- I. Hong Kong's Smooth Return to China
- II. Establishment of the Special Administrative Region System in Hong Kong
- III. Comprehensive Progress Made in Various Undertakings in the HKSAR
- IV. Efforts Made by the Central Government to Ensure the Prosperity and Development of the HKSAR
- V. Fully and Accurately Understanding and Implementing the Policy of "One Country, Two Systems"
2. Supporting the HKSAR in Reinforcing and Enhancing Its Competitive Strengths
-Supporting Hong Kong as an international center of finance, trade and shipping. The central government supports Hong Kong in launching individual use of RMB, issuing RMB bonds and conducting trials of RMB settlement in cross-border trade, thus consolidating Hong Kong's position as a leading offshore RMB market. It has continued to encourage the listing of mainland enterprises on the stock market in Hong Kong, and introduced other measures to support Hong Kong's financial sector. In 2013, a total of 216 Hong Kong banks joined the RMB clearing platform, and the amount of cross-border RMB settlement in Hong Kong reached RMB3.84 trillion, accounting for 82.9 percent of the total cross-border RMB settlement of China. The balance of Hong Kong's RMB customer deposits and depository receipts reached RMB1 trillion. Hong Kong has become the world's largest offshore RMB trading center. After the signing of the CEPA in 2003 and its coming into force in January 2004, the mainland signed and implemented ten supplementary agreements with Hong Kong. The mainland now gives zero tariff treatment to all products of Hong Kong origin. From that time to the end of 2013, the mainland imported from Hong Kong goods worth US$7.161 billion under the CEPA, with tariff preference of RMB3.983 billion for Hong Kong. The mainland also adopted a total of 403 liberalization measures in respect of trade in services. Based on WTO classification, the mainland has opened to Hong Kong 149 areas of trade in services under the CEPA and its supplementary agreements, accounting for 93.1 percent of the total number of such areas of the mainland. This makes the CEPA the most open agreement on free trade that the mainland has ever signed. In addition, Guangdong Province has adopted 82 pilot measures to open its services industries to Hong Kong. When drawing up the National Plan for the Layout of Coastal Ports, and the 12th Five-Year Plan for the Comprehensive Development of Transportation Systems, the central government took into account the need to consolidate and enhance Hong Kong's position as an international shipping center.
-Supporting Hong Kong in developing its tourism and retail sectors, and Hong Kong-invested companies on the mainland. At the request of the HKSAR government, the central government gradually expanded the Individual Visit Scheme to 49 pilot cities, with a total population of over 300 million. By the end of 2013, some 129 million mainland residents had visited Hong Kong under the Individual Visit Scheme. According to estimate of the HKSAR government, in 2012 alone the Individual Visit Scheme contributed to 1.3 percent increase of Hong Kong's GRP of the year, and it created more than 110,000 jobs, accounting for 3.1 percent of the local employment. To bring more benefits to medium-sized and small businesses and residents in Hong Kong, the central government also allows Hong Kong residents to start individual businesses on the mainland. By the end of 2013, a total of 5,982 individual businesses opened by Hong Kong residents had been registered on the mainland, employing 16,476 people. The central government encourages the development of Hong Kong processing and trading companies on the mainland, and has assisted the transformation and upgrading of Hong Kong-invested companies on the mainland. In 2009, Guangdong Province introduced 30 policies to help companies established with Hong Kong, Macau and Taiwan investment weather the international financial crisis and accelerate their transformation and upgrading. In December 2011, the central government issued the Guidelines on Promoting the Transformation and Upgrading of Processing Trade, and set up demonstration zones and pilot cities for the transformation and upgrading of processing trade in Suzhou and Dongguan, as well as 44 key areas in central and western China to relocate enterprises of processing trade in a phased way.
3. Supporting the HKSAR in Strengthening Exchanges and Cooperation in Various Fields with the Mainland
Since Hong Kong's return to China in 1997, the central government has made the maintenance of its prosperity and stability an important part of the country's overall development strategy. Both the 10th and 11th Five-Year Plans stress the need to ensure lasting prosperity and stability in Hong Kong, and strengthen its position as an international center of finance, trade and shipping. In the 12th Five-Year Plan, for the first time, the development of Hong Kong and Macau is dealt with in an independent section. This has further defined Hong Kong's strategic position in China's development strategy and stressed the state support for Hong Kong in enhancing its competitive edge, fostering emerging industries and deepening economic cooperation with the mainland.
-Supporting the HKSAR further in developing economic and trade cooperation with the mainland. The implementation of the CEPA and its supplementary agreements has removed a great deal of institutional barriers in trade, investment and other sectors between Hong Kong and the mainland, strengthened their economic and trade relations, and broadened the range of cooperation, with both sides benefiting from their cooperation. Currently, the mainland is the largest trading partner of Hong Kong. According to Hong Kong statistics, in 2013 the trade volume between Hong Kong and the mainland reached HK$3.8913 trillion, 3.49 times that of 1997 and accounting for 51.1 percent of Hong Kong's external trade. At the same time, Hong Kong is the mainland's most important trading partner, a key export market and the mainland's largest off-shore financial center. By the end of 2013, mainland enterprises listed in Hong Kong had totaled 797, accounting for 48.5 percent of the total number of Hong Kong listed companies. In addition, their total market value had reached HK$13.7 trillion, accounting for 56.9 percent of the total value of the Hong Kong stock market. In addition, the mainland and Hong Kong are each other's largest source of overseas direct investment (ODI). By the end of 2013, Hong Kong's ODI from the mainland had exceeded US$358.8 billion, accounting for nearly 60 percent of the mainland's total ODI; the mainland had approved nearly 360,000 projects with Hong Kong investment, involving US$665.67 billion in total and accounting for 47.7 percent of the mainland's total ODI.
-Supporting the HKSAR in strengthening cooperation with mainland provinces, autonomous regions and municipalities directly under the central government, particularly Guangdong Province. The central government has endorsed the establishment of the Hong Kong-Guangdong Cooperation Joint Conference, and the Pan-Pearl River Delta Regional Cooperation and Development Forum. It approved the implementation of the Outline of the Plan for the Reform and Development of the Pearl River Delta (2008-2020), the Overall Development Plan of Hengqin, the Overall Development Plan for the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, and the Development Plan for the Nansha New District of Guangzhou, and approved the signing by Guangdong with the HKSAR of the Framework Agreement on Hong Kong-Guangdong Cooperation, which identifies the three key areas of cooperation, namely, building the Hengqin New District of Zhuhai, the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone and the Nansha New District of Guangzhou, the central government has urged Guangdong and Hong Kong to work together to build more competitive world-class urban cluster with cutting-edge manufacturing and service industries. The central government has also approved the establishment by the HKSAR of regional cooperation mechanisms with Beijing and Shanghai, and supported the HKSAR government to set up offices on the mainland. Currently, in addition to its Beijing Office, the HKSAR government has also set up commercial offices in Guangzhou, Shanghai, Chengdu and Wuhan, and liaison offices in Shenzhen, Chongqing and Fuzhou, which are instrumental in promoting Hong Kong's economic and trade cooperation with the various localities in the mainland and exchanges in other areas.
-Supporting efforts by the HKSAR and the mainland in cross-border infrastructure construction and facilitation for personnel and cargo customs clearance. The Hong Kong-Shenzhen Western Corridor, which opened to traffic in 2007, has become the fourth land passage linking Hong Kong with the mainland. The Hong Kong-Zhuhai-Macau Bridge, the construction of which started in 2009 and scheduled for completion in 2016, will connect Hong Kong in the east and Zhuhai and Macau in the west, and will become a new road transport corridor linking eastern and western banks of the Pearl River. The Guangzhou-Shenzhen-Hong Kong High-Speed Railway, when completed, will connect Hong Kong with China's national high-speed rail network. As things stand now, the mainland and Hong Kong have achieved full mutual recognition of inspection results at all land and water ports. In 2013, a total of 40.75 million mainland residents visited Hong Kong, which was 17.3 times that of 1997; while 76.88 million Hong Kong residents visited the mainland, up from 39.77 million in 1997.
-Supporting the HKSAR in strengthening exchanges and cooperation with the mainland in education, science and technology, culture and some other fields. The central government has supported universities of Hong Kong and the mainland in enrolling students from each other; supported cooperation in academic affairs between institutions of higher learning of Hong Kong and the mainland, and supported teaching staff and students from the two sides in carrying out exchange activities. It has supported Hong Kong's institutions of higher learning, research bodies and the science and technology parks in Hong Kong in setting up Partner Labs of Key State Laboratories, the Hong Kong branch of the National Engineering Research Center and the National High-tech Industrialization Base; supported Hong Kong universities in establishing research institutes in Shenzhen; supported Hong Kong science workers and institutions in applying for projects under China's National Research Program; and endeavored to make the country's key sci-tech projects more accessible to Hong Kong. In 2005, the mainland and Hong Kong signed the Mainland and Hong Kong Closer Cultural Ties Arrangement Agreement, launching overall cooperation in cultural conservation, and industrial development and exchanges. The central government supported Hong Kong, Macau and Guangdong in jointly and successfully including the Yueju opera in the UNESCO's Representative List of Intangible Cultural Heritage of Humanity in 2009; and supported Hong Kong's successful bid to list its Geopark in Sai Kung as part of the UNESCO Global Geoparks Network in 2011. It has also supported Hong Kong in joint production of films with the mainland; since the signing of the CEPA, Hong Kong and the mainland have worked together in producing 322 films, accounting for 70 percent of mainland's total in such area. The central government has supported Hong Kong in cooperating with the mainland in sports personnel exchanges, training and some other aspects. It invites Hong Kong athletes to take part in National Games and other events. It has also supported exchanges and cooperation between the two sides in the development of traditional Chinese medicine, health care management, notification and prevention and treatment of infectious diseases, notification and cooperation in cases of public health crises, etc.
-Supporting the HKSAR government in establishing exchange and cooperation mechanisms with relevant departments of the central government. The HKSAR government has established a number of exchange and cooperation mechanisms at different levels and covering different areas with relevant departments of the central government to coordinate and promote related work. For example, the two sides established the CEPA Joint Steering Committee to oversee the implementation of the CEPA, solve problems, and supplement and amend the CEPA; and cooperation mechanisms in the areas of entry-and-exit control, customs, inspection and quarantine, finance, public health, tourism and other fields, to promote communication, jointly handle emergencies and combat illegal activities. In addition, the central government established a Joint Inter-ministerial Conference System for the Promotion of Qianhai, Nansha and Hengqin, to strengthen guidance, coordination and services for the development and building of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, Nansha New District in Guangzhou and Hengqin New District in Zhuhai; and the HKSAR government is a member of this system. These mechanisms have played a positive role in promoting mutually beneficial cooperation between Hong Kong and the mainland, and in handling related issues of regional development and governance of common concern.
4. Ensuring Secure and Stable Supplies of Basic Necessities to the HKSAR
Because of the limitations of its natural environment, Hong Kong mainly relies on the mainland for the supply of fresh water, vegetables, meat and other basic necessities. Since the early 1960s, when the mainland opened "three express trains" to supply Hong Kong with fresh and frozen goods, and started the Dongjiang-Shenzhen Water Supply Project, the central government and the relevant local governments on the mainland have made great efforts to ensure the supply of foodstuff, agricultural and sideline products, water, electricity, natural gas, etc., to the HKSAR. By the end of 2013, some 95 percent of live pigs, 100 percent of live cattle, 33 percent of live chicken, 100 percent of freshwater fish, 90 percent of vegetables and 70 percent or more of flour on the Hong Kong market had been supplied by the mainland. The first pass yield of foodstuff supplied by the mainland to Hong Kong has maintained at a fairly high level. In 2013, in accordance with the revised agreement, Guangdong supplied Hong Kong with 606 million cu m of fresh water. From 1994, the Daya Bay Nuclear Power Plant started to supply Hong Kong with electricity, and now its annual power supply accounts for a quarter of the annual power consumption of Hong Kong. In 2013, the mainland supplied Hong Kong with 2.531 billion cu m of natural gas.
V. Fully and Accurately Understanding and Implementing the Policy of "One Country, Two Systems"
As a groundbreaking initiative, "one country, two systems" is a major issue of governance to the central leadership, and marks a major historical turning point for Hong Kong and Hong Kong people as well. While comprehensive progress has been made on all fronts in the HKSAR, the practice of "one country, two systems" has come to face new circumstances and new problems. Some people in Hong Kong have yet felt comfortable with the changes. Still some are even confused or lopsided in their understanding of "one country, two systems" and the Basic Law. Many wrong views that are currently rife in Hong Kong concerning its economy, society and development of its political structure are attributable to this. The continued practice of "one country, two systems" in Hong Kong requires that we proceed from the fundamental objectives of maintaining China's sovereignty, security and development interests and maintaining the long-term stability and prosperity of Hong Kong to fully and accurately understand and implement the policy of "one country, two systems," and holistically combine upholding the principle of "one country" with respecting the difference of "two systems," maintaining the power of the central government with ensuring the high degree of autonomy of the HKSAR, and letting the mainland play its role as a strong supporter of the HKSAR with improving the competitive edge of Hong Kong. In no circumstance should we do one thing and neglect the other.
1. Fully and Accurately Understanding the Meaning of "One Country, Two Systems"
"One country, two systems" is a holistic concept. The "one country" means that within the PRC, HKSAR is an inseparable part and a local administrative region directly under China's Central People's Government. As a unitary state, China's central government has comprehensive jurisdiction over all local administrative regions, including the HKSAR. The high degree of autonomy of HKSAR is not an inherent power, but one that comes solely from the authorization by the central leadership. The high degree of autonomy of the HKSAR is not full autonomy, nor a decentralized power. It is the power to run local affairs as authorized by the central leadership. The high degree of autonomy of HKSAR is subject to the level of the central leadership's authorization. There is no such thing called "residual power." With China's Constitution stipulating in clear-cut terms that the country follows a fundamental system of socialism, the basic system, core leadership and guiding thought of the "one country" have been explicitly provided for. The most important thing to do in upholding the "one country" principle is to maintain China's sovereignty, security and development interests, and respect the country's fundamental system and other systems and principles.
The "two systems" means that, within the "one country" the main body of the country practices socialism, while Hong Kong and some other regions practice capitalism. The "one country" is the premise and basis of the "two systems," and the "two systems" is subordinate to and derived from "one country." But the "two systems" under the "one country" are not on a par with each other. The fact that the mainland, the main body of the country, embraces socialism will not change. With that as the premise, and taking into account the history of Hong Kong and some other regions, capitalism is allowed to stay on a long-term basis. Therefore, a socialist system by the mainland is the prerequisite and guarantee for Hong Kong's practicing capitalism and maintaining its stability and prosperity. For Hong Kong to retain its capitalist system and enjoy a high degree of autonomy with "Hong Kong people governing Hong Kong" according to the Basic Law, it must fully respect the socialist system practiced on the mainland in keeping with the "one country" principle and, in particular, the political system and other systems and principles in practice. The mainland should respect and tolerate the capitalism embraced by Hong Kong while upholding its socialist system, and draw on the successful experience of Hong Kong in economic development and social management. Only by respecting and learning from each other can the "two systems" in the "one country" coexist harmoniously and achieve common development.
2. Resolutely Safeguarding the Authority of the Constitution of the PRC and the Basic Law of Hong Kong
The Constitution of the PRC and the Basic Law together constitute the constitutional basis of the HKSAR. As the fundamental law of the country, the Constitution, with supreme legal status and the highest legal authority, is applicable throughout the territory of the People's Republic of China, including the HKSAR. The Basic Law, which was formulated in accordance with the Constitution, provides for the system of the HKSAR and enjoys the legal status as its constitutional law. The systems and policies of the HKSAR are all based on the provisions of the Basic Law; no law enacted by the legislature of the HKSAR shall contravene the Basic Law. All the executive, legislative and judicial practices in the HKSAR must conform to the Basic Law. And all individuals, groups and organizations of the HKSAR shall obey the Basic Law. As a national law, the Basic Law is applicable throughout the country. (more)
Full Text: The Practice of the "One Country, Two Systems" Policy in the Hong Kong Special Administrative Region (12)
We should have a full understanding of the provisions of the Basic Law. All the provisions of the Basic Law underlie the HKSAR system. They are not isolated from but interrelated with each other. Each of these provisions must be understood in the context of the Basic Law and the HKSAR system as a whole. The implementation of the Basic Law shows that if we comprehend individual provisions of the Basic Law in an isolated way without taking into account the Basic Law as a whole, stressing one aspect while ignoring others, ambiguity or even contentious interpretation will occur, which will severely hamper the implementation of the Basic Law. Only by comprehensively understanding all the provisions of the Basic Law can we find that the HKSAR system, along with all its components, is an integrated whole complementary to each other and that this system plays the role of protecting the fundamental rights and freedoms of Hong Kong residents, and ensures the prosperity and stability of Hong Kong.
We should respect and uphold the power of interpretation and amendment of the Basic Law vested in the NPC and its Standing Committee. The Basic Law provides that the power of interpretation of the Basic Law shall be vested in the NPC Standing Committee, and the power of amendment shall be vested in the NPC. The Basic Law also provides that the courts of the HKSAR, in the process of adjudication, may give their own interpretation of the provisions in the Basic Law that are within the limits of the autonomy of the HKSAR and other provisions. This power of interpretation comes from the authorization of the NPC Standing Committee. However, if the courts of the HKSAR, in the process of adjudicating cases, need to interpret the provisions of the Basic Law concerning affairs which are the responsibility of the central government, or concerning the relationship between the central authorities and the HKSAR, and if such interpretation will affect the judgments on the cases, the courts of the HKSAR shall, before making their final judgments which are not appealable, seek an interpretation of the relevant provisions from the NPC Standing Committee through the Court of Final Appeal of the HKSAR. When the NPC Standing Committee makes an interpretation of the provisions concerned, the courts of the HKSAR, in applying those provisions, shall follow the interpretation of the NPC Standing Committee, which enjoys the same status with HKSAR laws. The fact that the Standing Committee of the NPC exercises the power of interpretation of the Basic Law in accordance with the law is aimed at maintaining the rule of law in Hong Kong, as it oversees HKSAR's implementation of the Basic Law and protects the high degree of autonomy of the region.
We should improve the systems and mechanisms related to implementing the Basic Law, which will help enhance its authority. Since the Basic Law came into force, a series of systems and mechanisms related to its implementation have been put in place. For example, in amending the method for selection of the chief executive of the HKSAR and method for the formation of the Legislative Council of the HKSAR, a "five-step" legal procedure has been established and the five steps are: the chief executive makes a report to the NPC Standing Committee; the NPC Standing Committee makes a corresponding decision; the Legislative Council endorses the decision; and the chief executive gives his consent; and the NPC Standing Committee approves or puts it on the record. Regarding the interpretation of the Basic Law, the relevant procedures and working mechanisms that have been established include: the NPC Standing Committee interprets the Law on its own initiative; the chief executive makes a report to the State Council, which then submits it to the NPC Standing Committee and asks it to give an interpretation; or the Court of Final Appeal of the HKSAR seeks an interpretation of the relevant provisions from the NPC Standing Committee. Regarding legislation in the HKSAR, the working procedure for the NPC Standing Committee to put on the record of laws enacted by the HKSAR has been established; in terms of judicial aid between the mainland and HKSAR, arrangements have been made in mutual service of judicial documents, reciprocal recognition and enforcement of arbitration awards of civil and commercial cases as well as judgments of certain civil and commercial cases. Regarding accountability the chief executive holds to the central government, a system is in place for the chief executive to make reports to the central government on his/her own work. As the practice of "one country, two systems" continues and the Basic Law is further implemented, it is imperative to further improve the systems and mechanisms in relation to the implementation of the Basic Law. In particular, it is necessary to, with an eye to the lasting peace and order in Hong Kong, exercise well the power invested in the central government as prescribed in the Basic Law and see to it that the relationship between the central government and HKSAR is indeed brought onto a legal and institutionalized orbit.