Memorandum submitted by Foreign and Commonwealth
Office (Hong Kong and Macau)
1. This memorandum outlines major developments
in Hong Kong since the Foreign Affairs Committee's 1998 report
on Hong Kong (HC 710), and the Government's two responses to that
report, delivered in November 1998 (Cm 4156) and April 1999 (Cm
4331). It draws on the reports on Hong Kong presented by the Secretary
of State for Foreign and Commonwealth Affairs to Parliament every
six months since the handover, and takes account of developments
since the latest report, covering the period from July to December
1999. The next six monthly report will be published in July 2000.
2. Britain has a moral and political obligation
to do its utmost to ensure that China respects its obligations
under the Sino-British Joint Declaration (JD). The Sino-British
Joint Liaison Group, which was the main body for detailed planning
of the transfer of sovereignty, and which thereafter provided
a forum in which Britain and China could continue to discuss the
implementation of the JD, ended its work in December 1999 (as
agreed in the JD). However this does not signal the end of Britain's
interest in Hong Kong. We will continue to watch developments
in Hong Kong closely and, as co-signatory of the JD, will comment
on how the values of the JD are protected and observed by the
Chinese Government and the Government of the Hong Kong Special
Administrative Region (SAR). We will also continue to report regularly
to Parliament on Hong Kong.
3. While we have some concerns about certain
developments in Hong Kong, we continue to believe that, on the
whole, the Chinese and SAR Governments remain committed to safeguarding
Hong Kong's systems and way of life under the principle of "One
Country, Two Systems". Overall, the experience of Hong Kong
since 1997 augurs well for the future of the SAR.
III. THE ELECTORAL
4. The next elections for the Hong Kong
Legislative Council (LegCo) will take place in September 2000.
The electoral framework will be similar to that for the last LegCo
elections in May 1998. However, in accordance with the Basic Law,
the number of members directly elected in geographical constituencies
will rise from 20 to 24; while the number elected by an Election
Committee will fall from 10 to six. The number in functional constituencies
representing certain professional and business sectors will remain
unchanged at 30.
5. The Government's views on the current
electoral framework were set out in the second six-monthly report
(Cm 3831). Our concerns centre around the much more restrictive
franchise in the functional constituencies compared to the arrangements
used in 1995, in addition to a return to the use of corporate
voting. We have said publicly that we hope the SAR Government
will work towards the early realisation of the goal of universal
suffrage, at a pace in step with the wishes of the local community.
Local interest in the question of Hong Kong's democratic development
is growing, focussing not only on the electoral system but also
on the SAR Government's relationship with, and accountability
to, LegCo. SAR Government officials have indicated that they will
begin looking at options for political development after the September
2000 LegCo elections. The Chief Executive has reiterated the need
for steady progress in accordance with the Basic Law.
6. The SAR Government has reformed Hong
Kong's system of local government, abolishing the Urban and Regional
Councils and replacing the old District Boards with 18 new District
Councils with effect from 1 January 2000. Concerns have been expressed
in Hong Kong about the high proportion of appointed seats on the
IV. THE RULE
7. As foreshadowed in Cm 4331, there was
significant controversy in 1999 after the Court of Final Appeal
(CFA) struck down certain provisions of Hong Kong's immigration
law as being incompatible with the Basic Law's provisions on the
right of abode in Hong Kong. Details of the case are set out in
the six monthly reports for 1999 (Cm 4415 and Cm 4594). The CFA's
interpretation of the Basic Law opened the way for a substantial
wave of immigration from the mainland. The SAR Government took
the view that this would represent an intolerable burden. They
considered seeking an amendment to the Basic Law to restrict eligibility
to right of abode. This option was supported by the Hong Kong
Bar Association and many legislators as the most natural and acceptable
solution in a common law jurisdiction. However, the SAR Government
was concerned that this would take too long and that the National
People's Congress (NPC) in Beijing might not be prepared to make
an amendment. They therefore decided to seek an interpretation
of the Basic Law's right of abode provisions from the Standing
Committee of the NPC.
8. While some welcomed the SAR Government's
action as the most appropriate way to resolve the immigration
challenge, others sharply criticised it as undermining the authority
of the CFA and the rule of law. The SAR Government has emphasised
the unusual circumstances in which it found itself and the exceptional
nature of its decision to request an interpretation. We believe
that the procedure by which the SAR Government sought the interpretation
should remain exceptional. We would not want to see confidence
in the rule of law undermined by its repetition.
9. The right of abode issue returned to
the CFA in December. In its judgment, the CFA affirmed the power
of the NPC Standing Committee to interpret all parts of the Basic
Law, and the duty of the Hong Kong courts to follow such an interpretation.
10. In December 1999, the CFA overturned
a ruling by the Court of Appeal that the provisions of the National
and Regional Flag Ordinances which created the offence of desecration
of flags were unconstitutional. We recognise that this is a difficult
constitutional issue and fully respect the judgment of the CFA.
11. Interest has continued to focus on the
lack of formal arrangements for the rendition of fugitive offenders
between Hong Kong and the mainland. The issue has been the subject
of talks between SAR and mainland officials, most recently in
March 2000. We have made clear to the Chinese and SAR Governments
our view that any arrangements must be acceptable to all concerned.
V. BASIC RIGHTS
12. We continue to attach the highest importance
to the rights and freedoms of Hong Kong people, and to follow
closely the SAR Government's commitment to uphold and protect
those rights. Although our overall assessment is positive, we
continue to take note of issues of concern.
13. One of Hong Kong's major strengths is
its diverse and open media. We welcome the fact that controversial
issues continue to be discussed and debated in Hong Kong. We were
therefore very concerned at comments made in April 2000 by the
Deputy Director of the Chinese Government Liaison Office in Hong
Kong, Wang Fengchao, that the Hong Kong media should not report
views advocating the independence of Taiwan. We issued a statement
expressing our concerns and welcoming a statement by the SAR Acting
Chief Executive which reaffirmed that the Hong Kong media remain
free to report and comment on all matters of current interest.
We raised our concerns with the Chinese Government, who replied
that press freedom was guaranteed by the Basic Law, but that it
was inappropriate to disseminate views about Taiwan's independence
in Hong Kong. The Chinese also stated that foreign countries should
not interfere in what the CPG regarded as the internal affairs
of China. We in turn have made clear our right to remain engaged
on matters relating to the implementation of the JD, to which
we are a co-signatory.
14. Many believe that a degree of self-censorship,
particularly in respect of events on the mainland, has existed
in the press and electronic media since before the handover. There
are still varying assessments as to whether the situation has
deteriorated since 1997. During 1999, renewed concerns were expressed
about the editorial independence of Radio Television Hong Kong
(RTHK), following the departure of the Director of Broadcasting.
We have noted the commitment of the new Director to maintain the
editorial independence of RTHK.
15. The freedom to demonstrate is a fundamental
right in a free society. We welcome the fact that peaceful and
orderly public demonstrations, including the annual commemoration
of the 1989 Tianamen crack-down, have continued to take place
in Hong Kong. We note practitioners of Falun Gong and other groups
branded in the mainland as "evil cults" have been permitted
to hold demonstrations in the SAR in accordance with the law,
even though the organisations have been declared illegal in the
mainland. This is clearly in accordance with "One Country,
16. A number of pro-democracy politicians
have continued to face difficulties in travelling to the mainland.
These include members of the Democratic party such as Martin Lee,
as well as other outspoken legislators such as Emily Lau. Most
recently, in September 1999, legislator Margaret Ng was refused
entry to the mainland to attend a legal seminar, raising concerns
in Hong Kong and internationally. The Chief Executive reiterated
his commitment to safeguarding the rights and freedoms set out
in the Basic Law, but said that he believed the decision had been
made in accordance with mainland laws. We have raised this issue
on several occasions with the SAR Government and the Chinese Government.
17. Reports on Hong Kong under the International
Covenant on Civil and Political Rights (ICCPR) and the International
Covenant on Economic, Social and Cultural Rights (ICESCR) were
submitted to the UN Human Rights Committee (HRC) in January and
June 1999 respectively. The HRC hearing on the report under the
ICCPR took place in November. This was a significant event, as
it was the first time Hong Kong's record had been examined by
the UN since the handover. We understand that the report was drafted
entirely by the SAR Government, without subsequent amendment by
the Chinese Government. We welcomed the fact that SAR Government
officials conducted the main business of defending the report
at the HRC hearing; and that Hong Kong NGOs were able to give
an informal briefing to the HRC before the hearing. The HRC, while
praising the quality of the Hong Kong report, raised a number
of concerns. We have taken note of the HRC's detailed comments.
Overall, this process has demonstrated the vibrancy and autonomy
of the process in Hong Kong. We look forward to the same active
discussion when the hearing on the ICESCR report takes place.
18. A highly sensitive issue remains the
enacting of legislation under Article 23 of the Basic Law to prohibit
any act of treason, secession, sedition, subversion against the
Central People's Government, theft of state secrets and to regulate
the activities of foreign political organisations in Hong Kong.
The SAR Government has not yet brought forward legislative proposals.
In April 2000, the Deputy Director of the Chinese Government Liaison
Office, in his remarks on the Hong Kong media, called for the
legislation to be speeded up.
The SAR Acting Chief Executive reiterated that
the SAR Government had made no decisions as to the timing or content
of such legislation; that they will consult Beijing and that full
public consultation would be carried out before any final decisions
were made; and that legislation on this matter could not be in
conflict with the provisions of the Basic Law. We have previously
welcomed SAR Government assurances on public consultation.
19. The impact on Hong Kong of the regional
economic crisis in the late 1990s presented the SAR Government
with significant challenges in the area of economic and financial
decision making, where it has full autonomy. However, the Hong
Kong economy is now recovering strongly from the recession triggered
by the crisis. The SAR Government is projecting real GDP growth
of 5 per cent in 2000. The budget deficit for 2000-01 was substantially
lower than expected, and no new taxes were introduced. The SAR
Government has however, announced a review of public finances
which will explore options for widening the tax base.
20. The Chinese Government has continued
to avoid involvement in Hong Kong's economic affairs. However,
there have been suggestions that the Chinese Government encouraged
the Hong Kong company Pacific Century CyberWorks in its recent
bid for Cable and Wireless Hong Kong Telecom. In the event, Cable
and Wireless decided to support a merger with Pacific Century
CyberWorks bid in preference to the deal offered by SingTel (of
Singapore). The SAR Government's stated position was that the
deal was a purely commercial matter for the companies concerned.
21. In January 2000, the Chinese Government
announced that the Hong Kong branch of the Xinhua News Agency
would be renamed the Liaison Office of the Central People's Government
(CPG) in the Hong Kong SAR, and listed the Office's functions.
The change was welcomed by the SAR Chief Executive and many took
the view that it would increase transparency. However, others
were concerned about the possibility of greater involvement in
local affairs by the Liaison Office.
22. The British Consulate-General in Hong
Kong has a staff of 147 working in its Political and Economic,
Commercial, Consular, Passport, Visa and Management Sections,
of whom 40 are UK-based.
23. The Government has continued to nurture
links with the SAR Government on a wide range of issues including
economic policy, law enforcement, the environment, civil service
reform, cultural affairs and IT. For example, in June 1999, during
his visit to Hong Kong, the Secretary of State for Trade and Industry
signed a Memorandum of Understanding with the SAR Government on
IT and telecommunications. There is active co-operation between
the Home Office and the SAR Department of Justice on the surrender
of fugitive offenders. We also maintain a regular dialogue with
the SAR Government on issues related to strategic trade. We continue
to treat Hong Kong separately from the mainland for export control
purposes, and have confidence in the strength of the SAR's control
24. The regular flow of high-level visits
in both directions has helped develop the bilateral relationship.
Since the Committee's report in July 1998, there have been visits
to Hong Kong by the Prime Minister, the Deputy Prime Minister,
the Lord Chancellor, the Secretary of State for Trade and Industry
and the Secretary of State for Culture, Media and Sport as well
as the Foreign Secretary, the late Derek Fatchett and, on two
occasions, John Battle (Minister of State at the Foreign and Commonwealth
Office responsible for Hong Kong affairs).
25. The FCO operates a sponsored visits
programme under which leading Hong Kong figures are invited for
working visits to the UK. The British Chevening Scholarships Scheme
has operated in Hong Kong since 1996, giving young people with
leadership potential the opportunity to develop their academic
and management skills in the UK. Around 45 scholarships are offered
annually, a total of 166 in the first five years of the scheme's
application to Hong Kong.
26. We continue to support actively the
SAR Government's efforts to widen visa-free access for SAR passport
holders. As at mid-April 2000, 71 countries or territories world-wide
offered such access. Currently 85 countries offer visa-free access
to holders of BN(O) passports and we continue to seek opportunities
to widen this field.
27. Economically, Britain and Hong Kong
remain major trading partners. Hong Kong is Britain's second largest
export market in Asia after Japan, taking well over £2,000
million of British exports a year. Some 35 per cent of British
exports to mainland China also pass through Hong Kong. Capital
flows between Britain and Hong Kong are worth about £20,000
million a year. Total British investment in Hong Kong is estimated
at some £14,000 million. Hong Kong is a priority market for
British Trade International, which is submitting a separate memorandum.
28. Due to the strong links with the UK,
Hong Kong has been a long-term investor in the UK, with around
80 per cent of their European investment in the UK. There is a
mix of investment from ports, telecomms, textiles, boat manufacture,
property and computer peripherals. Although inward investment
from Hong Kong has been lower over the last two years, primarily
due to the economic environment, there are signs that Hong Kong
companies are again becoming more active overseas.
29. Hong Kong remains an important centre
of activity for the British Council, which provided English language
courses to 40,000 students in Hong Kong in 1999. Further details
of the Council's activities in Hong Kong are covered in the Council's
separate memorandum. The British Consulate-General works very
closely with the British Council in promoting better awareness
of the UK's creativity, its cultural diversity and its recent
achievements, and in challenging outmoded stereotypes.
30. There are about 3.5 million British
passport holders in Hong Kong, of which the majority are British
National (Overseas) (BN(O)). There are some 3.44 million BN(O)
passport holders worldwide and most still reside in Hong Kong.
There is also a large expatriate community of about 24,000. Hong
Kong is thus a busy post for passport and consular work. The Consulate
General operates the largest passport issuing facility outside
the United Kingdom. It also has an important role to play with
regard to distressed British nationals in Hong Kong.
31. However, as most BN(O) passport holders
are of ethnic Chinese origin and are eligible for the Hong Kong
Special Administrative Region passport, we are unable to give
formal consular assistance to BN(O) passport holders in Hong Kong
and mainland China. But we regularly provide consular assistance
to BN(O) passport holders in third countries throughout the world
and, as a consequence, our consular staff in Hong Kong are in
frequent contact with their families.
32. There are currently 10 British nationals
(not BN(O)s) in prison in Hong Kong and receive regular visits
from our consular staff. In addition Cantonese-speaking staff
at the British Consulate-General pay periodic visits to the 80
or so BN(O)s who are in prison in Thailand.
33. Some 4,370 members of Hong Kong's ethnic
minorities holding BN(O) status have registered as British citizens
under the British Nationality (Hong Kong) Act 1997. The Consulate-General
continues to accept new applications on behalf of the Home Office
and to handle residual enquiries. Many of the applications from
minors of Pakistani origin which were outstanding at the time
of the Committee's third report on Hong Kong, have now been resolved.
The Pakistani Government confirmed in September 1999 that those
minors born outside Pakistan, whose fathers were Pakistani by
birth, have retained Pakistani citizenship. Therefore they do
not qualify for British citizenship under the 1997 Act.
34. China resumed sovereignty over Macau
on 20 December 1999 in accordance with the 1987 Sino-Portuguese
Joint Declaration. Macau's Basic Law, which is closely modelled
on Hong Kong's, guarantees that Macau's way of life and capitalist
system will remain unchanged for 50 years under the principle
of "One Country, Two Systems". The Macau Special Administrative
Region, like the Hong Kong SARG, has a high degree of autonomy.
35. The British Consul-General in Hong Kong
and a number of his staff are jointly accredited to Macau, and
make regular visits there. They maintain links between the UK
and Macao on a range of consular, commercial, political and economic
issues. There is also an Honorary Consul based in Macau.
Foreign and Commonwealth Office
17 May 2000