Hong Kong Special Administrative Region: Annual report 2015

Since the handover of Hong Kong to the People’s Republic of China (PRC) in 1997, the European Union (EU) and its Member States have closely followed political and economic developments in the Hong Kong Special Administrative Region (SAR) under the ‘one country, two systems’ principle. In line with the commitment given to the European Parliament in 1997, an annual report is issued on developments in Hong Kong. This is the 18th report, covering developments in 2015.

2015 was a politically challenging year for the Hong Kong SAR and for the functioning of the ‘one country, two systems’ principle. On 18 June the Legislative Council voted down the government’s proposal to introduce universal suffrage for the election of the Chief Executive from 2017. The negative vote concluded an electoral reform process of almost 18 months’ duration, involving polarised debates and, in late 2014, massive demonstrations in favour of a higher degree of democracy in the voting system than was permitted by the August 2014 decision of the Standing Committee of the National People’s Congress.

The EU regrets that the principal actors in the electoral reform process were unable to reach a compromise on the reform. As a stakeholder in Hong Kong’s future and in line with the Basic Law, the EU encourages the Hong Kong SAR and Central Government authorities, through constructive discussion, to resume the electoral reform and reach an agreement on an election system that is democratic, fair, open and transparent. Universal suffrage would give the government greater public support and legitimacy for reaching Hong Kong’s economic objectives and tackling social challenges, such as the socio-economic and generational divides in Hong Kong society.

The functioning of the ‘one country, two systems’ principle was called into serious doubt by the disappearance, in late 2015, of five individuals, two of whom hold EU citzenship, associated with a Hong Kong publishing house and bookshop known for printing and selling material critical of the Central Government. The circumstances of the disappearances were suspicious; the fifth person who disappeared from Hong Kong SAR territory seems to have been abducted.

The EU considers the case of the five book publishers to be the most serious challenge to Hong Kong’s Basic Law and the ‘one country, two systems’ principle since Hong Kong’s handover to the PRC in 1997. The case raises serious concerns about respect for human rights and fundamental freedoms and about the application of PRC criminal law to acts that are not punishable under Hong Kong law. The case has potentially lasting implications for Hong Kong’s rule of law and could impact on Hong Kong’s standing as an international business centre. The EU calls on the Central Government to fully respect the constitutional arrangements for Hong Kong SAR within the PRC, and restore the trust placed by Hong Kong residents as well as the international community in the Basic Law and the ‘one country, two systems’ principle.

Other aspects of the ‘one country, two systems’ principle continued to function well in Hong Kong during 2015. The judiciary continued to demonstrate its independence and consistent adherence to due process. The rule of law remained the guiding principle for the government, economic actors and the population at large. Anti-corruption action remained strong, as shown by the due process in the prosecution of the former Chief Executive and positive good governance indicators. Freedom of speech and freedom of information are generally respected. However, a negative trend can be observed in press freedom and pluriformity, as a result of caution and self-censorship when reporting about PRC domestic and foreign policy developments. The disappearance of the five publishers is expected to aggravate this trend. Academic freedom remains largely respected; however, the institutional autonomy of the universities is jeopardised by the appointment of pro-establishment figures to university councils.

The free market economic system continued to function efficiently and Hong Kong remained a competitive international business centre as well as the world’s premier hub for business with mainland China. The rule of law, the transparent regulatory framework, very low corruption levels and crime rates, along with an efficient public administration and an independent judiciary contributed to preserving and fostering the favourable investment climate that lies at the heart of Hong Kong’s success. Upholding these elements is vital for Hong Kong’s competitiveness, as are the enactment of new legislation on copyright, the automatic exchange of tax information and the implementation of the Competition Ordinance. Climate action needs to be reinforced to achieve the low-carbon economy goals in line with the COP21 outcome.