Situation Analysis: Four Years
After Hong Kong’s Handover
▓Hong Kong has remained stable politically, with the international community still closely watching post-1997 developments.
▓The Hong Kong economy has faired rather good, but the unemployment rate keeps rising.
▓The HKSAR government’s performance received mixed reviews, but opinion polls show a narrowing gap between extreme views.
▓ The government has been criticized for its poor handling of the Falun Gong that undercut Hong Kong’s autonomy.
▓Taiwan-Hong Kong relations remained restricted and require a major breakthrough.
▓The PRC’s promise that Hong Kong will remain unchanged for 50 years has been challenged by 130 controversial events, as widely reported by the media.
Hong Kong remained stable politically in the fourth year since its handover to the Beijing government in 1997. With the early retirement of Chief Secretary for Administration Anson Chan, Chief Executive Tung Chee-Hwa’s power core has been further strengthened. Despite mixed reviews, the Hong Kong Special Administrative Region (HKSAR) government has witnessed a narrowing of the gap between extreme views while Hong Kong economy is recovering from its low. Noticeably, Hong Kong is still troubled by rising unemployment, increasing challenges to its democratic development and autonomous rule, and questions over media and judicial independence. In sum, there have been 130 controversial events related to freedom, human rights and rule of law in Hong Kong that caused widespread international concerns in the post-1997 period. While interactions between Hong Kong and Mainland China are intensifying, Taiwan-Hong Kong relations remained restricted and require a significant breakthrough. This report summarizes Hong Kong situations during the period from July 1999 to June 2000.
1. Hong Kong remains stable politically, and Tung Chee-Hwa’s power core is taking shape.
During the 12 months covered by this report, Hong Kong remained stable politically, but there are a number of controversies still caused widespread social concerns. These events include the Robert Chung case, confrontation between the anti-Tung and pro-Tung factions, the Garry Cheng case, arson by abode seekers, the citation of the Public Order Ordinance to arrest student movement leaders, and the HKSAR government’s tougher stance against Falun Gong activities in line with Beijing’s rhetoric. None of these events could threaten the rule of the HKSAR government, but they did contain elements for social unrest. The Chief Executive, with low rating in popularity in most public opinion surveys, failed to help dissipate social discontent.
Along with the early retirement of Chief Secretary Anson Chan, reputed to be the conscience of Hong Kong, the HKSAR government’s personnel arrangements have been adjusted according to the wishes of the Chief Executive. On February 15, 2001, Tung announced that Financial Secretary Donald Tsang would succeed Anson Chan as the new Chief Secretary, and that Tsang's position would be filled by Antony Leung. These two appointments were seen as a consolidation of Tung’s leadership, and a smart move toward his re-election. Whether this personnel adjustment will help preserve Hong Kong’s high degree of autonomy remains to be seen.
2. Despite the ups-and-downs in the rating of the HKSAR government’s performance, the gap between extreme public opinions has narrowed.
Public opinion surveys conducted by various polling centers last year indicated shifts in the rating of the government’s performance. Hong Kong’s economic rebound, falling unemployment and low inflation helped dampen people’s dissatisfaction with the government. The Chinese University of Hong Kong reported in a recent survey that Tung’s support remained low, but that it had picked up from the low of 49.7% in August 2000. His support gradually climbed to 53.6% in May 2001. Ratings for other HKSAR government officials and political leaders were on an upward trend as well. This finding echoed results by other public opinion pollsters. Clearly, the economic upturn and optimistic job market have reduced social discontent. However, in a long-term macroeconomic perspective, Hong Kong has not yet completely cleared uncertainties, and people’s confidence in the future economic outlook remains feeble.
3. Many hurdles are still in the way of Hong Kong’s democratic development.
In the second election for the Legislative Council (LEGCO) in September last year, the Democratic Party lost grounds while the Democratic Alliance for the Betterment of Hong Kong (DAB) made considerable gains. Despite the Garry Cheng case, DAB’s popularity increased by 4.46 percentage points from last election. But support for the Democratic Party dramatically dropped 7.9 percentage points from the last election, indicating the party’s weakening popularity.
In post-1997 Hong Kong, changes at home and abroad might account for these social situations. It is generally believed that the Democratic Party failed to introduce solutions for issues of the general public’s concern, and has been marred by a lack of coordination between internal factions, resulting in the party’s weakening support. While the DBA has strengthened its mobilization network and made use of resources from the pro-China camp, the Democratic Party has thus suffered in the elections. While Hong Kong is undergoing "mainlandization," the weakening support for the Democratic Party signifies Hong Kong will follow a long and thorny path before full-fledged democracy takes hold on the island.
4. HKSAR’s handling of the Falun Gong damages its autonomy.
The Falun Gong, outlawed on the Mainland but legal in Hong Kong, has been a visible litmus test for Hong Kong’s autonomy, but it was also a dilemma for the government. For pro-China people, a laisser faire attitude toward Falun Gong activities could jeopardize Beijing’s trust in Hong Kong. But, any action against the religious sect’s activities permitted under Hong Kong law could invite media criticism and international concern.
Mainland agencies in Hong Kong publicly announced that they would not tolerate outlawed sects using Hong Kong as a base for illegal activities. Pro-Mainland representatives have asked the HKSAR government to expedite the legislation of Article 23 of the Basic Law, which governs secession and splitting of the national territory. Some HKSAR government officials echoed Beijing’s strong condemnation of the Falun Gong as an evil cult that presents both a religious and political problem. Apparently, Beijing liaison offices in Hong Kong have used this issue to interfere in the HKSAR government and affect its high degree of autonomy.
5. Independence of Hong Kong’s judiciary system is worrisome.
Over the past 12 months, the following issues caused concerns over Hong Kong’s judicial independence. Mainland policemen have transgressed into the Hong Kong territory for law enforcement. The HKSAR government sought an ex post facto reinterpretation of the Basic Law by the PRC National People’s Congress Standing Committee on the "right-of-abode" decision. The Department of Justice decided not to prosecute Yeun Kai-fai, son of Justice Yeun Wan-Tao, for having drug. An independent judiciary is the pillar of Hong Kong’s free and open society. These cases, regarded detrimental to its judicial independence, have caused great concern within the international community and among Hong Kong people over Hong Kong's future judiciary operation.
In a report released in February, the Economist downgraded Hong Kong’s business environment from third place in world to twelfth place. The report said the slide was attributed to three factors -- the political environment, fair competition, and rule of law -- showing dropping scores. In addition, the Hong Kong Policy Research Institute released a report on Hong Kong's political confidence index in January. Among the ten areas rated, six showed falling ratings, including confidence in the judiciary, press freedom, the development of democracy, political outlook, "one country, two systems," and the overall performance of government employees. Judicial independence and press freedom showed the greatest slide ever. These reports indicated that Hong Kong’s rule of law has been influenced by political factors. Whether such an influence will expand to hurt Hong Kong’s competitiveness remains to be seen.
6. Increasing self-censorship of the media harms freedom of the press.
In post-1997 Hong Kong, freedom of the press remained generally respected and the media have operated the same as during the pre-handover period. However, self-censorship has alarmingly occurred in most of the media during the past four years. Such self-censorship can be more easily found in the media’s reporting of Mainland Chinese leaders, Beijing’s attitude toward Hong Kong, and political news related to Taiwan.
In the 12 months covered by the report, controversial events related to the press include the following. Senior political commentator Willy Lam left the South China Morning Post after his commentaries were regarded unacceptable by his superiors; PRC President Jiang Zemin reprimanded Hong Kong journalists; and Asia Television Ltd. and Television Broadcast Ltd. (TVB) showed increasing self-censorship. These were negative developments in Hong Kong’s press freedom.
7. Despite a positive economic performance, Hong Kong has faced rising unemployment.
According to the Census and Statistics Department, Hong Kong registered an impressive 10.5% GDP growth rate last year, much higher than the 3.1% a year ago. The 2000 unemployment rate dropped from 6.3% from a year ago to be 5%, but the rate is likely to rise in the first half of 2001. Consumer prices dropped to 3.7% from 4% in the previous year. These figures showed that Hong Kong economy is rather healthy.
The HKSAR Department of Finance made public the 2000-2001 fiscal budget in March. This report predicted that Hong Kong’s 2001 GDP growth would be 4%, and that consumer prices would record zero growth, meaning no inflation or deflation. A few media organizations criticized the failure of the department’s report to address rising unemployment. A few government policies, such as plans to recruit Mainland Chinese experts, will even push up the unemployment rate. Some Hong Kong scholars said that unstable oil prices and poor economic performance in the United States and Hong Kong could drag down Hong Kong’s economic growth.
On the other hand, the HKSAR government predicted that the government would maintain a budget deficit for the period from 2001 to 2004. A few media organizations reported that new taxation, such as the environmental tax, departure tax, and the lottery tax, have been the government’s priority taxation items. The fiscal deficit could pose the greatest challenge to the new financial secretary, Antony Leung.
8. Intensifying bilateral interaction pulled Hong Kong under the increasing influence of the Mainland.
Traditionally, Hong Kong and Mainland China maintain close relations. The HKSAR Censor and Statistics Department reported that Hong Kong people spent about HK$30 billion in the Mainland last year, and made 30 million visits there. Consumption per visitor was HK$870. In the other direction, Mainland Chinese made 3.78 visits to Hong Kong last year, spending about HK$1.83 billion. In average, one Mainland Chinese spent HK$4,800 in trips to Hong Kong. The longer the post-1997 period is, the greater interaction and amalgamation with Hong Kong and the Mainland, a phenomenon worth noting.
During the past 12 months, the major developments in Hong Kong-Mainland relations were as follows. The Beijing government strongly wooed Hong Kong enterprises to invest in its Move West project. China is becoming a member of the World Trade Organization (WTO). The HKSAR government has been actively promoting the integration of Hong Kong with the Pearl River Delta. The bilateral notification mechanism, extradition of criminals, and opening of customs ports will be established between the two sides. Hong Kong seems to come he increasing influence of the Mainland.
9. Hong Kong’s international relations with other countries remained unchanged, under close watch of the international community.
The United Nations, United States, United Kingdom, and European Union gave generally favorable reports on Hong Kong’s civil liberties and human rights over the past year. But, these reports reviewed Hong Kong’s business environment, judiciary independence, and press freedom with criticism. On another aspect, Hong Kong’s external relations have been improved at practical level. Acceptance of HKSAR-issued passports has been improved, and passport holders enjoy increasing visa-free treatment.
10. Taiwan-Hong Kong relations remain restricted, requiring a major breakthrough.
During this report’s 12-month period, Taiwan-Hong Kong relations remained restricted due to the delay in issuing a visa for Chang Liang-jen, head of the Hong Kong Affairs Bureau. At the end of last year, the HKSAR government finally approved Chang’s appointment with a pragmatic attitude and Chang assumed office on January 30, 2001. After this, the HKSAR government approved visits by Taipei City Mayor Ma Ying-jeou, Finance Minister Yen Ching-chang, and Chairman Chen Poh-chih of the Council of Economic Planning and Development. These visits placed a silver lining over the clouded bilateral relations.
The government released a report on June 1, "Holism and Pragmatism----Policy Toward Hong Kong and Macao." This serves to make clear that the new government will handle relations with Hong Kong based upon the principles of "goodwill reconciliation, active cooperation, and permanent peace." The Taipei government will fully respect the high degree of autonomy of Hong Kong to maintain a positive development of Taiwan’s relations with Hong Kong, promote mutual exchanges and cooperation, and jointly work towards prosperity and peace. In the future, the government will act on the basis of good will, pragmatism, and services to strengthen the function of our agency in Hong Kong, expand contacts and exchanges with all sectors in Hong Kong, and enhance rules and regulations related to people of Hong Kong residing in or coming to Taiwan.
However, Taiwan-Hong Kong relations are still subject to Beijing’s influence. The HKSAR government remains rather conservative in handling relations with Taiwan. Any future breakthrough in bilateral relations will depend on the two government’s pragmatism and mutual respect.
11. Hong Kong has 130 post-1997 controversial events.
According to media reports, in post-1997 Hong Kong, there has accumulated 130 major controversies related to liberty, human rights and rule of law over the past four years. The most recent ones in the past 12 months are particularly noteworthy as tests of the Beijing Government’s commitment to keep Hong Kong unchanged for 50 years. The most recent incidents are summarized as follows.
A. Beijing leaders publicly supports Tung Chee-Hwa’s re-election: PRC President Jiang Zemin, Premier Zhu Rongji, and Vice Premier Qian Qichen have publicly supported Tung Chee-Hwa to seek re-election as HKSAR Chief Executive. Qian asked Hong Kong government officials to be more strongly support the Chief Executive’s work, which was criticized as damaging the "high-degree of autonomy" in Hong Kong.
B. Beijing’s Liaison Office interferes in HKSAR autonomy. The Liaison Office of the Central Government in the HKSAR urged the Hong Kong Catholic Church to keep "low key" any celebration of the October 1 Vatican canonization of 120 foreign missionaries and Chinese Catholics martyred in China. This caused criticism as Beijing’s interference in Hong Kong’s religious freedom. The spokesmen of the Liaison Office later accused the Falun Gong of using the Special Administrative Region to stage activities against the Beijing government. The media again labeled this as interference in the HKSAR affairs.
C. HKSAR imposes self-limitations. The HKSAR government refused to issue visas to Wu Rung-i, president of the Taiwan Institute of Economic Research, and Chang King-yuh, former chairman of Mainland Affairs Council. The media charged that these denials were politically motivated. The HKSAR government also downplayed the visit by Nobel Prize Winner Gao Xinjian. The media said the HKSAR government acts out of fear of getting blame from the Beijing government.
D. Press freedom is a major concern. The dismissal of Willy Lam, editor of China page of the South China Morning Post, invited serious concerns from the international media in Hong Kong. PRC President Jiang asked the media to heed making commentaries in relation to social responsibility. The Hong Kong media immediately reacted, saying that Jiang’s comments would have a negative impact on press freedom in Hong Kong. ATV and TVB referred to the president of the Republic of China as the "Taiwan leader," which was criticized as self-censorship.
E. The HKSAR is tightening supervision of Falun Gong activities. The Falon Gong convention, attended by local and overseas practitioners, received a verbal warning from the HKSAR Council of Recreation and Culture. While the Fortune Forum was held in May, the Hong Kong government denied entry to around 100 overseas Falun Gong members. Also, the government is considering anti-cult legislation. These developments have negatively affected the promise of "one country, two systems."
II. Construct a Holistic and Pragmatic Hong Kong Policy
1. The current state of Taiwan-Hong Kong relations
After the government’s deregulation of restrictions on family visits to the Mainland in 1987 and liberalization of indirect investment there three years later, Hong Kong has played an increasingly significant intermediary role between the two sides of the Taiwan Strait. Invited by the private sector and encouraged by the government, more and more Hong Kong leaders in political, economic, and academic circles have visited Taiwan and obtained first-hand experience of Taiwan’s economic, political and democratic achievements. Extensive Taiwan-Hong Kong flows have thus become a major underpinning for bilateral relations, which have remained generally unaffected by the change of Hong Kong’s status in 1997.
▓Trade and economic aspects: In 2000, Taiwan-Hong Kong trade totaled US$33 billion, making Hong Kong Taiwan’s third largest trading partner and the No. 2 export market. Taiwan is Hong Kong’s fourth largest trading partner.
▓Visits: In 2000, Hong Kong residents made 295,000 visits to Taiwan. Taiwan people made 2.8 million visits to Hong Kong, accounting for the second largest number of visitors to Hong Kong. The number of passengers flying on Taiwan-Hong Kong routes has seen steep growth, with airlines fully booked most of the time. Many Taiwan passengers visit Hong Kong on business trips, for sightseeing, or making transfer on their way to the Mainland. These frequent trips have created lucrative revenue for the local economy. After Taiwan liberalized regulations governing visits by Mainland tourists, Hong Kong’s significance as the major hub of cross-strait exchanges will be further enhanced.
▓Culture and education: The government has formulated measures to actively promote academic exchanges between Taiwan and Hong Kong scholars, and encourage and assist local scholarly and art groups to sponsor exchanges. Hong Kong students, after completing their higher education in Taiwan, will be able to contribute their learning to local development and growth.
Government-to-government exchanges: In the post-1997 period, the HKSAR government has acted under constrains by the Seven Articles of PRC Vice Premier Qian Qichen in handling relations with Taiwan. In a few areas, Taiwan-Hong Kong relations remained more restricted than cross-strait relations, leaving insufficient interactions. The Taipei government, understanding the HKSAR’s position for the time being, still hopes for improvements in the future to facilitate more efficient solutions of the issues between Taiwan and Hong Kong.
2. Future orientations:
In line with President Chen’s announcement in his inaugural speech that cross-strait relations will be promoted under the principles of "goodwill reconciliation, active cooperation and permanent peace," the government has applied this principal to its relations with Hong Kong as well. In full respect of HKSAR’s high degree of autonomy, the government has three approaches as follows: 1. foster favorable environment for positive development of Taiwan-Hong Kong relations; 2. enhance two-way exchanges and cooperation; and 3. jointly work towards prosperity and peace. Under the principles of good will, pragmatism, and service to people, the government focuses on the following works:
▓Strengthen the function of our agency in Hong Kong
In order to expand services for local people, Hong Kong citizens, foreigners, and Mainland visitors, and to resolve any issues arising from their trips, our agency in Hong Kong will act in a more transparent, streamlined, and legalized manner in related works. The office will expand and strengthen various services, upgrade service quality and efficiency, and ease exchanges between Taiwan and Hong Kong people.
▓Expand contacts with different sectors in Hong Kong, enhance mutual understanding.
Based upon its established platform, the government will augment contacts with different sectors in Hong Kong, promote exchanges and cooperation between related associations and their counterparts, and build up a diversified network of contracts. The government will focus on expanding exchanges in-depth in different trade, cultural, and educational fields for mutual benefits and advancement.
▓Enhance rules and regulations related to people of Hong Kong residing in or coming to Taiwan.
With good will, humanitarian concerns, and pragmatism, the government will actively assist Hong Kong people in visiting and staying in Taiwan and in resolving their problems. It will strengthen contacts, provide advices, and improve related regulations to protect Hong Kong people’s interests.
Despite a few disturbing controversies in political, economic, and social fields, relations with Taiwan, and international relations in the post-1997 period, Hong Kong remained stable in general. Our agency in Hong Kong has managed to make its function into full play. However, due to many given obstacles, the government’s work in Hong Kong failed to achieve a major breakthrough. In the future, the government will spare no effort in expanding Taiwan-Hong Kong exchanges, understanding and cooperation. It is hoped that the Mainland authorities can have a broader and long-term vision, sincerity and good will to pragmatically deal with Taiwan-Hong Kong relations. Only by doing so can a normalized coordination mechanism be established to enhance government-to-government exchanges and thereby lay a sounder foundation for the relations between Taiwan and Hong Kong.