Congressional Research Service, "Hong Kong: Ten Years After the Handover," 2007

Summary

In the 10 years that have passed since the reversion of Hong Kong from British to Chinese sovereignty, much has changed and little has changed.

On the political front, the Hong Kong Special Administrative Region (HKSAR) has selected its first Chief Executive, only to have him step down and be replaced in a process not without some controversy. Meanwhile, belated changes by the British in the makeup of Hong Kong’s Legislative Council (Legco) were initially undone, but subsequent changes in the Legco selection process have brought things back nearly full circle to where they stood prior to the Handover. There is also unease about the independence of Hong Kong’s judicial system and the protection provided by Hong Kong’s Basic Law in light of decisions made by the Chinese government.

Similarly, the civil liberties of the people of Hong Kong remain largely intact. In part, this can be attributed to the increased politicization of the people of Hong Kong. The freedom of the press in Hong Kong is still strong, but also faces challenges — both on the legal front and from allegations of self-censorship on the part of the media owners reluctant to antagonize the People’s Republic of China. Yet, even with these challenges, many Hong Kong residents do not appear to perceive a decline in their civil liberties since 1997.

Economically, Hong Kong is still a major international financial center and a leading gateway into China. However, Hong Kong’s economic interaction with the Chinese mainland has grown deeper and broader over the last 10 years than was expected, increasing the city’s economic connections with China. This closer tie to the mainland is being bolstered by the signing of a free trade agreement in 2003, called the “Closer Economic Partnership Arrangement,” or CEPA, between China and Hong Kong. Current economic and trade dynamics have raised concerns that Hong Kong’s relationship with China will shift in the long run from one of synergy to full integration, possibly undermining the HKSAR’s “high degree of autonomy.”

Recent social and cultural trends appear to reflect some apprehension about the long-term implications of current economic and political trends. There has been a decline in Hong Kong’s expatriate (“ex-pat”) community, including U.S. nationals. Also, there is a perception that Hong Kong’s “middle class” is disappearing. Underlying many of these social and cultural trends is a redefinition of Hong Kong by its residents, indicating a closer identification with China.

At present, few of these long-term trends have had a significant effect on Hong Kong’s political or economic situation and its relations with the United States. Under the U.S.-Hong Kong Policy Act of 1992 (P.L. 102-383), the United States treats Hong Kong as a separate entity in a variety of political and economic areas so long as the HKSAR remains “sufficiently autonomous” from China. While Hong Kong government continues to fulfill its obligations to the United States under existing bilateral and multilateral treaties and agreements, there are still some minor issues that might warrant action by Congress. This report will be revised as circumstances warrant.

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