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In 1984, the UK and China signed the Sino-British Joint Declaration, paving the way for Hong Kong to be transferred from British to Chinese sovereignty while preserving Hong Kong's legal, social and economic systems and way of life. This agreement promised Hong Kong a high degree of autonomy. "One country, two systems" was a compromise that has brought success to Hong Kong Special Administrative Region since the 1997 handover, but this delicate balance has recently come under strain amidst debate over Hong Kong's political and constitutional future. This, in turn, fuels our concern about Hong Kong's overall direction of travel.
Eighteen years since the handover, Hong Kong SAR is a vibrant and dynamic city in which to do business, the largest financial services hub in China and a key platform for China's trade with the world. Economic and business ties between the UK and Hong Kong remain very strong, with the hundreds of UK firms operating there facing few, if any, obstacles. We hope the UK Government will continue to ensure that its strategy on improving UK-Chinese economic and trade relations recognises the special role of Hong Kong as a partner for the UK. Deepening the successful cooperation between London and Hong Kong on the internationalisation of the RMB should constitute a key element of this strategy.
The preservation of both the letter and the spirit of the Joint Declaration is crucial to Hong Kong's economic and business success, and the UK has both a legal right and a moral obligation to monitor the implementation of the principles established in the treaty. This is primarily done via the FCO's six-monthly reports on Hong Kong, which aim to record developments in Hong Kong and to establish the UK position on significant issues of interest or concern. We found the reports bland and repetitive, giving little sense of wider context for events in Hong Kong or the UK Government's views on important topics. We would like to see the reports restructured to include less ambiguous conclusions, supported by more in-depth analysis of the political, social and economic implications of the developments they describe.
Recent debates over electoral reform have exposed deep divisions in Hong Kong and a wide divergence of expectations for its political future. Hong Kong's mini-constitution, the Basic Law, promises that the people of Hong Kong will eventually be able to elect their Chief Executive and Legislative Council by universal suffrage. On 31 August 2014, the Standing Committee of the Chinese National People's Congress issued a decision stating that universal suffrage could be introduced in 2017, but with severe restrictions on the candidate nomination process. As evidenced by the Occupy Central campaign that at its peak brought much of Hong Kong to a standstill, the SCNPC's decision does not go far enough in meeting the aspirations of Hong Kong's people. We agree with the UK Government that the specific details of constitutional reform are for the governments of China and Hong Kong to decide together with the people of Hong Kong, but we do not share its view that the current electoral proposals for 2017 offer "genuine choice" to the people of Hong Kong. We also judge that the UK can and should take a clearer position on the overall pace and degree of democratic reform.
In addition to debates on constitutional reform, we heard widespread concern that the autonomy, rights and freedoms guaranteed to Hong Kong in the Joint Declaration and Basic Law have been gradually eroded in recent years. In some respects, this reflects the continuing vibrancy of "one country, two systems", as Hong Kong people remain vigilant and outspoken in preserving the autonomy of the Special Administrative Region and pushing back against any perceived threat to that autonomy. We were concerned, however, by reports that freedom of assembly and freedom of speech and the press are being undermined in ways both overt and indirect. A free press and the right to demonstrate peacefully are essential to the functioning of a free society and are among the most crucial pillars upholding Hong Kong's high degree of autonomy. The UK Government should closely monitor the preservation of these freedoms, and should be robust and persistent, both publicly and privately, in affirming its support for these fundamental rights.
Looking to the future, Hong Kong may face a crisis of governance if the people, the leadership and the Chinese government cannot find a solution to the current constitutional impasse. The demand for greater democracy is more than an abstract concern: it reflects the understandable desire of Hong Kong's people to have an accountable government that responds to their needs and interests. The status quo is not sustainable in the long term and could soon threaten the open business climate and stability that underpins Hong Kong's enviable prosperity and growth. In our view, this tension can only be resolved by meaningful progress toward democracy, guided by a transparent process in line with the Basic Law, in which both the Hong Kong people and the Chinese government can have confidence. A democratic, stable and prosperous Hong Kong is good for the people of Hong Kong SAR, good for China, and good for the UK. Britain has an enduring responsibility to see that Hong Kong achieves this goal and to ensure that the principles, legal obligations and spirit of the Joint Declaration remain as respected today as they were in 1984 and 1997.
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