the Bank of China (Hong Kong), or BoCHK, will lead its counterparts to benefit from the business. Analysts predicted that RMB business may bring around HK$200 million in revenue to BoCHK each year.

Construction of Hong Kong Disneyland began. Construction began on a Disney theme park and its recreation area in Hong Kong on January 12, 2003, and the doors are expected to open in 2005 or 2006. Jointly developed by the Walt Disney Co. and the HKSAR Government, the Hong Kong Disneyland will occupy 126 hectares at Penny's Bay. The Phase-I build-out includes a projected 10 million annual visitor Disneyland-style theme park, 2,100 hotel rooms, and an area of 28,000 square meters for retail, dining and entertainment. The project is estimated to create 18,000 new jobs during the construction period, and the figure will grow to 36,000 at its opening. The HKSAR Government estimated that the phase-I Disneyland project would yield HK$ 148 billion in benefits to the region.