MCLC: State Council white paper on HK

Denton, Kirk denton.2 at osu.edu
Wed Jun 11 09:04:14 EDT 2014


MCLC LIST
From: Anne Henochowicz <anne at chinadigitatimes.net>
Subject: State Council white paper on HK
**********************************************************

Source: SCMP (6/10/14):
htp://www.scmp.com/news/hong-kong/article/1529167/full-text-practice-one-c
untry-two-systems-policy-hong-kong-special

Full text: Chinese State Cuncil white paper on ‘One Country, Two Systems’
policy in Hong Kong

The Inormation Office of the State Council issued a white paper on the
practice of the "one country, two systems" policy in Hong Kon on Tuesday.

 
Following is the full text:

 
The Practice of the "One ountry, Two Systems" Policy in the Hong Kong
Special Administrative Regon
 

* Foreword
* I. Hong Kong's Smooth Return to China
* II. Establishent of the Special Administrative Region System in Hong
Kong
* III. Compreensive Progress Made in Various Undertakings in the HKSAR
* IV. Effort Made by the Central Government to Ensure the Prosperity and
Development ofthe HKSAR
* V. Fully and Accurately Understanding and Implementing th Policy of
"One Country, Two Systems"
* Conclusion

 
Foreword

 
"One counry, two systems" is a basic state policy the Chinese government
has adoptd to realize the peaceful reunification of the country.
Following this pinciple, the Chinese government successfully solved the
question of Hng Kong through diplomatic negotiations with the British
government, ad resumed the exercise of sovereignty over Hong Kong on July
1, 1997, flfilling the common aspiration of the Chinese people for the
recovery of ong Kong. As a result, Hong Kong got rid of colonial rule and
returned o the embrace of the motherland, and embarked on the broad road
of common evelopment with the mainland, as they complemented each other's
Avantages.

 
Hong Kong's return to the motherland turned "one country, wo systems"
from a scientific concept into vivid reality. The central govrnment
strictly adheres to the Basic Law of Hong Kong, earnestly performs its
constitutional duties and stands firm in supporting the administraion of
the chief executive and the government of the Hong Kong Special
Administrative Region (HKSAR) i accordance with the law. The HKSAR
exercises a high degree of autonomy inaccordance with the law, and is
vested with executive, legislativeand independent judicial power,
including that of final adjudication. The pevious capitalist system and
way of life remain unchanged, and most las continue to apply. Hong Kong
continues to prosper, its society remains stble, and full development is
being witnessed in all undertakings. Te "one country, two systems" policy
enjoys growing popularity in Hong Kong,winning the wholehearted support
from Hong Kong compatriots as well as eople in all other parts of China.
It is also thought highly by the intenational community.

 
"One country, two systems" is a new doman in which we constantly explore
new possibilities and make new progressin pioneering spirit. A summary of
the policy's implementation in the HKSAR, and a comprehensive and correct
understanding and impleentation of the policy will prove useful for
safeguarding China'sovereignty, security and development interests, for
maintaining long-termprosperity and stability in Hong Kong, and for
further promoting the "on country, two systems" practice along the
correct track of developent.

 
I. Hong Kong's Smooth Return to China

 
In the early 1980s, Cina's state leader Deng Xiaoping put forward the
scientific concept known a "one country, two systems" in an effort to
realize the peaceful reunifiation of China, and this ingenious design was
first applied to solve the qustion of Hong Kong. According to Deng
Xiaoping, "one country, two systems means there is only but one China and
under this premise the mainland dheres to the socialist system while Hong
Kong, Macau and Taiwan may retai their capitalist systems over a long
time to come.

 
On December 4, 192, the Fifth Session of the Fifth National People's
Congress (NPC) endored a new Constitution of the People's Republic of
China. Its Article 31 rovides, "The state may establish special
administrative regions when necessary. The systems to be instituted in
special administrative regins shall be prescribed by law enacted by the
National People's Congress inthe light of the specific conditions."
Giving expression to the "one countr, two systems" concept, this Article
provides the constitutional basis forthe establishment of special
administrative regions in certain areas thatadopt different social
systems and different policies from those on th mainland, as the Chinese
government makes efforts to realize the peacefulreunification of China.
After in-depth investigations and research, the hinese government
formulated 12 basic policies regarding the question of Hog Kong, known as
the "12 Principles," in early 1983. The main contents ere: (1) The
Chinese government decided to resume the exercis of sovereignty over Hong
Kong as of July 1, 1997. (2) After resuming theexercise of sovereignty
over Hong Kong, the central government would estabish a special
administrative region in Hong Kong in accordance with theprovisions in
Article 31 of the Constitution. The Hong Kong Special Adinistrative
Region would be directly under the authority of the Central Peple's
Government and would enjoy a high degree of autonomy. (3) The HKAR would
be vested with legislative and independent judicial power, includng that
of final adjudication. The laws, decrees and regulatins currently in
force in Hong Kong would remain basically unchanged. (4) Th government of
the HKSAR would be composed of local inhabitants. The princial officials
would be selected by election or through consultations held loally and be
appointed by the Central People's Government. Those previouslyworking in
the public and police services in the government departments o Hong Kong
may remain in employment. British and other foreign nationals may also be
employd to serve as advisers to government departments of the HKSAR. (5)
The currnt social and economic systems in Hong Kong would remain
unchaged, and so would the life-style. Freedoms, including those of
speech, of te press, of assembly, of association, of travel, of movement,
of corrspondence, and of religious belief would be ensured in the HKSAR.
Privae property, ownership of enterprises, legitimate right of
inheritance and freign investment would be protected by law. (6) The
HKSAR would retain th status of a free port and a separate customs
territory. (7) The HKSA would retain the status of a financial center,
and its markets for foreig exchange, gold, securities and futures would
continue. There would contine to be a free flow of capital, and the Hong
Kong dollar would continue to irculate and remain freely convertible. (8)
The HKSAR would have independen finances. (9) The HKSAR may establish
mutually beneficial economic elations with the United Kingdom, whose
economic interests in Hong Kong wuld be given due regard. (10) Using the
name "Hong Kong, China," the HKSAR ay on its own maintain and develop
economic and cultural relations nd conclude relevant agreements with
states, regions and relevant internaional organizations. The government
of the HKSAR may itself issue trave documents for entry into and exit
from Hong Kong. (11) The maintenance ofpublic order in the HKSAR would be
the responsibility of the governmet of the HKSAR. And (12) the
above-stated policies would be stipulated in te Basic Law of the HKSAR by
the NPC of the People's Republic of China(PRC), and they would remain
unchanged for 50 years. (more)

 
During hi meeting with the visiting British Prime Minister Margaret
Thatcher on Sptember 24, 1982, Deng Xiaoping made clear the Chinese
government'sposition on the question of Hong Kong, pointing out that
sovereignty ws not a matter for discussion and that China would take back
Hong Kong in1997. It was under this premise that China and Britain would
negotate to ensure the smooth transfer of Hong Kong and clarify what was
to be dne about Hong Kong 15 years later. This marked the beginning of
the negotations between China and Britain on the question of Hong Kong.
On December 9, 1984, after 22 rounds of negotiations, the governments of
China ad Britain signed the Joint Declaration of the Government of the
People's Republic of China and the Government of the United Kingdom of
Great Britain and Northern Ireland on the uestion of Hong Kong in
Beijing, confirming that the government of the RC would resume its
exercise of sovereignty over Hong Kong with effct from July 1, 1997. The
Chinese government also made clear in the JointDeclaration its basic
policies regarding Hong Kong based on the "12 Priciples." The signing of
the Sino-British Joint Declaration marked the entryof Hong Kong into a
13-year transition period before its return to Chna. During this period,
the Chinese government unswervingly followed th "one country, two
systems" policy, closely relied on the Hong Kong compatiots, and
resolutely held off interference to promote the preparation wrk for Hong
Kong's return.

 
On April 10, 1985, the Third Sessionof the Sixth NPC decided to form the
Drafting Committee for the Basic La of the HKSAR of the PRC. In July, the
Drafting Committee began its work It completed its mission in February
1990, taking four years and eight mnths to develop the Basic Law of Hong
Kong. The drafting of the Basic Lawof Hong Kong was highly democratic and
open, and the compatriots of Hong Kog were widely involved. Twenty-three
of the 59 members of the Drafting Comittee came from various walks of
life in Hong Kong, and the Drafting Cmmittee entrusted its Hong Kng
members to set up a 180-member counseling committee in Hong Kong to
collet the views and opinions of the people of Hong Kong. In April 988,
the Drafting Committee published the Basic Law of Hong Kong (draft) fr
comments, and in February 1989 the Standing Committee of the NPC made
pulic the Basic Law of the HKSAR (draft) and twice widely solicited vews
in Hong Kong and on the mainland. People from all walks of lif in Hong
Kong and the mainland took active part in the deliberation and dscussion
of the draft, and in Hong Kong alone nearly 80,000 files of viws and
comments were collected. The Basic Law of Hong Kong embodies the cmmon
will of all Chinese people, including Hong Kong compatriots, and
encapulates the wisdom of the Chinese nation.

 
On April 4, 1990, the Third Sesion of the Seventh NPC passed the Basic
Law of the Hong Kong Special Aministrative Region of the People's
Republic of China, and made the deciion to establish the HKSAR. The Basic
Law of the HKSAR is a basic law frmulated in accordance with the
Constitution of the People's Republic of Chna. It stipulates the system
and policies to be instituted in the HKSA, and is the legalization and
institutionalization of the "one country, to systems" policy. It also
provides a legal basis for the implementationof "one country, two
systems" in the HKSAR. The Basic Law was lauded by eng Xiaoping as a "law
of historic and international significance" and "a ceative masterpiece."

 
Following the promulgation of the Basic Law, the Chinee government began
preparation work for the establishment of the HKSAR. In July 1993, the NPC
Standing Committee athorized the formation of the Preliminary Working
Commission of the Prepartory Committee of the HKSAR (the Preliminary
Working Commission). In Januar 1996, the Preparatory Committee of the
HKSAR of the NPC (the Preparatory Cmmittee) was established. Both the
commission and the committee did a grat deal of work for the smooth
transition and transfer of government in Hog Kong.

 
On July 1, 1997, the Chinese government resumed its exercise f
sovereignty over Hong Kong. At the same time, the HKSAR was established
and the Basic Law came into effect. Hong Kong entered a new epoch
charaterized by "one country, two systems," "Hong Kong people governing
Hong Kog" and a high degree of autonomy. As members of the big Chinese
family, te people of Hong Kong and the people of the mainland share the
pride and gory of the great mother country, and bear the common
responsibility and mssion of rejuvenation of the Chinese nation.

 
 
II. Establishmentof the Special Administrative Region System in Hong Kong

 
The system ofthe special administrative region, as prescribed in the
Constitution of th People's Republic of China and the Basic Law of the
HKSAR, is a specal administrative system developed by the state for
certain regions. Under his system, the central government exercises
overall jurisdiction over the HKSAR, including the powers directly
exercised by thecentral government, and the powers delegated to the HKSAR
by the central overnment to enable it to exercise a high degree of
autonomy in accordancewith the law. The central government has the power
of oversight over the xercise of a high degree of autonomy in the HKSAR.

 
1. The Central Leadrship Directly Exercises Jurisdiction over the HKSAR
in Accordance wit the Law

 
As prescribed in the Constitution of the People's Republc of China and
the Basic Law of the HKSAR, the organs of power by whch the central
leadership directly exercises jurisdiction over the HKSR are the NPC and
its Standing Committee, the president of the state, the Cntral People's
Government, and the Central Military Commission. TheNPC decided on the
establishment of the HKSAR, formulated the Basic Lawof the HKSAR to
prescribe the system to be instituted in the HKSAR, andhas the power of
amendment to the Basic Law. The NPC Standing Cmmittee has the power of
interpretation regarding the Basic Law of the HKAR, the power of decision
on revising the selection methods of the chief xecutive and the
Legislative Council of the HKSAR, the power of supevision over the laws
formulated by the legislative organs of the HKSAR, te power of decision
on the HKSAR entering a state of emergency, and the poer of making new
authorization for the HKSAR. The HKSAR comes directly unde the Central
People's Government, and its chief executive is accountableto the Central
People's Government. The Central People's Government ppoints the chief
executive and the principal officials, is responsible forforeign affairs
relating to the HKSAR in accordance with the law, and issues directives to
the chief executive. The Cntral Military Commission is the leading body
of the Hong Kong garrison, an performs defense and other duties. The
central authorities perform overal jurisdiction and constitutional duties
as prescribed in the Constitutio of the People's Republic of China and in
the Basic Law of the HKSAR, ad exercise effective administration over the
HKSAR.

 
-Forming the powe organs of the HKSAR. Prior to the return of Hong Kong,
the Preparatory Comittee of the HKSAR completed the organization of the
Selection Committe of the First Government of the HKSAR. The Selection
Committee electe Tung Chee-hwa as the first chief executive of the HKSAR,
and then the Cenral People's Government appointed him as the chief
executive. The SelectionCommittee also elected members of the interim
Legislative Council. The firs chief executive, Tung Chee-hwa, appointed
the judges of the Court o Final Appeal, and the chief justice of the High
Court. The competion of the above work ensured the effective
administration of the HKSAR bythe central leadership upon its
establishment. After the return of Hong Kong to China, theCentral
People's Government appointed Tung Chee-hwa, Donald Tsang nd Leung
Chun-ying, all elected, as chief executives of the HKSAR inthat order,
and appointed and dismissed key officials of their administations.
China's state leaders attended the inauguration ceremones of the chief
executives and key government officials, and heard them tak their oaths
of office.

 
-Supporting and guiding the administration of th chief executive and
government of the HKSAR in accordance with the law The chief executive
reports his/her work to the central governmen on an annual basis, on the
implementation of the Basic Law and other tems for which he/she is
accountable to the central government; andthe state leaders give guidance
to the chief executive on major matters reated to the implementation of
the Bsic Law. The central government has established the Hong Kong and
Macau Affirs Office of the State Council as an administrative office of
the StateCouncil to handle Hong Kong and Macau affairs. The office works
to implment the "one country, two systems" principle and related
directives of thecentral government, and is responsible for communicating
with the governmen of the HKSAR. The Liaison Office of the Central
People's Government inthe HKSAR is a resident organ of the Central
People's Government in HongKong. Its duties involve communication with
the Office of the Commissioer of the Ministry of Foreign Affairs in the
HKSAR and the PLA Hong Kng Garrison, the promotion of exchanges and
cooperation between Hong Kongand the mainland in various areas,
communication with personages from all sectors of Hong Kong society, and
the handlin of affairs involving Taiwan.

 
-Responsible for foreign affairs involvingthe HKSAR. First, the central
leadership supports the HKSAR in actively carying out international
exchanges and cooperation; supports and assists th HKSAR in participating
in international organizations and conferencesin a proper capacity;
assists the HKSAR in bidding to host important iternational conferences
of various kinds, and supports the HKSAR in develoing international
conference centers, regional legal services and disputesettlement
centers; supports the recommendation of Hong Kong residents to take up
posts in international organzations; supports the promotion of visa
waivers for HKSAR passport holdersin other countries and regions; and
supports the work of trade office of the HKSAR government in other
countries and regions. Second,the role of the central leadership also
includes properly handling legal isues involving Hong Kong, such as the
application of international conventons in Hong Kong. The number of
multilateral treaties and amendments thathave become applicable in the
HKSAR now exceeds 170, and the number of ageements concluded with other
countries with the authorization of the entral government regarding
invetment protection, civil aviation, taxation and judicial assistance
hasreached 338. The central government assists the HKSAR in acceting
reviews on the implementation of international conventions, supports t in
maintaining and developing ties, and in signing and implementing treties
and agreements with other countries, regions and related internatioal
organizations in the name of "Hong Kong, China" in the areas of econom,
trade, finance, maritime transport, communications, tourism, cultue and
sports. It also authorizes and assists Hong Kong in conducting judical
cooperation with other countries. Third, it ratifies the establishmnt of
consulates and other governmental or quasi-governmental oranizations of
foreign countries in the HKSAR. Currently, there re 66 consulates-general
set up by foreign countries under related agreemnts in the HKSAR, with 73
honorary consuls. Fourth, it strives to enure the safety and legitimate
rights and interests of Hong Kong comatriots while in other countries,
and actively offers consular protectionto Hong Kong travelers abroad. By
the end of 2013, Chinese embassies an consulates overseas had handled
over 10,000 cases of consular protecton involving Hong Kong residents.
Fifth, it prevents foreign forcesfrom interfering in Hong Kong's affairs.
Hong Kong's affairs are internl affairs of China, and the Chinese
government has made timely representations with certain countries through
diplomatic channel regarding their words and actions of interference. The
Ministry o Foreign Affairs has established the Office of the Commissioner
in the HKSR to attend to foreign affairs involving Hong Kong.

 
-Responsible for he defense of the HKSAR. The central leadership made the
decision andauthorized the formation of the People's Liberation Army
(PLA) Hong Kong Garison in January 1996, and on December 30 the same
year, the 23rd Sesson of the Eighth NPC Standing Committee adopted the
Law of the People's epublic of China on Garrisoning the Hong Kong Special
Administrative Regin. At midnight on July 1, 1997, troops of the PLA Hong
Kong Garriso entered Hong Kong to take over the defense of the HKSAR. The
Garrison's dties include guarding against and resisting aggression,
ensuring the securiy of the HKSAR, performing defense services, managing
military installatins, and handling military affairs involving other
countries in accordance ith the law. The Garrison adheres to the law in
performing its duties, an oversees military conduct in accordance with
the law. It diligently fulills its duties in defense, organizing sea and
air patrols and carrying ou search and rescue exercises in case of
maritime or air emergencies, joit exercises of combined arms, and
cross-district maneuvers, vigorouslysafeguarding China's sovereignty and
territorial integrity. The Garrison also activel takes part in activities
to promote the public good in Hong Kong, invitinglocal residents to visit
the Garrison barracks and holding summer militry camps for young
students, in an effort to strengthen ties between the Garrison and the
local cmmunity. All this has helped enhance the mutual understanding and
trust etween the Garrison and the people of Hong Kong, fully exemplifying
the valor and good conduct of th PLA.

 
-Exercising power granted to the NPC Standing Committee by the
Constitution of the PRC and the Basic Law of the HKSAR. First, the NPC
Standng Committee keeps record of the laws drawn up by the legislature of
he HKSAR for review. By the end of 2013, the HKSAR had reported a total
of 70 local laws to the NPC Standing Committee for the record. Second, it
adds or subtacts national laws applicable in the HKSAR as listed in Annex
III of the Basic Law of the HKSAR. Currently, 12 national aws are listed
in Annex III of the Basic Law of the HKSAR for implementatio. Third, it
makes new authorizations to the HKSAR. In 1996, the NPC Standig Committee
empowered the HKSAR government to appoint its immigration deprtment as
the office to accept applications for nationality in the HKSAR and handle
he applications in accordance with the Nationality Law and its
interpretatons. In 2006, the NPC Standing Committee authorized the HKSAR
to run the Hong Kong section of the Shenzhen ay Port in accordance with
the laws of the HKSAR. Fourth, it makes interretations regarding the
Basic Law of the HKSAR. The NPC Standing Committee ade interpretations of
the related articles of the Basic Law in 1999, 204, 2005 and 2011 on the
following questions respectively: the right of abode in Hog Kong for
permanent Hong Kong residents' children born outside Hong Kong ad with
Chinese nationality, the legal procedure for modifying the selection
methods of the chief executive and theLegislative Council, the length of
the term of a by-elected chief executive, and the principles of state
immunity, and interpretatins of relevant provisions in the Basic Law and
its appendixes. Fifth, it dcides on issues relating to the constitutional
development in the HKSAR. Te NPC Standing Committee made decisions in
2004 and 2007, respectively,on the selection method of the chief
executive for 2007 and the Legislativ Council for 2008, and the selection
method of the chief executive, te Legislative Council and the general
election for 2012. Sixth, it ratifis and keeps record of the amendments
to the selection methods of the chiefexecutive and Legislative Council of
the HKSAR. In 2010, the NPC Standing Committee ratified the HKSAR's
amendment to the selection method of he chief executive for 2012,
agreeing to put on record the amendment tothe selection method and voting
procedure of the Legislative Council for 2012. Seveth, it keeps records
of the appointment and removal of the judges of the Cort of Final Appeal
and the chief judge of the High Court of the HKSAR. In addiion, according
to the Basic Law of the HKSAR and relevant decisions of th NPC, the Basic
Law Committee of the HKSAR of the NPC Standing Committee, etablished on
July 1, 1997, when the Basic Law came into effect, is coposed of members
from the mainland and Hong Kong, and is responsible for providing opinions
to theNPC Standing Committee on issues such as whether the laws drawn up
by the HKSAR's legislature comply with the provisions of the Basic Law on
the rage of affairs responsible by the central government and the
relationshp between the central government and the HKSAR, on adding or
subtracting th national laws applicable in Hong Kong as listed in Annex
III and on the iterpretation or revision of the Basic Law, and related
issues. (more)

 
2.The HKSAR Exercises a High Degree of Autonomy in Accordance with the Lw

 
After the establishment of the HKSAR, the previous capitalist system and
way of life remain unchanged in Hong Kng, and existing laws remain
basically unchanged. Adhering to the law, th HKSAR protects the right of
ownership of private property, maintains th status of Hong Kong as a free
port and a separate customs territory, mantains independent finances,
practices an independent taxation system, an formulates its own policies
regarding trade, finance, education, science,culture, public health and
sports. In accordance with the Basic Law of the HKSAR and the decision of
the NPC Stading Committee on handling the laws previously practiced in
Hong Kong, thelaws previously in force in Hong Kong, that is, the common
law, rules of quity, ordinances, subordinate legislation and customary
law are maintained except for any that contravene the Basic Law and are
subject to anyamendment by the legislature of the HKSAR. On this basis,
the HKSAR execises a high degree of autonomy, and fully exercises its
administraive, legislative and independent judicial power, including that
of final adjudication.

 
The chief executive of the HKSAR is the head of th Special Administrative
Region. He/she represents the HKSAR and is accountale to both the Central
People's Government and the HKSAR. he chief executive is also the head of
the government of the Special Adminitrative Region, and exercises powers
and functions conferred by the BasicLaw, such as leading the government
of the region and being responsible fo the implementation of the Basic
Law. While exercising his/her powes and functions, the chief executive
shall implement the directives isued by the Central People's Government
in respect of the relevant matters provided for in the Basic Law of the
HKSAR. The government of the KSAR is composed of permanent residents of
Hong Kong in accordance with he relevant provisions of the Basic Law,
with a Department of Administratin, a Department of Finance, a Department
of Justice, and various bureaus, divisions and commissions to exercie
powers and functions such as formulating and implementing policies and
cnducting administrative affairs, as prescribed by the Basic Law. The
HKSR enjoys administrative power in a wide range of areas, including the
conomy, education, science, culture, sports, religion, social services
public order, and control of entry and exit of the region. In additio,
the HKSAR conducts external affairs as authorized by the Central eople's
Government.

 
The Legislative Council of the HKSAR is he legislature of the HKSAR. It
is formed by election, and exercises the ollowing powers and functions in
accordance with the Basic Law: enacting, mending or repealing laws in
accordance with the provisions of the Basc Law and legal procedures;
examining and approving budgets introduced by te government, and
approving taxation and public expenditure, among others. The HKSAR enjoys
legislative powr in a wide range of areas, and is empowered to formulate
laws relating to ivil, criminal and commercial affairs, as well as
judicial proceedings, fr application in the region in accordance with the
Basic Law. The aws drawn up by the Legislative Council of the HKSAR must
be reported t the NPC Standing Committee for the record. If the NPC
Standing Committee after consulting the Committee for the Basic Law of
the HKSAR, consides that any law enacted by the legislature of the region
is not in coformity with the provisions of the Basic Law regarding
affairs within the esponsibility of the central leadership or regarding
the relationshp between the central leadership and the region, the
Standing Committee may return the law in questio but shall not amend it.
Any law returned by the NPC Standing Committee i immediately invalidated.

 
The courts of the HKSAR at all levels are the judiciary of the region,
exercising te judicial power of the region. After the establishment of
the HKSAR, theCourt of Final Appeal was established to exercise the power
of fina adjudication in the region. The judicial system previously
practiced n Hong Kong is maintained except for those changes consequent
upon the stablishment of the Court of Final Appeal. The common law and
relevant jdicial principles and systems previously practiced in Hong
Kong, including the prnciple of independent adjudication, the principle
of following precedent, and the jury system, continue to apply. The
courts of the HKSAR have no jrisdiction over acts of state such as
defense and foreign affairs. They hve jurisdiction over all civil and
criminal cases in the region, except that the restrictons on their
jurisdiction imposed by the legal system and principles previosly in
force in Hong Kong are maintained. When adjudicating cases, the cours of
the HKSAR may refer to precedents of other common law jurisdiction, and
the Court of Final Appeal may as required invite judges from other common
law urisdictions to sit in the Court of Final Appeal.

 
 
III. Comprehensive rogress Made in Various Undertakings in the HKSAR

 
Since the establishmnt of the HKSAR, the government of the Special
Administrative Region has, wth energetic support from the central
government and the mainland, rallied people of all walks of life in Hong
Kong, worked hard and vercome difficulties, made full use of the
advantage of the policy of "one ountry, two systems," maintained overall
social, economic and political staility, promoted the development of all
undertakings and made new achevements one after another.

 
-HKSAR residents' fundamental rights and freedoms are fully protected.Hong Kong residents enjoy basic rights and freedoms in accordance with thelaw, which are under the full protection of the Constitution, the Basic
La and the local laws. The Constitution and the Basic Law safeguard the
HKSAR residents' fundamental rights and freedoms at the contitutional
level. The HKSAR provides further protection to residents'rights and
freedoms by enacting the Sex Discrimination Ordinance, Race Discimination
Ordinance, Personal Data (Privacy) Ordinance, Independent Police
omplaints Council (IPCC) Ordinance, Minimum Wage Ordinance and other
ordiances. A multitude of organs, including the Equal Opportunity
Commission, ffice of the Privacy Commissioner for Personal Data, Office
of th Ombudsman, Legal Aid Department, Independent Police Complaints
Counil, Legal Aid Services Council, Women's Commission and Commission on
Povery, have been set up by the HKSAR government to help promote and
protect HKSAR residents' fundamental rights nd freedoms.In addition, the
Basic Law explicitly stipulates that Chinese ctizens who are residents of
the HKSAR shall be entitled to participatio in the management of state
affairs according to law. In accordance withthe assigned number of seats
and the selection method specified by the NPC, the Chinese citizens amng
the HKSAR residents elect deputies of the region to the NPC to particpate
in the work of China's supreme organ of state power. The HKSAR ha held in
succession four such elections and 36 deputies were elected each time by
thebroadly representative Conference for Electing Deputies of the HKSARto the NPC. The Chinese People's Political Consultative Conferene (CPPCC)
always values the participation of Hong Kong compatriots. Aside fom
specially inviting Hong Kong personages, other CPPCC groups also inclue
representatives from Hong Kong. The 12th CPPCC National Committee had a
124-member Hong Kong group, and 16 other CPPCC groups had 82 membersfrom 
Hong Kong.

 
-The democratic political system has been steadily romoted. Before the 
return of Hong Kong to China in 1997, the United Kingdom designated 
governors to enforce colonial rule over Hong Kong for more tha 150 years. 
Since 1997, the HKSAR government and the legislature hve been composed of 
local residents. The chief executive of the HKSAR is appointed by the 
Central People's Government on the basis of the results of elections or 
consultations held locally; the legislature of the HKSAR is established by 
elections. The Basic Law of the HKSAR explicitly stipulates that the chief 
executive and all the members of the Legislative Council must be elected 
by universal suffrage, making universal suffrage a legal objective. Since 
the establishment of the HKSAR, the central government and the HKSAR 
government have unswervingly and steadily promoted Hong Kong's democratic 
political system, featuring the election methods for the chief executive 
and the Legislative Council, according to the Basic Law and relevant 
decisions of the NPC Standing Committee.

 
The election of the chief executive of the HKSAR has become increasingly 
democratic. Candidates for the first chief executive were elected by a 
400-member Selection Committee, while candidates for the second, third and 
fourth chief executives were elected by the Election Committee, the 
membership of which in the meantime had grown from 800 to 1,200. Members 
of the Election Committee came from the four major sectors of "industry, 
commerce and finance," "the professions," "labor, social services, 
religious and other sectors" and "members of the Legislative Council, 
representatives of district boards and Heung Yee Kuk, HKSAR deputies to 
the NPC, and representatives of HKSAR members of the National Committee of 
the CPPCC" in equal proportions. Such a composition is an expression of 
equal participation and broad representativeness.

 
The election of the Legislative Council is becoming more and more direct. 
The first Legislative Council formed in 1998 had 20 members elected 
directly by geographical constituencies, 30 members by functional 
constituencies, and ten members by the Election Committee. The second 
Legislative Council formed in 2000 had 24 members elected directly by 
geographical constituencies, 30 members by functional constituencies, and 
six members by the Election Committee. The third and fourth Legislative 
Councils formed respectively in 2004 and 2008 both had 30 members elected 
directly by geographical constituencies, and 30 members by functional 
constituencies. The membership of the fifth Legislative Council elected in 
2012 expanded to 70, including 35 members elected directly by geographical 
constituencies and 35 members by functional constituencies. The additional 
five members elected by functional constituencies were nominated by 
district boards, and elected by voters who had enjoyed no right to vote 
under functional constituencies.

 
The timetable has been set for universal suffrage. The 31st Session of the 
Standing Committee of the Tenth NPC made a decision on December 29, 2007 
"that the election of the fifth chief executive of the HKSAR in 2017 may 
be implemented by the method of universal suffrage; that after the chief 
executive is selected by universal suffrage, the election of the 
Legislative Council of the HKSAR may be implemented by the method of 
electing all the members by universal suffrage," thus setting a timetable 
for the selection of the chief executive and all members of the 
Legislative Council by universal suffrage. From December 4, 2013 to May 3, 
2014, the HKSAR government initiated a five-month public consultation on 
the election of the chief executive in 2017 and that of the Legislative 
Council in 2016, starting the relevant procedures for introducing 
universal suffrage. (more)

 
-The HKSAR has maintained steady economic growth. From 1997 to 2013, Hong 
Kong's Gross Regional Product (GRP) grew by 3.4 percent annually in real 
terms, and its per-capita GRP increased by a total of 39.3 percent 
calculated in US dollar. According to the 2013 statistics of the 
International Monetary Fund (IMF), Hong Kong's GRP and per-capita GRP, 
respectively, ranked the 35th and 7th in the world, as calculated by 
purchasing power parity.

 
Hong Kong has maintained and enhanced its status as an international 
financial, trade and shipping center. As an important international 
banking center, Hong Kong boasts the world's sixth-largest securities 
market and fifth-largest foreign exchange market. Hong Kong ranks high in 
various lists of international financial centers. As the world's 
ninth-largest trading economy, Hong Kong has regular trading ties with 
almost every country and region in the world. Hong Kong is one of the 
world's largest container shipping ports and fourth-largest 
ship-registration center. The Hong Kong International Airport is one of 
the world's busiest. Its air freight volume has led the world for many 
years, and its passenger transport volume ranks fifth.

 
Hong Kong's robust industries have been strengthened even further. Trade 
and logistics, tourism, finance, and professional services and support 
services for industry and commerce continue to play an important role as 
Hong Kong's four pillar industries. In 2012, these four sectors employed 
47.2 percent of Hong Kong's total working population, and their added 
value accounted for 58 percent of Hong Kong's total GRP. Hong Kong also 
focuses on the cultivation and development of the cultural and creative, 
innovation and technology, testing and certification, and environmental 
protection industries.

 
Hong Kong has maintained a sound business environment, and is generally 
recognized as one of the world's freest economies. For many years, it has 
ranked high in the World Bank's evaluation of business environments of 185 
economies. In its World Investment Report 2013, the United Nations 
Conference on Trade and Development (UNCTAD) ranked Hong Kong the third in 
the world in attracting foreign direct investment (FDI). For many years, 
Hong Kong has been listed among the world's most competitive economies by 
the World Competitiveness Yearbook compiled by the International Institute 
for Management Development based in Lausanne, Switzerland.

 
-Social programs have been further enhanced. Hong Kong leads the 
Asia-Pacific region in education, as the HKSAR government continues to 
increase its investment in education, the biggest government expenditure 
item. During the 2014-2015 fiscal year, the HKSAR government's current 
budgetary spending on education reached HK$75.37 billion. Since the 
2008-2009 school year, Hong Kong has implemented 12-year free education in 
public schools. The University of Hong Kong and the Hong Kong University 
of Science and Technology are among Asia's top-ten universities, according 
to the Times Higher Education Asian University Rankings 2013. The 
University of Hong Kong was the 43rd according to the World University 
Rankings 2013-2014. Hong Kong continues to rank high in the global test of 
the Program for International Student Assessment (PISA) 2012, which 
reflects the quality of primary education.

 
Hong Kong continues to provide quality medical and health care services. 
During the 2014-2015 fiscal year, the HKSAR government's budget for 
expenditure on medical and health care is HK$52.4 billion, accounting for 
17 percent of the government's recurrent expenditure. All Hong Kong 
residents enjoy equal access to affordable public medical services. By the 
end of 2012, Hong Kong had more than 35,500 beds in various medical 
institutions. The infant mortality rate dropped from 4 per thousand in 
1997 to 1.6 per thousand in 2013, which is among the world's lowest. In 
2013, the life expectancy of Hong Kong's male and female residents was 
80.9 years and 86.6 years, respectively, which are among the world's 
highest.

 
Cultural and sports activities are flourishing in Hong Kong, where the 
Chinese and foreign cultures intermingle. The HKSAR government encourages 
the diverse development of Hong Kong's culture and promotes cultural 
exchanges. Four unique Hong Kong cultural events were added to the third 
batch of the State-level Non-material Cultural Heritage List, namely, Yu 
Lan Ghost Festival, Tai Hang fire dragon dance, Tai O dragon boat parade, 
and Cheung Chau Jiao Festival. Hong Kong hosted the equestrian events of 
the Beijing 2008 Olympic Games, and the fifth East Asian Games in 2009. 
Hong Kong athletes have excelled themselves in events such as windsurfing, 
table tennis, cycling and martial arts during the Olympics, World 
Championships and Asian Championships.

 
Hong Kong's social security service has been continuously improved. During 
the fiscal year 2014-2015 the HKSAR government's budget for social welfare 
reached HK$61.9 billion, 3.03 times as compared with the HK$20.4 billion 
during the fiscal year 1997-1998. Hong Kong has put in place a multilayer 
and diversified social security and welfare service system. Hong Kong has 
more than 400 social service agencies, and the number of registered social 
workers has increased from 8,300 at the end of 1998 to more than 18,000 
today. The HKSAR government actively promotes the construction of public 
housing, moves low-wage residents into public housing, and provides 
financial aid to those who purchase housing units. Around half of Hong 
Kong's residents live in housing provided or funded by the government. 
Among them, more than 2 million live in rented public housing, and over 1 
million have purchased housing units with government financial aid.

 
 -Hong Kong's international exchanges and its international influence have 
further expanded. Hong Kong's international exchanges have been broadened. 
By June 2013, Hong Kong, as a member of a Chinese government delegation or 
in other appropriate capacities, had participated in 41 events held by 
inter-governmental international organizations, and joined 37 
inter-governmental international organizations whose membership is not 
limited to sovereign states. As a member of a Chinese government 
delegation or in other appropriate capacities, Hong Kong has attended more 
than 1,400 international meetings; using the name of "Hong Kong, China" it 
has attended more than 20,000 international meetings not limited to 
states. It has also hosted or co-hosted more than 1,000 international 
meetings. The HKSAR has visa waiver agreements with 42 countries, and 150 
countries or regions provide visa-free entry or grant visas upon arrival 
to HKSAR passports holders. Hong Kong has civil air transport agreements, 
agreements on avoidance of double taxation, agreements on investment 
promotion and protection, and agreements on criminal justice assistance 
with many countries. The HKSAR government has economic and trade offices 
in 11 places, such as Geneva, London, Tokyo, New York and Berlin. Six 
international organizations, including the European Commission, have 
representative offices in Hong Kong.

 
 Outstanding Hong Kong professionals have taken important positions in 
international organizations. Supported by the central government, Chan 
Fung Fu-chun, former director of health of the HKSAR, was elected 
director-general of the World Health Organization (WHO) in November 2006, 
and was reelected in May 2012. She is the first Chinese to head an 
inter-government international organization since the founding of the 
United Nations. Shun Chi-ming, director of the Hong Kong Observatory, was 
elected president of the Commission for Aeronautical Meteorology of the 
World Meteorological Organization in February 2010.

 
IV. Efforts Made by the Central Government to Ensure the Prosperity and 
Development of the HKSAR

 
The central government has always given high priority to Hong Kong's 
economic development and improvement of its people's livelihood, and fully 
supported it in meeting various difficulties and challenges. It gives full 
play to its role in adopting and executing the national development 
strategy, and actively promotes exchanges and cooperation between Hong 
Kong and the mainland, thus providing solid backing for Hong Kong's 
prosperity and stability.

 
1. Supporting the HKSAR in Defusing Risks and Meeting Challenges

 
-Supporting Hong Kong in the fight against the Asian financial crisis. In 
1997, the Asian financial crisis broke out, and spread rapidly around the 
region. Hong Kong was attacked by international speculative forces, its 
financial market was volatile, its dollar pegged exchange rate system came 
under attack, and its financial system faced a grave threat. Given these 
circumstances, the central government solemnly announced that it would 
safeguard the stability and prosperity of the HKSAR at all costs, strongly 
support the HKSAR government in protecting the pegged exchange rate 
system, and not depreciate the RMB. With this support from the central 
government, the HKSAR government took swift measures that ensured the 
stability of its financial system and the Hong Kong society.
 
-Supporting Hong Kong in the fight against SARS. In the first half of 
2003, the SARS epidemic hit Hong Kong. It not only posed a threat to the 
lives and health of the Hong Kong people, but also dealt a blow to Hong 
Kong's economy that had not recovered from the Asian financial crisis, 
resulting in deflation, market slump and a high unemployment rate of 8.7 
percent. To ensure the safety of life of the Hong Kong people and help the 
Hong Kong economy climb out of recession, the central government promptly 
lent a helping hand. Although the mainland also needed medical supplies in 
the fight against SARS, the central government provided a large quantity 
of free medical supplies to Hong Kong. The Chinese leaders also went to 
the hardest-hit areas and hospitals of Hong Kong to inspect local 
conditions and console victims. On June 29, the mainland and Hong Kong 
signed the Mainland and Hong Kong Closer Economic Partnership Arrangement 
(CEPA), which outlines the steps that the mainland and Hong Kong should 
take in trade in goods and services, and trade and investment facilitation 
as well as the goals to be achieved. Later, the Individual Visit Scheme 
was introduced, allowing mainland residents to visit Hong Kong on their 
own. These measures helped Hong Kong overcome the SARS attack and boosted 
its economic growth.

 
 -Supporting Hong Kong in the fight against the international financial 
crisis. When the international financial crisis broke out in the second 
half of 2008, the central government was highly concerned about its impact 
on Hong Kong. In December of that year, it introduced 14 policies to 
ensure economic and financial stability in Hong Kong. In January 2009, the 
central government launched more policies, including the signing of a 
RMB200 billion currency swap agreement by the People's Bank of China with 
the Hong Kong Monetary Authority. Later, when visiting Hong Kong, the 
Chinese leaders announced a number of policies to support Hong Kong's 
economic development, improve the local people's livelihood, and 
strengthen its exchanges and cooperation with the mainland. All these 
policies played a positive role in boosting confidence, strengthening 
capability to defuse risks and stimulating the economic recovery of Hong 
Kong.

 
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)
2014-06-10 12:03:51  

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.

 
3. The Hong Kong People Who Govern Hong Kong Should Above All Be Patriotic

 
There are lines and criteria to be observed in implementing "Hong Kong 
people governing Hong Kong," that is what Deng Xiaoping stressed, Hong 
Kong must be governed by the Hong Kong people with patriots as the 
mainstay, as loyalty to one's country is the minimum political ethic for 
political figures. Under the policy of "one country, two systems," all 
those who administrate Hong Kong, including the chief executive, principal 
officials, members of the Executive Council and Legislative Council, 
judges of the courts at different levels and other judicial personnel, 
have on their shoulders the responsibility of correctly understanding and 
implementing the Basic Law, of safeguarding the country's sovereignty, 
security and development interests, and of ensuring the long-term 
prosperity and stability of Hong Kong. In a word, loving the country is 
the basic political requirement for Hong Kong's administrators. If they 
are not consisted of by patriots as the mainstay or they cannot be loyal 
to the country and the HKSAR, the practice of "one country, two systems" 
in the HKSAR will deviate from its right direction, making it difficult to 
uphold the country's sovereignty, security and development interests, and 
putting Hong Kong's stability and prosperity and the wellbeing of its 
people in serious jeopardy. 

 
The fact that Hong Kong must be governed by patriots is well grounded in 
laws. Both the Constitution and the Basic Law provide for the 
establishment of the HKSAR, which works for China's national unification, 
territorial integrity and maintaining Hong Kong's long-term stability and 
prosperity. In that context, the Basic Law requires that the chief 
executive, principal officials, members of the Executive Council, 
president and over 80 percent of the members of the Legislative Council, 
chief justice of the Court of Final Appeal and chief judge of the High 
Court shall be Chinese citizens who are permanent residents of Hong Kong 
with no right of abode in any foreign country; that, when assuming office, 
the chief executive, principal officials, members of the Executive Council 
and Legislative Council, judges of the courts at all levels and other 
members of the judiciary in the HKSAR must, in accordance with the law, 
swear to uphold the Basic Law and swear allegiance to the HKSAR of the 
PRC; and that the chief executive be accountable to the central government 
and the HKSAR with respect to implementing the Basic Law. All this is 
necessary for displaying sovereignty, ensuring loyalty to the country by 
the mainstay of Hong Kong administrators and helping them to subject to 
oversight by the central government and Hong Kong society, while taking 
their responsibility for the country, the HKSAR and Hong Kong's residents. 

 
4. Firmly Supporting Chief Executive and the HKSAR Government in Governing 
Hong Kong in Accordance with the Law

 
The chief executive, as head of both the HKSAR and its government, is the 
prime responsible person for implementing the policy of "one country, two 
systems" and the Basic Law in Hong Kong. The central government has always 
firmly supported the chief executive and the HKSAR government in governing 
Hong Kong in accordance with the law, in rallying the broad sections of 
the Hong Kong society for economic development, in taking effective steps 
to improve people's livelihood, and in advancing democracy in a gradual 
and orderly way to promote inclusiveness, mutual support and harmony.

 
Developing the economy and improving the people's livelihood are common 
aspirations of the Hong Kong people. They serve as an important basis for 
solving social problems and ensuring overall stability in the HKSAR, and 
also the main task before the chief executive and the HKSAR government in 
governing Hong Kong in accordance with the law. At present, Hong Kong is 
at a critical juncture of development, with both opportunities and 
challenges. It should seize the opportunities and vigorously address the 
salient problems in its economic and social development, so as to bolster 
and enhance its own competitive edge, maintain a steady economic and 
social development, and upgrade the texture of people's life. The mainland 
has always been a powerful backing for Hong Kong.

 
The central government continues its support for the HKSAR in developing a 
system of democratic governance that suits the actual conditions in Hong 
Kong in a gradual and orderly manner as provided for in the provisions of 
the Basic Law. The ultimate aim of selection of the chief executive will 
be one by universal suffrage upon nomination by a broadly representative 
nominating committee in accordance with democratic procedures and the 
election of all the members of the Legislative Council by universal 
suffrage. This solemn commitment of the central government has been 
incorporated in the Basic Law and the relevant resolutions by the NPC 
Standing Committee. The central government is sincerely in favor of moving 
Hong Kong's democratic governance forward. The system of universal 
suffrage for selecting the chief executive and forming the Legislative 
Council must serve the country's sovereignty, security and development 
interests, tally with Hong Kong's actual conditions, take into 
consideration the interests of all social strata, give expression to the 
principle of equal participation, and be conducive to the development of 
capitalism in Hong Kong. In particular, the systems must conform to 
HKSAR's legal status as a local administrative region directly under the 
central government and accord with the Basic Law and relevant resolutions 
adopted by the NPC Standing Committee. Furthermore, the chief executive to 
be elected by universal suffrage must be a person who loves the country 
and Hong Kong. As long as all sectors of the Hong Kong society hold 
pragmatic discussions and build a consensus based on the above principles, 
these two ultimate goals are sure to be reached.

 
Hong Kong is a free, open and pluralistic society. It is also an 
international commercial metropolis where Chinese and non-Chinese cultures 
converge and mingle. Maintaining social harmony and stability serves the 
interests of all strata and all sectors of the Hong Kong society as well 
as those of outside investors. It is a prerequisite for retaining Hong 
Kong's status as an international financial, trade and shipping center. 
The central government will continue to encourage the people of Hong Kong 
to carry forward their fine traditions of inclusiveness, mutual support 
and respect for the rule of law and order. It calls on the Hong Kong 
people to seek common ground while reserving differences, be tolerant and 
help each other in the fundamental interests of the nation and the general 
and long-term interests of Hong Kong, achieve the broadest unity under the 
banner of loving the country and Hong Kong with strengthened social 
harmony and stability through compromise and mutual assistance. 

 
5. Continuously Promoting Exchanges and Cooperation Between the Mainland 
and Hong Kong

 
Increasingly frequent exchanges and closer cooperation between Hong Kong 
and the mainland have expanded channels for common development by 
leveraging complementary advantages. Hong Kong has gained access to 
enormous space and momentum for development by taking advantage of the 
broad market and abundant factor resources of the mainland and 
opportunities of China's rapid development. By consolidating and enhancing 
its existing advantages, Hong Kong can better play its role in introducing 
external investment and talents, in absorbing internationally advanced 
technologies and managerial expertise, in serving as a bridge for 
implementing China's "go global" strategy, and in helping quicken the 
shift of the growth mode on the mainland. In addition, Hong Kong's 
experience can be of reference for the mainland to pursue innovative ways 
in social and economic management. 

 
As contacts between the mainland and the HKSAR become closer and mutual 
understanding between the people deepens, the Hong Kong compatriots are 
getting a stronger sense of national identity and commitment. They pay 
closer attention to the development of the country and take an active part 
in the country's modernization drive as well as public welfare activities, 
such as poverty alleviation, education and protection of the rights of 
women and children. When the mainland suffered major natural disasters, 
the Hong Kong compatriots extended generous and active support for the 
rescue and relief work and post-disaster reconstruction. These fully 
demonstrate the strong ties of blood and affection between the people on 
the mainland and the Hong Kong compatriots.

 
The central government will continue to support the HKSAR government in 
forming a closer working relationship with relevant government departments 
at both the central and local levels, support the Hong Kong compatriots in 
having more exchanges with people on the mainland, and support Hong Kong 
in playing its unique role in the country's endeavor of comprehensive 
reform and opening up. The central government encourages Hong Kong to 
carry out broader and deeper exchanges and cooperation with the mainland, 
and make concerted efforts with the mainland to build the common home of 
the Chinese nation.

 
Conclusion

 
The implementation of the principle of "one country, two systems" in the 
HKSAR has achieved widely recognized success. This fully proves that "one 
country, two systems" is not only the best solution to the Hong Kong 
question left over from history but also the best institutional 
arrangement for the long-term prosperity and stability of Hong Kong after 
its return to the motherland. Firmly advancing the cause of "one country, 
two systems" is the common wish of all the Chinese people, the Hong Kong 
compatriots included, and is in the fundamental interests of the country 
and people, the general and long-term interests of Hong Kong and the 
interests of foreign investors. 

 
The endeavor to further the practice of "one country, two systems" 
requires both a comprehensive and accurate understanding and 
implementation of the policy to ensure that the practice moves forward on 
the right track and proactive and effective response to the difficulties 
and challenges confronting Hong Kong in its development. In the face of 
profound adjustments and changes in the economic environment both within 
and outside the region, Hong Kong needs to continuously enhance its 
competitiveness. Some deep-seated problems that have built up over a long 
period of time are becoming more conspicuous and need to be solved by 
pooling the efforts of all sectors. The deepening exchanges and 
cooperation between the HKSAR and the mainland call for better 
communication and coordination, and the concerns of the people should be 
properly addressed. Meanwhile, it is necessary to stay alert to the 
attempt of outside forces to use Hong Kong to interfere in China's 
domestic affairs, and prevent and repel the attempt made by a very small 
number of people who act in collusion with outside forces to interfere 
with the implementation of "one country, two systems" in Hong Kong. A 
proper handling of these issues and further implementation of "one 
country, two systems" in Hong Kong will further demonstrate the strong 
vitality of the policy of "one country, two systems."

 
Now, people all over the country are working hard with full confidence 
towards the "two centenary goals" - to complete the building of a 
moderately prosperous society in all respects when the Communist Party of 
China celebrates its centenary in 2021, and to turn China into a modern 
socialist country that is prosperous, strong, democratic, culturally 
advanced and harmonious when the PRC marks its centenary in 2049 - as well 
as the Chinese dream of the great rejuvenation of the Chinese nation. 
Continuously enriching and developing the practice of "one country, two 
systems" in the HKSAR and maintaining long-term prosperity and stability 
in the region are integral part of the Chinese dream. It is also a 
necessary requirement for improving and developing socialism with Chinese 
characteristics and promoting the modernization of the national governance 
system and governing capability. The central government will continue to 
work with the HKSAR government and the Hong Kong compatriots to fully and 
faithfully implement the principle of "one country, two systems" and the 
Basic Law, so as to further the development of all undertakings in Hong 
Kong. We are convinced that the HKSAR will advance steadily forward under 
the principle of "one country, two systems" and the Basic Law, and work 
hand in hand with the mainland toward a better future for the Chinese 
nation.

 
Appendix 

 
I. Statistics of Hong Kong's Economic and Social Development 

 
     1. The Gross Regional Product (GRP) of Hong Kong rose from HK$1.37 
trillion in 1997 to HK$2.12 trillion in 2013, an average annual growth 
rate of 3.4 percent.
 
     2. The fiscal reserves of the HKSAR government had increased by 65.2 
percent from HK$457.5 billion at the end of 1997 to HK$755.7 billion at 
the end of March 2014.
 
     3. Hong Kong's foreign exchange reserves had grown by 3.35 times from 
US$92.8 billion at the end of 1997 to US$311.2 billion by the end of 2013.
 
     4. According to the 2013 statistics released by the International 
Monetary Fund (IMF), Hong Kong's GRP and per-capita GRP respectively 
ranked 35th and 7th in the world, as calculated by purchasing power parity 
(PPP).
 
     5. As Hong Kong is a leading international banking center, 73 of the 
world's top 100 banks operate in Hong Kong.
 
     6. As Asia's second-largest and the world's sixth-largest securities 
market, Hong Kong recorded a market capitalization of HK$24.04 trillion by 
the end of 2013. IPO funds raised by the Hong Kong Stock Exchange in 2013 
totaled HK$166.5 billion, making Hong Kong the second-largest IPO market 
in the world.
 
     7. Hong Kong's foreign exchange market scored an average daily 
turnover of US$274.6 billion in 2013, making it the fifth-largest foreign 
exchange market in the world.
 
     8. According to the 2012 Financial Development Report released by the 
World Economic Forum in October 2012, Hong Kong's financial development 
index ranked top worldwide. Hong Kong ranked third in the Global Financial 
Centres Index published by the City of London Corporation in September 
2013.
 
     9. As the world's ninth-largest trading economy, Hong Kong is home to 
approximately 100,000 import and export companies, which trade with almost 
every country and region in the world.
 
     10. Hong Kong's external merchandise trade grew by a factor of 2.48 
from HK$3.07 trillion in 1997 to HK$7.62 trillion in 2013.
 
     11. Hong Kong is one of the largest recipients of foreign direct 
investment (FDI). The World Investment Report 2013 released by the United 
Nations Conference on Trade and Development (UNCTAD) shows that Hong Kong 
is the world's third-largest recipient of FDI. By the end of 2013, the 
total number of overseas companies registered in Hong Kong reached 9,258, 
an 83 percent increase over 1997. By June 2013, 1,379 foreign-funded 
companies in Hong Kong served as regional headquarters and 2,456 foreign 
representative offices served as regional offices, recording 52.7 percent 
and 52.5 percent increase respectively over that at the end of 1997.
 
     12. As one of the largest container ports in the world, Hong Kong 
handled 22,288,000 ISO containers in 2013, 52.9 percent higher than in 
1997.
 
     13. Hong Kong is the world's fourth-largest ship registry. By the end 
of 2013, Hong Kong-registered ships numbered 2,327, totaling 86.43 million 
dwt.
 
     14. The Hong Kong International Airport, from which more than 100 
airlines operate flights, is the world's fifth-busiest passenger airport 
and has the world's most active air cargo operation. Its passenger traffic 
and cargo throughput in 2013 were 2.18 times and 2.53 times the 1998 
figures, respectively.
 
     15. Hong Kong ranked third among over 660 international port cities 
or regions in the 2013 Global International Shipping Center Index.
 
 
 
     16. The HKSAR government's 2014-2015 budget recurrent expenditure on 
education is HK$67.13 billion, 21.8 percent of the government's total 
recurrent expenditure. The budget for expenditure on education is HK$75.37 
billion, accounting for as high as 18.3 percent of the government's total 
expenditure budget and ranking first in all budget expenditure items. Hong 
Kong has been providing 12-year free education through public schools 
starting from the 2008/09 school year.
 
     17. Since Hong Kong returned to China in 1997, institutions of higher 
learning that award local degrees have increased from 12 to 17, of which 
eight are funded by the government. The University of Hong Kong and the 
Hong Kong University of Science and Technology were among the top 10 in 
the Asia University Rankings released by Times Higher Education in 2013. 
The University of Hong Kong was ranked 43rd in the Times Higher Education 
World University Rankings 2013/14.
 
     18. From the second quarter of 2000 to the third quarter of 2013, the 
percentage of people with post-secondary education in the entire employed 
population rose from 23.7 percent to 35.1 percent, and the percentage of 
those with higher education in the employed population increased from 14.5 
percent to 26 percent. Hong Kong students remained high in the 2012 
rankings of the Programme for International Student Assessment (PISA). 
Hong Kong ranked third in the Global Index of Cognitive Skills and 
Educational Attainment published by education company Pearson in 2012.
 
     19. In the 2014/15 fiscal year, the HKSAR government's budget 
expenditure on medical and health care reaches HK$52.4 billion, accounting 
for 17 percent of the government's recurrent expenditure. 
 
     20. By the end of 2012, all types of health facilities in Hong Kong 
had a total of 35,500 beds. Public medical facilities with 90 percent of 
their funding coming from the government comprise 38 public hospitals, 48 
specialist clinics and 73 general out-patient clinics, with 64,000 
employees and 27,000 beds. They provide 90 percent of the in-patient 
services and 30 percent of the out-patient services of Hong Kong.
 
     21. Hong Kong's infant mortality rate, dropping to 1.6 per thousand 
in 2013 from 4 per thousand in 1997, is one of the lowest in the world. 
Hong Kong also enjoys one of the highest life expectancies in the world - 
80.9 for men and 86.6 for women.
 
     22. By June 2013, Hong Kong had, as a member of a Chinese government 
delegation or in other appropriate capacities, participated in activities 
of 41 international inter-governmental organizations limited to states. 
Among these organizations were the International Monetary Fund, World 
Bank, International Civil Aviation Organization, Food and Agriculture 
Organization of the United Nations, and International Criminal Police 
Organization. Hong Kong joined 37 international inter-governmental 
organizations not limited to states, including the World Trade 
Organization, Asia-Pacific Economic Cooperation and World Meteorological 
Organization. Hong Kong had attended over 1,400 international conferences 
as a member of Chinese government delegations or in other appropriate 
capacities and over 20,000 international conferences not limited to states 
under the name of Hong Kong, China.
 
     23. Each year, the HKSAR hosts an average of over 100 visits by 
foreign senior government officials and influential personages of academic 
circles and think tanks from all over the world. Many heads of state and 
heads of government have paid visits to or attended international 
conferences in Hong Kong. Hong Kong has hosted or co-hosted over 1,000 
international conferences, such as the annual meetings of the World Bank 
Group and IMF, the Sixth WTO Ministerial Meeting, Telecom World of the 
International Telecommunication Union, Diplomatic Conference of the 
International Maritime Organization, Asian Regional Workshop of the World 
Intellectual Property Organization, and Asian-Pacific Postal Union 
Executive Council Meeting.
 
     24. The HKSAR has signed visa waiver agreements with 42 countries, 
and 150 countries and regions have provided visa-free entry or visa upon 
arrival for HKSAR passport holders.
 
     25. The HKSAR has signed civil air services agreements and civil air 
services transit agreements with 67 countries, double taxation avoidance 
agreements with 35 countries and regions, investment promotion and 
protection agreements with 17 countries, legal assistance in criminal 
matters agreements with 30 countries, transfer of fugitives agreements 
with 19 countries, and transfer of sentenced persons agreements with 13 
countries.
 
     26. The HKSAR government has established 11 economic and trade 
offices in Geneva, Brussels, London, Toronto, Tokyo, Singapore, Sydney, 
Washington D.C., New York, San Francisco and Berlin to promote Hong Kong's 
economic, trade, investment and public relations with relevant countries 
and regions. 
 
     27. There are 66 foreign consulates-general and 73 honorary consuls 
in Hong Kong. The European Commission, Bank for International Settlements, 
IMF, UN High Commissioner for Refugees, International Finance Corporation, 
and Hague Conference on Private International Law have offices in Hong 
Kong.

 
 II. Statistics of Exchanges and Cooperation Between the Mainland and Hong 
Kong

 
     1. 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 over 1997 and 
accounting for 51.1 percent of Hong Kong's external trade.
 
     2. Hong Kong is the most important trading partner of the mainland 
and one of the mainland's major export markets. According to the data from 
the General Administration of Customs, the mainland's exports to Hong Kong 
in 2013 totaled US$384.79 billion, constituting 17.4 percent of the 
mainland's total exports.
 
     3. The mainland is the largest source of overseas direct investment 
for Hong Kong. By the end of 2013, direct investment from the mainland to 
Hong Kong had exceeded US$358.8 billion, accounting for nearly 60 percent 
of the mainland's total outbound direct investment.
 
     4. Hong Kong is also the mainland's largest source of overseas direct 
investment. According to the data from the Ministry of Commerce, the 
mainland had approved nearly 360,000 projects with Hong Kong investment by 
the end of 2013, with US$665.67 billion paid-in investment, accounting for 
47.7 percent of the total overseas investment in the mainland. Hong Kong 
is the largest recipient of the mainland's overseas investment as well as 
the mainland's largest financing center. By the end of 2013, the 
mainland's non-financial direct investment in Hong Kong had reached 
US$338.669 billion, taking up 59 percent of the mainland's total outbound 
non-financial direct investment.
 
     5. By the end of 2013, the number of mainland enterprises listed in 
Hong Kong had reached 797, accounting for 48.5 percent of the total number 
of companies listed in Hong Kong. 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.
 
     6. By the end of 2013, RMB deposits and depository receipts in Hong 
Kong amounted to RMB1.05 trillion, an increase of 46 percent over 2012. 
RMB loans totaled RMB115.6 billion, and outstanding RMB bonds totaled 
RMB310 billion.
 
     7. The Mainland/Hong Kong Science and Technology Co-operation 
Committee has, with the support of institutions of higher learning, 
research institutes and Hong Kong Science and Technology Parks, 
established 16 Partner State Key Laboratories, one Hong Kong branch of the 
Chinese National Engineering Research Center, and two National High-tech 
Industrialization Bases in Hong Kong. The Committee supports Hong Kong's 
institutions of higher learning in setting up research institutes in 
Shenzhen, Hong Kong's neighboring city on the mainland, and encourages 
Hong Kong's participation in key national science and technology programs.
 
     8. Since 2010, four projects under the national 973 Program have been 
undertaken by Hong Kong's science and technology professionals and 
institutes, and have received total research and development funding of 
RMB160 million.
 
     9. China's Chang'e-3 lunar lander and its Yutu rover landed on the 
moon in December 2013. The camera pointing system on Yutu was developed by 
experts from the Hong Kong Polytechnic University.
 
     10. By the end of 2013, the number of academicians of the Chinese 
Academy of Sciences and the Chinese Academy of Engineering from Hong Kong 
had reached 39, including foreign nationals. In addition, 88 Hong Kong 
scientists had won 44 state science and technology awards, including the 
State Natural Science Award, State Scientific and Technological Progress 
Award and State Technological Invention Award.
 
     11. Mainland students studying at institutions of higher learning in 
Hong Kong numbered 22,000 in the 2012/13 academic year. By October 2013, 
the number of Hong Kong students studying at institutions of higher 
learning in the mainland topped 14,000.
 
     12. The University of Hong Kong, the Chinese University of Hong Kong, 
Hong Kong Polytechnic University, Hong Kong Baptist University and City 
University of Hong Kong have worked with mainland universities in jointly 
holding academic programs and running institutions of higher learning. 
Universities in cities and provinces of Guangdong, Beijing, Shanghai, 
Zhejiang, and Fujian on the mainland have established over 400 pairs of 
sister-school partnerships with Hong Kong universities.
 
     13. In 2009, Yueju opera, jointly nominated by Hong Kong, Macau and 
Guangdong Province, was officially inscribed on UNESCO's Representative 
List of the Intangible Cultural Heritage of Humanity.
 
     14. In September 2011, with the support of the central government, 
Hong Kong Global Geopark was listed by UNESCO as part of its Global 
Geoparks Network.
 
     15. Since the mainland and Hong Kong signed the Closer Economic 
Partnership Arrangement (CEPA) in 2003, Hong Kong and the mainland have 
worked together in producing 322 films, accounting for 70 percent of 
mainland's total in such area. Moreover, 61 of the 322 co-productions 
topped RMB100 million each in box office receipts.  



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