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OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION 
OF THE PEOPLE'S REPUBLIC OF CHINA (DRAFT) 




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Non-interference under the Principle of "One Country Two Systems" 

National Security Law and Emergency Regulations 

The Stationing of Military Forces in the Hong Kong Special Administrative 
Region 



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Collective Bargaining 
Retirement Security 



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Development of the Discussions on Political Structure 

Proposals for Selecting the Chief Executive and for Forming the Legislature 

Pace of Development of the Political Structure 

Relationship between the Executive Authorities and the Legislature 

Electoral Law 

Civil Servants and Politics 

Constitutional Economics and the Provisions on Economy in the Basic Law 
(Draft) 






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THE CONSULTATIVE COMMITTEE FOR THE BASIC LAW 

OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION 

OF THE PEOPLE'S REPUBLIC OF CHINA 

November 1989 






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Prepared by 

the Secretariat of 

the Consultative Committee for the Basic Law of 

the Hong Kong Special Administrative Region of 

the People's Republic of China 



Passed by 

the Thirty-first Meeting of 

the Executive Committee of 

the Consultative Committee for the Basic Law of 

the Hong Kong Special Administrative Region of 

the People's Republic of China 



The Consultation Report 

on the Basic Law (Draft) 

is published in three volumes 



The Consultation Report on the Basic Law (Draft) is based on 
the opinions collected from various sources by the 
Consultative Committee for the Basic Law during the 
consultation period. The opinions stated in the report do not 
represent the view of the Consultative Committee for the Basic 
Law, its Executive Committee or its Secretariat. 

The report on the "Development of the Discussions on Political 
Structure" is only a brief account of the discussions among 
people in Hong Kong on the design of the political structure 
for the future Hong Kong Special Administrative Region. For 
specific opinions and proposals on the political structure, 
please refer the other five reports on special issues 
concerning the political structure. 






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BOOK:. ION ORDINANCE 

Chapiei U2 



Number: HK9Q15761/ 



NON-INTERFERENCE UNDER THE PRINCIPLE OF 
"ONE COUNTRY TWO SYSTEMS" 



Contents 



1. Introduction 



2. Provisions in the Sino-British Joint Declaration 
concerning the future relationship between the Central 
Authorities and the Hong Kong Special Administrative 
Region 



3. The definition of "interference" 

4. Previous major discussions on "interference" 



5. Relevant provisions in the Basic Law (Draft) and opinions 
sol ic ited 



6. On "interference" - the other side of the coin 



7. Some opinions on the "interfering" in the affairs of the 
mainland 



8. The crux of the question 



9. Some suggestions on how to prevent the two systems from 
interfering with one another 



10. Conclusion 



1 . Introduction 

In 1984, the Government of the United Kingdom and the 
Government of the People's Republic of China signed the 
Sino-British Joint Declaration on the future of Hong 
Kong. The People's Republic of China ( PRC ) affirmed, 
through the Joint Declaration, that it would implement 
the basic policy of "one country two systems" in Hong 
Kong upon its resumption of the exercise of sovereignty 
over the territory. However, the relationship between the 
Central Authorities and the Hong Kong Special 
Administrative Region (HKSAR) involves much intricacy. 
The question of how to clearly define the relationship 
between the Central Authorities and the HKSAR under the 
principle of "one country two systems" such that the two 
societies can have exchanges on the one hand and abide by 
the principle of "one country two systems" on the other 
has long been a major concern under the topic of the 
relationship between the Central Authorities and the 
HKSAR during the drafting of the Basic Law. 

2. Provisions in the Sino-British Joint Declaration 

2.1 The Joint Declaration specifies in explicit terms 
the relationship between the PRC and Hong Kong. According 
to the policy declared by the Chinese Government under 
the Joint Declaration, the Central People's Government 
shall be responsible for the following affairs: 

Paragraph 1: " The Government of the People's 

Republic of China has decided to resume the exercise of 
sovereignty over Hong Kong with effect from 1 July 1997." 

Paragraph 3(1): " The People's Republic of China has 

decided to establish, in accordance with the provisions 
of Article 31 of the Constitution of the People's 
Republic of China, a Hong Kong Special Administrative 
Region upon resuming the exercise of sovereignty over 
Hong Kong . " 

Paragraph 3(2): "The Hong Kong Special Administrative 
Region will be directly under the authority of the 
Central People's Government of the People's Republic of 
China. The Hong Kong Special Administrative Region will 
enjoy a high degree of autonomy, except in foreign and 
defence affairs which are the responsibilities of the 
Central People's Government." 

Paragraph 3 (4): " The chief executive will be 

appointed by the Central People's Government on the basis 
of the results of elections or consultations to be held 
locally. Principal officials will be nominated by the 
chief executive of the Hong Kong Special Administrative 



Region for appointment by the Central People's Govern- 
ment " 

Paragraph 3 (8): " The Central People's Government 

will not levy taxes on the Hong Kong Special 
Administrative Region." 

Paragraph 3 (12): "The above-stated basic policies of the 
People's Republic of China regarding Hong Kong and the 
elaboration -of them in Annex I to this Joint Declaration 
will be stipulated, in a Basic Law of the Hong Kong 
Special Administrative Region of the People's Republic of 
China, by the National People's Congress of the People's 
Republic of China, and they will remain unchanged for 50 
years . " 

2.2 The Government of the HKSAR will be responsible for the 
following matters: 

Paragraph 3 (2): " The Hong Kong Special 

Administrative Region will enjoy a high degree of 
autonomy . " 

Paragraph 3 (3): "The Hong Kong Special Administrative 
Region will be vested with executive, legislative and 
independent judicial power, including that of final 
adjudication " 

Paragraph 3 (4): "The Government of the Hong Kong Special 
Administrative Region will be composed of local 
inhabitants. The chief executive will be appointed by the 
Central People's Government on the basis of the results 
of elections or consultations to be held locally. 
Principal officials will be nominated by the chief 
executive of the Hong Kong Special Administrative Region 
for appointment by the Central People's Govern- 
ment " 

Paragraph 3 (5): " Rights and freedoms, including 

those of the person, of speech, of the press, of 
assembly, of association, of travel, of movement, of 
correspondence, of strike, of choice of occupation, of 
academic research and of religious belief will be ensured 
by law in the Hong Kong Special Administrative 
Region " 

Paragraph 3 (6): "The Hong Kong Special Administrative 
Region will retain the status of a free port and a 
separate customs territory." 

Paragraph 3 (7): "The Hong Kong Special. Administrative 
Region will retain the status of an international 
financial centre, and its markets for foreign exchange, 



gold, securities and futures will continue. There will be 
free flow of capital " 

Paragraph 3 (8): "The Hong Kong Special Administrative 
Region will have independent finances " 

Paragraph 3 (9): "The Hong Kong Special Administrative 
Region may establish mutually beneficial economic 
relations with the United Kingdom and other 
countries " 



Paragraph 3 (10): "Using the name of 'Hong Kong, China', 
the Hong Kong Special Administrative Region may on its 
own maintain and develop economic and cultural relations 
and conclude relevant agreements with states, regions and 
relevant international organizations. 

"The Government of the Hong Kong Special Administrative 
Region may on its own issue travel documents for entry 
into and exit from Hong Kong." 

Paragraph 3 (11): "The maintenance of public order in the 
Hong Kong Special Administrative Region will be the 
responsibility of the Government of the Hong Kong Special 
Administrative Region." 

2.3 The provisions in the Joint Declaration define in 
principle the relationship between the Central 
Authorities and the HKSAR while Annex I to the Joint 
Declaration elaborates on the specific details. The 
powers and functions of the Central Authorities include 
the following: 

2.3.1 The National People's Congress ( NPC ) of the PRC shall 
enact and promulgate a Basic Law of the HKSAR of the PRC 
in accordance with the Constitution of the PRC, 
stipulating the system and policies to be practised in 
the HKSAR after 1997. 

2.3.2 The HKSAR shall report to the Central People's Government 
for the record on the following matters: laws enacted by 
the legislature of the HKSAR, the appointment and removal 
of principal judges (i.e. those of the highest rank), 
budgets and final accounts of the HKSAR, the 
establishment of official and semi-official economic and 
trade missions in foreign countries as necessary, etc. 

2.3.3 As authorized by the Central People's Government, the 
HKSAR may deal with the following matters on its own: 
appropriate arrangements for reciprocal juridical 
assistance with foreign states, the maintenance of a 
shipping register, the renewal and amendment of Air 
Service Agreements previously in force, the issue of 
HKSAR passports to qualified persons in accordance with 



law and the conclusion of visa abolition agreements with 
states or regions, etc. 

2.3.4 The Central People's Government will send military forces 
to be stationed in the HKSAR. 

2.4 Annex I to the Joint Declaration provides a detailed 
description on the powers and functions of the HKSAR. 
Except for the matters to be dealt with by the Central 
People's Government, matters that the HKSAR may arrange 
on its own but have to report to the Central People's 
Government for the record, and matters that the HKSAR may 
deal with on its own as authorized by the Central 
People's Government, the HKSAR will enjoy a high degree 
of autonomy, including the formation of the government, 
the enactment of laws, judicial adjudication, the 
appointment of public servants, dealing with financial 
matters, deciding the economic, trade and financial 
systems of the HKSAR, the issue of Hong Kong currency, 
shipping management, participating in relevant 
negotiations at the diplomatic level on its own or with 
delegates of the Central People's Government, designing 
the educational system of the HKSAR, protecting the 
rights and freedoms of inhabitants, etc. 

3. The definition of "interference" 

3.1 The Joint Declaration defines in specific terms the 
relationship between the Central Authorities and the 
HKSAR. The term "interference", therefore, should be 
taken to mean overstepping the responsibilities and areas 
of powers and functions stipulated in the Joint 
Declaration. In the event that the Central People's 
Government interferes in the affairs that fall within the 
realm of the high degree of autonomy enjoyed by the 
HKSAR, thus contravening the provisions of the Joint 
Declaration and interfering in the internal powers and 
functions of the HKSAR, the situation may be referred to 
as a state of "interference". 

3.2 However, the expression "interference" implies that some 
specific actions are involved. The mere expression of 
opinions and criticism through speech and writing is not 
a form of "interference". 

3.3 The Joint Declaration provides for the operational 
relationship between the Central People's Government and 
the government of the HKSAR, thus offering a relatively 
specific definition of "interference". However, in 
addition to the activities and exchanges carried out 
between the Central People's Government and the 
government of the HKSAR, there are also activities and 
exchanges to be carried out between non-governmental 



bodies in China and the HKSAR, such as exchanges between 
commercial and cultural organizations in the private 
sector. The complexities and extensiveness of these 
activities defy a clear definition of "interference". 

3.4 It is difficult to define what is appropriate 
participation and what is excessive "interference" under 
the policy of "one country two systems". In addition to 
the specific definitions in the Joint Declaration, the 
Basic Law also provides relevant stipulations regarding 
"interference". As far as the issue of "interference" is 
concerned, it is obvious that mutual trust and mutual 
respect are as important as the enactment of laws. 

4. Previous major discussions on "interference" 

4.1 Although both the Joint Declaration and the Basic Law 
(Draft) set out that the relationship between the Central 
Authorities and the HKSAR after 1997 is based on the 
policy of "one country two systems", whether the Central 
Authorities and the HKSAR can really maintain mutual 
respect and non-interference after 1997 has always been a 
major concern of the people of Hong Kong because 
traditionally, the system practised on the mainland is 
different from that in Hong Kong and there are areas of 
incompatibility between the two systems. 

Some people hold that since there is a great disparity in 
strength between the Central Authorities and the HKSAR, 
the HKSAR does not have the capacity to contend with the 
Central Authorities if the Central Authorities interfere 
in the affairs of the HKSAR. Therefore, previous 
discussions on the relationship between the Central 
Authorities and the HKSAR have invariably focused on how 
to prevent the socialist system of the mainland from 
interfering in the capitalist system of Hong Kong, 
leaving only a few debates on how to prevent the 
capitalist system of Hong Kong from interfering with the 
socialist system of the mainland. 

4.2 Ever since the conclusion of the Joint Declaration and 
during the period when the Basic Law was drafted, many 
people in Hong Kong have expressed their wish to see the 
relationship between the two systems to be defined by law 
so as to protect the independent operation and interest 
of the HKSAR. Previous discussions on "residual power", 
the power of interpreting and amending the Basic Law, and 
the application of the Chinese Constitution and national 
laws of the PRC in the HKSAR are centred around the 
question of "interference", with particular emphasis on 
preventing the mainland from interfering in the affairs 
of the HKSAR. 



4.3 However, after the series of events happened in Beijing 
in May and June 1989, discussions on "interference" have 
changed their emphasis. There are opinions in the 
mainland that some people of Hong Kong participated, in 
various degrees and forms, in the events that happened in 
China, and some of their activities went so far as to 
constitute interference in the political affairs and the 
existing social system of the mainland. For this reason, 
the mainland holds that "non-interference" should refer 
not only to non-interference in the affairs of the HKSAR 
by the mainland but also non-interference in the 
socialist system of the mainland by the capitalist system 
of the HKSAR. 



5. Relevant provisions in the Basic Law (Draft) and 
opinions solicited 

5.1 Military forces (Article 14) 

The Basic Law (Draft) sets out that military forces to 
be stationed in the HKSAR for defence shall not interfere 
in the local affairs of the Region unless the Chief 
Executive of the HKSAR requests for assistance under 
special circumstances. However, some people are worried 
that even if the military forces to be stationed in Hong 
Kong will not formally interfere in the affairs of Hong 
Kong, their presence will have a psychological impact on 
the local people, and may cause damage to the image of 
Hong Kong as a tourist paradise and an international 
trade port, not to mention the fact that such military 
forces may informally interfere in the affairs of the 
people of Hong Kong. It is also stipulated in the Basic 
Law (Draft) that members of the garrison must abide by 
national laws and the laws of the HKSAR. However, when 
the national laws and the laws of the HKSAR are in 
conflict, the military forces may interfere in the 
affairs of Hong Kong on the grounds that they must abide 
by national laws. 

5.2 The legislative power of Hong Kong's legislature 
(Article 17) 

Article 17 provides that if the Standing Committee of the 
NPC considers that any law enacted by the legislature of 
Hong Kong is not in conformity with the provisions of the 
Basic Law regarding affairs within the responsibility of 
the Central Authorities or the relationship between the 
Central Authorities and Hong Kong, the Standing Committee 
may return the law in question rendering it ineffective. 
However, there is no specific definition as to what is 
meant by "not in conformity with the provisions 
regarding affairs within the responsibility of the 
Central Authorities" and "the relationship between the 



10 



Central Authorities and Hong Kong". Therefore, it has 
been put forward that this obscurity may provide a 
pretext for the Central People's Government to interfere 
in the legislation of Hong Kong after 1997. 

5.3 The application of national laws in Hong Kong 
(Article 18) (Annex III) 

Under Article 18, the Standing Committee of NPC may 
decide, by reason of turmoil within Hong Kong which is 
beyond its control, that the Region is in a state of 
emergency so as to decree the application of the six 
national laws specifically listed in Annex III. There is, 
however, no elaboration on "turmoil within the HKSAR 
which is beyond the control of the Region", what is meant 
by "a state of emergency", and what specific national 
laws will be applied under such circumstances. Some 
people are worried that this will provide an easy opening 
for the Central Authorities to interfere in the affairs 
of Hong Kong. 

5.4 The power of interpreting the Basic Law (Article 
157) 

Although the courts of the HKSAR may interpret provisions 
in the Basic Law regarding the autonomy of the Region, 
the final power of interpreting the Basic Law is vested 
in the Standing Committee of the NPC. There are concerns 
that when the Central Authorities and the HKSAR are in 
disagreement on specific issues, the Central Authorites 
may impose its interpretation on Hong Kong because the 
final power of interpreting the Basic Law is vested in 
the Standing Committee of the NPC. 

5.5 The interference of the Central People's 
Government (Article 22) 

While it is prescribed under Article 22 that no 
department of the Central People's Government and no 
province, autonomous region or municipality directly 
under the Central People's Government may interfere in 
the affairs which the HKSAR administers on its own in 
accordance with the Basic Law, there is no provision that 
restrains the Central People's Government from 
interfering in the local affairs of Hong Kong. Further, 
Article 22 implies that if the HKSAR does not administer 
its local affairs in accordance with the Basic Law, the 
departments and units directly under the Central People's 
Government may then interfere in the affairs of Hong 
Kong. 



11 



5.6 Laws concerning "treason" (Article 23) 

Article 23 provides that the HKSAR may enact laws on its 
own to prohibit any act of treason. Some people are 
worried that since the Central Authorities and the HKSAR 
may have diverse conceptions regarding "treason", 
"secession" and so forth, the Central Authorities may not 
pass the laws enacted by Hong Kong regarding the 
prohibition of the act of treason, and will impose the 
standards of the mainland on Hong Kong. 

5.7 Selection of the Chief Executive (Annex I) 

Under Annex I, the Chief Executive shall be elected by an 
Election Committee which is composed of 800 members from 
the industrial, commercial and financial sectors; the 
professions, labour and other sectors; and Hong Kong 
deputies to the NPC , etc. Some people hold that although 
the details of the election are to be prescribed by the 
electoral law of the HKSAR, if the Election Committee is 
to be entirely appointed by the Central People's 
Government, the Central Authorities may select, through 
such appointment, those who represent their opinions as 
members of the Election Committee so as to control the 
election of the Chief Executive. Some people consider 
that this method of selecting the Chief Executive will 
provide an opportunity for China to interfere in the 
political system of Hong Kong. 

5.8 Formation of the Legislative Council (Annex II) 

It is prescribed under Annex II that the Legislative 
Council shall be constituted by representatives from 
various sectors for the first four terms. During its 
fourth term of office, the Legislative Council shall 
formulate a specific method to decide, through a 
referendum in the Region, whether all members of the 
Legislative Council shall be selected by general 
election. However, the same annex also provides that such 
referendum can only be held with the approval of the 
Standing Committee of the NPC. There are worries that 
this provision will give the Central Authorities a cause 
to prevent the formation of the Legislative Council by 
general election. 

6. On "interference" - the other side of the coin 

During May and June, some people of Hong Kong 
participated, in different forms and extent, in the 
events that happened in China. The mass media and some 
officials on the mainland regarded such activities as 
interference in the political affairs of China. Their 
opinions are as follows: 



12 



6.1 Mr Ji Pengfei, Director of the Hong Kong and Macau 
Affairs Office, made the following statement on 23 June 
on behalf of the Chinese Government: 

"Whether during the transition period or after China 
resumes its sovereignty over Hong Kong and Macau, the 
social and economic systems practised on the mainland 
and in Hong Kong and Macau are different from one 
another. The Central People's Government will 
definitely not change the capitalist system of Hong 
Kong and Macau, nor will it apply the socialist 
policies to Hong Kong and Macau. Similarly, Hong Kong 
and Macau should not interfere with or attempt to 
change the socialist system of the mainland. To make 
use of Hong Kong and Macau as a base for subverting the 
Central People's Government is not to be tolerated. 
Citizens of China must abide by the laws of Hong Kong 
and Macau when they stay in these regions; likewise, 
Hong Kong and Macau compatriots must abide by the 
Chinese constitution and laws during their stay in 
mainland China." 

6.2 The General Secretary of the Central Committee of the 
Chinese Communist Party, Mr Jiang Zemin, made the 
following remarks at a meeting with the Hong Kong members 
of the Drafting Committee for the Basic Law and the 
Consultative Committee for the Basic Law: 

"In dealing with the issues of Hong Kong, Macau and 
Taiwan, we follow the principle of 'one country two 
systems' . We practise our socialism and you may 
practise your capitalism. The well water does not 
interfere with the river water. We will not practise 
socialism in Hong Kong, Macau and Taiwan, and you 
should not transplant capitalism onto the mainland." 

6.3 In an article entitled "China's Internal Affairs Are Not 
to Be Interfered With - On the Statement Made by the 
Chiefs of the Seven Western Countries" published on 17 
July in the People's Daily . the following description 
concerning the relationship between China and Hong Kong 
is noted: 

"China will continue to uphold the principle of 'one 
country two systems' , and will not change the 
capitalist system of Hong Kong in accordance with our 
agreement. You may practise your capitalism and we 
practise our socialism. The well water does not 

interfere with the river water The current issue 

is that some people intend to make use of Hong Kong as 
a base for interfering with or attempt to change the 
socialist system on the mainland. This is not to be 
tolerated . " 



13 



6.4 A signed article entitled "The Principle of One Country 
Two Systems Is Not To Be Violated" published in the 
People's Daily on 21 July puts forward the following 
argument : 

"After 1997, Hong Kong will be restored to China in 
accordance with the principle of 'one country two 
systems'. In practising 'one country two systems', it 
must be recognized, in the first place, that the 
principle is implemented in 'one country'. In other 
words, Hong Kong is a special administrative region 
directly under the Central People's Government and the 
sovereignty of Hong Kong belongs to the People's 
Republic of China. The Central Authorities authorizes 
Hong Kong to exercise a high degree of autonomy. 
Therefore, the Hong Kong Special Administrative Region 
must submit itself to the leadership of the Central 
People's Government. 

"By 'two systems', we mean that the mainland practises 
the socialist system and Hong Kong may continue to 
practise the capitalist system. You go your way, I'll 
go mine. The well water does not interfere with the 
river water. The Central Authorities will definitely 
not change the capitalist system of Hong Kong; 
likewise, Hong Kong should not interefere with the 
socialist system practised on the mainland. To make use 
of Hong Kong as a base for subverting the Central 
People's Government is not to be tolerated. This is an 
important element of the principle of 'one country two 
systems ' . " 

6.5 In mid-October, Mr Lu Ping, Deputy Director of the Hong 
Kong and Macau Affairs Office, said in Macau that after 
Hong Kong and Macau became special administrative regions 
directly under the Central People's Government, the 
capitalist system would continue to be practised in the 
two regions and freedom of speech and of the press would 
be maintained. He stated that the press and people from 
all walks of life could freely air their views and 
opinions, and criticize socialism and the Communist Party 
but if such activities developed into acts opposing the 
Communist Party, they would not be accepted. 

6.6 The above-quoted statements can be summarized as follows: 

6.6.1 China practises the socialist system and will continue to 
do so after 1997 whereas Hong Kong practises the 
capitalist system. 

6.6.2 Under the concept of "one country" as in "one country two 
systems", the sovereignty of Hong Kong belongs to China, 
and China authorizes Hong Kong to exercise a high degree 



14 



of autonomy on the premise that Hong Kong should not turn 
itself into a base for opposing the Chinese Government. 

6.6.3 Under the concept of "two systems" as in "one country two 
systems", China will not impose the socialist system on 
Hong Kong; likewise, Hong Kong should not transplant the 
capitalist system onto the mainland. 

6.6.4 Any intention on the part of Hong Kong to interfere with 
the socialist system of China or to launch the 
implementation of the capitalist system on the mainland 
is not to be tolerated. 

6.6.5 The people of Hong Kong will continue to enjoy freedom of 
speech and of the press. They can criticize the Communist 
Party and socialism but such activities should not be 
transformed into acts opposing China. 

6.6.6 Hong Kong people must abide by the laws of China during 
their stay on the mainland. 

7. Some opinions on "interfering" in the affairs of the 
mainland 

7.1 In the Beijing events, some people of Hong Kong behaved 
in a way that seriously interfered in the political 
affairs of the mainland: 

7.1.1 Some people initiated mass demonstrations in Hong Kong 
combatting the Chinese Government. They shouted slogans 
such as "down with the Communist Party" and "down with 
the Deng-Li-Yang clique" , which constitutes an act of 
inciting persons to overthrow the Chinese Government. 

7.1.2 After Beijing was put under martial law, some people of 
Hong Kong went up to the capital and participated in 
processions and demonstrations. They even joined illegal 
organizations in Beijing and plotted to bring about 
turmoil . 

7.1.3 Some people in Hong Kong brought a huge amount of money 
and material resources to Beijing in support of illegal 
activities that had been labelled by the Chinese 
Government as turmoil. 

7.1.4 After the Beijing events, some people in Hong Kong set up 
underground channels to help the persons declared wanted 
by the Chinese Government to slip to other countries. 

7.1 .5 Some of the persons wanted by the Chinese Government set 
up organizations whose objective is to oppose the Chinese 
Government after they had fled overseas. Certain 



15 



associations in Hong Kong continued to give them 
financial support. 

7.2 The view that the activities of some of the Hong Kong 
people constitute interference in the internal affairs of 
China 

7.2.1 It is pointed out that some people's behaviour 
constitutes interference in the internal affairs of 
China. The rationale is that China has long practised the 
socialist system and has its unique national conditions, 
and that the notion of freedom and democracy conceived in 
a socialist state is different from that conceived in a 
capitalist state. Therefore, the people of Hong Kong 
should not impose their own standards on the mainland. In 
so doing, they are not paying due respect to the national 
conditions of China. Activities that are considered to be 
legal in Hong Kong may violate the laws of China, and 
vice versa. Some people of Hong Kong launched activities 
in the territory to condemn the acts of the Chinese 
Government and the events that happened in China. They 
did not realize that they were carrying out activities 
that were meant to subvert the Central People's 
Government. They got themselves entangled in the affairs 
of China and seriously violated the Chinese laws. 
Internationally, every country has the obligation to 
prevent activities that damage other countries from being 
carried out within its territory. Therefore, although the 
venue of these activities was not within the boundaries 
of China, the behaviour and response of these Hong Kong 
people should be regarded as "interference" in the 
internal affairs of China. 

7.2.2 Further, some people of Hong Kong went up to Beijing to 
participate in illegal activities, and they provided 
financial and material resources for the persons who 
combatted the Chinese Government. Even if they believed 
they had a just and reasonable cause to do so and that 
the crackdown action taken by the Chinese Government was 
wrong, they must strictly abide by the Chinese laws once 
they were in the country, and should not ignore the 
Chinese laws simply because the activities which they 
carried out might be considered to be legal in a 
capitalist society. For this reason, those who went up to 
Beijing to support or participate in anti-government 
activities have actually violated the laws of China, such 
as the martial law and the law of sedition. Such act 
cannot be simply regarded as an expression of opinion or 
criticism. 

7.2.3 Some people have set up organizations in Hong Kong to 
give financial assistance to wanted Chinese criminals who 
have fled overseas with a view to supporting their anti- 
government activities. These Hong Kong people have, in 



16 



effect, contravened the criminal law of China. Under 
Article 102 of the Criminal Law of the People's Republic 
of China, whoever commmits any of the following acts is 

deemed to have committed an offence :" (1) Inciting 

the masses to resist or to sabotage the implementation of 
the state's laws and decrees; (2) Through counter- 
revolutionary slogans, leaflets or other means, 
propagandizing for and inciting the overthrow of the 
political power of the dictatorship of the proletariat 
and the socialist system." 

7.2.4 Some people of Hong Kong have always been criticizing the 
internal affairs of the mainland but they do not consider 
themselves to be interfering in the internal affairs of 
China. However, after the Beijing events when the media 
and officials on the mainland criticized their 
activities, they regarded such criticism as interference 
in the local affairs of Hong Kong. Some people point out 
that this is not fair to China because while the people 
of Hong Kong can criticize the affairs of the mainland, 
the people on the mainland can also criticize the affairs 
of Hong Kong. 

7.3 The view that the activities of some of the Hong Kong 
people do not constitute interference in the internal 
affairs of China 

7.3.1 It is also indicated in some opinions that the behaviour 
of some of the Hong Kong people does not constitute 
interference in the internal affairs of China. The 
argument is that the way that the Chinese Government 
treated the Beijing demonstrators was a serious mistake 
because under the Chinese Constitution, citizens have 
"freedom of speech, of publication, of assembly, of 
association, of procession and of demonstration." 
(Article 35). The crackdown is wrong because the Chinese 
Government was suppressing the freedom granted to the 
people by the Constitution. When the people of Hong Kong 
supported the people of Beijing, they were simply 
pointing out the mistake of the government in authority, 
and they were not interfering in the internal affairs of 
China. 

7.3.2 Moreover, the Chinese Government has always regarded Hong 
Kong people as compatriots. It is natural that they are 
concerned for the affairs of the country. As they witness 
the latest development in China, they have the right and 
obligation to express their views and to propose the 
orientation of reform. The people of Hong Kong are not 
foreigners and their participation in Chinese affairs 
should not be deemed as "interfering in the internal 
affairs" of China. 



17 



7.3.3 While the legislation enforced in Hong Kong is different 
from that on the mainland, activities such as procession, 
assembly and shouting of slogans carried out locally by 
the people of Hong Kong should not be considered illegal 
so long as the law of Hong Kong permits, nor should they 
be deemed interference in the internal affairs of China. 

7.3.4 Further, since the Chinese Government agrees that the 
systems of other countries and regions should be 
respected, China should not oppose the people of Hong 
Kong holding activities that are permitted by the local 
law. Along this argument, when the officials and the mass 
media in China criticized again and again the activities 
(such as procession, demonstration and assisting persons 
from China on exile) carried out by some of the people of 
Hong Kong, they were actually imposing the criteria of 
the socialist system on the people of Hong Kong. This is 
interference in the affairs of the Hong Kong people. 

8. The crux of the question 

8.1 The people of Hong Kong participating in national 
affairs 

8.1.1 Under the concept of "one country", Chinese nationals in 
Hong Kong naturally have the right and obligation to 
participate in national affairs. The problem, however, is 
how the people of Hong Kong, who have lived for a long 
time in a capitalist society, should participate in 
national political activities. This is a question well 
worth exploring. Also, there is no rule that defines 
whether the people of Hong Kong should follow the 
convention of the mainland or that of Hong Kong when they 
participate in such activities, and what laws such 
activities are subject to. Notwithstanding Article 21 
which provides that the residents of the HKSAR shall be 
entitled to participate in the management of state 
affairs in accordance with law, there is the question as 
to what possibilities the people of Hong Kong other than 
the HKSAR' s deputies to the NPC have in participating in 
the management of state affairs, and what specific laws 
are to be followed if they participate. 

8.1.2 The national security law in force in Hong Kong is 
generally based on the English law with the objective to 
safeguard the security of the British and Hong Kong 
governments. At present, those people who have acted in 
opposition to the Chinese Government are not subject to 
sanction under the relevant laws of China so long as they 
have not violated the national security law in force in 
Hong Kong. The situation will change after 1997. 
According to the provisions of the Basic Law (Draft), the 
national security law of China will not be applied to 



18 



Hong Kong; instead the HKSAR will enact laws on its own 
to prohibit activities that oppose the Chinese 
Government. So far, there is no provision that prescribes 
how such laws are to be drafted, on what criteria they 
are to be drafted, who will enforce these laws, and on 
what criteria these laws are to be enforced. 

8.1.3 There is a relatively unanimous view that when the people 
of Hong Kong participate in state affairs, only when they 
take specific actions of interference should they be 
deemed as interfering in the internal affairs of China. 
The mere act of expressing one's opinions does not 
constitute interference. There are, however, diverse 
interpretations of "opinions" and "specific actions". 

8.2 The role of the Central Authorities in the HKSAR 

In line with the basic principle of "one country two 
systems", the Central Authorities, in addition to being 
responsible for the defence and foreign affairs relating 
to the HKSAR, assume a monitoring role in the appointment 
of some senior executives and in legislation. Moreover, 
the Central Authorities have the ultimate power of 
interpreting and amending the Basic Law. To what extent 
will the monitoring exercised by the Central Authorities 
be proper or be "excessive", thus constituting 
interference, is a question that affords varied answers 
and standards depending on the standpoint of the one who 
raises the question. 

9. Some suggestions on how to prevent the two systems from 
interfering with one another 

9.1 The Basic Law should prescribe in specific terms the 
relationship between the Central Authorities and the 
HKSAR 

The Basic Law is the small constitution to be implemented 
in Hong Kong after 1997. It will prescribe in specific 
terms the relationship between the Central Authorities 
and the HKSAR, and the systems to be practised locally. 
If the power of the Central Authorities and of the HKSAR 
is clearly defined in the Basic Law - for instance, the 
behaviour and activities of the military forces stationed 
in Hong Kong when they are outside the garrison should be 
regulated; and with regard to the application of national 
laws in Hong Kong, the expressions such as "turmoil 
beyond the control of the HKSAR" and "a state of 
emergency" need to be clearly defined - even if acts of 
interference occur in the future, they can be dealt with 
in accordance with the provisions of the Basic Law. 



19 



9.2 Establishment of a sound and systematized judiciary 

A set of well-drafted provisions can help to ensure that 
there is a definite legal basis to rely on when disputes 
arise between the Central Authorities and the HKSAR. The 
prerequisite, however, is the presence of a sound 
judiciary and effective appeal procedures. This is 
because regardless how comprehensive the provisions are, 
their actual enforcement involve the interpretation of 
laws and judgment by the court. The establishment of 
courts of various levels is a means to ensure that there 
will be adequate trial and appeal procedures. 

9.3 Fair public trial 

The judicial system of Hong Kong adheres to the principle 
of fair public trial. This ensures that the facts of a 
case are not covered up and any act of illicit transfer 
can be prevented. The practice of fair public trial also 
ensures that members of the judiciary are under the 
monitoring of professional bodies and the public. 

9.4 The judiciary must enact laws on its own taking into 
account the realities of Hong Kong 

The Basic Law only prescribes the principles of the laws 
to be enforced in Hong Kong after 1997, but the details 
under these principles are to be formulated by the the 
legislature of Hong Kong on its own. Article 23, for 
instance, provides that "the Hong Kong Special 
Administrative Region shall enact laws on its own to 
prohibit any act of treason, secession, sedition or theft 
of state secrets". Under this premise, the HKSAR must 
formulate laws that suit Hong Kong, taking into account 
the local social conditions and needs instead of adhering 
to the standards and requirements of the mainland. Only 
when this is achieved can Hong Kong attain a high degree 
of autonomy. 

9.5 Mutual understanding and respect between the mainland and 
the HKSAR 

Even the most comprehensive and thorough set of 
provisions may have loopholes. While the mainland and the 
HKSAR will maintain their respective systems for at least 
50 years after 1997, they are, nonetheless, under "one 
country". Therefore, it is desirable that the mainland 
and the HKSAR develop a mutual understanding and realize 
the merits and demerits of different systems in addition 
to paying due respect to societies whose systems are 
different from theirs. 



20 



10. Conclusion 



"One country two systems" is a major principle underlying 
the relationship between the Central Authorities and the 
HKSAR. Under this principle, China practises the 
socialist system, and Hong Kong may practise the 
capitalist system. Although one party may not completely 
approve of the system practised by the other, both must 
show restraint for the sake of maintaining the prosperity 
and advancement of their respective societies. It is 
essential that two societies maintain active exchange 
while restraining themselves from any act of 
interference. The two societies are parts of one country. 
The question of how to keep the characteristics of the 
two systems while fulfilling national obligations and 
upholding the benefit of the state is one of the major 
objectives of drafting the Basic Law. 



If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



21 



NATIONAL SECURITY LAW AND EMERGENCY REGULATIONS 



Contents 



1 . Introduction 

2. National security law 

3. Emergency regulations 

4 . Conclusion 



1 . Introduction 

1.1 National security laws are laws that a state enacts to 
govern issues concerning external aggression and internal 
disorder. External aggression may include war, espionage 
and political penetration. Internal disorder may include 
rebellion, mutiny and unlawful sabotage. National 
Security Law is a generic representation of legislation 
relating to national security. In different legal 
systems, provisions relating to national security are 
scattered and separately contained in various ordinances. 
In Hong Kong, despite the fact that it is not a nation, 
there exist a number of provisions and regulations that 
are similar to and carry the same effect as national 
security laws. The spirit of national security is 
reflected in the principles and precedents in the common 
law, while explicit provisions are separately contained 
in legislation like the Crimes Ordinance, Public Order 
Ordinance, Emergency Regulations Ordinance and Societies 
Ordinance . 

1.2 Emergency regulations are regulations that are not 
implemented in normal times. They are special regulations 
to be implemented when the nation enters into a state of 
emergency. A state of emergency means a state declared by 
the government as emergency when the security and social 
order of the whole or part of the nation is severely 
endangered or damaged (such as war, internal disorder and 
serious natural disasters). A state of emergency is 
normally declared by the head of government in accordance 
with the constitution. Once a state of emergency is 
declared, in some circumstances, the state will enforce 
martial law, suspend the implementation of certain 
provisions of the constitution, and may even explicitly 
restrain or prohibit its nationals from exercising their 
rights and freedoms under law, for the purpose of 
stringently maintaining social order. The emergency 
regulations presently in force in Hong Kong include 
Emergency Regulations Ordinance, and Emergency Powers 
(Extension and Amendment) Incorporation Ordinance. 

1.3 During the period immediately following the publication 
of the Basic Law (Draft), the people of Hong Kong showed 
no major disagreement over the provisions relating to 
national security and emergency measures. However, the 
series of events that took place in Beijing this June 
have aroused the special concern of the people of Hong 
Kong about issues relating to national security and 
emergency orders. For example, under the present law of 
Hong Kong, in what circumstances may the government 
introduce martial law? What kind of activities are deemed 
as subverting the government? What is sedition? How can 
conflict between national security law and basic human 
rights be resolved? In what ways will Hong Kong be 



25 



subject to the national security law of mainland China 
after 1997? The present report attempts to discuss the 
relevant legislation presently in force in Hong Kong and 
that in the People's Republic of China ( PRC ) . Further 
discussions will be made on the protection of the rights 
of the Hong Kong people and on how the Basic Law may 
protect their rights while ensuring their obligations 
towards the nation and society. 



2 National security law 

2.1 Theoretical basis for the implementation of national 
security law 

2.1.1 Every government has the power to take emergency measures 
on occasions of emergency, the purpose of which is to 
maintain political stability and social order. 

2.1.2 Article 4(1) of the International Covenant on Civil and 
Political Rights states: "In time of public emergency 
which threatens the life of the nation and the existence 
of which is officially proclaimed, the States Parties to 
the present Covenant may take measures derogating from 
their obligations under the present Covenant to the 
extent strictly required by the exigencies of the 
situation, provided that such measures are not 
inconsistent with their other obligations under 
international law and do not involve discrimination 
solely on the ground of race, colour, sex, language, 
religion or social origin." 

2.1.3 An underlying principle of this article is that the 
curtailment of certain rights and freedoms of the 
citizens is justified and acceptable when the nation is 
at stake. 

2.2 The present national security law of the PRC 

2.2.1 There are criminal law and laws relating to public order 
and national security in force in the PRC. Their aim is 
to maintain political stability and social order. For 
instance, the Special Provisions of the Criminal Law of 
the PRC contain the following provisions: 

Article 92: Whoever plots to subvert the government or 

dismember the state is to be sentenced to life 

imprisonment or not less than ten years of fixed-term 
imprisonment . 

Article 97: Whoever commits any of the following acts of 
espionage or aiding an enemy is to be sentenced to not 
less than ten years of fixed-term imprisonment or life 
imprisonment; when the circumstances are relatively 



26 



minor, the sentence is to be not less than three years 
and not more than ten years of fixed-term imprisonment: 

(1) Stealing, secretly gathering or providing 
intelligence for an enemy; 

(2) Supplying arms and ammunition or other military 
materials to the enemy; 

( 3 ) Taking part in a secret service or espionage 
organization or accepting a mission assigned by an 
enemy. 

Article 102: Whoever for the purpose of counter- 
revolution commits any of the following acts is to be 
sentenced to not more than five years of fixed-term 
imprisonment, criminal detention, control or deprivation 
of political rights; ringleaders or others whose crimes 
are monstrous are to be sentenced to not less than five 
years of fixed-term imprisonment: 

( 1 ) Inciting the masses to resist or to sabotage the 
implementation of the state's laws or decrees; and 

(2) Through counter-revolutionary slogans, leaflets or 
other means, propagandizing for and inciting the 
overthrow of the political power of the dictatorship 
of the proletariat and the socialist system. 

2.3 Ordinances presently in force in Hong Kong that are 
similar to national security law 

2.3.1 In Hong Kong, in addition to the principles and 
precedents that exist in the common law, there are also 
explicit provisions that can be categorized as national 
security law under the Crimes Ordinance, Public Order 
Ordinance, Emergency Regulations Ordinance and Societies 
Ordinance . 

2.3.2 The Crimes Ordinance lists a number of criminal offences 
that endanger national security and social order, such 
as : 

2.3.2.1 Treason - anyone who kills, wounds or causes bodily harm 
to Her Majesty, or imprisons or restrains Her; or forms 
an intention to do any such act and manifest such 
intention by an overt act; levies war against Her Majesty 
with the intent to depose Her Majesty from the style, 
honour and royal name of the Crown of the United Kingdom 
or of any other of Her Majesty's dominions, or in order 
by force or constraint to compel Her Majesty to change 
Her measures or counsels, or in order to put any force or 
constraint upon or to intimidate or overawe Parliament or 
the legislature of any British territory; instigates any 



27 



foreigner with force to invade the United Kingdom or any 
British territory; assist by any means whatever any 
public enemy at war with Her Majesty; or conspires with 
any other person to do anything aforesaid. Any person who 
commits treason shall be guilty of an offence and on 
conviction shall be sentenced to death. 

2.3.2.2 Treasonable offences - any person who forms an intention 
to depose Her Majesty from the style, honour and royal 
name of the Crown of the United Kingdom or of any other 
of Her Majesty's dominions; to levy war against Her 
Majesty within the United Kingdom or any British 
territory in order by force or constraint to compel Her 
Majesty to change Her measures or counsels, or in order 
to put any force of constraint upon or to intimidate or 
overawe Parliament or the legislature of any British 
territory; or to instigate any foreigner with force to 
invade the United Kingdom or any British territory, and 
manifests such intention by an overt act or by publishing 
any printing or writing, shall be guilty of an offence 
and shall be liable on conviction to imprisonment for 
life. 

2.3.2.3 Assaults on the Queen - any person who wilfully produces 
or has near Her Majesty any arms of destructive or 
dangerous thing with intent to use the same to injure Her 
Majesty; discharges, or points, aims or presents any arms 
at or near Her Majesty, causes any explosive substance to 
explode near Her Majesty, assaults Her Majesty, or throws 
anything at or upon Her Majesty with intent to alarm or 
to injure Her Majesty, or to provoke a breach of the 
peace or whereby a breach of the peace is likely to be 
caused, shall be guilty of an offence and shall be liable 
on conviction to imprisonment for 7 years. 

2.3.2.4 Incitement to mutiny - any person who knowingly attempts 
to seduce any member of Her Majesty's forces or any 
member or officer of the Royal Hong Kong Regiment or of 
the Royal Hong Kong Auxiliary Air Force, any police 
officer or any member of the Royal Hong Kong Auxiliary 
Police Force from his duty or allegiance to Her Majesty; 
or any person who knowing that any such member or officer 
is about to desert or absent himself without leave, 
assists him in so doing, or knowing such member or 
officer to be a deserter or absentee without leave, 
conceals him or assists him in concealing himself or 
assists in his rescue from custody; or any person who has 
in his possession any document related to the aforesaid 
offences, shall be guilty of an offence and shall be 
liable to on conviction to imprisonment for 2 years. A 
judge may, in the course of such trial, grant a search 
warrant . 



28 



2.3.2.5 Seditious act and speech - A seditious act or speech is 
one that intends to bring into hatred or contempt or to 
excite disaffection against the person of Her Majesty, or 
Her Heirs or Successors, or against the Government of 
Hong Kong, or the government of any other part of Her 
Majesty's dominions or of any territory under Her 
Majesty's protection; or to excite Her Majesty's subjects 
or inhabitants of Hong Kong to attempt to procure the 
alteration, otherwise than by lawful means, of any other 
matter in Hong Kong as by law established; or to bring 
into hatred or contempt or to excite disaffection against 
the administration of justice in Hong Kong; or to raise 
discontent or disaffection amongst Her Majesty's subjects 
or inhabitants of Hong Kong; or to promote feelings of 
ill-will and enmity between different classes of the 
population of Hong Kong; or to incite persons to 
violence; or to counsel disobedience to law or to any 
lawful order. Any person who does or attempts to do, or 
makes any preparation to do, or conspires with any person 
to do, any act with a seditious intention as aforesaid; 
or utters any seditious words; or prints, publishes, 
sells, offers for sale, distributes, displays or 
reproduces any seditious publication; or imports any 
seditious publication, unless he has no reason to believe 
that it is seditious, shall be guilty of an offence and 
shall be liable on conviction to imprisonment for 2 
years . 

However, an act, speech or publication is not seditious 
by reason only that it intends to show that Her Majesty 
has been misled or mistaken in any of Her measures; or to 
point out errors or defects in the government or 
constitution of Hong Kong or in the administration of 
justice with a view to the remedying of such errors or 
defects; or to persuade Her Majesty's subjects or 
inhabitants of Hong Kong to attempt to procure by lawful 
means the alteration of any matter in Hong Kong as by law 
established; or to point out, with a view to their 
removal, any matters which are producing or have a 
tendency to produce feelings of ill-will and enmity 
between different classes of the population of Hong Kong. 

2.3.2.6 Unlawful possession of seditious publication - any person 
who commits such offence shall be liable on conviction to 
imprisonment for 1 year. 

2.3.2.7 Unlawful oath - any person who takes, administers or is 
present at and consents to the administering of any oath 
or engagement in the nature of an oath, purporting to 
bind the person who takes it to commit any offence 
punishable with death, shall be guilty of an offence and 
shall be liable on conviction to imprisonment for life. 
However, if such oath or engagement in the nature of an 



29 



oath purports to bind the person who takes it to act in 
the following ways:- 

(1) to engage in any mutinous or seditious enterprise; 

(2) to commit any offence not punishable with death; 

(3) to provoke a breach of the peace; 

(4) to be of any association or society, formed for the 
purpose of doing any act mentioned in the above 3 
sub-paragraphs ; 

(5) to obey the orders or commands of any unlawful 
committee or leaders; 

(6) not to inform or give evidence against any associate 
or other person; 

(7) not to reveal or discover any unlawful association 
or any illegal act done or to be done or any illegal 
oath or engagement, 

any person who is found guilty of such an offence shall 
be liable to imprisonment for 7 years. 

2.3.3 In addition to the Crimes Ordinance, the Public Order 
Ordinance of Hong Kong presently in force also lays down 
provisions that ban activities which may cause a breach 
of the peace. In particular, this ordinance pertains to 
the control of assembly, procession and gatherings. It 
provides for the following: 

2.3.3.1 The Commissioner of Police may control the extent to 
which music or human speech or any other sound may be 
amplified, broadcast or relayed in or towards public 
places . 

2.3.3.2 For meetings of more than 30 persons to be held in public 
places or meetings to be held in private premises of more 
than 200 persons or than the lawful capacity of such 
premises, notice of the intention to hold such public 
meeting shall be given in writing to the Commissioner of 
Police not less than 7 days prior to the date on which 
the meeting is intended to be held for the purpose of 
applying for a licence. 

2.3.3.3 For any public procession on a public highway or 
thoroughfare or in a public park of more than 20 persons, 
an application for a licence shall be made to the 
Commissioner of Police not less than 7 days prior to the 
date on which the procession is intended to take place 
(in the case of a public procession held solely for the 
purposes of a funeral, 24 hours prior to the forming of 



30 



the procession). The Commissioner of Police may, in the 
interest of public order, cancel any licence issued by 
him or amend the conditions of any such licence, or may 
at any time control the route, direction and ways of 
dispersal of such procession. 

2.3.3.4 Any person who in any public place behaves in a noisy or 
disorderly manner, or displays or distributes any writing 
containing threatening, abusive or insulting words, 
whereby a breach of the peace is caused, shall be guilty 
of an offence and shall be liable on conviction to 
imprisonment for one year. 

2.3.3.5 The Governor in Council may for the prevention of serious 
public disorder to prohibit the holding of public 
gatherings or of any class of public gatherings in Hong 
Kong or any part thereof for such period not exceeding 3 
months . 

2.3.3.6 Unlawful assembly: When 3 or more persons, assembled 
together, conduct themselves in a disorderly, 
intimidating, insulting or provocative manner intended or 
likely to cause any person reasonably to fear that the 
persons so assembled will commit a breach of the peace, 
or will by such conduct provoke other persons to commit a 
breach of the peace, they are an unlawful assembly. Any 
person who takes part in an unlawful assembly shall be 
guilty of an offence and shall be liable on conviction to 
imprisonment for 3 years. 

2.3.3.7 Riot: Any person taking part in an unlawful assembly 
commits a breach of the peace, the assembly is a riot and 
the persons assembled are riotously assembled. Serious 
cases shall be tried by the Supreme Court and any person 
guilty of such an offence shall be liable on conviction 
to imprisonment for 10 years. Any person taking part in a 
riot who unlawfully pulls down or destroys any building, 
transportation facilities or the like shall be guilty of 
an offence and shall be liable on conviction to 
imprisonment for 14 years, while any person in such a 
case who unlawfully damages any of such things shall be 
liable on conviction to imprisonment for 10 years. Less 
serious cases may be tried by courts at lower levels. Any 
person guilty of such an offence shall be liable on 
conviction to imprisonment for 5 years. 

2.3.3.8 Any person who, without lawful authority, at any public 
gathering makes any statement, or behaves in a manner, 
which is intended to incite or induce any person to kill 
or do physical injury to any other person, to destroy or 
do any damage to any property, or to deprive any person 
of the possession of any property, shall be guilty of an 
offence. Serious cases shall be tried by the Supreme 
Court and any person convicted shall be liable to 



31 



imprisonment for 5 years. Less serious cases may be tried 
by courts at lower levels and any person convicted shall 
be liable to imprisonment for 2 years. 

2.3.3.9 The Governor may, in the interest of public order, make a 
curfew order in which the area and hours of such curfew 
are specified and may direct that any person shall remain 
indoors. Any person who contravenes any of the provisions 
of a curfew order shall be guilty of an offence and shall 
be liable on conviction to imprisonment for 2 years and 
to a fine of HK$5,000. Any person holding a permit issued 
by the Commissioner of Police shall not be subject to 
such curfew order. 

2.3.3.10 The Governor may by order declare any area or place to be 
a closed area. 

In addition to the other powers as by law established, 
any police officer may use such force as may be 
appropriate and necessary to prevent the commissioning or 
continuance of any offence aforesaid. 

2.4 Relevant provision in the Basic Law (Draft) 

Article 23: "...shall enact laws on its own to prohibit 
any act of treason, secession, sedition or theft of state 
secrets . " 

2.5 Opinions and proposals regarding Article 23 of the Basic 
Law (Draft) 

2.5.1 This article gives no definition of the expression "an 
act of treason, secession, sedition or theft of state 
secrets" . Who will be responsible for giving a definition 
to such an act? Will speech, publication and artistic 
creation within this realm be prohibited? 

2.5.2 Since a democratic state and a communist state may have 
its own conceptions and interpretations of expressions 
such as "treason", "secession", "sedition" and "theft of 
state secrets" , some people hold that as the power of 
interpretation of the Basic Law is not vested in the Hong 
Kong Special Administrative Region (HKSAR), the 
implementation of Article 23 may in the future undermine 
freedom of the press and freedom of speech in the HKSAR. 

2.5.3 Concepts like "treason" must be clearly defined and 
explicitly specified in the Basic Law. 

2.5.4 After 1997, whether a person in Hong Kong has contravened 
the provision of this article should be determined in 
accordance with the laws of Hong Kong rather than the 
laws of the PRC . 



32 



3. Emergency regulations 

3.1 The definition of "a state of emergency" 

3.1.1 There are two categories of "state of emergency"-- one is 
declared during wartime and the other is declared at 
times of peace. 

3.1.2 During wartime, a state of emergency may be declared to 
allow for the taking of warfares, preparations for 
unavoidable war and the outbreak of civil war. 

3.1.3 A state of emergency may also be declared at times of 
peace to deal with occasions of natural disasters, 
collapse of the economy, internal social disorder, riots, 
subversion, etc. 

3.2 The exercise of emergency powers 

3.2.1 The granting of emergency powers to a government can only 
be made by the constitution and such powers shall be 
subject to monitoring so as to prevent the occurrence of 
abuse of power. Article 4(1) of the International 
Covenant on Civil and Political Rights states: "In time 
of public emergency which threatens the life of the 
nation and the existence of which is officially 
proclaimed, the States Parties to the present Covenant 
may take measures derogating from their obligations under 
the present Covenant to the extent strictly required by 
the exigencies of the situation, provided that such 
measures are not inconsistent with their other 
obligations under international law and do not involve 
discrimination solely on the ground of race, colour, sex, 
language, religion or social origin." 

3.2.2 The government, before exercising its emergency powers, 
must first declare that the whole or part of the country 
is in a state of emergency. 

3.2.3 In countries -- such as the USA, UK, India, West Germany, 
Canada and Australia -- that check political powers by 
means of the constitution, it is normally the 
responsibility of the executive to declare a state of 
emergency. In the PRC , this is a responsibility of the 
Standing Committee of the National People's Congress 
(NPC) and the State Council. 

3.2.4 Normally, in the exercise of its emergency powers, a 
government must always adhere to the following 
principles : 

( 1 ) Monitoring by the legislature - the commencement and 
continuation of the exercise of, emergency powers 
must be effectively and regularly monitored by the 
legislature (for example, the parliament). 



33 



(2) All emergency measures must conform to international 
standards such as those specified in the Universal 
Declaration of Human Rights. 

(3) Even in a state of emergency, some personal rights 
may not be deprived of. 

(4) Except for some personal rights which may not be 
taken away in whatever circumstances (for example, 
the right to life), other personal rights may be 
restricted in a state of emergency but such 
restriction should only be made as and when 
necessary and shall be kept to a minimum. 

(5) Emergency powers may only be exercised when other 
normal powers or procedures are not sufficient to 
deal with the situation. 

(6) There must be sufficient evidence to prove that it 
is necessary to exercise, continue to exercise or 
introduce any emergency powers. 

(7) There must be effective measures to prevent the 
occurrence of abuse of emergency powers. 

(8) There must be channels for complaint and remedial 
measures to deal with unreasonable deprivation of 
some personal rights during the exercise of 
emergency powers. 

(9) Emergency powers and the procedures for exercising 
such powers must be clearly separated from normal 
powers. For example, members of the judiciary should 
not be granted emergency powers so that the people 
will have confidence in the judiciary as being just, 
neutral and impartial. 

3.3 Provisions in the Chinese Constitution relating to the 
introduction of martial law 

3.3.1 One of the functions and powers granted by the 
Constitution of the People's Republic of China to the 
Standing Committee of the NPC is to decide on the 
enforcement of martial law in particular provinces or 
municipalities : 

Article 67: "The Standing Committee of the National 
People's Congress exercises the following functions and 
powers : 



(20) to decide on the enforcement of martial law ...in 
particular provinces, autonomous regions or 



34 



municipalities directly under the Central 
Government ; " 

3.3.2 The State Council is vested with the power to decide on 
the enforcement of martial law in parts of provinces or 
municipalities : 

Article 89: "The State Council exercises the following 
functions and powers: 



(16) to decide on the enforcement of martial law in parts 
of provinces, autonomous regions and municipalities 
directly under the Central Government;" 

3.4 The emergency powers granted to the Hong Kong Government 
at present 

3.4.1 At present, the Hong Kong Government is granted emergency 
powers under the Emergency Regulations Ordinance. Section 
2(1) of the Ordinance states: "On any occasion which the 
Governor in Council may consider to be an occasion of 
emergency or public danger he may make any regulations 
whatsoever which he may consider desirable in the public 
interest." Also, in Section 2(3), it is prescribed that 
any regulations made under the provisions of this 
ordinance on occasion of emergency shall continue in 
force until repealed by order of the Governor in Council. 

3.4.2 Under the provisions of the Emergency Regulations 
Ordinance, the Governor in Council has the absolute power 
to declare a state of emergency in Hong Kong and to adopt 
any emergency measures. In such emergency period, when 
the Governor in Council makes regulations in accordance 
with the Emergency Regulations Ordinance, only those 
emergency regulations the contravention of which shall be 
punished by death shall require the endorsement of the 
Legislative Council. All other emergency measures and 
regulations can be made without the monitoring by the 
legislature and the Governor in Council has the absolute 
power to decide. 

3.4.3 In addition, the present ordinance does not specify how 
long a period of emergency may last. Once a state of 
emergency is declared, only the Governor in Council has 
the power to end such a period of emergency and this 
power is subject to no limitation or monitoring. 

3.5 Relevant provisions in the Basic Law (Draft) 

Article 14: "The Central People's Government shall be 
responsible for the defence of the Hong Kong Special 
Administrative Region." 



35 



"The Government of the Hong Kong Special Administrative 
Region shall be responsible for the maintenance of the 
public order of the Region." 

"Military forces sent by the Central People's Government 
to be stationed in the Hong Kong Special Administrative 
Region for defence shall not interfere in the local 
affairs of the Region. The Government of the Hong Kong 
Special Administrative Region may, in times of need, ask 
the Central People's Government for assistance from the 
garrison in the maintenance of public order and in 
disaster relief." 

"Expenditure for the garrison shall be borne by the 
Central People's Government." 

Article 18, Paragraph 4: "In case the Standing Committee 
of the National People's Congress decides to declare a 
state of war or, by reason of turmoil within the Hong 
Kong Special Administrative Region which is beyond the 
control of the Region, decides that the Region is in a 
state of emergency, the State Council may decree the 
application of the relevant national laws in the Region." 

3.6 Opinions and proposals on the provisions 

3.6.1 The issue of definition 

3.6.1.1 Some people are of the opinion that as the terms used in 
the Basic Law (Draft) are not clearly defined, they may 
cast uncertainty on future interpretation of the 
provisions or may be manipulated to justify the abuse of 
power. For instance, expressions like "in times of need" 
in Article 14, and "turmoil within the Hong Kong Special 
Administrative Region which is beyond the control of the 
Region" and "state of emergency" in Article 18 are not 
explicitly defined. It is pointed out that the Basic Law 
should contain clear definitions of these terms. 
Moreover, these provisions give no specification as to 
who has the authority to ask the Central People's 
Government for assistance from the People's Liberation 
Army and who has the power to decide the termination of 
such assistance. 

3.6.1.2 On the other hand, there are opinions that it is not 
advisable to define terms like "state of emergency" in 
the Basic Law; such kind of definition rarely appears in 
the constitutions of other countries. An adequate measure 
is to establish an appropriate and effective monitoring 
mechanism and, subject to this mechanism, the person in 
authority should be granted the power by the constitution 
to declare at his discretion a state of emergency and the 
exercise of emergency powers. 



36 



3.6.2 The procedures of implementation 

3.6.2.1 Article 14 does not explicitly lay down what procedures 
should be followed in the event the Government of the 
HKSAR needs to ask the Central People's Government for 
assistance from the garrison. For instance, it does not 
specify whether the Chief Executive may decide on his own 
or such a decison should require the passage by the 
legislature or the executive authorities. 

3.6.2.2 According to Paragraph 4 of Article 18, the power to 
declare that the HKSAR is in a state of emergency is 
vested in the Standing Committee of the NPC and the 
Standing Committee may on its own declare a state of 
emergency in the HKSAR subject to no monitoring or 
checking. Also, the provision does not specify how long 
such a state of emergency should last, who is to declare 
the termination of such a state of emergency, and whether 
the Central Authorities will be responsible for the 
monitoring of the application of national laws in the 
HKSAR during such state of emergency. 

Neither does the provision specify which national laws 
will be applied in the HKSAR when there is a "turmoil 
within the HKSAR beyond the control of the Region". 

3.6.2.3 It is also suggested that the power to declare that the 
HKSAR is in a state of emergency should be vested in the 
executive authorities of the HKSAR rather than in the 
Standing Committee of the NPC, and that the emergency 
powers to be exercised by the executive authorities in a 
state of emergency and the procedures of exercising such 
powers should be clearly laid down in the Basic Law. 

3.6.2.4 The Basic Law should differentiate the emergency powers 
to be exercised in peacetime from those to be exercised 
in wartime. The emergency powers to be exercised in 
peacetime should be vested solely in the Government of 
the HKSAR (unless it cannot function by then), and the 
emergency powers to be exercised in wartime should be 
exercised by the Central People's Government. Even when 
the Central People's Government is at war with another 
country, it does not necessarily follow that a state of 
emergency must be declared in the HKSAR. 

3.6.3 The criteria for taking emergency measures 

3.6.3.1 The taking of emergency measures must adhere to the 
following principles: 

( 1 ) The government may declare a state of emergency only 
when it is absolutely necessary; 



37 



(2) The government must officially and openly declare 
the commencement of a state of emergency; 

(3) Initially, the state of emergency must be confined 
to a short period and there should be limitations on 
the emergency measures to be taken. If a consent 
cannot be obtained from the legislature to the 
continuation of such emergency period, the state of 
emergency should automatically end when the initial 
emergency period expires; 

(4) Even when the HKSAR is in a state of emergency, some 
basic rights and freedom should not be taken away. 
These include the right to life, to be free from 
torture and cruel, inhuman or degrading treatment or 
punishment, not to be required to perform forced or 
compulsory labour, not to be imprisoned merely on 
the ground of inability to fulfil a contractual 
obligation, to recognition everywhere as a person 
before the law, not to be given a heavier penalty 
than the one that was applicable when the criminal 
offence was committed, and to freedom of thought, 
conscience and religion. 

3.6.4 Several basic principles proposed to be incorporated into 
the Basic Law 

3.6.4.1 The Government of the HKSAR should have the sole 
authority to handle the internal affairs of the HKSAR, 
including affairs concerning social order, public 
security, etc. Unless the Government of the HKSAR is 
unable to function or the HKSAR is in war or a serious 
disaster, the Central People's Government should not take 
emergency measures or exercise emergency powers over the 
HKSAR. 

3.6.4.2 The emergency measures taken by the Government of the 
HKSAR must conform to the laws of the HKSAR and must be 
subject to review by the legislature. 

3.6.4.3 Even when the HKSAR is in a state of emergency, some 
basic rights and freedoms should not be taken away or 
reduced (those listed in 3.6.3.1(4) above). There is a 
similar provision in Article 4 of the International 
Covenant on Civil and Political Rights. Therefore, if the 
Basic Law specifies in its chapter on fundamental rights 
and duties of the residents that this international 
covenant shall be applicable to the HKSAR, it will be 
able to provide protection to these basic human rights. 

3.6.4.4 Specific provisions relating to the procedures for taking 
emergency measures, the principles of monitoring by the 
legislature and the duration of the emergency period can 



38 



be covered by relevant emergency regulations to be made 
in the future. 



4 . Conclusion 



The people of a country should be able to enjoy extensive 
rights and freedoms in times of social order, peace and 
prosperity. However, in times of emergency, external 
aggression, internal disorder, natural disasters and so 
forth, some personal rights and freedoms may need to be 
reduced or restricted. Some personal rights are basic 
rights, such as the right to life and the right to be 
free from inhuman treatment, and they may not be taken 
away under whatever circumstances. Therefore, how to 
safeguard national and social security on the one hand 
and to ensure the protection of basic personal rights and 
freedoms and the prevention of the abuse of national 
security laws and emergency regulations on the other is a 
major issue of concern. Further, the balance between 
national/social interest and individual interest is 
another issue that requires careful study. Under the 
principle of "one country two systems", these issues 
become even more complicated and there are a lot of 
elements to be considered. Only when the Basic Law 
accommodates both national/social interest and the 
interest of the individual can it be deemed as a sound 
basic law. 



If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



39 



THE STATIONING OF MILITARY FORCES 
IN THE HONG KONG SPECIAL ADMINISTRATIVE REGION 



Contents 



1. Introduction 



2. Provisions in the Sino-British Joint Declaration 
concerning the stationing of military forces 



3. Provisions in the Basic Law (Draft) concerning the 
stationing of military forces 

4. Preliminary discussion of the Sino-British Joint Liaison 
Group 

5. Information about the present British forces in Hong Kong 

6. Information about the People's Liberation Army of China 

7. Main points of discussion 

7.1 Whether the People's Liberation Army should be 
stationed in Hong Kong after 1997 

7.2 Provisions on the deployment of the garrison 

7.3 Laws to be observed by the garrison 

7.4 Jurisdiction over the garrison 

7.5 Expenditure for the garrison 

7.6 Relationship between the garrison and the local 
community 

8. Proposals for amendment to Article 14 of the Basic Law 
(Draft) 

9. Conclusion 



1 Introduction 

1.1 It is stated in the Sino-British Joint Declaration that 
after 1997, the Hong Kong Special Administrative Region 
(HKSAR) shall be vested with executive, legislative and 
independent judicial power, including that of final 
adjudication, while defence and foreign affairs shall be 
the responsibilities of the Central People's Government. 
The stationing of military forces in Hong Kong is one of 
the ways to show that the Central People's Government 
shall be responsible for the defence affairs of Hong Kong. 
The People's Liberation Army ( PLA ) shall not interfere in 
the local affairs of the HKSAR but may, in times of need 
assist in the maintenance of public order and in disaster 
relief at the request of the HKSAR Government. 
Nevertheless, the provisions in the Joint Declaration and 
the Basic Law (Draft) are principles in nature. Other 
questions arising from them await further discussion. 

1.2 This report is in two sections. Section 1 lists out as 
reference the provisions in the Joint Declaration and the 
Basic Law (Draft) concerning the stationing of the PLA in 
Hong Kong after 1997, the preliminary discussion of the 
Sino-British Joint Liaison Group on this issue, and the 
background information about the British forces stationed 
in Hong Kong at present and about the PLA on the mainland. 
Section 2 enumerates different views and reference 
materials concerning the various focuses of discussion on 
the stationing of the PLA in Hong Kong, including the 
proposal raised after the Beijing incident in June that 
there should be some other arrangements so that the PLA 
would not be stationed in Hong Kong; the deployment of the 
PLA; the laws to be obeyed by the PLA; jurisdiction over 
the PLA; expenditure for the military forces; and the 
relationship between the PLA and the community of Hong 
Kong. 

2. Provisions in the Sino-British Joint Declaration 
concerning the stationing of military forces 

2.1 Clause (2) of Paragraph 3: "The Hong Kong Special 
Administrative Region will be directly under the authority 
of the Central People's Government of the People's 
Republic of China. The Hong Kong Special Administrative 
Region will enjoy a high degree of autonomy, except in 
foreign and defence affairs which are the responsibilities 
of the Central People's Government." 

Clause (11) of Paragraph 3: "The maintenance of public 
order in the Hong Kong Special Administrative Region will 
be the responsibility of the Government of the Hong Kong 
Special Administrative Region." 

2.2 Section I of Annex I: "...The Hong Kong Special 



43 



Administrative Region shall be directly under the 
authority of the Central People's Government of the 
People's Republic of China and shall enjoy a high degree 
of autonomy. Except for foreign and defence affairs which 
are the responsibilities of the Central People's 
Government, the Hong Kong Special Administrative Region 
shall be vested with executive, legislative and 
independent judicial power, including that of final 
adjudication. . . " 

Section XII of Annex I: "The maintenance of public order 
in the Hong Kong Special Administrative Region shall be 
the responsibility of the Hong Kong Special Administrative 
Region Government. Military forces sent by the Central 
People's Government to be stationed in the Hong Kong 
Sepcial Administrative Region for the purpose of defence 
shall not interfere in the internal affairs of the Hong 
Kong Special Administrative Region. Expenditure for these 
military forces shall be borne by the Central People's 
Government . " 

3. Provisions in the Basic Law (Draft) concerning the 
stationing of military forces 

3.1 Article 14: "The Central People's Government shall be 
responsible for the defence of the Hong Kong Special 
Administrative Region. 

"The Government of the Hong Kong Special Administrative 
Region shall be responsible for the maintenance of the 
public order of the Region. 

"Military forces sent by the Central People's Government 
to be stationed in the Hong Kong Special Administrative 
Region for defence shall not interfere in the local 
affairs of the Region. The Government of the Hong Kong 
Special Administrative Region may, in times of need, ask 
the Central People's Government for assistance from the 
garrison in the maintenance of public order and in 
disaster relief. 

"In addition to abiding by national laws, members of the 
garrison shall abide by the laws of the Hong Kong Special 
Administrative Region. 

"Expenditure for the garrison shall be borne by the 
Central People's Government." 

4. Preliminary discussion of the Sino-British Joint Liaison 
Group 

4.1 Annex II to the Joint Declaration on "Sino-British Joint 
Liaison Group" states that the functions of the Joint 

44 



Liaison Group shall be (i) to conduct consultations on the 
implementation of the Joint Declaration; (ii) to discuss 
matters relating to the smooth transfer of government in 
1997; and (c) to exchange information and conduct 
consultations on such subjects as may be agreed by the two 
sides. Since its establishment, the Group has discussed a 
number of issues closely relating to the smooth transition 
of Hong Kong, including the stationing of the PLA in Hong 
Kong after 1997. This issue is still under consultation. 
No specific decisions have been made yet. 

4.2 Mr Zheng Weirong, Director of the First Department of the 
Hong Kong and Macao Affairs Office under the State Council 
and one of the Chinese representives in the Joint Liaison 
Group, made the following points at a press conference of 
the Hong Kong and Macao Affairs Office in April 1988. 

4.2.1 The stationing of military forces in Hong Kong by China is 
provided for in the Sino-British Joint Declaration though 
the details have yet to be discussed. 

4.2.2 Control of illegal immigration is one of the duties of the 
British forces stationed in Hong Kong at present. The 
Sino-British Joint Liaison Group has discussed this 
question before: after 1997 this duty will be taken up by 
the police of the HKSAR. 

4.2.3 When China sends military forces to be stationed in Hong 
Kong after 1997, they have to be quartered. It has not 
been decided whether they will be quartered in the urban 
area, and whether they will be quartered on the previous 
barracks of the British forces in the urban area. As to 
whether the barracks and military installations of the 
British forces in the urban area will be removed, it has 
yet to be discussed by the experts. 

4.2.4 After 1997, the present facilities of the British forces 
will in principle be used by the Chinese garrison. But 
definitely not all of them will be in use because the size 
of the future garrison will not exceed that of their pre- 
1997 British counterpart. As to exactly what facilities 
of the British forces will continue to be used, it cannot 
be decided until the Chinese members of the Joint Liaison 
Group have inspected the existing facilities. 

4.2.5 The future Chinese forces stationed in Hong Kong will 
include the army, the navy and the air force as the 
present British forces also have this composition though 
the size of some forces is quite small. As to whether the 
Chinese navy will be stationed at Tamar and whether the 
facilities there will remain in use, no overall plan has 
been made yet. 

5. Information about the present British forces in Hong Kong 

45 



5.1 Hong Kong has served as a British military base in East 
Asia since it became a British colony in the mid 19th 
century. In 1975, Britain released the White Paper on 
Defence and announced that the strength of the colony's 
garrison would be reduced by 15 per cent. From 1976 to 
1979, the garrison consisted of only four battalions. The 
garrison together with the locally enlisted Chinese 
soldiers totalled about 8,000 men. In October 1980, Hong 
Kong and Britain decided to add a permanent battalion to 
the Hong Kong garrison in order to prevent illegal 
immigrants from crossing the border to Hong Kong. 
Consequently, there are five battalions of British forces 
permanently stationed in Hong Kong. 

5.2 The British armed services in Hong Kong comprise the Royal 
Nacy, the British Army and the Royal Air Forces. Their 
functions are to perform defence duties and to maintain 
stability in the territory of Hong Kong. In addition, 
Hong Kong has a strong auxiliary force made up of 
volunteers. These auxiliary services include the Royal 
Hong Kong Regiment (The Volunteers), the Royal Hong Kong 
Auxiliary Air Force, the Civil Aid Services, and the 
Auxiliary Medical Services. 

5.3 The Armed Services operate in Hong Kong under the overall 
command of the Commander British Forces, who advises the 
Governor on matters affecting the security of Hong Kong 
and who is also responsible to the Chief of Defence Staff 
in London. According to the Letters Patent, the Govenor 
of Hong Kong is the titular Command-in-Chief of the Armed 
Services in Hong Kong. 

5.4 Types of military forces stationed in Hong Kong 

5.4.1 The Royal Navy has five patrol craft. The strength of the 
Royal Navy, including reinforcements, is about 600. The 
Royal Navy, based at HMS Tamar in Central District of the 
Hong Kong Island, carries out various kinds of patrol 
duties mainly within the territorial waters of Hong Kong. 
The Captain-in-Charge Hong Kong who works closely with the 
Director of Marine and Director of Civil Aviation is 
responsible for the operational control of the Hong Kong 
Sea Defence Area which extends to 91 kilometres. He is 
also responsible for all Royal Navy forces deployed in the 
South China Sea. Besides, the Royal Navy acts in close 
support of the Royal Hong Kong Police Force in deterring 
and apprehending illegal immigrants from China, and 
conducting operations against smugglers and others who 
illegally infringe on territorial waters. 

5.4.2 The Army 

The Army provides the majority of the forces in Hong Kong 
under the direct command of the Commander Land Forces. 



46 



Command of operational units is exercised on behalf of 
the Commander British Forces by the Commander 48 Gurkha 
Infantry Brigade, while logistic units are commanded by 
the Commander Support Troops. The primary role of the 
Army is to support the Police Force in maintaining 
internal security, and to be responsible for preserving 
the intergrity of the border. In recent years, its major 
task has been to help with the control of illegal 
immigration. The Army have also provided logistic support 
to the Hong Kong Government, assisting with the movement 
and administration of the influx of Vietnamese boat 
people . 

Hong Kong people play an important role through their 
support of the Royal Hong Kong Regiment (The Volunteers) -- 
a locally enlisted regiment of part-time soldiers — and 
the Hong Kong Military Service Corps, which is also 
locally enlisted but forms part of the British Army. The 
latter corps is staffed by full-time regular soldiers and 
numbers about 1,300 Chinese officers and men who serve 
throughout Hong Kong as guards, military policemen, 
interpreters, dog-handlers, drivers, cooks, clerks, seamen 
and storemen. The Hong Kong Military Service Corps 
provides much assistance to the garrison and continues to 
play an important role in operations against illegal 
immigrants . 

5.4.3 Royal Air Force 

The main element of the Royal Air Force in Hong Kong is 
based at Sek Kong in the New Territories. The no. 28 
(Army Cooperation) Squadron operates from Sek Kong 
airfield supported by engineering and administrative 
squadrons. Included in the supporting element is an Air 
Traffic Control Unit, through which the Commander Royal 
Air Force exercises responsibility for the air space in 
the Sek Kong sector. Advisory control service outside 
Hong Kong International Airport is also provided. 
Movement of military personnel and cargo by air from Hong 
Kong International Airport is controlled by the RAF 
Airport Unit based at Kai Tak, and includes the handling 
of over 200 RAF transport aircraft movements a year. An 
RAF Provost and Security Services Unit is located at 
Blackdown Barracks, San Po Kong. Additionally, RAF 
personnel serve on the staff of Headquarters British 
Forces, in the Joint Air Tasking Cell, and in the Joint 
Services Movements Centre. 

The Royal Air Force regularly provides training and 
support to the police, including the tactical deployment 
of personnel on operations and rapid reinforcement in 
emergency. It has also assisted in a number of community 
projects . 

5.5 Auxiliary forces 

47 



5.5.1 Royal Hong Kong Regiment (The Volunteers) 

The Royal Hong Kong Regiment is a light reconnaissance 
regiment of part-time volunteers. It has an establishment 
of about 950 volunteers, of whom over 95 per cent are 
Chinese. The Regiment is administered and financed by the 
Hong Kong Government but if called out it is commanded by 
the Commander British Forces. Its role, though primarily 
one of internal security, also includes reconnaissance, 
anti-illegal immigration operation and assistance to 
other government departments in the event of natural 
disaster . 

5.5.2 Royal Hong Kong Auxiliary Air Force 

It operates a fleet of 10 aircraft and has an 
establishment of 127 permanent staff and 170 volunteers. 
Based at Hong Kong International Airport, it provides a 
variety of flying services for the government. It also 
responds to request for emergency medical evacuation and 
rescues such as carrying out search and rescue functions 
in the South China Sea in case of marine emergency. 
During the dry season, it provides assistance to fire- 
fighting activities in areas inaccessible to conventional 
fire-fighting appliances. Apart from that, helicopter 
flights are routinely provided to transport engineering 
staff to hilltops to carry out maintenance and repair work 
at communications repeater stations. In connection with 
anti-illegal immigration operation, they maintain regular 
offshore patrols and are heavily employed in support of 
the Lands Department's continuing need for aerial survey, 
photography, and map-making. 

5.5.3 Civil Aid Services 

The Civil Aid Services is formed by volunteers and has an 
establishment of about 3,700 adult uniformed and 
disciplined volunteers and about 3,000 cadets. It is 
financed and administered by the Hong Kong Government. The 
primary role of the Civil Aid Services is to provide 
emergency services in times of natural or other disasters 
and during emergencies, and to perform civic duties in 
normal times. Since the Vietnamese refugees first arrived 
in 1975, it has been engaged in the work of refugee camps, 
such as supplying food and managing refugee centres. 

5.5.4 Auxiliary Medical Service 

The Auxiliary Medical Servie is a medical civil defence 
organization with volunteer members coming from all walks 
of life. It has an establishment of about 5,800 
volunteers. Its main duties are to support the emergency 
services of the Medical and Health Department and those of 
the Ambulance Service of the Fire Services Department, and 



48 



to man medical centres in Vietnamese refugee camps 



6. Information about the People's Liberation Army of China 

6.1 Articles 93 and 94 of the Constitution of the People's 
Republic of China contain provisions on the defence system 
of China. 

Article 93: "The Central Military Commission of the 
People's Republic of China directs the armed forces of the 
country. " 

Article 94: "The Chairman of the Central Military 
Commission is responsible to the National People's 
Congress and its Standing Committee." 

6.2 The role of the PLA is to: (1) defend the country; and (2) 
help national construction. In addition, it also provides 
rescue and relief in case of emergency and disaster. 

6.3 Structure of the PLA 

The highest leadership of the PLA is the Central Military 
Commission, which is composed of a chairman, vice- 
chairmen, and members. Its main function is to direct the 
armed forces of the country. Under the Central Military 
Commission is the General Staff Headquarters. The PLA is 
directly under the command of and deployed by the Central 
Military Commission whereas the Chief-of-General Staff 
acts as the commander in operations. 

Under the command of the Chief-of-General Staff, the 
country is divided into seven major military regions: 
Beijing Military Area, Shenyang Military Area, Nanjing 
Military Area, Guangzhou Military Area, Jinan Military 
Area, Lanzhou Military Area, and Chengdu Military Area. 
Hong Kong is located in the southeast of Guangzhou 
Military Area. The PLA services include the PLA Navy, the 
PLA Air Force and the PLA Land Force, which are under the 
command of the Commander of the Navy, the Commander of the 
Air Force and the Chief-of-General Staff respectively. 
The establishment of the PLA can be divided into field 
armies and the regional armies. A field army may be 
deployed to any part of the country and is under the 
command of the Central Military Commission. A regional 
army refers to an army stationed at a particular 
province /region. 



7. Main points of discussion 

7.1 Whether the PLA should be stationed in Hong Kong after 
1997 



49 



Although the Joint Declaration and the Basic Law 
(Draft) provide that the PLA shall be stationed in Hong 
Kong after the reversion of Hong Kong to China, and the 
Joint Liaison Group has started studying the question 
of the garrison, many people still raise the question 
as to whether the PLA should be stationed in Hong Kong 
after 1997. 

7.1.1 Views in favour of having the PLA stationed in Hong 
Kong 

7.1.1.1 The stationing of the PLA in Hong Kong after 1997 is 
provided for in the Joint Declaration. The Joint 
Declaration which is an agreement drawn up by China and 
the United Kingdom after rounds of discussion should 
not be amended wantonly. Now that a few years have 
passed since the signing of the Joint Declaration, to 
request at this moment that the provision on the 
stationing of the PLA in Hong Kong be changed will 
contravene the Joint Declaration and the consequence 
will be most undesirable. 

7.1.1.2 After 1997 China will resume the exercise of 
sovereignty over Hong Kong which will then become a 
special administrative region directly under the 
Central People's Government. This is an important 
event. And the stationing of the PLA in Hong Kong is 
an important way of expressing China's resumption of 
sovereignty over Hong Kong. China as a sovereign 
state of Hong Kong has no grounds for not stationing 
troops in Hong Kong. 

7.1.1.3 Both the Joint Declaration and the Basic Law (Draft) 
expressly provide that the PLA shall not interfere in 
the internal affairs of the HKSAR while the public 
order of the HKSAR shall be the responsibility of the 
HKSAR Government, and that only in times of need and 
at the request of the HKSAR Government shall the PLA 
play a part in the maintenance of public order and 
disaster relief. Such provisions will guarantee that 
the PLA will not interfere in the affairs of the HKSAR 
in normal times but may ensure the security of the 
HKSAR when necessary. This arrangemnt will be highly 
favourable to Hong Kong. Thus, it is important and 
essential that PLA should be stationed in Hong Kong. 

7.1.1.4 As the British armed services will withdraw from Hong 
Kong after 1997, the only forces to protect Hong Kong 
from foreign invasion will be the Chinese PLA. If no 
Chinese forces are stationed in Hong Kong after the 
withdrawal of British troops, Hong Kong will be in a 
defence vacuum. It will be extremely dangerous for 
Hong Kong as far as security is concerned. 

7.1.1.5 There is practically no difference as to whether or not 

50 



Canada-] g K ce Centre 

1 Spadina Crescent, Rm. 1 1 1 • Toronto, Canada • M5S I A I 

the PLA is stationed in Hong Kong because the Chinese 
border is very close to the urban area of Hong Kong. 
The suggestion that the PLA should not be stationed in 
Hong Kong is therefore unfounded. 

7.1.2 Views requesting that the PLA be not stationed in Hong 
Kong 

7.1.2.1 The Joint Declaration indicates that the Central 
People's Government will send the PLA to be stationed 
in Hong Kong. This only shows that the PLA "may" be 
stationed in Hong Kong and does not stipulate that they 
"must" be stationed in Hong Kong. Should the Central 
People's Government, after considering the request of 
the people of Hong Kong, decide not to send the PLA to 
be stationed in Hong Kong, it is certainly not a 
violation of the Joint Declaration. 

7.1.2.2 Hong Kong will be reverted to China after 1997 and 
becomes a special administrative region of the People's 
Republic of China. This is already the best way of 
expressing China's sovereignty over Hong Kong. It is 
not necessary to express China's sovereignty over Hong 
Kong by stationing the PLA in Hong Kong. 

7.1.2.3 People in Hong Kong have become wary of the PLA after 
the Beijing incident in June. If the PLA is to be 
stationed in Hong Kong after 1997, it will pose a 
tremendous threat to Hong Kong people psychologically. 
To allay the anxiety of Hong Kong people, it would be 
best if the PLA would not be stationed in Hong Kong. 

7.1.2.4 Hong Kong as an important tourist and investment centre 
is a place where tourists and foreign investors 
assemble. They may not be accustomed to the presence 
of the PLA stationed in Hong Kong. Especially after 
the Beijing incident, people of other countries have a 
rather bad impression of the PLA. Should the Central 
People's Government insist on stationing the PLA in 
Hong Kong, the tourist industry and investment in Hong 
Kong will suffer badly. 

7.1.3 Other proposals concerning the stationing of military 
forces in Hong Kong 

7.1.3.1 The PLA should be stationed outside the territory of 
Hong Kong 

7.1.3.1.1 In terms of defence, the PLA stationed outside the 
territory of Hong Kong, for example in Shenzhen, will 
also serve their function. For Hong Kong. is so small 
that it only takes a few hours to move the forces from 
Shenzhen to Hong Kong. If the PLA is not stationed 
within the territory of Hong Kong, people in Hong Kong 
will be reassured. 



51 



7.1.3.1.2 If it is maintained that stationing the PLA in Shenzhen 
is not the same as stationing them within the territory 
of Hong Kong, it is possible to station them in the 
present "restricted area" along the New Territories- 
Shenzhen border. This "restricted area" is now 
fortified by the British forces. Changes will be 
minimal if they are simply replaced by the PLA after 
1997. People living near the "restricted area" are few 
in number and they are used to seeing the PLA. As 
residents of other regions cannot easily enter the 
"restricted area", only a very small area will be 
affected. This is therefore the best possible 
arrangement. Since the PLA may not enter other areas 
which are "demilitarized", the life of Hong Kong 
residents living beyond the "restricted area" will not 
be disturbed. 

7.1.3.1.3 The authorities concerned may consider setting up a 
Hong Kong PLA headquarters in the urban area of Hong 
Kong, and a PLA sentry post on an outlying island (or 
even in Shenzhen). The Hong Kong headquarters is an 
accredited office of the army, mainly responsible for 
liaison, dealing with related matters, and reception of 
visiting armies. Since the PLA will be stationed on an 
outlying island or outside the territory of Hong Kong, 
its influence on the life of the people in Hong Kong 
will be minimal. With this arrangement, the decision 
in the Joint Declaration that the Central Authorities 
will send military forces to be stationed in Hong Kong 
will be put into practice and those military forces may 
be called out to defend Hong Kong when necessary. 

7.1.3.2 The HKSAR should organize its own defence forces 

7.1.3.2.1 To remove the psychological threat to Hong Kong 
residents posed by the PLA stationed in Hong Kong, and 
to ensure that Hong Kong has sufficient defence forces 
for maintaining social stability, Hong Kong can 
organize its own defence forces. Formally, this army 
pledge allegiance to China. In practice, they are 
commanded and deployed by the Chief Executive of the 
HKSAR and their expenses will be borne by the HKSAR 
Government. Such an arrangement will guarantee that 
this army will take orders from the HKSAR Government. 

7.1.3.2.2 It has been proposed that a "joint garrison" be formed. 
The Chinese authorities will send some senior military 
cadres to enlist soldiers in Hong Kong. The enlisted 
soldiers will form a special army directly under the 
PLA headquarters in Hong Kong. This army will formally 
be under the PLA of China but the soldiers are all 
residents of Hong Kong who understand the local 
conditions and the way of life of Hong Kong people. 
This will avoid any possible clashes between military 



52 



forces sent from the mainland and local civilians which 
are caused by the difference in their backgrounds. On 
the other hand, the people in Hong Kong tend to have 
more trust in an army formed by local residents. 

7.1.3.2.3 With reference to the above-mentioned proposal, should 
it be difficult to enlist soldiers in Hong Kong, 
recruitment of forces other than the British army, e.g. 
the Gurkha forces, could be considered. The Gurkha 
soldiers who have been stationed in Hong Kong for a 
long time are very familiar with the conditions of Hong 
Kong. As they are militarily trained, they are able to 
take up military duties readily. 

7.1.3.2.4 Some responsibilities of the British army at present 
will be handed over to the police force after 1997. 
For instance, with the withdrawal of the British troops 
from Hong Kong, the police will be in charge of defence 
along the border. Similar arrangements can be made for 
other duties, i.e. the facilities and manpower of the 
present police force and auxiliary forces can be 
strengthened to cope with new duties. In this way, it 
will be possible for them to replace the PLA in 
discharging military duties in Hong Kong so that the 
stationing of troops in Hong Kong will be unnecessary. 

7.1.3.3 Gradual stationing of military forces 

7.1.3.3.1 It is possible to make the stationing of military 
forces a gradual process. That is, military forces 
should not be stationed in large quantities at the 
resumption of sovereignty. For the first five years 
after 1997, a PLA headquarters will first be 
established in Hong Kong and a small detachment of 
picked troops will be dispatched to perform military 
service with the police force or other disciplinary 
forces. For the second five years, that detachment of 
troops after a few years of training will perform 
military duties independently. For the third five 
years, members of that detachment will be posted to 
other forces as core members, thus extending the entire 
defence system. In this way, there will be a gradual 
process for the garrison and civilians to get 
familiarized with and accustomed to each other. 

7.1.3.3.2 In terms of timing, the PLA may initially be stationed 
in areas like the New Territories in 1997. After a few 
years, the PLA will then be stationed in Kowloon and 
subsequently on the Hong Kong Island. This arrangement 
will ensure that Hong Kong residents will not feel the 
psychological pressure that there will be a great 
influx of PLA into Hong Kong in 1997. 

7.2 Provisions on the deployment of the garrison 



53 



7.2.1 Relevant provision in the Basic Law (Draft) 

Article 14 of the Basic Law (Draft) contains the 

following provision on the deployment of the PLA 
stationed in the HKSAR: "The Government of the Hong 

Kong Special Administrative Region may, in times of 

need, ask the Central People's Government for 

assistance from the garrison in the maintenance of 
public order and in disaster relief." 

7.2.2 The present conditions in Hong Kong 

The Armed Services operating in Hong Kong are under the 
overall command of the Commander British Forces. Apart 
from advising the Governor on matters affecting the 
security of Hong Kong, the Commander British Forces is 
responsible to the Chief of Defence Staff in the UK. 
According to the Letters Patent, the Governor is also 
the titular Commander-in-Chief. 

7.2.3 Opinions on the deployment of the PLA 
7.2.3.1 Deployment of the garrison by the HKSAR 

7.2.3.1.1 In times of need, the Chief Executive may ask the 
Central People's Government for assistance from the 
garrison in the maintenance of pulic order and in 
disaster relief. To prevent the Chief Executive from 
arrogating all powers to himself, thus violating the 
principles of separation of powers as well as checks 
and balances, it is necessary to make legislation to 
ensure that in times of emergency the Chief Executive 
must openly declare his request to the Central 
Authorities for assistance from the garrison in the 
maintenance of public order, that after the request is 
made by the Chief Executive, a meeting must promptly be 
called by the legislature to pass that request, and 
that if the Chief Executive's decision to ask the 
Central Authorities for assistance from the garrison is 
not passed by a majority (two-thirds or more) of 
members of the legislature within a short period of 
time (e.g. three to five days), the decision will 
automatically be annulled. 

7.2.3.1.2 To ensure that the power of asking for assistance from 
the garrison will not be abused, the consent of the 
Chief Executive and the majority of members of the 
legislature should still be required (emergency 
meetings of the legislature may be called) even in 
times of emergency for making request to the Central 
Authorities for the garrison's assistance. This 
requirement not only safeguards against the abuse of 
power, but also prevents the chaos which may arise if 
the legislature should veto the Chief Executive's 
request after such request is made to the Central 



54 



Authorities . 

7.2.3.2 Deployment of the garrison by the Central People's 
Government 

When the HKSAR Government is in normal operation, only 
the HKSAR Government may make a request to the Central 
Authorities for the deployment of the garrison. But 
when the Chief Executive is unable to exercise his 
powers or functions and the legislature is unable to 
call a meeting because the HKSAR is in a state of 
anarchy as a result of war or tremendous social 
disorder, the Central People's Government may make 
emergency arrangements for the deployment of the PLA 
to help Hong Kong. Nevertheless, once Hong Kong has 
returned to normality and the HKSAR Government is able 
to function again, the power to ask for deployment of 
the PLA should be handed back to the HKSAR Government. 

7.3 Laws to be observed by the garrison 

7.3.1 Relevant provisions in the Basic Law (Draft) 

Article 14 of the Basic Law (Draft) contains the 
following provision on the laws to be observed by the 
garrison: "...In addition to abiding by national laws, 
members of the garrison shall abide by the laws of the 
Hong Kong Special Administrative Region...." Article 42 
also states: "Hong Kong residents and other persons in 
Hong Kong shall have the obligation to abide by the 
laws in force in the Hong Kong Special Administrative 
Region." Nevertheless, Article 14 does not specify 
whether the garrison shall abide by all of the national 
laws or only some of them. If only some, what are 
they? Furthermore, if there should be any discrepancy 
between the national laws and the laws of the HKSAR, 
which set of laws shall prevail? These details have 
not been provided for in the Basic Law (Draft). 

7.3.2 Opinions on the laws to be observed by the garrison 

7.3.2.1 The garrison should abide by the laws of the HKSAR 
only. 

7.3.2.1.1 As the social system of Hong Kong is different from 
that of the mainland, certain national laws (such as 
Article 28 of the Chinese Constitution on the 
suppression of actions that disrupt the socialist 
economy) are not applicable to Hong Kong. If the army 
is of the opinion that the economic system practised in 
Hong Kong disrupts the socialist economy and that the 
people concerned should be suppressed and penalized, 
the social order in Hong Kong will be seriously 
disrupted. As the main duty of the PLA stationed in 
Hong Kong is to defend the HKSAR, it should observe the 

55 



laws of the HKSAR only. 

7.3.2.1.2 Annex III to the Basic Law (Draft) only lists six 
national laws that shall be applied in Hong Kong. 
Thus, the national laws to be observed by the PLA 
stationed in Hong Kong should be confined to those six 
laws . 

7.3.2.1.3 The provisions of the Basic Law (Draft) on the laws to 
be observed by the garrison are principles only. 
Specific details will be prescribed in the form of 
military code. Thus, those national laws which should 
be observed by the army may be listed in detail in the 
military code, and it should not be necessary to state 
in the Basic Law that the garrison shall abide by 
national laws. For it will create apprehensions among 
Hong Kong people if it is unclear as to which part of 
the national laws should be observed by the army. 

7.3.2.2 The garrison should abide by national laws 

7.3.2.2.1 The PLA of China is a well-organized and well- 
disciplined army. There must be some laws which are 
commonly observed by them. These laws include the 
national laws of China. Members of the PLA cannot make 
themselves an exception by being stationed in Hong 
Kong. Otherwise, it will be difficult to maintain the 
discipline of the PLA. 

7.3.2.2.2 In terms of subordinate relationship, the PLA stationed 
in Hong Kong is directly under the leadership of the 
Central Authorities and should of course be bound by 
national laws. 

7.3.2.2.3 It will not be possible for the laws of Hong Kong to 
regulate the activities of the garrison in various 
aspects, such as internal affairs, deployment and 
subordinate relationship. These must be prescribed by 
the laws of the mainland. 

7.3.2.3 In case of conflict between the two sets of laws, the 
garrison should abide by the laws of the HKSAR. 

Under normal circumstances, the PLA stationed in Hong 
Kong should abide by national laws as well as the laws 
of Hong Kong. In case of conflict between the two sets 
of laws, Hong Kong laws shall prevail according to the 
principle of territorial jurisdiction. For the acts of 
the PLA being stationed in Hong Kong will have direct 
bearing and impact on the social order of Hong Kong. 
If a soldier commits an act which is not permissible in 
the community of Hong Kong, the social order of Hong 
Kong will definitely be undermined. Thus, even if this 
act does not contravene any national laws, he should 
still have legal liability according to the laws of 



56 



Hong Kong. 
7.4 Jurisdiction over the garrison 

7.4.1 The Basic Law (Draft) only states that the garrison 
shall abide by national laws as well as the laws of 
the HKSAR. It does not spell out the jurisdiction over 
the garrison. Though Article 79 in the section on 
judicial organs under Chapter IV prescribes the 
functions and powers of the courts of the HKSAR as 
follows: "The courts of the Hong Kong Special 
Administrative Region at all levels shall be the 
judicial organs of the Region, exercising the judicial 
power of the Region", it does not specify whether 
there is any special arrangement for the jurisdiction 
over the army stationed in the HKSAR. 

7.4.2 Present conditions in Hong Kong 

The present practice in Hong Kong is mainly based on 
the Order on United Kingdom Forces (Jurisdiction of 
Colonial Courts) [1965 Ed.] applied by the United 
Kingdom to its overseas territories, including Hong 
Kong. The Order defines the jurisdiction of the UK 
courts and the colonial courts with regard to the 
British forces stationed locally. 

According to Paragraph (1) of Section 3 of that Order, 
a member of the British forces charged with an offence 
against the local law shall not be liable to be tried 
for that offence by a local court if the alleged 
offence arose out of and in the course of his duty as a 
member of the British forces, or if the alleged offence 
is an offence against a person who has a relevant 
association with the British forces, or if the alleged 
offence is an offence against the public property of 
the UK. Section 4 of the Order specifies that where a 
person has been tried by a military court, he shall not 
be tried for the same crime by a local court. Except 
for the above-mentioned offences, the local colonial 
courts have jurisdiction. According to Paragraph (2) 
of Section 3 of the Order, in any case where a 
certificate is issued by the Governor that the officer 
commanding the British forces has notified the Governor 
that the case would not be dealt with by a military 
court, the case can be tried by a local court. 
Furthermore, Section 7 of the Order provides that a 
certificate issued by the officer commanding the 
British forces, stating that a certain person is a 
member of the British forces or that the alleged 
offence committed by a member of the British forces 
arose out of and in the course of his duty as a member 
of the military forces, shall in any proceedings in any 
local court be sufficient evidence of the fact so 
stated unless the contrary is proved. Hence, the 



57 



certificate issued by the officer commanding the 
British forces does not have 100 per cent binding force 
and may be subject to challenge. 

7.4.3 Opinions on the jurisdiction over the garrison 

7.4.3.1 Jurisdiction with regard to non-military matters 

When a member of the garrison is not performing his 
dutes, he will be like any other person in Hong Kong. 
Under Article 14 and 42 of the Basic Law (Draft), 
members of the garrison shall abide by the laws of the 
HKSAR. If any one of them commits an offence which is 
not relating to his military duties, he should be tried 
by a court of the HKSAR in accordance with the judicial 
procedures of the HKSAR. 

7.4.3.2 Jurisdiction with regard to military matters 

7.4.3.2.1 When members of the garrison are performing their 
duties, they have to observe the military code. If 
legal proceedings are involved, the trial will be 
conducted at a military court in accordance with the 
military code, and the courts of the HKSAR will not be 
responsible . 

7.4.3.2.2 If a member of the garrison commits an offence when he 
is off duty but the offence is against another member 
of the garrison or his family member, or the offence 
involves the property of the garrison, then the case 
will be dealt with by a military court and not by a 
court of the HKSAR. 

7.4.3.3 Other opinions 

In cases where an offence committed by a member of the 
garrison involves various factors and the circumstances 
under which the offence was committed are rather 
complicated (e.g. when performing his duty, a member of 
the garrison seriously violated the traffic legislation 
of the HKSAR, creating an accident in which civilians 
were injured. That member of the garrison did violate 
the laws of the HKSAR but in accordance with the 
military code, he may be immune from legal action as he 
was performing his duty when the offence was 
committed. ), the offence may be dealt with jointly by a 
HKSAR court and a military court of the PLA, or after 
consultations, either of them may hand the judicial 
right to the other. 

7.5 Expenditure for the garrison 

7.5.1 Relevant provision in the Basic Law (Draft) 

Article 14 of the Basic Law (Draft) contains the 



58 



following provision on the expenditure for the 
garrison: "...Expenditure for the garrison shall be 
borne by the Central People's Government. 

7.5.2 Present conditions in Hong Kong 

The contribution Hong Kong makes towards the 
expenditure for the garrison here is determined by a 
Defence Costs Agreement between the Hong Kong 
Government and the UK Government. The current 
Agreement came into effect on 1 April 1988 and remain 
valid until 30 June 1997. According to the Agreement, 
the Hong Kong Government contributes 75 per cent of the 
total expenditure, with the rest being borne by the UK 
Government . 

7.5.3 Opinions on the expenditure for the garrison 

7.5.3.1 Part of the expenditure for the garrison should be 
borne by Hong Kong 

7.5.3.1.1 The Basic Law (Draft) states that expenditure for the 
garrison shall be borne by the Central People's 
Government. But since the standard of living in Hong 
Kong is higher than that on the mainland, if the 
expenditure for the garrison is borne exclusively by 
the Central Government, it will be a heavy burden on 
them. In order to cut expenses, the Central Government 
may lower the standard of living of the garrison. In 
that case, the discipline, appearance and bearing of 
the soldiers as well as their work will be adversely 
affected, thus indirectly spoiling the image of Hong 
Kong. Since the function of the garrison is to defend 
Hong Kong, it is just reasonable that part of the 
expenditure for the garrison should be borne by Hong 
Kong. 

7.5.3.1.2 If the expenditure is borne exclusively by the Central 
Government, the garrison will possibly take orders from 
the Central Government only. Should there be any 
conflict between the HKSAR Government and the Central 
People's Government in the future, the garrison would 
be completely under the control of the Central 
Government. To avoid such unfavourable situation, 
Hong Kong should pay part of the expenditure. 

7.5.3.2 Expenditure for the garrison should be borne by the 
Central People's Government 

7.5.3.2.1 Since both the Sino-British Joint Declaration and the 

Basic Law (Draft) specify that expenditure for the 

garrison shall be borne by the Central Government, it 

is obvious that the Central Government is willing and 

able pay such cost. Thus, no amendment to the 
provision in this respect is required. 

59 



7.5.3.2.2 The PLA of China is a well-organized and well- 
disciplined army. Though part of the army is stationed 
in Hong Kong, these forces and other forces on the 
mainland should be uniform in terms of their 
organization and system. If part of the expenditure is 
borne by the HKSAR Government, the organization of the 
forces might be affected. Consequently, forces 
stationed in Hong Kong and their mainland counterparts 
may be given different treatment. 

7.6 Relationship between the garrison and the local 
community 

7.6.1 Relevant provision in the Basic Law (Draft) 

Article 14 of the Basic Law (Draft) contains the 
following provision on the relationship between the 
garrison and the community of the HKSAR: "...Military 
forces sent by the Central People's Government to be 
stationed in the Hong Kong Special Administrative 
Region for defence shall not interfere in the local 
affairs of the Region...." It only states that the 
garrison shall not interfere in the local affairs of 
the HKSAR. No provision has been made as to how they 
may play an active part in local affairs without 
causing any interference. 

7.6.2 Opinions on the relationship between the garrison and 
the local community 

7.6.2.1 The garrison should not intrude into the community of 
Hong Kong 

One of the arguments against having the PLA stationed 
in Hong Kong is that the movement and activities of the 
PLA within the territory of Hong Kong may exert 
psychological pressure on the residents, tourists and 
investors in Hong Kong. Thus, except in military 
affairs and defence, the garrison should not intrude 
into the community of Hong Kong. For instance, except 
when they are discharging their duties or within the 
military camp, members of the garrison should not carry 
any weapons, and unless on duty, they should not be in 
uniform when they enter the urban area. 

7.6.2.2 The garrison may take part in social services 

The present defence forces in Hong Kong are playing an 
active part in social services. For instance, the Navy 
provided sea training for the Hong Kong Sea School. 
The Royal Air Force also assisted in a number of 
community projects, such as transporting young people 
to camps in the New Territories on government sponsored 
schemes, and the provision of air experience flights 



60 



for Air Scouts and members of the Air Cadet Corps of Hong 
Kong. These services which have benefited from the 
expertise and facilities of the various forces have been 
well received by people in Hong Kong and should therefore 
be continued. 

8. Proposals for amendment to Article 14 of the Basic Law 
(Draft) 

8.1 It was proposed that Paragraphs 1, 2 and 3 should read: 

8.1.1 "The Central People's Government shall be responsible for 
the external defence of the Hong Kong Special 
Administrative Region. 

"The Government of the Hong Kong Special Administrative 
Region shall be solely responsible for the maintenance of 
the public order of the Region. Military forces of the 
Central People's Government shall not be stationed in the 
Region. 

"The only circumstances when military forces of the 
Central People's Government shall be allowed to enter the 
Region shall be at the specific request of the Government 
of the Hong Kong Special Administrative Region and then 
only when civil disturbances have involved the extensive 
use of fire arms by the public or for disaster relief." 

8.1.2 "The police force of the Hong Kong Special Administrative 
Region shall be responsible for the defence of the Hong 
Kong Special Administrative Region. Military forces 
shall not be sent by the Central People's Government to 
be stationed in the Region. The Government of the Hong 
Kong Special Administrative Region may, in times of need, 
ask the Central People's Government for assistance from 
the army in the maintenance of public order and in 
disaster relief." 

8.2 It was proposed that Paragraphs 3, 4 and 5 should read: 

"Military forces of the Central People's Government shall 
not enter the Hong Kong Special Administrative Region in 
times of peace. When the People's Republic of China is 
at war against a foreign country, they shall enter the 
Region only if requested by the Government of the Region. 

"In addition to abiding by national laws, members of the 
military forces temporarily stationed in the Hong Kong 
Special Administrative Region shall abide by the laws of 
the Region. 

"Expenditure for military forces shall be borne by the 
Central People's Government." 



61 



8.3 It was proposed that Paragraph 3 should read: 

8.3.1 "Military forces sent by the Central People's Government 
to be stationed in the Hong Kong Special Administrative 
Region shall not interfere in the local affairs of the 
Region. The garrison shall not enter and be stationed in 
the urban area unless with the consent of the Chief 
Executive and the majority of members of the Legislative 
Council of the Region." 

8.3.2 "Military forces sent by the Central People's Government 
to be stationed in the Hong Kong Special Administrative 
Region for defence shall not interfere in the local 
affairs of the Region. In the event of a turmoil or 
disaster in the Region which is beyond the control of the 
Region, the Chief Executive may in accordance with law 
declare that the Region is in a state of emergency, and 
may, in times of need, ask the Central People's 
Government for assistance from the garrision in the 
maintenance of public order and and in disaster relief." 

8.4 It was proposed that the second sentence of Paragraph 3 
should read: 

"The Government of the Hong Kong Special Administrative 
Region may, in times of need, decide by a vote held at 
the Executive and Legislative Councils to ask the Central 
People's Government for assistance from the garrison in 
the maintenance of public order." 

8.5 It was proposed that Paragraph 4 should read: 

"In addition to abiding by national laws, members of the 
garrison shall at the same time abide by the laws of the 
Hong Kong Special Administrative Region." 

8.6 It was proposed that Paragraph 5 should read: 

8.6.1 "The Central People's Government shall bear all of the 
expenditure for the garrison." 

8.6.2 "Expenditure for the garrison shall be borne jointly by 
the Central People's Government and the Hong Kong Special 
Administrative Region." 

9. Conclusion 

The stationing of the PLA in Hong Kong after 1997 is an 
expression of China's resumption of its exercise of 
sovereignty over Hong Kong, as well as an arrangement to 
ensure defence and security for Hong Kong. The Joint 
Declaration and the Basic Law (Draft) have laid down the 
relevant principles. However, specific arrangements and 
transition procedures regarding the withdrawal of British 

62 



forces and the stationing of the PLA in Hong Kong around 
1997 have yet to be studied thoroughly. The aim of this 
report is to enumerate the opinions and background 
information on the major points of discussion among 
people in Hong Kong regarding the stationing of the PLA. 
These points include the proposal that there should be 
some other arrangements so that the PLA need not be 
stationed in Hong Kong, the deployment of the PLA, the 
laws to be observed by the PLA, jurisdiction over the 
PLA, payment for the expenditure incurred by the garrison 
and the relationship between the PLA and the local 
community. It is hoped that the opinions and information 
contained in this report will be taken into consideration 
by drafters of the Basic Law and other interested 
parties . 



* If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



63 



COLLECTIVE BARGAINING 



Contents 



1 . Introduction 

2. Definition of collective bargaining 

3. Substance of collective bargaining 

4. Practice of collective bargaining 

5. Functions of collective bargaining 

6. Collective bargaining in Hong Kong 

7. Development of collective bargaining in Hong Kong 



8. The inclusion of the right of collective bargaining in 
the Basic Law 



9 . Conclusion 



1. Introduction 



During last year's consultation exercise, it was proposed 
that the provision: Hong Kong residents shall have the 
right of collective bargaining, be included in the Basic 
Law. However, since no specific and detailed reasons were 
put forward, the proposal was not adopted in the 
amendments to the Draft Basic Law for Solicitation of 
Opinions. To help members of the public and the 
Drafting Committee better understand this question, this 
report will first look at the definition, substance, 
practice and functions of collective bargaining within 
the context of labour relations, then move on to discuss 
collective bargaining in Hong Kong and its development, 
and conclude with a summary of the pros and cons of 
including such a provision in the Basic Law. The 
contents of this report are based on the seminar: 
"Labour-Management Relations and Collective Bargaining" 
held by the Consultative Committee for the Basic Law on 8 
April 1989 and on the views expressed on this subject by 
people from various sectors. 



Definition of collective bargaining 

In labour relations, "collective bargaining" is the 
process through which wages, paid leaves and other terms 
of employment are negotiated. It also means the 
determining of employment or working conditions and 
standards. The two parties to the negotiation are the 
representative of the employees (in a group or in the 
form of a union, whose representation is recognized by 
the employer), and the representative of the management 
(the employer or chamber of commerce). The outcome of 
collective bargaining is the drawing up of a collective 
agreement by the two parties concerned to stipulate the 
terms they have agreed upon. Such a collective agreement 
is, to a certain extent, binding on the acts of both 
parties. Hence, collective bargaining can be clearly 
distinguished from the drawing up individual employment 
contracts . 



3. Substance of collective bargaining 

3.1 In collective bargaining, wages and the working 
conditions, such as working hours, days off and fringe 
benefits, are the basic issues being negotiated. With 
social developments, the substance of collective 
bargaining has been extended to cover the formulation of 
certain rules and regulations governing the operation of 
the organization concerned, such as the procedure for 
employee dismissal, the system of reward and punishment, 
the system of promotion and the procedure for settling 
labour-management disputes. Collective bargaining may 

67 



cover all labour-related policies of an organization. 

3.2 The results of collective bargaining are normally laid 
down in an agreement. This kind of agreements fall into 
two categories: one is substantive agreements which 
specify the terms of employment and the other is 
procedural agreements. In a substantive agreement, all 
results of the negotiation, including the wages, working 
hours and benefits agreed upon by the two parties 
concerned, are clearly set down. In a procedural 
agreement, the recognized union, the rights of the union 
and the employer, the procedure of negotiation, and the 
rules for settling labour-management disputes are 
specified. It can therefore be said that a procedural 
agreement is the blueprint for carrying out collective 
bargaining . 



4. Practice of collective bargaining 

4.1 The practice of collective bargaining takes two forms: 
"voluntarism" and "legalism". Voluntarism is commonly 
practised in the United Kingdom whereas legalism has its 
origin in the United States. By voluntary collective 
bargaining, we mean that the negotiation is initiated and 
conducted voluntarily by the employer and the employees. 
The collective agreement consequently reached is a kind 
of gentleman's agreement which is not legally binding. 
The American tradition of "legalism" originated from the 
1935 Wagner Act which empowers the National Labour 
Relations Board to designate bargaining units. A trade 
union may obtain certification from the Board and be 
appointed as the bargaining agent of a bargaining unit. 
This form of negotiation requires the two parties 
concerned to conduct their negotiation "in good faith", 
otherwise the dissatified party may resort to legal 
action for resolving their problems. With respect to the 
collective agreement consequently reached, if either 
party violates any of the terms in the agreement, that 
party will be deemed having breached the agreement. The 
injured party may file a complaint with the court. 

4.2 In countries like the United Kingdom and the United 
States, collective bargaining often involves a third 
party -- in most cases, the government -- which plays any 
of the following roles: 

4.2.1 To encourage the employer and employees to inquire into 
their differences and to help them draft their own 
proposals for resolving problems; 

4.2.2 To put forward proposals to the employer and employees 
for reconciling their differences; and 

4.2.3 To decide for the employer and employees the way to 

68 



resolve their problems. 

4.3 Collective bargaining may be conducted within a trade, an 
enterprise, a factory or even an internal department of 
an enterprise. 



5. Functions of collective bargaining 

5.1 Positive functions: 

5.1.1 To provide a systematic way of preventing or resolving 
labour-management disputes. Through such an orderly and 
institutionalized negotiation process, the parties 
representing the employer and the employees may jointly 
formulate rules governing their specific economic 
relations and power relations. 

5.1.2 With collective bargaining, the workers collectively 
appoint a trade union to be their bargaining agent and 
the common rules of the agreement apply to all employees. 
This may strengthen the bargaining power of the employees 
as well as grass-roots communications; 

5.1.3 To work as a coordinating vehicle for representative 
industrial democracy; 

5.1.4 To ensure that the employment terms for labour during 
economic recessions will be maintained at a minimum 
standard; and 

5.1.5 To provide opportunities for the employer and employees 
to have dialogue and to minimize confrontation. 

5.2 Negative functions: 

5.2.1 The checks and balances of interests between labour and 
management are matters to be resolved by collective 
bargaining. In the course of bargaining, both parties may 
find an organized way of making compromise only through 
confrontation of interests. This process of bargaining 
which highlights partial and conflicting interests will 
further polarize labour and management; and 

5.2.2 Collective bargaining stresses collective actions, which 
will amplify individual conflicts. 



6. Collective bargaining in Hong Kong 

6.1 According to the records of the Labour Department, up to 
the end of June 1988, there were altogether 88 general 
collective agreements reached in Hong Kong, involving 
120,000 employees who accounted for about 4.4% of the 
total working population. This percentage is 

69 



comparatively low in terms of the international standard. 
In most of these agreements, only the minimum wage (which 
is not commonly adopted in the labour market ) , and 
individual terms of employment, such as paid leaves and 
bonuses, are stipulated. These agreements are therefore 
not as detailed as those in other industrial countries. 
In Hong Kong, collective agreements are not legally 
binding. Under normal circumstances, they are only a kind 
of gentleman's agreements. That is to say, neither the 
labour nor the management will be deemed violating the 
law should they breach their agreement. 

6.2 In Hong Kong, collective bargaining is conducted either 
within a trade or within a company. Collective agreements 
for a trade are mainly drawn up by some of the industries 
adopting traditional techniques, such as the textile 
industry, the printing industry and furniture 
manufacturing. The chambers of commerce and trade unions 
of these industries meet every year to discuss the wage 
level and the terms of service. For some of the building, 
shipping and service industries, the wage levels are also 
determined by trade unions and chambers of commerce (or 
employers) through negotiation. However, this kind of 
negotiation rarely touches on other labour benefits and 
employment contracts. The classic examples of corporate 
collective bargaining in Hong Kong are those conducted 
by the staff unions of the Cable & Wireless (HK) Ltd., 
Cathay Pacific Airways, and the two bus companies. Take 
the Cable & Wireless ( HK ) Ltd. as an example, the company 
recognizes its staff union as the bargaining agent for 
its staff. Apart from wages, bonuses, paid leaves, 
promotion and other terms of employment, the agreement 
signed by the company with its employees includes the 
procedure for filing complaints and the regulations on 
strikes and company lockout. Their agreement also 
stipulates that should the employer and the employees 
fail to resolve the wage issue within the prescribed time 
limit through collective bargaining, they may, in 
accordance with the Labour Relations Ordinance, seek 
help from the Labour Department which will arrange 
conciliation meetings for solving the problem. 

6.3 In Hong Kong, other forms of negotiation are more 
commonly adopted by labour and management than collective 
bargaining. Government departments and large-scale 
enterprises normally practise a consultative system not 
based on negotiations. For instance, the councils set up 
within some government departments and the consultative 
committees set up in such enterprises as the China Light 
and Power Co. Ltd., the Hong Kong Telecommunications 
Ltd., the Hong Kong Electric Co. Ltd., the Kowloon Motor 
Bus Company, and the Mass Transit Railway Corporation. 
The target of consultation of these committees may be 
representatives of the trade unions or representatives of 
the employees working in certain departments who are not 

70 



representatives of any trade unions. Under such a 
consultative system, the employees will have a chance of 
expressing their opinions and filing complaints through 
certain consultation procedures. Also through this kind 
of communications, the welfare, benefits and working 
conditions of employees can be improved to a certain 
extent. Some of these committees can even play a role in 
wage adjustments. The labour-management relations in 
other trades and factories are relatively slack. The 
forms of negotiation adopted by the employer and the 
employees include: 

6.3.1 Negotiation between individual employees and the 
employer ; 

6.3.2 Informal labour-management consultations (in the form of 
a working group); and 

6.3.3 Provisional negotiation brought about by strike movement. 

6.4 Matters being discussed in these negotiations usually 
concern wages or compensations for termination of 
employment contracts. These diversified forms of 
negotiation are not institutionalized. In Hong Kong, 
these informal modes of negotiation which are similar to 
collective bargaining are more common than the 
institutionalized collective bargaining in Western 
countries . 

6.5 The two International Labour Conventions which mention 
collective bargaining are No. 84: Right of Association 
(Non-Metropolitan Territories) Convention and No. 98: 
Rights to Organize and Collective Bargaining Convention. 
These two Conventions are applied to Hong Kong without 
modification. Convention No. 84 ensures that trade unions 
have the right to conclude collective agreements and 
negotiate with employers or their associations, and that 
they will reconcile the differences and resolve the 
disputes with the employers under the mediation of the 
government. In Hong Kong, the right of association of 
employers and employees is governed by the Trade Unions 
Ordinance 1971 and the Trade Union Registration 
Regulations 1971. The Ordinance grants certain rights to 
the registered trade unions and protects some of their 
activities by law. 

6.6 All trade unions or employers' associations shall enjoy 
the freedom of collective bargaining and drawing up 
agreements provided that these activities are not against 
the law. At the same time, the Labour Department is 
promoting the machinery for voluntary labour-management 
negotiation in various enterprises. Convention No. 98 
provides that workers will not be subject to 
discrimination in respect of their employment on the 
grounds of joining trade unions or participating in union 

71 



activities. For instance, that an employee shall not join 
a trade union or shall withdraw from a trade union should 
not be taken as a condition for employment. On the other 
hand, trade unions and employers' associations shall also 
enjoy the right to be free from each other's 
interference. In particular, the Convention stresses the 
importance of voluntary negotiation and bargaining 
between trade unions and employers or employers' 
associations . 

6.7 Owing to the lack of appropriate legislation in Hong 
Kong, many trade unions are at present not recognized by 
the management. That is, the management does not regard 
the trade unions as the representatives of workers, that 
are in a position to negatiate for the terms of 
employment. Even though some trade unions have their 
status recognized by the management and the management is 
willing to conduct "collective bargaining" with them, 
since collective bargaining has not been 
institutionalized in Hong Kong, workers would not have 
the proper channels to lodge their complaints should the 
management carry out negotiations not "in good faith". 
In other words, as there is no supporting legislation, 
the workers' right of "collective bargaining" is only 
nominal in many cases. 

6.8 In addition, the Hong Kong Government formulates labour 
legislation from time to time to lay down standards to 
be followed by employers and employees. These standards 
are set down in consultation with the Labour Advisory 
Board which comprises six employer representatives (five 
of them are nominated by major chambers of commerce in 
Hong Kong and appointed by the government, and the 
remaining one is appointed in his personal capacity) and 
six employee representatives (five of them are selected 
by registered trade unions and the remaining one is 
appointed in his personal capacity). The Chairman of the 
Board is the Commissioner for Labour. In other words, 
with the assistance of the government, employers and 
employees are able to determine the standards for certain 
terms of employment through consultations. In case of 
conflicts between the employer and the employees, the 
Labour Department, the Labour Tribunal, the trade union 
or the labour organization concerned will play the role 
of a mediator or an arbitrator. However, the majority of 
cases mediated involve dismissal or disbandment. Only 
very few of them are related to wages, working 
conditions or improvement of welfare benefits. 



7. Development of collective bargaining in Kong Kong 

7.1 In Hong Kong, it is not a common practice to determine 
the terms of employment through collective bargaining. 
Employers and employees determine the terms of employment 

72 



through diversified means. And wages are generally 
regulated by the market. Members of the public hold 
various views on the institutionalization of collective 
bargaining. Their opinions are summarized as follows: 

7.2 Supporting views: 

7.2.1 Free market regulation cannot protect workers 

To rely on the regulation of a free market for 
determining the terms of employment will leave the 
workers unprotected during economic recessions. For 
instance, competition for jobs by individual workers will 
force the wage level down. Giving recognition to and 
promoting collective bargaining through legislation can 
strengthen the bargaining power of workers to the extent 
that they are in a position to negotiate with the 
employers on an equal footing the terms of employment 
which are acceptable to both parties. 

7.2.2 Inadequate labour legislation 

Although the Hong Kong Government has formulated much 
labour legislation to protect the interests and welfare 
of workers, the existing legislation is still inadequate 
to afford full protection to workers. In addition, what 
has been laid down in the Employment Ordinance of Hong 
Kong is the minimum standard in terms of labour 
protection. But since workers are not strong enough and 
collective bargaining is not institutionalized, they 
cannot fight for reasonable terms and working conditions 
with employers. Moreover, in the situation where 
employers are only required to abide by the labour 
legislation, the legislation has become the maximum 
standard for determining the terms of employment. 
Doubtless, the standard laid down in legislation can only 
protect the most fundamental, and such a standard has 
kept the labour protection in Hong Kong at a low level in 
general . 

7.2.3 Strengthening the status of trade unions 

In labour-management relations, the role of the trade 
unions in Hong Kong is given full play mainly in 
marginal issues such as the handling of individual 
disputes, fighting for partial interests (e.g. wage 
increase and improvement of benefits for individual 
trades), putting forward amendment proposals on labour 
legislation, and even becoming the party to be consulted 
by organizations. However, the trade unions still cannot 
secure a major bargaining position or an equal footing in 
negotiating crucial questions in labour-management 
relations, such as employment security, wage increase, 
basic working conditions and improvement of welfare 
benefits. In addition, as the status of many trade unions 



73 



is not recognized by the management, workers cannot carry 
out collective bargaining with the management on an equal 
footing. Collective bargaining will help raise the 
status of trade unions, making the management recognize 
their status as a bargaining agent. Collective 
bargaining can help improve the workers' social status 
and give them more respect and protection, thus ensuring 
social justice. 

7.2.4 Collective bargaining will help improve efficiency 

Collective bargaining provides a channel for exchanging 
information, thus promoting the understanding between 
employers and employees and reducing unnecessary 
conflicts between them. By giving the workers a chance 
to take part in the management, collective bargaining 
strengthens the workers' sense of belonging to their 
trades or enterprises. In addition, trade unions also 
help resolve disputes among workers, thus sharing the 
work of the management. This will be beneficial to both 
the workers and the management. 

7.2.5 Collective bargaining will be conducive to social 
stability 

Since collective bargaining is not yet institutionalized, 
labour-management disputes may easily develop into 
confrontational industrial actions -- a long-standing 
latent crisis in Hong Kong -- which will be unfavourable 
to the stable development of society. 

7.2.6 Changes in Hong Kong are favourable to the development of 
collective bargaining 

7.2.6.1 Hong Kong's economc structure has started to change. 
Labour-intensive secondary industries are becoming more 
and more capital-intensive. Captial-intensive industries 
require more capital and the immobility of skilled 
workers. In the production process, the workers and the 
management have to work closely. Workers therefore have 
greater expectations, thus increasing the possibility of 
and creating an environment for the emergence of 
collective bargaining and the conclusion of collective 
agreements. As the scale of government departments, 
public enterprises and public services expands, employees 
working for these large departments and enterprises tend 
to build up their strength for negotiation of better 
wages, promotion prospects and working conditions, thus 
giving rise to collective bargaining and collective 
agreements . 

7.2.6.2 The political scene in Hong Kong is beginning to change. 
In the future political framework, workers will play a 
definite role. Capitalists must secure the support of 
workers in order to maintain the stability of the future 

74 



regime. Trade unions will become part of the existing 
institution and be absorbed to a certain extent by the 
regime. These changes will help the trade unions and 
representatives of the workers in obtaining certain 
social status, bargaining position and consultative role, 
thus promoting the development of collective bargaining 
and collective agreements. 

7.2.6.3 The trade union movement is beginning to change. Trade 
unions of different political inclinations are joining 
forces for the attainment of common economic goals, thus 
creating the conditions for forming alliances of trade 
unions and for cooperation. This will be help trade 
unions build up strength for promoting the development of 
collective bargaining and collective agreements. 

7.2.6.4 The inadequacies and changes in the existing framework 
have bearing on labour-management relations. On the one 
hand, trade unions are becoming more aware of their role 
in labour-management relations and are gradually gaining 
the central position where direct dialogues and 
negotiations can be conducted with employers. On the 
other, the apprehension of employers towards trade unions 
is gradually diminishing. As the existing labour 
legislation cannot satisfy the specific requirements of 
individual trades and industries, collective agreements 
and collective welfare may emerge within certain trades, 
thus revolutionizing the existing situation where only a 
minimum standard is applied to the protection of the 
interests of the majority of workers. In addition, the 
existing consultative structure in government 
departments and large enterprises can no longer meet the 
workers' expectations. And the demand for setting up a 
system based on negotiations is becoming more apparent. 

7.2.7 Institutionalized collective bargaining should be 
developed in Hong Kong 

7.2.7.1 In Hong Kong, collective bargaining could best be 
conducted on the trade level. Individual trades may, 
according to their own special requirements and 
conditions, determine their terms of employment through 
collective bargaining. At present, the Hong Kong 
Government needs to take an active approach in improving 
the status of workers and in promoting collective 
bargaining through legislation. Since the strength of 
workers is so much weaker than that of the management, 
workers will be put in a disadvantageous position if 
collective bargaining is to be conducted on a voluntary 
basis . 

7.2.7.2 Hong Kong may institutionalize collective bargaining by 
combining the traditions of voluntarism and legalism. 
When making legislation, the government should retain the 
voluntary nature of collective bargaining, and at the 

75 



same time inject the necessary binding elements. When 
the development of collective bargaining has reached a 
mature stage, government intervention through legislation 
can be reduced. 

7.2.7.3 Hong Kong may make legislation to give legal status to 
collective bargaining and validity to collective 
agreements . 

7.2.7.4 Trade unions may fight for themselves the status in 
collective bargaining. 

7.2.7.5 The existing Labour Advisory Board may be developed into 
a structure for conducting negotiations, thus creating a 
body with both advisory and negotiating functions. This 
practice may be extended to various trades and 
industries . 

7.3 Opposing views: 

7.3.1 The present system is operating efficiently 

Hong Kong has been enjoying two-digit economic growth for 
a long time. Hong Kong ranks second among Asian 
countries (with Japan being the first) in terms of the 
average earnings of workers. There is full employment and 
the mobility of workers is high. Under the principle of 
"more work, more pay", workers are getting more returns. 
All these indicate that the present system is efficient. 

7.3.2 The Labour Department has been playing an effective role 
as mediator 

The Labour Department plays the role of mediator in 
reconciling conflict of interests between employers and 
employees, enabling them to reach an agreement. The 
Labour Department is also actively encouraging employers 
and employees to establish channels of communication 
and provides suggestions for resolving their problems. 
Consequently, employers and employees do not have to 
resort to legal action for resolving problems in labour- 
management relations. 

7.3.3 Strong trade unions are not favourable to labour- 
management relations 

The trade unions in Hong Kong are political. If trade 
unions become too powerful, like those in the United 
Kingdom, the contention and hostility among trade unions 
will affect productivity, which will in turn be 
detrimental to labour-management relations. 

7.3.4 Hong Kong should retain the present practice 

7.3.4.1 The function of trade unions lies in their 



76 



representativeness. So long as workers enjoy the freedom 
of joining trade unions, they will be able to negotiate 
with their employers on issues concerning labour- 
management relations through their trade unions. This is 
the effective form of negotiation adopted in Hong Kong at 
present . 

7.3.4.2 Provided that workers in Hong Kong continue to enjoy the 
rights to organize and join trade unions and to strike, 
that trade unions may put forward to the government their 
opinions on the formulation of labour legislation to 
protect the rights of workers, that the Labour Department 
continues to play the role of mediator in labour- 
management disputes, and that labour-management 
negotiation continues to function, Hong Kong does not 
need more legislation to govern labour-management 
relations. At present, it is not necessary for Hong Kong 
to introduce drastic changes in this respect, for 
example, by adopting the American institution of 
collective bargaining. Moreover, international 
corporations with investments in Hong Kong are not 
familiar with the American practice. 

7.4 Reservations: (issues to be considered in promoting 

collective bargaining in Hong Kong) 

7.4.1 Operational problems 

The labour movement in Hong Kong is characterized by 
sectarianism and weak representation. There are 
difficulties in making trade unions the bargaining 
agents of workers. The will of Hong Kong workers to join 
trade unions is too weak to support and stabilize the 
trend of institutionalizing collective bargaining. 

7.4.2 Undesirable effect of collective bargaining 

Collective bargaining stresses partial interests, and is 
therefore unable to resolve conflicting interests. 

7.4.3 Consequence of government intervention in collective 
bargaining 

Voluntarism and natural development are emphasized in 
collective bargaining. That is why the results of 
bargaining are acceptable to both the employer and 
employees. If government intervention leads to the 
introduction of procedures and conditions for 
negotiation, it will be against the voluntary nature of 
collective bargaining and will reduce the acceptability 
of the results of negotiation. 

7.4.4 Other forms of negotiation 

7.4.4.1 Legislation - It is highly unifying and integrative, and 

77 



will not intensify the conflicts between employers and 
employees; but it lacks flexibility and cannot look after 
the needs of different trades. 

7.4.4.2 Labour-management negotiation - It may remedy the 
inadequacy of legislation. In comparison with central 
legislation, it is more flexible to conduct labour- 
management negotiation in industries and enterprises. 

7.4.4.3 Workshop council - It may resolve conflicting interests 
which cannot be resolved by collective bargaining. 

7.4.5 The mode to be developed in Hong Kong awaits exploration 

Hong Kong's own environment and conditions must be taken 
into consideration and the British or the American 
tradition should not be applied in its entirety. The 
present labour market is operating according to the laws 
of a free economy. With government legislation and the 
Labour Advisory Board, the whole structure is operating 
well and may continue to develop. In addition, collective 
bargaining cannot completely replace the diversified 
modes of labour-management negotiation. On the contrary, 
we may consider further developing the effective practice 
of legislation after consultation, or explore a new mode 
which is suitable to Hong Kong. 



8. The inclusion of the right of collective bargaining in 
the Basic Law 

8.1 Views diverge on whether or not to include the right of 
collective bargaining in the Basic Law. These views are 
summarized as follows: 

8.2 Those in favour of the inclusion would like to have the 
relevant articles in the Basic Law (Draft) amended as 
follows : 

8.2.1 Article 27: "Hong Kong residents shall have freedom of 
speech, of the press and of publication; freedom of 
association, of assembly, of procession and of 
demonstration; and the right and freedom to form and join 
trade unions, of collective bargaining and to go on 
strike . " 

8.2.2 Article 146: "The Government of the Hong Kong Special 
Administrative Region shall, in the light of economic 
development, social needs or labour-management 
consultations, formulate, develop and improve labour laws 
and policies on its own. Trade unions shall have the 
right to recognition and of collective bargaining, and 
may on their own draw up collective agreements with the 
employers . " 



78 



8.3 Reasons for supporting the amendments: 

8.3.1 The right to form and join trade unions, the right to 
strike and the right of collective bargaining are the 
three fundamental rights recognized internationally. The 
first two rights have already been included in Article 27 
of the Basic Law (Draft) but the right of collective 
bargaining has been left out. 

8.3.2 The right of collective bargaining should not be 
provided for in great detail in the Basic Law. For such 
specific provisions as the dates, standards and substance 
of collective bargaining should be dealt with by the 
HKSAR Government through legislation. 

8.3.3 The inclusion of the right of collective bargaining in 
the Basic Law may invite Hong Kong Government to consider 
formulating laws in this respect before 1997. 

8.4 Opposing views: 

8.4.1 Hong Kong needs not introduce such drastic changes as 
institutionalized collective bargaining. 

8.4.2 If people in Hong Kong wanted to consolidate their own 
interests or the interests of their social strata or 
organizations through the formulation of the Basic Law, 
this would not only give rise to conflict of interests, 
but would also be against the principle of maintaining 
the status quo. 

8.5 Reservation: 

The inclusion of the inclusion that Hong Kong residents 
shall enjoy the right of collective bargaining in the 
Basic Law does not necessarily enable Hong Kong residents 
to enjoy institutionalized collective bargaining. On the 
contrary, the absence of such a provision does not mean 
that Hong Kong residents will not enjoy such a right. 



9. Conclusion 

The views on the inclusion of the right of collective 
bargaining in the Basic Law ( including the supporting and 
opposing ones as well as the reservations) have taken 
the characteristics of labour-management relations in 
Hong Kong, the unique environment of Hong Kong and the 
effectiveness of the present system as the basis for 
determining whether collective bargaining in Hong Kong 
should be promoted (before or after 1997). Since the 
Basic Law will be Hong Kong's constitutional instrument 
after 1997, whether or not it should provide for such a 
right has important bearing on the future development of 
collective bargaining in Hong Kong. Hence, it is 

79 



necessary to explore the development of collective 
bargaining in Hong Kong when considering whether or not 
to provide in the Basic Law that Hong Kong residents 
shall enjoy the right of collective bargaining. It is 
hoped that this report which summarizes the supporting 
and opposing views on this issue as well as other 
matters awaiting further exploration will facilitate 
discussions among the drafters and members of the public. 



* If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



80 



RETIREMENT SECURITY 



Contents 



1 . Introduction 



2. Relevant provisions in the Basic Law (Draft) 



3. The changing trend in the population and family structure 
of Hong Kong 



4. The means of the aged 

5. The cost of living allowance for the aged 

6. The present system of retirement security 

7. Further suggestions put forward by the public 

8. The provident fund scheme 



9. On the inclusion of "retirement security" in the Basic 
Law as part of the rights of the residents 



1 . Conclusion 



1 . Introduction 

Over the years, many people have been fighting for better 
retirement benefit for the salary and wage earners of 
Hong Kong. Some people even consider that the entitlement 
to retirement security is part of the rights of the 
residents of Hong Kong. Although it is a common wish that 
the "livelihood of the aged should be ensured", there are 
varied opinions as to how this wish can be realized. The 
most arresting topic about the provision of retirement 
security for the working population is the suggestion 
that a central provident fund should be established. 
There are, however, suggestions that improvements made on 
the present system are enough to help ensure the 
livelihood of the salary and wage earners after they 
retire. This report attempts to epitomize some of the 
principles reflected in the debates that have been going 
on for years, and to provide a basis for the residents 
and the members of the Drafting Committee to consider how 
the Basic Law should respond to the issue. 

The ensuing discussions focus on the present and future 
demands for retirement security, the existing system of 
cost of living allowance for the aged, and the merits and 
demerits of the proposals on retirement security. 
Discussions will also be made on the suggestions that the 
Basic Law should be amended incorporating retirement 
security into its provisions. 

2. Relevant provisions in the Basic Law (Draft) 

2.1 Article 36: "Hong Kong residents shall have the right to 
social welfare as prescribed by law. The welfare benefits 
of the labour force shall be protected by law." 

2.2 Article 144: "On the basis of the previous social welfare 
system, the Government of the Hong Kong Special 
Administrative Region shall, on its own, formulate laws 
and policies on the development and improvement of this 
system in the light of the economic conditions and social 
needs . " 

2.3 Article 146: "The Government of the Hong Kong Special 
Administrative Region shall formulate labour laws and 
policies on its own." 

3. The changing trend in the population and family structure 
of Hong Kong 

3.1 The population of Hong Kong is gradually aging. A 
comparison between the population pyramids of the 1970s 
with those of the 1980s reveals that youngsters in the 



83 



age group of 15 and below are decreasing in number while 
persons in the age group of 60 and above are slowly 
increasing. According to the 1986 By-census, those aged 
under 15 represented only 23.1% of the population, a 
decline from the 1976 level of 30.2%. However, those aged 
60 or above represented 11.5% of the total population, a 
prominent increase from 9% recorded ten years ago. A 
distinctive feature of the population trend is that the 
proportion of those aged 70 or above has increased in 
this ten-year period from 3.2% to 4.6%. Another parameter 
indicating that the population of Hong Kong is aging is 
that the median age of the population has soared from the 
age of 23.9 in 1976 to 28.6 in 1986. 

3.2 The population pyramids reveal the way that the 
population is aging and the social problems inherent in 
an aging population. As the birth rate declines in recent 
years, youngsters aged under 15 make up only 23.1% of the 
total population while persons aged 20 to 34 constitute 
30.8% (of which 10.4% aged 20 to 24, 11.2% between 25 to 
29 and 9.2% between 30 to 34). If the present trend 
continues for another 30 to 40 years, by the time the 
30.8% people in the age group of 20-34 grow old, they may 
become a burden to the able-bodied and economically 
active younger members of society who are apparently 
obliged to cater for the livelihood of the senior 
citizens. Even after a decade or so, in the year 2001, 
the number of people aged above 60 will reach an 
estimated figure of 1 million, representing 15.8% of the 
total population. In other words, one in every six 
persons is an elderly, which is a considerably high 
percentage. In terms of family structure, the emergence 
of nuclear family has caused a decrease in the average 
number of family members from 4.2 per family in the 1970s 
to 3.7 in 1986. In respect of family care provided for 
the elderly, small families face more difficulties than 
extended families. 



4. The means of the aged 

The means of the aged is tested by their dependence on 
their families or on society, and has a direct bearing on 
the seriousness of the problem of the old people. 

4.1 According to information sources from the social welfare 
sector, the means of the aged in Hong Kong is far from 
satisfactory. With an aim to provide financial assistance 
for the destitute, the Hong Kong Government has launched 
the Public Assistance Scheme. Among the present 60,000 
cases of public assistance, 63% are persons aged above 
60. In 1987, the proportion of senior citizens receiving 
public assistance to the total number of old people in 
Hong Kong is five times the proportion of the total 



84 



number of citizens under public assistance to the total 
population; the proportion expands to more than 11 times 
in the case of old people aged above 70. The means of the 
elderly who are not receiving public assistance is also 
depressing. According to the Survey on the Beneficiaries 
of Old Age Allowance 1987 conducted by the Social Welfare 
Department, among the people aged above 70, only 0.5% are 
pensioners; 9.1% rely on welfare assistance provided by 
the Government; 4.5% live on their own savings and the 
rest depend upon their families. Only a small number of 
these beneficiaries can earn their own living. Of course, 
to be able to earn a living does not necessarily mean 
that a decent life is envisaged. Other surveys indicate 
that 30% of the persons aged above 65 (i.e. beyond the 
age of retirement) still go to work, and among them 
nearly two-thirds remain as salary or wage earners 
because of economic hardship. In addition, over 40% of 
the old-age working people work for more than 55 hours a 
week. 

4.2 It is difficult to forecast the means of the aged in the 
future. The following lists out some relevant data and 
the views expressed by members of the public for the 
reference of the reader. It is indicated in some opinions 
that the rate of savings in Hong Kong is 25% of the gross 
domestic product, which is one of the highest in the 
world. However, some people point out that a large 
proportion of the total savings in Hong Kong comes from 
overseas or from the local rich people and, therefore, 
the figure cannot adequately reflect the rate of savings 
of the general public. Some people deduce from 
statistical studies that the rate of savings in Hong Kong 
is declining. This appears compatible with the notion 
that the prevailing propensity for high spending in Hong 
Kong is cutting down savings. The table below shows the 
mode of spending of the Hong Kong people, indicating a 
falling rate of savings in Hong Kong. 

The mode of spending of the Hong Kong people 

Family income Percentage of bi-weekly spending in 

monthly income 

(HK$/month) 1979-80 

500 - 999 60% 

1000 - 1499 53% 

1500 - 1999 60% 

2000 - 2499 53% 

2500 - 2999 50% 

3000 - 3499 49% 

3500 - 3999 49% 

4000 - 4499 44% 

4500 - 4999 45% 



85 



1984-85 


78% 


64% 


62% 


58% 


58% 


5 3% 


5 3% 


4 7% 



5000 - 5999 44% 48% 

6000 - 6999 41% 47% 

7000 - 9999 38% 44% 

(Source: Figures based on the Survey on Family 
Expenditure conducted by the Census and Statistics 
Department and the Hang Sang Bank) 

5. The cost of living allowance for the aged 

The cost of living allowance available to the retired and 
the aged mainly includes the social security provided by 
the Government and the long-service payment schemes 
established in accordance with the labour legislation. 
The following provides a brief introduction to social 
security and long-service payment schemes. 

5.1 Social security 

Two kinds of social security schemes are available to the 
elderly: the non-means-tested Special Needs Allowance 
Scheme and the means-tested Public Assistance Scheme. 

5.1.1 Special Needs Allowance 

Subsequent to the publication of the White Paper on 
Social Security in 1973, the Government established the 
Disability and Infirmity Allowance Scheme which later 
became the Special Needs Allowance Scheme. This is a non- 
contributory and basically non-means-tested allowance 
scheme. The present Special Needs Allowance Scheme 
provides a flat-rate allowance for the severely disabled 
and elderly persons and may be broadly divided into the 
following categories: 

5.1.1.1 Old-age Allowance 

This is specially designed for the benefit of the 
elderly. A person who is aged 70 or above and has 
continuously resided in Hong Kong for five years is 
eligible for applying for the higher old-age allowance of 
HK$355 a month, regardless of his assets or income. As 
the Government's policy is to extend the benefit of old- 
age allowance, persons in the age bracket of 67-69 have 
also become eligible for the old-age allowance of HK$ 310 
a month provided that their assets and income do not 
exceed a certain prescribed level. There will be a phased 
extension of this allowance scheme and persons at the age 
of 65 will also be eligible for the old-age allowance by 
1991. 






86 



5.1.1.2 Disability Allowance 

This allowance is catered for those who are severely 
disabled. Originally, it was not related to the cost of 
living allowance given to the aged. However, since 1 
April 1988, the Government of Hong Kong has extended this 
benefit by providing a higher disability allowance of 
HK$1,240 a month for persons who are over the age of 60 
and are severely disabled. This allowance doubles the 
general disability allowance in monetary value. 

In addition to fulfilling the age requirement, applicants 
for the higher disability allowance must have resided in 
Hong Kong for at least one year and have never received 
any care from the Government or government subvented 
agenc ies . 

5.1.2 Public Assistance Scheme 

The history of public assistance can be traced back to 
the 1950s and 1960s when the Government began to provide 
assistance in kind. In the 1970s, the Government of Hong 
Kong launched the social security scheme aimed at meeting 
the basic maintenance needs of the residents. Since 1971, 
public assistance has been provided in the form of cash. 

The aim of the social security scheme is to provide 
financial assistance for those who cannot help 
themselves. The scheme is non-contributory but is means- 
tested. A person who has resided in Hong Kong for one 
year and has insufficient income or other resources to 
meet his basic needs is entitled to apply for assistance. 
A single person who meets this eligibility requirement 
may receive a basic public allowance of HK$620 a month 
and his rent is to be paid by the Government (maximum 
HK$405). In addition to the basic allowance, an old-age 
supplement , a disability supplement or a long-term 
supplement may also be given on individual basis. 

5.2 Security prescribed by labour legislation 

5.2.1 Labour legislation is a branch of the Laws of Hong Kong 
that governs the legal matters arising from labour 
relations. The most significant item in labour 
legislation is the Employment Ordinance (Cap. 57). 

5.2.2 Under the Employment Ordinance, the long-service payment 
scheme was implemented on 1 January 1986. 

This scheme is non-contributory and the fund is entirely 
borne by the employer. The main objective of the scheme 
is to provide security for those employees who reach a 
certain age and have worked continuously for the same 
employer for a long period of time. At the outset, only 



87 



those who have worked for the same employer for many 
years and have been dismissed are entitled to benefit 
from the scheme. The ordinance was later amended to 
extend the coverage of the scheme to employees who retire 
on grounds of old age or who take early retirement on 
grounds of ill health, and to the family members of those 
employees who die in the term of employment. 

5.2.3 Retirement security under the long-service payment scheme 

5.2.3.1 An employee who has worked continuously for the same 
employer for a period of ten years and has reached the 
age of 65 is entitled to be given a long-service payment 
by the time he retires. If an employee takes early 
retirement on grounds of ill health, he must satisfy the 
following requirements to be entitled to the long-service 
payment: if he is under 41 years of age, he must have 
worked continuously for ten years for the same employer; 
if he is 41 years of age, he must have worked 
continuously for nine years and so forth, until the age 
of 45 wherefrom he needs only to have worked for five 
years . 

5.2.3.2 The calculation method for the long-service payment is as 
follows: for a monthly-rated employee, the payment is the 
sum of his last salary multiplied by two-thirds of his 
total number of years in service; for a daily-rated 
employee, the payment is the sum of his last 18 days' 
wages multiplied by his total number of years in service. 
The maximum payment for both cases is the sum of the last 
12 months' wages of the employee. 

6. The present system of retirement security 

6.1 In can be seen from the above information that the amount 
of money a retired person receives under the current 
social welfare system is only enough for him to live at 
subsistence level. The long-service payment scheme, which 
imposes a ceiling on the amount received by the retired, 
is viewed by many as merely a job-leaving compensation. 
To those who feel that a senior citizen is entitled to 
enjoy "a decent life" after he retires, the cost of 
living allowances granted by the Government are 
insufficient . 

6.2 Many large organizations have set up retirement security 
plans for the benefit of their employees. These plans 
normally fall into two categories. The fixed benefit plan 
enables the employee to receive, upon leaving his job, a 
payment which is a certain percentage of his last salary. 
The applicable percentage depends on the number of years 
he has been of service and the reason for leaving his 
job. A more popular category is the provident fund scheme 



88 



whereby the employer and the employee make monthly 
contribution to the fund at a certain percentage of the 
salary of the employee, usually 5-10%. The contribution 
made by an employee to the provident fund may be 
different from that contributed by his employer depending 
on his years of service in the organization. An employee 
who has worked for a long period may enjoy a higher rate 
of contribution from the employer. Upon leaving his job, 
the employee is entitled to obtain his accumulated 
contribution to the provident fund plus investment 
returns gained by the fund together with a part of or all 
of the contributions made by the employer to be 
calculated on the basis of the employee's years of 
service . 

6.3 As at March 1989, about 7,000 retirement plans are 
implemented in Hong Kong, of which around 800 are fixed 
benefit plans and the rest (over 6,000) are provident 
fund schemes. 

The past 20 years saw an increasing number of private 
retirement schemes. The growth rate in 1987 and 1988 was 
18.5% and 25.5% respectively. The number of salary and 
wage earners covered by these private retirement schemes 
is estimated at 600,000-800,000. If the 200,000 or so 
civil servants are taken into account, the total number 
of employees in Hong Kong covered by retirement security 
amounts to 800,000 to 1 million. Supposing there is a 
workforce of 2.8 million in Hong Kong, about one-third of 
the workforce is enjoying retirement security. 

6.4 With a view to strengthening its control over private 
provident fund schemes, the Government is in the course 
of drafting a bill to regulate retirement schemes. It 
also plans to ensure, by setting up a regulatory body, 
the proper management of the assets of the private 
retirement schemes such that the interests of the salary 
and wage earners can be protected. 

7. Further suggestions put forward by the public 

7.1 Many people feel that the provident fund scheme is a 
useful means to help the old and the retired to maintain 
a living. Some people further point out that the present 
number of salary and wage earners covered by provident 
fund schemes is too small. If the voluntary effort of the 
private organizations to establish provident fund schemes 
is to be relied on, it is doubtful whether the entire 
workforce will be able to benefit from such schemes even 
after some 20 to 30 years. Therefore, it is suggested 
that a compulsory provident fund scheme should be 
established and all employers and employees must 
participate. There are others who feel that the real 



89 



problem is the reliability of the organizations which 
manage the private provident funds. They suggest that all 
provident fund schemes should be managed centrally so as 
to protect the interests of the salary and wage earners. 
Some people even propose setting up a compulsory central 
provident fund scheme that incorporates the merits of a 
central provident fund and of a compulsory provident fund 
while allowing a salary/wage earner the flexibility to 
change jobs and providing him the means of living after 
retirement . 

7.2 The above suggestions have aroused extensive debates 
among the public. Some people think that the 
central/compulsory provident fund scheme may bring about 
serious economic consequences. For this reason, it is 
more desirable to retain the present practice of having 
provident fund schemes set up by private companies 
voluntarily and individually managed while reinforcing 
regulation over the schemes. On the other hand, 
improvement should be made on the existing social welfare 
system and labour legislation to ensure that the 
livelihood of the elderly will no longer be a problem. 
Since this issue has far-reaching effect, many people 
have expressed their opinions. Some focus on the 
characteristics of provident funds. A brief explanation 
of the nature of provident funds and the views of the 
public on central/compulsory provident funds are listed 
be] ow . 



8. The provident fund scheme 
8.1 Nature and characteristics 

8.1.1 As previously discussed, the provident fund scheme is a 
contributory retirement security under which both the 
employer and the employee are required to contribute to 
the fund. Those who advocate the central/compulsory 
provident fund suggest that both the employer and the 
employee should each on a monthly basis contribute to the 
fund an amount equal to 5% of the employee's salary. The 
fund will be used for investment and the returns gained 
after deduction of the management fee of the fund, 
together with the contributions, will become the 
employee's savings. 

8.1.2 Since the contributions made to a provident fund are 
fixed at a certain percentage of the employee's salary, 
the amount of provident fund that an employee may get is 
proportional to his salary. Therefore, some people are 
concerned that the scheme may not be able to ensure the 
livelihood of the salary/wage earners who are on low 
incomes after their retirement; instead it helps those 
who are better paid save up a large sum of money. 



90 



8.1.3 Besides, there is no trade union in Hong Kong that is 
strong enough to bargain effectively with the employers. 
Through slowing down the pace of wage increase, the 
employers can make their contributions to the provident 
fund gradually fall behind the rate of inflation. Unless 
the Government also makes contribution to the fund in 
addition to those made by the employers and the 
employees, the central provident fund will eventually 
turn out to be only a form of savings of the employees 
and their income will not be augmented because of the 
existence of the provident fund. In this way, the central 
provident fund scheme does not serve the function of 
redistributing resources. This is why the scheme is 
described by some people as "self-paid lunch". 

8.1.4 Although the provident fund scheme emerges as a form of 
retirement security, it is often used as a means to 
provide assistance in the areas of medical care, property 
purchases, or in times of emergency. Some schemes entitle 
an employee to withdraw the full amount of the provident 
fund attributable to him after making contributions for 
five or ten years. However, it is important that 
stringent requirements governing withdrawals from the 
fund must be laid down to ensure effective savings for 
the employees and the successful operation of the fund. 

8.2 The central provident fund scheme 

To "centralize" provident funds means that all provident 
funds are to be managed by one designated organization on 
behalf of the participants. At present, there is no 
central organization in Hong Kong that manages provident 
funds. Opinions on the establishment of a central 
provident fund scheme are presented below. 

8.2.1 Opinions for the scheme 

8.2.1.1 The major advantage of having a central organization to 
manage the provident fund is that the contributions made 
to the fund are protected from loss, as in the case when 
individual companies managing such funds go bankrupt. 
Default of payment rarely occurs with the centrally- 
managed provident fund unless it is struck by nationwide 
or territory-wide economic collapse. This is the greatest 
security offered to the beneficiaries of the provident 
f und . 

8.2.1.2 If the central provident fund scheme is implemented, the 
public may be given the chance to supervise the 
management of the fund. This will make the usage of the 
fund transparent to the participants and will 
consequently ensure effective use of fund. 



91 



8.2.1.3 As the fund is centrally managed, the fund manager can 
effectively control the proportion of the portfolio to be 
invested locally or overseas. On the other hand, if 
provident funds are individually managed by different 
companies, it is possible that these companies will 
apportion a major share of the portfolio for investment 
overseas so as to achieve better returns, thus resulting 
in a drain of capital from the local market. In the case 
of the central provident fund, a percentage of the money 
may be kept in the local market to finance 
infrastructure, social development or the expansion of 
local enterprises. 

8.2.2 Opinions against the scheme 

8.2.2.1 As mentioned above, the Hong Kong Government is drafting 
a bill to enforce the separation of the staff retirement 
plan in a company from the assets of the employer, and to 
protect the employees' interests in the fund by means of 
government supervision. The legislation may help protect 
the employees' interests from loss caused by poor 
performance of the company and may ensure that the 
company managing the fund is properly operated. Under the 
regulatory legislation, private provident fund schemes 
will become more reliable and therefore it is not 
necessary to establish a central provident fund. 

8.2.2.2 In general, provident fund management companies have 
greater flexibility in investment than a central 
provident fund management organization which is a 
monopoly. Investment effected by diverse companies can 
especially avoid diseconomy of scale. 

8.2.2.3 Under the central provident fund scheme, the central 
organization that manages the fund has in control an 
enormous amount of the territory's wealth, and the way it 
uses the fund will greatly influence the economic 
activities of Hong Kong. This may weaken the 
adjustability and flexibility of the economy. In 
addition, if capital is centralized, individual private 
enterprises will have less chances to obtain finance, 
thus inhibiting the development of the local 
entrepreneurs . 

8.2.3 Other considerations 

The level of contribution 

Those who object to setting up the central provident fund 
are invariably concerned about the problems that the fund 
will cause to the general economy of Hong Kong. They 
think that if an enormous amount of capital is held by a 
single provident fund management organization, the 
purchasing power and investment position of individual 



92 



organizations or persons in the market will be affected. 
Besides, the use of the central provident fund will have 
much effect on the overall economic activities as well as 
the level and orientation of investment in Hong Kong. 

The validity of the above argument depends on the level 
of the contributions made to the central provident fund. 
A lower level of contribution can prevent the central 
provident fund from playing too important a role in the 
economy and the financial market of Hong Kong. However, 
too low a contribution level will not be able to meet the 
basic maintenance needs of the retired life of the salary 
and wage earners. On the other hand, since the central 
provident fund scheme is regarded as "self-paid lunch", 
too high a contribution level will make the low-rated 
workforce even more difficult to make ends meet. 

It is also suggested that the level of the contributions 
to the central provident fund should not exceed too much 
that of the previous schemes. Otherwise, the effort to 
integrate various levels of contribution into one single 
standard will meet with resistance. 

8.3 The compulsory provident fund 

The Government can make the participation in the 
provident fund scheme by every employer and employee 
compulsory. At present, there is no legislation in Hong 
Kong to make participation in the provident fund scheme 
compulsory. Among the provident fund schemes established 
by private organizations, some are compulsory for all 
employees and some are not. The public's opinions on the 
compulsory provident fund scheme are as follows: 

8.3.1 Opinions for the scheme 

8.3.1.1 The compulsory provident fund scheme is, in effect, a 
form of compulsory savings. In a society dominated by a 
propensity for high spending, a person who wishes to 
sustain the life quality that his peers enjoy can seldom 
rationally fix for himself a saving-expenditure ratio so 
as to put aside enough money for use after retirement. 
According to some studies, the people of Hong Kong 
generally welcome the establishment of the provident fund 
scheme and are willing to make monthly contributions to 
the fund. This shows that the public accept the concept 
of saving in the form of provident fund. 

8.3.1.2 Further, when there is a need to cut expenses, people may 
first consider buying less imported luxury goods. This 
may help Hong Kong maintain equilibrium of balance of 
payments . 



93 



8.3.1.3 Even if a person has the good sense to save up, he may 
not have the time, resources and ability to make wise 
investment to fight inflation or to keep his capital 
appreciate in value. If he puts his savings in a 
professional provident fund management organization that 
will invest on his behalf, his expected return will be 
higher. 

8.3.1.4 Some people hold that as an employer has the right to 
make profit by means of the working ability of his 
employees, the employees, having devoted themselves to 
the company throughout their lives, should also have the 
right to ask for retirement security. In running a 
business, an employer should make provision for the 
depreciation of his workforce, just as he does with the 
maintenance of his equipment. 

8.3.2 Opinions against the scheme 

8.3.2.1 In the business world, financial conditions vary from one 
company to another. While large businesses can afford the 
contributions to the provident fund, small- and medium- 
sized companies may have difficulties in making their 
share of contributions because they rely on a low-cost 
mode of operation and their profit is often marginal. 
Moreover, an increase in operation cost will lead to a 
rise in product price, rendering the small- and medium- 
sized manufacturers -- the major components of the local 
manufacturing industry -- less competitive in the 
overseas markets. Although the burden of the provident 
fund can be transferred to the employees in the long run, 
the medium- and short-term effect of the provident fund 
is irrecoverable. Further, if the provident fund is not 
compulsory, the employer can make use of the fund to 
strengthen his relations with his staff. Therefore, it is 
advisable to let individual employers decide, taking 
their actual situations into account, whether to set up a 
provident fund scheme or not. 

8.3.2.2 If the amount of contribution to the compulsory provident 
fund is less than the amount a person is willing to save, 
the fund will not cause him to save more. Instead, only a 
portion of the amount he originally prepares to save will 
be saved up in the form of contribution to the provident 
fund. On the other hand, if the amount of contribution is 
greater than the amount a person is willing to save, the 
marginal utility of consumption and that of savings 
cannot maintain a balance, thus reducing the economic 
benefit originally generated by the income of the salary 
and wage earners. Besides, since the working ability of 
an employee cannot be totally converted into his own 
disposable income, a high contribution to the provident 
fund will demotivate the employee, just as what a high 
tax rate does . 



94 



8.3.2.3 The establishment of the provident fund will also 
demotivate the senior employees who still have the 
ability to work. They will resort to a more leisure life 
knowing that they can live on the provident fund in the 
future. Contrary to what people generally believe, the 
provident fund will create the livelihood problem of the 
aged instead of solving it. 

8.3.3 The implementation of the compulsory provident fund 
scheme is against the spirit of free economy. Companies 
may establish provident fund schemes of their own accord, 
making use of the schemes to strengthen staff relations. 
However, if the provident fund scheme is compulsory, the 
responsibility that the whole society should shoulder is 
imposed on the employers who, in fact, do not have such 
obligation . 

8.3.4 Other considerations 

The burden of social security 

Those who support the implementation of the compulsory 
provident fund scheme argue that in society there is a 
group of people who can actually save up money rationally 
in their prime for use after retirement, but they fail to 
do so when they are economically active and as a result, 
have to depend on society for a living after retirement. 
If this group of people is large, they become a great 
burden to society and the setting up of a compulsory 
provident fund scheme then becomes justified. If the 
group is small, there is no need to confine the society's 
mode of savings by government measures. 

Nevertheless, it should be noted that the spending on 
old-age welfare will not be totally eliminated even if 
the compulsory provident fund scheme is implemented 
because there is still a group of people who are on low 
incomes or have no fixed income. No matter how hard they 
attempt to save, their savings are never enough to 
support their life after retirement, which may extend for 
ten years or more. Since they cannot help themselves, 
they have to rely on social security funded by tax 
income, a form of redistribution of social resources, to 
maintain a certain level of living. The present spending 
on social welfare for the elderly is estimated at more 
than HK$1 billion. The compulsory provident fund scheme 
is, therefore, a proposal that can only help relieve the 
burden of social security. 



95 



9. On the inclusion of "retirement security" in the Basic 
Law as part of the rights of the residents 

Some people propose including the expression of "the 
right to retirement security" in Article 36 of the Basic 
Law so that it reads: "Hong Kong residents shall have the 
right to social welfare as prescribed by law. The welfare 
benefits and the right to retirement security of the 
labour force shall be protected by law." 

9.1 Opinions for the suggestion 

9.1.1 Those who support the suggestion of including "retirement 
security" in the Basic Law think that social security can 
only provide assistance for those who can least help 
themselves and should not be regarded as a means to 
maintain the living of the retired. Therefore, although 
Article 36 of the Basic Law (Draft) specifies that the 
residents of Hong Kong will have the right to social 
welfare, "the right to retirement security" should also 
be included in the provisions to further safeguard the 
rights of the residents. There are others who think that 
since the Basic Law is similar to a constitution in 
essence, it should lay down in principle the right to 
retirement security. The Chinese Constitution contains a 
similar provision in Article 44 which reads "the 
livelihood of retired personnel is ensured...". 

9.1.2 The inclusion of "retirement security" in the provisions 
of the Basic Law will not directly result in the 
implementation of the compulsory provident fund scheme in 
society nor will it contradict the opinions of those who 
support the implementation of other forms of retirement 
security . 

9.2 Opinions against the suggestion 

9.2.1 Although the inclusion of "retirement security" in the 
provisions of the Basic Law apparently does not have a 
direct relationship with the implementation of the 
compulsory provident fund scheme, the provision that 
incorporates "retirement security" may be construed as a 
constitutional requirement. This will force those who do 
not wish to participate in any provident fund scheme to 
join the central provident fund, thus undermining the 
self-determination and flexibility enjoyed by private 
enterprises . 

9.2.2 Retirement security falls within the scope of social 
welfare or labour relations. Since the future HKSAR 
Government is endowed with enough flexibility, by 
Articles 144 and 146 of the Basic Law (Draft), to improve 
on the previous social security and labour policies, 



96 



there is no need to include "retirement security" in 
Chapter III. 

9.3 Other considerations 

9.3.1 It is true that Articles 144 and 146 of the Basic Law 
(Draft) allow room for improvement on the existing social 
security and labour policies. The present concern, 
however, is that the inclusion of "retirement security" 
in Chapter III seems to have become a means to judge 
whether "retirement security" is regarded as part of the 
fundamental rights of the residents. Yet the recognition 
of "retirement security" as part of the rights of the 
residents will not directly cause the establishment of 
the retirement security scheme. This is because under 
Articles 144 and 146, the HKSAR Government can formulate 
on its own the policies concerning retirement security. 

9.3.2 There is no intrinsic relationship between the inclusion 
of "retirement security" in the Basic Law and the 
implementation of the provident fund scheme. Retirement 
security can be realized in many forms. In addition to 
the above-mentioned schemes, there is the state pension 
system which is funded by tax revenue. Under the system, 
the government allocates a portion of the national tax 
income to support the life of the senior citizens. This 
is a system whereby "the present generation takes care of 
the older generation" . 

Nevertheless, in the future when the HKSAR Government 
sets up its retirement security system, it has to rely on 
legislation to specify what type of retirement scheme is 
to be implemented. 

10. Conclusion 

The problems associated with an aging population deserve 
careful and serious consideration. These problems 
transcend the domains of social security and labour 
relations and are intrinsic to the development of the 
whole society. In addition to outlining various opinions 
for and against the establishment of the retirement 
security scheme, the above discussions also attempt to 
epitomize some major points of argument to facilitate 
further exploration of the issue. 



If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



97 



DEVELOPMENT OF THE DISCUSSIONS ON 
POLITICAL STRUCTURE 



Contents 



1 . Introduction 



2. Background of the proposals on political structure 



3. Impact of the Beijing incident on the discussions on 
political structure 



4. Political models proposed during the consultation period 
for the Basic Law (Draft) 



5. Discussions on matters other than the contents of the 
models 



6. Conclusion 



1 . Introduction 

Ever since the Sino-British Joint Declaration took effect 
in 1985 -- and when the Draft Basic Law for Solicitation of 
Opinions was released in April 1988 and the Basic Law 
(Draft) in February 1989 -- the public have shown a 
relatively keen interest in the design of the future 
political structure. In particular, they have paid much 
attention to the proposals for selecting the Chief 
Executive and for forming the legislature. The discussions 
were focused on the modes of elections to be adopted, the 
initial percentage of seats to be returned by each mode and 
the process through which the ultimate mode will be 
reached. As there are numerous proposals, this report will 
give a brief account of the development of the discussions 
on political structure so that people from various sectors 
will better understand the background of these proposals. 
The proposals themselves and the pace of development of the 
political structure will be dealt with by the reports on 
"Proposals for Selecting the Chief Executive and for 
Forming the Legislature" and on the "Pace of Development of 
the Political Structure". 



2. Background of the proposals on political structure 

2.1 The discussions on the future political structure were most 
heated before the release of the Draft Basic Law for 
Solicitation of Opinions. At one time, there were 41 
complete proposals (including those for selecting the Chief 
Executive and for forming the legislature). At the fifth 
plenary session of the Drafting Committee, the Subgroup on 
Political Structure submitted the first draft of the 
majority of articles in Chapter IV, but Articles 45 and 67 
on the selection of the Chief Executive and the formation 
of the legislature have yet to be drafted. When the Draft 
Basic Law for Solicitation of Opinions was about to be 
released in April 1988, very few new proposals were put 
forward. The various parties mainly summed up the existing 
proposals. making additions and amendments to them. At 
this stage, the Drafting Committee began to further study 
the articles of Chapter IV which had yet to be drafted. 
Since there were divergent views on the methods for 
selecting the Chief Executive and for forming the 
legislature, the Subgroup on Political Structure decided to 
present those views as a number of alternatives. 

2.2 The Draft Basic Law for Solicitation of Opinions was 
released on 28 April 1988. Opinions on the selection of 
the Chief Executive and the formation of the Legislative 
Council were sorted out into five alternatives for the 
selection of the Chief Executive and four alternatives for 
the formation of the Legislative Council. These 
alternatives were presented in Annexes I and II to the 
Draft Basic Law. The method for forming the first 

101 



government and the first Legislative Council was included 
in Annex III for soliciting opinions from people in Hong 
Kong. 

2.3 The first five-month consultation period commenced upon the 
publication of the Draft Basic Law for Solicitation of 
Opinions. From May to September, there were still intense 
debates on the political structure among members of the 
public but the scope was narrowed down. Up to the end of 
the consultation period, opinions on political development 
are mainly in favour of the following three political 
models : 

(1) A model without a definite programme of development, 
which provides for the gradual development of democracy 
in the light of objective conditions; 

(2) A model with a definite programme of development which 
requires that the voter turnout rate be taken as a 
means of measuring the political maturity of the 
general public and as a trigger point for introducing 
one-person-one-vote direct election; and 

(3) A model with a definite programme of development based 
on the terms of office of the government. This model 
requires that a timetable of development be prescribed 
in the Basic Law. 

2.4 After the first consultation period, the Subgroup on 
Political Structure of the Drafting Committee had to 
prepare for the eighth plenary session scheduled for 
January 1989 and the subsequent meeting of the Standing 
Committee of the National People's Congress around February 
and March. By that time, the Subgroup would only be 
allowed to submit a single political model to be passed by 
the Standing Committee of the NPC . Thus, the drafters, 
members of the Consultative Committee for the Basic Law 
(CCBL) and other parties actively carried out dialogues in 
order to arrive at a model which is relatively acceptable 
to all. 

2.5 At the meeting of the Subgroup on Political Structure of 
the Drafting Committee held in Guangzhou from 19 to 21 
November, Mr Louis Cha, co-convenor of the Subgroup, tabled 
a compromise political model. Since people in Hong Kong 
had not agreed on one particular model, the meeting did not 
study the models one by one. Instead, the discussion was 
based on individual terms of the post-1997 Hong Kong 
Special Administrative (HKSAR) Government. The results of 
the discussion were close to the model put forward by Mr 
Cha and were referred to as the "mainstream model" by the 
meeting. The "mainstream model" which was passed by the 
eighth plenary session of the Drafting Committee held from 
9 to 15 January 1989 became the political model in the 
Basic Law (Draft). At the same time, the eighth plenary 

102 



session also passed the amendment proposal on referendum 
submitted by Mr Cha Chi Ming. 

2.6 In December, a total of 14 groups responded to the 
"mainstream model" passed by the Subgroup on Political 
Structure. They were the Business and Professional Group 
of CCBL members (Group of 89), 38 members of the cultural 
and education sectors (Group of 38), Hong Kong Chinese 
Civil Servants' Association, University Graduates' 
Association of Hong Kong, Hong Kong Federation of Trade 
Unions, Federation of Hong Kong and Kowloon Labour Unions, 
New Hong Kong Society, Association for Democracy of Hong 
Kong, Cha Chi Ming, Joint Committee on the Promotion of 
Democratic Government (Group of 190), Progressive Society 
of Hong Kong, Outstanding Young Persons' Association, Hong 
Kong People's Association and Hong Kong Federation of 
Students. Except for the last five, all of these groups 
revised their original models or suggested amendments to 
the "mainstream model". 

2.7 On 21 February 1989, the Standing Committee of the NPC 
passed the political model -- made up of the "mainstream 
model" and the amendment proposal on referendum 
submitted by the Drafting Committee, that is the part on 
selection and formation in the present Basic Law (Draft). 
The model also mentions the aim that the method for 
selecting the Chief Executive and forming the Legislative 
Council will ultimately develop into general election, in 
the light of the actual situation and according to the 
principle of gradual and orderly progress. 

2.8 The Standing Committee of the NPC announced on the day of 
publication of the Basic Law (Draft) that from that day to 
the end of July, opinions would be extensively solicited in 
Hong Kong and other regions of China. The CCBL was again 
asked to conduct a comprehensive consultation exercise on 
the Basic Law (Draft), which is the second round of 
consultations. According to the schedule of the CCBL, the 
consultation period for the Basic Law was to end on 30 June 
1989. 



3. Impact of the Beijing incident on the discussions on 
political structure 

3.1 Impact of the Beijing incident on the consultation 

3.1.1 The events that took place in May and June in mainland 
China evoked great repercussions in Hong Kong, thus making 
it impossible for the consultation exercise to proceed as 
planned. Consequently on 7 June, the Executive Committee 
of the CCBL announced that all consultative activities were 
suspended but the Secretariat continued to collect and 
process opinions. 



103 



3.1.2 On 10 July, the Chairman, Vice Chairmen and Secretary- 
General of the CCBL went to Beijing at the invitation of 
the Chairman of the Drafting Committee Ji Pengfei, to 
discuss how further consultations on the Basic Law 
(Draft) were to be carried out. At the meeting, Mr Ji 
reiterated that the policies of the Chinese Government 
regarding Hong Kong would remain unchanged, and that they 
would propose to the Standing Committee of the NPC that 
the consultation period for the Basic Law (Draft) in Hong 
Kong be duly extended, whereas the date for submitting 
the Basic Law to the NPC for examination and approval 
would not be changed. The meeting of Executive Committee 
of the CCBL held on 20 July noted that people in Hong 
Kong had revived their interest in the drafting of the 
Basic Law and realized that "one country two systems" was 
the only realistic arrangement for the future of Hong 
Kong and that the Basic Law was important to the 
development of Hong Kong. It was therefore decided that 
the consultation exercise was to be fully resumed as from 
that date. Meanwhile, the CCBL was informed by the 
Drafting Committee that the consultation period for the 
Basic Law (Draft) was extended to the end of October. 
The various special groups of the CCBL also resumed 
operation and held meetings for discussion. 

3.2 Impact of the Beijing incident on the consideration of 
the political structure 

In their consideration of the political structure, people 
from various sectors reacted differently to the events 
that took place in June on the mainland. 

3.2.1 Views in favour of speeding up the development of the 
political structure 

3.2.1.1 The strong reaction of Hong Kong people to the Beijing 
incident indicates their commitment to participate in 
social affairs. With growing political consciousness, a 
faster pace of democratization can be considered. 

3.2.1.2 The Beijing incident has made Hong Kong people realize 
that human rights and freedom must be safeguarded and 
that democracy is indispensable. For only in a democratic 
structure will those in power reflect and respect the 
people's wishes in terms of constitutional and practical 
political interests. 

3.2.1.3 The Beijing incident has greatly reduced the Hong Kong 
people's confidence in China. In addition to the tense 
Sino-Hong Kong relations, there are various 
circumstantial factors which bring the confidence of Hong 
Kong people to its lowest point. The faith of Hong Kong 
people in their future can only be restored by speeding 
up the development of a democratic political structure. 



104 



3.2.1.4 It has been suggested that people in Hong Kong should 
strive to completely democratize Hong Kong. The Chief 
Executive should be directly elected and members of the 
legislature should all be elected by citizens through 
general election. Only such a govenment will be capable 
of resisting the interference of China. 

3.2.2 Views maintaining that the pace of development should not 
be affected 

3.2.2.1 The Beijing incident should not have any impact on the 
consideration of the political development because it 
is an incident independent of the development of the Hong 
Kong political structure. The development of the 
political structure of Hong Kong must tie in with various 
social conditions. As some conditions still do not exist 
at the moment, it is impossible to introduce drastic 
democratic reforms in just a few years' time. The 
principle of gradual and orderly progress should 
therefore be maintained. 

3.2.2.2 The mass emotions at that time have not been channeled 
into deep, sensible and committed civic awareness. With 
a growing sense of helplessness, the masses will regress 
and become politically indifferent. As mass emotions 
have been stirred up, radical political leaders are 
likely to emerge, while those who are originally 
interested in joining the political arena would be 
discouraged. In addition, the concept of supporting 
democratization in order to resist China's interference 
is a subjective notion. There are still a number of 
objective factors unfavourable to genuine 
democratization. 

3.2.2.3 The reactions of Hong Kong people to the Beijing incident 
indicate that they are over emotional and sensitive 
towards the happenings on the mainland. Thus, they may 
not be able to develop a democratic political structure 
in a mature manner under the policy of one country two 
systems in the future. Speeding up the development of 
the political structure may intensify the feeling of 
resistance against China. It is expected that China will 
not accept the proposal for speeding up the development. 

3.2.2.4 At present, people in Hong Kong are too emotional. It is 
not the appropriate time to discuss the development of 
the political structure. It is therefore suggested that 
the details of the future political structure should not 
be listed in the Basic Law. It should prescribe only the 
broad principles and allow the post-1997 government to 
decide the pace of development of the political structure 
in the light of the conditions then. 

3.2.3 Other views 



105 



3.2.3.1 A democratic political structure is in the long-term 
interest of Hong Kong. But from a practical point of 
view, one should not blindly demand a faster pace of 
democratization under the influence of the Beijing 
incident. Instead, the principle of gradual and orderly 
progress should be maintained in order to preserve Hong 
Kong's prosperity and stability as the essential 
prerequisites. The Beijing incident has made people in 
Hong Kong realize that they should seriously take their 
future into their own hands. 

3.2.3.2 At present, people in Hong Kong do have a mistrust of the 
Chinese Government and are therefore demanding a faster 
pace of democratization in the hope that the future HKSAR 
Government will be able to stand against the pressure 
from the Central Government. This is totally 
understandable. Yet, the idea of resisting communism 
with democracy is unrealistic because when China resumes 
the exercise of sovereignty over Hong Kong. Hong Kong 
will be a part under China's administration. The Chinese 
Govenrment allows "one country two systems" but does not 
allow the "two systems" to resist and check on each 
other. Thus, to be realistic, it is only possible to 
develop under the principle of "one country two systems" 
a political structure that meets the expectation of Hong 
Kong people and is at the time acceptable to the Chinese 
Government . 

3.2.3.3 Only with stability can Hong Kong continue to develop. 
When considering a faster pace of development of the 
political structure, one should be all the more careful. 
If the problem of convergence should arise, it would 
bring about social unrest and the situation would be 
irreparable . 

4. Political models proposed during the consultation period 
for the Basic Law (Draft) 

4.1 During the period after the publication of the Basic Law 
(Draft) in February and before the Beijing incident, the 
discussions on political models mainly focused on the 
relevant provisions of the Basic Law (Draft) and the 14 
models mentioned in Point 2.6 of this report. Meanwhile, 
ten groups, including the Group of 38, Hong Kong 
Federation of Trade Unions, Association for Democracy of 
Hong Kong, Tritolaire Academy, Hong Kong Chinese Civil 
Servants' Association, Federation of Hong Kong & Kowloon 
Labour Unions, Hong Kong People's Association, University 
Graduates' Association of Hong Kong, Progressive Society 
of Hong Kong and New Hong Kong Society organized 
themselves in an attempt to jointly produce a compromise 
model acceptable to all parties. These ten groups are 
collectively known as the "Moderates". On 26 April, the 
Moderates arrived at a compromise model and submitted it 

106 



to the Drafting Committee. Time and again, the Moderates 
invited the Business and Professional Group of CGBL 
Members (Group of 89) and the Joint Committee on the 
Promotion of Democratic Government (Group of 190) for 
dialogue to reach more points of consensus for the sake 
of compromise. On 28 April, the Business and 
Professional Group of CCBL Members also submitted their 
latest model to the Drafting Committee. On 24 May, the 
Unofficial Members of the Executive and Legislative 
Councils of the Hong Kong Government put forward a new 
"5-5 model". With the consultation period being 
extended to the end of October after the June 4th 
incident, the discussions on political models gained 
momentum again. At that time, three new models were 
introduced: the Joint Committee on the Promotion of 
Democratic Government put forward its newly revised model 
on 3 August; the New Hong Kong Alliance introduced the 
one-council two-chamber (or bicameral) model on 29 
August; and the Business and Professional Group of CCBL 
Members, the Group of 190 and the Moderates proposed the 
4-4-2 model as the basis for compromise on 16 September. 
On 17 October, the Hongkong Chinese Reform Association 
put forward a 5-3-2 model. On 31 October, the Hong Kong 
Federation of Trade Unions proposed a modified bicameral 
model. These two models have incorporated the 
characteristics of the various previous models. 
Including the models contained in the Basic Law (Draft) 
and the original model of the Group of 38 still upheld by 
the Group, there are ten models in the second 
consultation which have attracted much public attention. 
The details of these models and comments on them are 
dealt with by the report on "Proposals for Selecting the 
Chief Executive and for Forming the Legislature". 

4.2 Many of these models were derived from previous models. 
Some adopt a faster pace of development than the previous 
ones. Some of the new models -- being products of 
compromise with other groups -- suggest a pace slower 
than that proposed in the original models. There are 
groups or individuals who support more than one model. 
Some of these models are mutually exclusive while some 
are compatible with one another. Certain groups still 
maintain their original models after they have a forward 
their new ones. There are many cases where a member of 
one group happens to be member of other groups also, and 
these groups have simultaneously or one after another 
shown support for a number of different models. 

4.3 Responses to these models are numerous and divergent. 
After July and August, opinions began to focus on the 
three models which were put forward in the latter half of 
the consultation period, namely, the 5-5 model, the one- 
council two-chamber model and the 4-4-2 model (new 
compromise model). 



107 



4.4 The 5-3-2 model and the modified bicameral model are 
amendment proposals on the above-mentioned three models. 
The 5-3-2 model only proposes amendment to the method for 
forming the Legislative Council. As these two models 
were released only a few days before the end of the 
consultation period, there were not many comments on 
them. 

4.5 With regard to the new model proposed by the Group of 190 
and a number of other models, since similar opinions had 
been put forward in the first consultation period, not 
many opinions were expressed on these models in this 
round of consultations. 

5. Discussions on matters other than the contents of the 
models 

When discussing the contents of the models, the various 
parties also debated the time of release of the models, 
and the objective, means, function and counteraction of 
reaching a consensus. 

5.1 Time of introducing the models 

5.1.1 It has been noted that some models were introduced too 
late. Some new models which were put forward near the 
end of the consultation period had bearing on the long- 
standing discussions. The public did not have enough time 
to discuss these new models in detail. 

5.1.2 Some opinions indicate that it does not matter whether a 
view was expressed at an early stage or not as long as it 
was expressed within the consultation period. Otherwise, 
it would seem meaningless to have a consultation period. 
In addition, the Drafting Committee would not reject a 
well-considered model simply on the grounds that it was 
submitted quite late. 

5.2 Difference between the newly proposed models and those 
contained in the Basic Law (Draft) 

5.2.1 According to some opinions, certain models proposed in 
this consultation period are vastly different from those 
listed in the Basic Law (Draft). It is against the 
intention of the consultation exercise. 

5.2.2 It has been pointed out that the models in the Basic Law 
(Draft) are not yet finalized. The proposal of new 
models is not against any provision. In fact, as far as 
drafting is concerned, the more opinions the better. In 
addition, models introduced at a relatively late stage 
tend to incorporate the merits of the previous ones and 
are likely to be more useful as reference. It has also 
been noted there are fundamental differences between the 
models in the Basic Law (Draft) and those which were 

108 



introduced after July and August. 
5.3 Significance of reaching a consensus 

5.3.1 Some people consider that it is highly important to 
arrive at a consensus as it indicates that all parties 
are ready to resolve problems in the spirit of mutual 
understanding and accomodation, which is the first step 
to Hong Kong people administering Hong Kong. 

5.3.2 On the other hand, some people worry that the "consensus" 
does not truly reflect the common view of the majority of 
Hong Kong people. A view which only represents the 
consensus of those who are involved would be exaggerated 
to such an extent that it becomes the consensus of the 
general public in Hong Kong. 

6 Conclusion 

After fours years of discussion on the political 
structure, the models which have been proposed up to this 
moment -- whether they still maintain their original 
points or have been modified or are totally new — have 
taken account of the various considerations and benefited 
from the experience of past debates, thus making the 
discussions more comprehensive and thorough. They will 
definitely be useful reference for the Drafting Committee 
in its deliberation on the methods for constituting the 
political structure. 



* If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



109 



PROPOSALS FOR SELECTING THE CHIEF EXECUTIVE 
AND FOR FORMING THE LEGISLATURE 



Contents 

1. Introduction 

2. Model proposed by the Group of 38 

3. Model proposed by the Moderates 

4. Model proposed by the Group of 89 

5. The 5-5 model 

6. New model proposed by the Group of 190 

7. One-council two-chamber model 

8. New compromise model 

9. The 5-3-2 model 

10. Model proposed by the Hong Kong Federation of Trade Unions 

11. Other proposals 

1 2 . Conclusion 



1. Introduction 

1.1 The discussion on the Basic Law has all along been 
focused on the future political structure. The selection 
of the Chief Executive and the formation of the 
legislature are the most controversial issues. In the 
discussion on this part of the political structure, two 
problem areas can basically be identified. One is on 
the starting point and the ultimate objective. The other 
is on the pace of development. This report will present 
the concrete suggestions in various proposed models and 
the comments on them. Another report, the one on the 
"Pace of Development of the Political Structure", will 
analyze in detail the various proposals in terms of 
their pace of development. 

1.2 This report will thoroughly deal with the nine proposals 
which have drawn the most attention recently. (The 
opinions on the political model in the Basic Law (Draft) 
are presented in the General Report on the Articles. ) 
These nine proposals are, namely, the model proposed by 
the Group of 38, the model proposed by the Moderates, 
the model proposed by the Group of 89, the 5-5 model, 
the new model proposed by the Group of 190, the one- 
council two-chamber model, the new compromise model, the 
5-3-2 model, and the model proposed by the Hong Kong 
Federation of Trade Unions. Other proposals received 
during the consultation period will also be presented. 



2. Model proposed by the Group of 38 (July 1987) 

This model was put forward by a group of 38 persons in 
the cultural, education and religious fields. This Group 
of 38 had suggested amendments to the mainstream 
political model in 1988 though they still insisted on 
their own model of 1987. They have reiterated the key 
points of their model during the current round of 
consultations. 

2 . 1 Contents 

2.1.1 The Legislative Council 

According to this model, the legislature shall be 
constituted by elections in two different kinds of 
constituencies. They are district elections and 
functional constituencies elections (previously known as 
elections by professional divisions). Each voter shall 
have two votes -- one in district elections based on 
where they reside; the other in the functional 
constituencies elections based on their professions (or 
social functions). 

On the proportions of seats filled by these two kinds of 

113 



elections, it was proposed that two-thirds of the seats 
should be filled by functional constituencies elections, 
and one-third by district elections. 

2.1.2 The Chief Executive 

According to the model, the candidates for the office of 
Chief Executive shall be nominated by a "Nominating 
College for the Chief Executive", and elected by 
universal suffrage. Members of the Nominating College 
shall be from the commercial, industrial and financial 
sectors, the professions, labour, former political 
figures (i.e. former members of the Legislative Council, 
former Hong Kong deputies to the National People's 
Congress and former members of the National Committee of 
the Chinese People's Political Consultative Conference). 
Each category should occupy one-fourth of the seats. 

2.2 Basic design principles 

2.2.1 Being democratic and able to balance the interests of 
different social strata 

It is pointed out in some opinions that this model may 
balance the interests and opinions of different social 
strata. It also allows gradual and orderly progress 
towards political democratization, and maintains the 
stability and prosperity of Hong Kong and the 
efficiency of its government. 

According to some opinions, the method of forming the 
legislature by "one person, two votes" can fully 
reflect the will of the voters as a whole and comply 
with the social demand for democratic development while 
ensuring that those functional constituencies which are 
relatively influential in the community despite their 
small size will be adequately represented. On the other 
hand, if the present election methods and the scope of 
the functional constituencies are kept unchanged, 
intense conflicts would occur should there be a drastic 
increase in the number of seats for functional 
constituencies. The long-term existence of this type of 
seats would be seen as an obstacle to political 
democratization. The system of "one person, two votes" 
may render functional constituency election more 
democratic and legitimate, and maintain a balanced 
allocation of seats. 

Some opinions also note that according to this model, 
the method of selecting the Chief Executive would allow 
participation of all voters and balance the interests of 
different sectors. 

2.2.2 Without specifying the future development 



114 



It is indicated in some opinions that this model will 
maintain long-term stability of the political structure 
of the HKSAR after 1997. It does not fix a timetable or 
an ultimate goal for political development. This is an 
important difference between this model and that 
contained in the Basic Law (Draft). 



3. Model proposed by the Moderates (26 April 1989) 

This model was proposed by a coalition of 10 groups, 
including the Group of 38, Federation of Hong Kong and 
Kowloon Labour Unions, Hong Kong Federation of Trade 
Unions, Tritolaire Academy, University Graduates' 
Association of Hong Kong, Association for Democracy of 
Hong Kong, Hong Kong Chinese Civil Servants' 
Association, Progressive Society of Hong Kong, Hong Kong 
People's Association and New Hong Kong Society. 

3 . 1 Contents 

3.1.1 The Legislative Council 

3.1.1.1 The first legislature shall have 62 seats, of which 20 
(32.26%) shall be filled by direct elections and the 
remaining 42 by functional constituencies elections. 
There shall be three functional constituencies: industry 
and commerce, the professions, and grass roots, each 
entitled to 14 seats. 

3.1.1.2 The second legislature shall have 72 seats, of which 30 
(41.7%) shall be filled by direct elections. The number 
of seats filled by functional constituencies elections 
(42) and the allocation of such seats to the various 
functional constituencies shall remain the same. 

3.1.1.3 The third legislature shall have 84 seats, of which 42 
(50%) shall be filled by direct elections. The number 
of seats filled by functional constituencies elections 
(42) and the allocation of such seats to the various 
functional constituencies shall remain the same. 

3.1.2 The Chief Executive 

3.1.2.1 For the first term, the Chief Executive shall be 
nominated by 40 members (1/10) of a 400-member election 
committee and elected by a simple majority vote of the 
rommi ttee . 

3.1.2.2 For the second and subsequent terms, the Chief Executive 
shall be nominated by 50 members (1/16) of a 800-member 
election committee and elected by a simple majority vote 
of the committee. 

3.1.2.3 For the third to fifth terms, there are two 

1 15 



alternatives : 

3.1.2.3.1 It shall be clearly specified in a timetable that the 
Chief Executive shall be selected by general election 
from the third term (2007) onwards. 

3.1.2.3.2 During the term of office of the second Chief 
Executive, the legislature shall conduct a review to 
decide whether the next Chief Executive shall be 
selected by general election. If the legislature 
rejects 3.1.2.3.1 by a simple majority, a review shall 
be conducted every term until the proposal for having 
the next Chief Executive selected by general election 
is not rejected. But general election shall be 
introduced in the fifth term at the latest. 

3.2 Basic design principles 

It is noted in some opinions that this model is 
consistent with the principles of democracy and the 
practical circumstances. It has the merits of 
stabilizing society and balancing the interests of 
various social strata. As its starting point meets 
the standard of democracy, this model will boost the 
confidence of the Hong Kong people and be conducive to 
reaching the objectives of a high degree of autonomy 
and Hong Kong people administering Hong Kong. As the 
education level of the population rises, the desire to 
participate in politics also increases. The design of 
the future political system should fulfil this demand. 
But at the same time, the inadequacy of political 
experience should also be noted. This is precisely 
what this model is doing: being not only democratic, it 
also takes account of the practical circumstances. 
Allowing the Chief Executive and part of the 
legislature to be selected by indirect election in the 
transition period would stabilize society. In addition, 
this model has a definite timetable as well as a 
flexible review mechanism. The Chief Executive will be 
elected by general election not later than the fifth 
term. This would accommodate unsteady social 
developments and also reduce the unpredictable and 
unstable factors to the minimum. It would not drag the 
present dispute into the transition period and beyond 
1997. These advantages would increase the feasibility 
and legitimacy of the this mode] . 



4. Model proposed by the Group of 89 (28 April 1989) 

This model was proposed by 89 CCBL members who are 
businessmen or professionals. The original model was 
put forward in August 1986. It went through many 
changes and refinements. Many opinions were raised on 
this model in the first round of consultations. During 

116 



this round of consultations, the Group of 89 along with 
other groups also put forward the "new compromise 
model" in addition to this model. 

4 . 1 Contents 

4.1.1 The Legislative Council 

4.1.1.1 The first legislature shall have 55 seats, of which 15 
shall be filled by direct elections, 25 by functional 
constituencies elections, and the remaining 15 by an 
election committee. 

4.1.1.2 The second and third legislatures shall have 65 seats. 
The number of directly elected seats shall be increased 
to 25 while the rest shall remain unchanged. 

4.1.1.3 In the fourth term, the legislature shall have 80 
seats. The number of directly elected seats shall be 
increased to 40 while the rest shall remain unchanged. 

4.1.1.4 The future development of the political structure shall 
be determined by a "trigger point" mechanism. When the 
voter turnout in Legislative Council elections reaches 
a certain proportion of the total number of eligible 
voters (i.e. when the political participation of the 
electorate and social conditions are mature), the Chief 
Executive shall be elected on a one-person-one-vote 
basis and all members of the legislature shall also be 
returned by general election. 

4.1.1.5 This model does not object to the use of referendum for 
determining the future development of the political 
structure. But the result of such a referendum shall be 
accepted only if at least 50% eligible voters turn out 
for the vote. It is not necessary to specify the above 
in the Basic Law (Draft). 

4.1.2 The Chief Executive 

4.1.2.1 The Chief Executive shall be nominated by a nominating 
committee and elected by an election committee. 

4.1.2.2 Members of the nominating committee shall be elected by 
members of the election committee from among 
themselves . 

4.1.2.3 For further development, the trigger point mechanism 
(or referendum) shall be used. 

4.2 Basic design principles 

4.2.1 Consistent with the principle of gradual and orderly 
progress 



117 



It is indicated in some opinions that this model is 
consistent with the principle of gradual and orderly 
progress and can raise the efficiency of government 
operation. Under this model, consideration is given to 
the sensitive period when the old system changes to a 
new one so that stability would be ensured. 

4.2.2 Election by an election committee 

According to some opinions, other than direct election 
and functional contituency election, there should be a 
third kind of election. The election by an electoral 
college would enable those who, despite their expertise 
and their ability to contribute to government 
operation, cannot be elected Councillors through direct 
elections or functional constituencies elections If the 
Chief Executive may give his advice in the nomination 
of these candidates, the relationship between the 
legislative and executive branches would be 
strengthened . 

4.2.3 The nominating committee 

Some opinions point out that the nomination of 
candidates by a committee would help to produce well- 
qualified candidates for the election. 

4.2.4 Trigger point 

It is indicated in some opinions that during this time 
of political reforms in Hong Kong, rigid provisions 
should not be laid down regarding political development 
as it would depend on the level of political 
participation of the people. The success of a 
democratic system hinges on civic education and 
citizens' participation. If a referendum or a timetable 
is used, it would be too inflexible -- it would bring 
about reform either too early or too late. This would 
not allow a rational development of the political 
structure based on the objective conditions. The 
trigger point mechanism has the merits of all of the 
above methods while avoiding their drawbacks. The 
trigger point mechanism is flexible, allowing a 
democratic political structure to develop in Hong Kong 
in the light of the objective situation, with special 
regard to Hong Kong people's interest in political 
participation. In addition, it also gives the next 
generation in Hong Kong the chance to make their own 
decisi on . 



5. The 5-5 Model 

A number of organizations and individuals proposed a 5- 
5 model in the middle of the year. This model came from 

118 



the Office of Members of the Executive and Legislative 
Councils of the Hong Kong Government. The model 
contains suggestions on political development before 
and after 1997. 

5 . 1 Contents 

5.1.1 The Legislative Council 

The term of office of the Legislative Council shall be 
four years. There shall be 60 seats in the Legislative 
Council in 1991. Among them, 20 shall be filled by 
direct elections, 20 by functional constituencies 
elections and 20 by appointed and ex-officio members. 
In 1995, the membership of the Legislative Council 
shall still be 60, of which not less than half shall be 
returned by direct elections, and not more than half by 
functional constituencies elections. The membership 
shall be increased to 90 in 1999. Among them, 60 shall 
be returned by direct elections and 30 by functional 
constituencies elections. In 2003, all 90 seats shall 
be returned by direct elections. 

5.1.2 The Chief Executive 

The term of office of the Chief Executive shall be four 
years. Before 2003, the Chief Executive shall be 
selected by an election committee. But the membership 
of the election committee shall be as large as 
possible, i.e. 800. There shall not be any difference 
between the election committee for selecting the first 
Chief Executive and that for selecting the second Chief 
Executive in terms of its composition. Both shall be 
broadly representative and selected through democratic 
procedures. The same principle shall apply to the 
grouping and subgroups under the election committee. 
The nominating process shall be open and least 
restrictive. It is suggested that any 50 members may 
nominate a candidate. The names of the candidates and 
persons who make the nominations shall be announced to 
the public. The Chief Executive shall be elected by an 
absolute majority rather than a simple majority. 

The Chief Executive shall be elected through general 
election not later than 2003. The nominating process 
shall be open. It is suggested that candidates may be 
nominated by one-tenth of the members of the 
legislature or 1000 eligible voters. 

5 . 2 Opinions 

5.2.1 Basic design principles 

5.2.1.1 Consistent with the principles of democracy 



119 



This model is more democratic than the others because 
it allows a greater proportion of popularly elected 
seats. It is also consistent with the principle of 
Hong Kong people administering Hong Kong. The model 
suggests that at least half the seats of the 
Legislative Council shall be filled by direct elections 
in 1997 and the Chief Executive shall ultimately be 
nominated through an open process and elected through 
general election. The model is based on the interests 
of Hong Kong people and consistent with their wishes. 
It is noted in some opinions that this model clearly 
specifies democracy as the ultimate goal. Only a 
Legislative Council returned by universal suffrage may 
maintain proper checks and balances in relation to the 
executive branch and work as a cooperative partner of 
the executive. Such a relationship between the 
executive and the legislature would be favourable to 
the prosperity and progress of Hong Kong. 

5.2.1.2 Making the Legislative Council more representative 

According to this model, the Legislative Council shall 
be fully elected in order to render it adequately 
representative and to guarantee the future realization 
of the basic principles laid down in the Sino-British 
Joint Declaration, i.e. representative Hong Kong people 
administering Hong Kong and a high degree of autonomy. 

Definite and steady pace of development 

The pace of development in this model conforms to the 
principles of stability and gradual and orderly 
progress. Its starting point is appropriate and it 
allows a faster pace of democratization at the end. It 
is noted in some opinions that the pace suggested in 
this model is relatively fast but not as fast as the 
new model proposed by the Group of 190. Its development 
pace is most appropriate. It would avoid problems of 
convergence in case the democratization process is 
pushed too fast. Unrest in both Hong Kong and mainland 
or departure of captalists from Hong Kong prompted by 
abrupt political reforms could also be prevented. As 
pointed out in some opinions, this model has 
incorporated the principles commonly accepted by the 
various parties, for example, the ultimate goal of 
universal suffrage, and the single chamber system for 
the Legislative Council. This model also provides for a 
smooth transition, a transition to direct election with 
the least changes. Compared to other models, this model 
supplies a relatively fixed timetable so that it would 
not be necessary to have a review at a later date. A 
fixed timetable is conducive to maintaining stability 
and prosperity. But at the same time, a review can be 
conducted when necessary and there is no need to 
specify the year for review. It is also stated in some 



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opinions that this model has the advantage of allowing 
different changes in the future. 

5.2.1.4 Suitable for Hong Kong society 

According to some opinions, since Hong Kong has been 
under colonial rule for the last hundred years or so, 
its people do not have much chance to participate in 
politics directly. But as time changes, their 
educational levels were raised and the government have 
also been actively promoting the concept of 
representative government. People in Hong Kong have 
gradually realized that the future of Hong Kong depends 
on their participation and commitment. The 5-5 model 
provides them with such an opportunity. For those who 
desperately long for democracy, this model might be a 
bit too slow. But in order to accommodate those who are 
more conservative, this should be considered an 
acceptable model. 

5.2.1.5 Other opinions 

5.2.1.5.1 The spirit of the bicameral system has been integrated 
into this model, that is, in 1995, the seats in the 
Legislative Council will be equally shared between 
members returned by direct elections and those by 
functional constituencies elections. There would be 
coordination between them so that no situation of 
antagonism would emerge. 

5.2.1.5.2 This model is simple, clear, and easy to understand. 

5.2.1.5.3 This model is in line with the Joint Declaration. 

5.2.1.5.4 By 1995, half the members of the Legislative Council 
will have been returned by functional constituencies, 
thus allowing people with sufficient exposure to serve 
on the Council and raise its efficiency. 

5.2.2 Criticisms 

5.2.2.1 The pace of development is too fast 

The number of directly elected seats will be increased 
too quickly, thus violating the principles of 
convergence and gradual and orderly progress. The 
political structure should be developed in the light of 
various social phenomena and conditions. The apathy of 
Hong Kong people in past elections points to the fact 
that their political awareness has not yet been 
developed. As Hong Kong does not have a tradition of 
direct election as far as Legislative Council elections 
are concerned, it would be dangerous to introduce 
direct election or expand the number of directly 
elected seats too fast for the following reasons. 



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Firstly, it would not be possible to guarantee the 
quality of the Councillors and would severely affect 
the normal operation of the Council. Secondly, it 
would cause extreme instability in Hong Kong socially 
and politically. As what is suggested in this model 
concerning the pace of development lacks an objective 
basis, it is impractical and would affect the smooth 
transition of Hong Kong. 

5.2.2.2 The pace of development should not be rigidly 
prescribed 

A democratic political model should allow the future 
HKSAR Government to decide its own pace of development. 
To stabilize the political structure in the transition 
period, it should be possible for the HKSAR Government 
in the third and fourth terms make its own decision in 
the light of the social conditions and development 
then. It is quite impossible to take the present 
social conditions as the sole basis for laying down a 
policy for 100 years. 

5.2.2.3 The model is too conservative 

This model is too conservative. The pace of 
democratization is slowed down because the privileged 
sector still holds political power. Some opinions 
propose that the seats returned by functional 
constituencies elections should be abolished once and 
for all. If they are to be phased out, there would be 
difficulties in deciding which functional 
constituencies are to be eliminated first. According to 
some opinions, the proportion of directly elected seats 
suggested in this model is too small. It is also 
proposed that general election should be introduced to 
the selection of the Chief Executive in the first term, 
rather than being delayed till 2003. 

5.2.3 Suggestions 

5.2.3.1 The allocation of seats subsequent to 1995 should be 
reconsidered, and scientific opinion polls should be 
used to gauge people's opinion on the pace of 
democrat i zat ion . 

5.2.3.2 Half of the seats in the Legislative Council should be 
filled by general election in 1995. 

5.2.3.3 A review should be conducted in 1995 to decide the 
composition of the post-1997 legislature. 

5.2.3.4 The membership of the legislature in -2003 should be 
kept at 60. There should not be too many seats created 
in a proportional system, lest there should be 
confusion, and decline in efficiency and 



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representativeness . 

5.2.3.5 Directly elected seats should be increased to one half 
of the total in 1991 and by 1995, all seats should be 
returned by direct election. But if such a proposal is 
deemed too radical, the proponent would go back to the 
5-5 model . 

5.2.4 Question to be clarified 

The model does not specify the method for constituting 
the electoral college for the Chief Executive. 

6. New model proposed by the Group of 190 (21 July 1989) 

This model was proposed by the Joint Committee on the 
Promotion of Democratic Government. The model includes 
suggestions for political development before 1997, 
which are also listed below for reference. 

6 . 1 Contents 

6.1.1 The Legislative Council 

All seats shall be filled by direct elections in 1997. 
It is also proposed that half of the seats shall be 
returned by direct elections in 1991 and all members be 
selected by direct elections in 1995 and remain in 
office in 1997. 

6.1.2 The Chief Executive 

The Chief Executive shall be selected by direct 
election before 1997. 

6 . 2 Opinions 

6.2.1 Basic design principles 

Only by having all seats filled by direct elections 
before 1997 can democracy be realized. A democratic 
political structure would ensure the separation of 
powers and mutual checks and balances among the 
executive, the legislature and the judiciary, thus 
preventing the emergence of dictatorship. Without, 
democracy, separation of powers and checks and balances 
would be impossible, nor would there be a sound basis 
for the protection of human rights and freedoms. 

Some opinions point out that this model will speed up 
the pace of democratization, enhance participation of 
the people and strengthen their sense of belonging to 
Hong Kong. It is also noted that the future political 
system should be led by the people of Hong Kong and 

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these leaders should be directly elected by the 
majority. Some opinions indicate that with the recent 
events in Hong Kong the civic consciousness of Hong 
Kong people has grown. What is proposed in this model 
is therefore the most appropriate. 

6.2.2 Criticism 

A democratic system is not to be equated with having 
all seats directly elected. Hong Kong is an 
international city and its prosperity depends very much 
on its ability to attract foreign investments and to 
maintain social stability. If the political 
development is too fast, social instability would be 
inevitable. Thus, the political reforms suggested in 
the model would not be good for social development. 

7. One-council two-chamber model (29 August 1989) 

This model was put forward by the New Hong Kong 
All iance . 

7 . 1 Contents 

7.1.1 The Legislative Council 

7.1.1.1 The Legislative Council of the HKSAR shall be composed 
of an elected district chamber and an elected 
functional chamber. 

7.1.1.2 The elected district chamber and the elected functional 
chamber shall be formed by direct and indirect 
elections . 

7.1.1.3 The elected district chamber shall be formed on the 
widest basis of electorate. For the first and second 
terms, not less than half of the seats shall be 
returned by district-based direct elections. The rest 
of the seats shall go to district organizations. The 
elected functional chamber shall be formed by elections 
in the major functional sectors in society. 

7.1.1.4 The composition of the third and subsequent 
legislatures may be determined by the HKSAR in the 
light of the social conditions then. The delimitation 
of sectors in the elected functional chamber and the 
proportions of directly and indirectly elected seats in 
the elected district chamber may be amended by the 
HKSAR on its own in accordance with the legislative 
procedure. All restrictions such as the timetable and 
the trigger point mechanism in the Basic Law (Draft) 
shall be eliminated and the Central Authorities shall 
not be involved. 



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7.1.1.5 All bills and legislation shall only take effect with 
the majority vote in each of the two chambers. 

7.1.1.6 To maintain the present efficiency, no chamber may have 
working committees of its own. Each committee under 
the Legislative Council shall be composed of members 
from both chambers in equal number. 

7.1.1.7 No Councillor may serve on both chambers at the same 
time . 

7.1.1.8 Each eligible voter may only vote once in the elections 
of the Legislative Council for each term. 

7.1.1.9 Each chamber may have 30 to 50 members. 

7.1.1.10 Ways to resolve differences between the two chambers 

When the voting result of one chamber on a bill is 
different from that of the other chamber, the Chief 
Executive may form a coordinating committee comprising 
members of both chambers. The committee shall submit a 
proposal for resolving the difference to the two 
chambers for a second round of voting. Before the 
second round of voting, there shall be a cooling-off 
period in which opinions shall be widely solicited from 
the public. If the results of the second vote in the 
two chambers still differ, the following methods may be 
considered : 

Method 1 It may be specified in the Basic Law that 
one chamber shall have a second vote. If 
this chamber passes the bill by a two-thirds 
majority vote, the bill shall be considered 
passed by the whole legislature. 

Method 2 Same as Method 1 except that a three-fourths 
majority is required for passing the bill in 
the second vote. 

Method 3 The Basic Law would not specify which 
chamber shall have the right of a second 
vote in order to maintain equality between 
the two chambers. When difference arises, 
the chamber which assents to the bill shall 
have the right to a second vote. For the 
proportion of votes needed to pass the bill 
in the second vote, refer to the suggestions 
in Methods 1 and 2. 

Method 4 Same as Method 3 except that the right to 
introduce the second vote shall rest with 
the Chief Executive to prevent abuse of the 
second vote. 



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Method 5 The two chambers shall hold a joint session 
for a second vote and the bill shall be 
passed by a simple majority. 

Method 6 Same as Method 5 except that a two-thirds 
majority vote shall be required to pass the 
bill. 

Method 7 As the provisions in the Basic Law (Draft) 
are already sufficient, there is no need to 
prescribe further procedures. Since the 
Basic Law (Draft) has provided for 
appropriate arrangements to deal with states 
of emergency and situations where the 
Legislative Council fails to pass the 
budget, it is not necessary to lay down 
procedures for resolving other deadlocks. 
The legislature's failure to pass a bill 
because of internal difference is inevitable 
under a democratic system. When both 
chambers have veto power, they would feel 
the importance of seeking compromise with 
mutual respect. 

Method 8 When the two chambers' voting results on a 
bill or motion are different and if the 
Chief Executive deems the bill or motion to 
be widely influential, he may dissolve the 
Legislative Council and call for the 
immediate election of a new Council. 

Method 9 When the two chambers' voting results on a 
bill or motion are different and if the 
Chief Executive deems the bill or motion to 
be widely influential and that the situation 
is critical, he may put the bill or motion 
to a vote by all eligible voters in Hong 
Kong. 

Method 10 When the two chambers have voted twice and 
they still disagree on the bill or motion in 
question, and if the Chief Executive deems 
the bill to be widely influential and that 
the situation is critical, the Chief 
Executive, together with the Executive 
Council, may promulgate the bill as law. 

7.1.2 The Chief Executive 

7.1.2.1 The candidates for the office of Chief Executive shall 
be recommended by a nominating committee. 

7.1.2.2 For the first and second terms, the Chief Executive 
shall be elected by an election committee. From the 
third term onwards, the Chief Executive shall be 

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directly elected by all eligible voters in Hong Kong on 
a one-person-one-vote basis. 

7.2 Supporting and opposing opinions (As numerous views 
have been expressed on this model, supporting and 
opposing opinions on the same points are grouped 
together . ) 

7.2.1 Function of the bicameral system in maintaining a 
balance of interests 

Some opinions note that while open and fair elections 
are demanded, balanced representation of the major 
social functional sectors should also be allowed. To be 
in line with the overall interest of Hong Kong, these 
common goals must be attained at the same time. 
Demanding that all sectors should simply be represented 
is not enough: the purpose of a bicameral system is to 
ensure balanced representation of all major functional 
sectors in the legislature. In the present one-chamber 
system, it is difficult to satisfy the requirement of 
balanced representation since part of the seats in the 
one-chamber system is returned by universal suffrage 
but the proportions of representation of various 
sectors are not fixed for these seats. When this 
variable is introduced to the seats returned by 
functional constituencies elections where there is 
balanced representation, the original design of a 
balanced structure will be completely spoiled. In 
addition, one important reason for having Councillors 
returned by district and functional elections is that 
they have different perspectives because of their 
different origins. If they can cooperate while 
maintaining their independence and balance, the 
legislature will be able to effectively take care of 
the interest of society as a whole. Since these two 
kinds of Councillors look at things from different 
angles, their opinions on a certain problem should also 
be counted separately. The overall decision should be 
made by the two sides after compromise. 

It is pointed out in some opinions that the legislature 
should take care of the overall interest of the 
community. This model would turn the legislature into 
an arena of conflicting interests. It will 
institutionalize sectorial interests and conflicts. In 
addition, this model only gives members of the 
industrial and commercial sectors and the professions 
in the functional groups special political power, while 
people in other trades in society can only select a few 
councillors through general election in the elected 
district chamber. 

7.2.2 Effect of the bicameral system on efficiency 



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It is indicated in some opinions that the bicameral 
system would set up two opposing interest groups. It 
would institutionalize the differences among various 
social strata and interest groups. Under the bicameral 
system, there is hardly any room for moderates to 
foster compromises and it is very likely to have 
deadlocks. The system is too complicated and will 
waste the time of civil servants as they would have to 
attend the meetings of both chambers to explain their 
proposed bills and policies, and answer questions. It 
would take much longer to formulate and pass government 
policies. The high efficiency of the present Hong Kong 
Government would therefore decline. If the membership 
of each chamber is the same, a quarter of all the votes 
plus one vote can veto a bill which is supported by the 
majority. On the contrary, if different opinions are 
put to one single chamber, it would be better because 
it would be possible for members of different views to 
have interaction, thus arriving at mutual understanding 
and resolutions. 

According to some opinions, the "one-council two- 
chamber" model would not intensify the existing 
antagonism. Instead, there would be an open process for 
conflicts to be resolved through compromise in the 
legislature under the supervision of the public. This 
model does not stress the creation of conflicts and 
contradictions. It uses a balancing system (the two 
chambers) to foster a deeper level of democratic 
compromises, allowing democratic practices (such as 
give and take, mutual acceptance and respect) to fully 
develop. Only in this way would the objective of a 
democratic system be attained. It is pointed out in 
some criticisms that if the seats filled functional 
constituencies are retained, it will give rise to 
conflict of interests in the legislature. But with or 
without the functional seats, different interests do 
exist. If these interests are not allowed to be 
exposed in front of the public, their confrontation 
will be channelled to some closed arena. Under the 
bicameral system, Councillors are selected in two 
different ways. The two types of Councillors thus 
selected are not necessarily confrontational. 
Moreover, bills can only be passed with the consent of 
both chambers. This would strengthen the checks and 
balances and coordination between different interest 
groups and maintain a cooperative spirit. In the one- 
chamber system, when there is a conflict, the situation 
is not conducive to a compromise because if one side 
has the majority vote, the other side is in no position 
to bargain at all. This is the unfairness of the one- 
chamber system: a system where only one side gets the 
benefit is a disguised dictatorship. Whether it is a 
bicameral system or not, as long as the legislature is 
elected, no one can guarantee that bills will 



128 



definitely be passed unless the election is a fake. 
Thus, the question of declining efficiency does not 
arise in the change from a one-chamber system to a 
bicameral one. 

7.2.3 Principles of gradual and orderly progress and a smooth 
transition 

Some opinions point out that the "one-council two- 
chamber" system does not concern the long-debated 
question of the pace of political development. The 
model puts forward a political structure which is new 
and totally unfamiliar to Hong Kong. If a bicameral 
system is to be introduced in 1997, there will be a 
problem of convergence in 1995. To try out an untested 
system during the transfer of political power is not 
consistent with the provision for "smooth transition" 
in the Joint Declaration. The bicameral system would 
bring about drastic changes to the present system and 
affect the confidence of civil servants and 
disciplinary services. It is also noted that the 
countries which practise a bicameral system usually 
have a large population or are federal states. Hong 
Kong is only a small place with five to six million 
people. There is no need to establish a bicameral 
legislature for containing the different interests of 
various social strata and constituent units (states, 
republics or minorities). 

However, according to some opinions, though Hong Kong 
has never practised a bicameral system before but the 
basis for such a system does exist. Hong Kong has had 
many elections where functional constituencies 
elections and district elections are held side by side 
and this would serve as the basis for a bicameral 
system. In addition, as Hong Kong has been a British 
colony for a long time, its people are no strangers to 
the bicameral system of the western countries. Before 
the signing of the Sino-British Joint Declaration in 
1984, all the seats in the Legislative Council were 
filled by representatives of various functional sectors 
because only such a composition could guarantee the 
stability and prosperity of Hong Kong. Any political 
model which reduces the functional seats to a minority 
or completely eliminates them would not be favourable 
to Hong Kong. On the contrary, if a political model 
adopts an open and fair method of selection while 
maintaining balanced representation of various 
functional groups in the legislature, Hong Kong would 
benefit from it. No matter how the present Legislative 
Council would change, the functional chamber in the 
"one-council two-chamber" system could adjust to the 
development, ensuring a balance between the two 
chambers. This would reduce the difficulties of 
convergence. Moreover, the addition of one more chamber 

129 



to the legislature is only a small technical change. 
There would not be any difference except in the method 
of counting votes. 

7.2.4 Ultimate objective of selecting all the members by 
general election 

Some opinions point out that the "one-council two- 
chamber" model violates Article 67 of the Basic Law 
(Draft) which states that the ultimate aim shall be the 
selection of all members of the Legislative Council 
through general election. Whatever the pace of 
development, the Draft has laid down a consensus agreed 
upon by all parties, that is, the ultimate aim shall 
be an open .and democratic political structure 
constituted through general election. This model has 
violated the consensus reached by various parties after 
much effort and rendered the discussions in the past 
few years useless. 

But some people argue that the Basic Law (Draft) is 
only a consultative document and its articles are still 
subject to amendment. All provisions in the Basic Law 
(Draft) can be changed provided that the change is in 
line with the wishes of Hong Kong people. Hong Kong 
does not have a tradition of electoral politics, nor is 
there any developed political parties to represent the 
interests of the major social strata or sectors. Thus, 
it is unlikely that there will be developed electoral 
politics or party politics within a short time in Hong 
Kong. If the western systems were transplanted to Hong 
Kong, the lack of actual conditions for such 
development and the difference in cultural background 
would lead to a one-party monopoly and pseudo- 
democracy. The government would be controlled by a few 
and the state would become a dictatorship where the 
people would not have liberty or the rule of law. 

In the transfer of sovereignty, Hong Kong is 
unavoidably faced with problems of various kinds. The 
result of direct election is unpredictable. It is 
unnecessary and impossible for Hong Kong to take such a 
risk. In fact, a number of scholars and public figures 
had openly expressed their objection to the 
elimination of the functional constituencies elections 
as they held that the participation of functional 
sectors in politics could effectively provide the 
necessary conditions for stability and prosperity. 
Based on this principle, the Basic Law should not 
stipulate that the ultimate aim shall be the selection 
of all members of the Legislative Council through 
general election. Though in the indirect elections of 
functional constituencies, restrictions are imposed to 
cater for the social structure, they cannot be 
considered undemocratic. The elected functional chamber 



130 






does not have to be there permanently. If the 
conditions are ripe, it can be changed into an advisory 
body. When circumstances permit, the functional 
chamber can also be elected on a one-person-one-vote 
basis. This flexibility in design is consistent with 
the spirit of democratic development. On the other 
hand, it is also pointed out that if the functional 
constituencies take up half of the seats in the 
Legislative Council, it will be very dangerous. . This 
arrangement is clearly designed to protect and give 
privilege to the industrial and commercial sectors in 
terms of their political power and their chances of 
participation in public and political affairs. This 
would give rise to a privileged class and is not 
consistent with the principle of democracy that each 
citizen should enjoy equal election right. As Hong Kong 
does not have acute social conflicts, it is not 
necessary to achieve "balanced representation" through 
the use of a special political system. In addition, 
what the legislature really requires from its members 
is not their expertise but their representation. 
Expertise can come from outside through the various 
advisory and policy committees. 

It is noted in some opinions that this model is 
favourable to stability and prosperity as only under 
this model could the interests of various sectors be 
reflected and the antagonism caused by the omission of 
some sectors be avoided. On the contrary, if only 
general election is introduced, there is no guarantee 
that the lower strata will be admitted to the 
legislature. In fact, in the western developed 
countries, general elections have usually resulted in 
the monopoly of the seats by the upper and middle 
classes. Those from the lower classes could not go into 
pol it ics . 

7.2.5 Relationship between the executive and legislative 
branches 

7.2.5.1 Beneficial to the relationship between the executive 
and legislative branches 

Some opinions point out that this model will strengthen 
the executive-led system and provide solutions to 
problems concerning the relationship among the Chief 
Executive, the executive authorities and the 
legislature. On the the relationship between the 
executive and legislative branches, the concern has 
always been over the legislature's excessive 
intervention in the executive branch. If there are 
certain checks and balances within the legislature, the 
concern can be relieved. If the executive and 
legislative branches have a balanced relationship, the 
past apprehension that the legislature should have 

131 



excessive power can be eliminated. Some opinions also 
indicate that this model would achieve the effect of 
checks and balances which are essential for prudent 
legislation. This model could also prevent the abuse 
of power by the Chief Executive and the unchecked 
growth of his power. 

7.2.5.2 Detrimental to the checks and balances between the 
executive and legislative branches 

It is noted in some opinions that the "one-council two- 
chamber" model is detrimental to the checks and 
balances between the executive and legislative 
branches. The ten methods proposed in the model cannot 
resolve the deadlock between the two chambers and would 
lead to the expansion of power of the executive 
authorities and the Chief Executive. The Chief 
Executive would then become a dictator and would be 
susceptible to China's interference. Comments on the 
ten methods are summarized as follow: 

7.2.5.2.1 The principles of equal participation and equal weight 
in policy-making are violated. According to Methods 1 
and 2, one of the two chambers is granted a special 
right while the other chamber is rendered useless. 

7.2.5.2.2 Methods 1 to 4 do not specify which chamber has the 
right to a second vote, but indicate that the power to 
introduce a second vote rests with the Chief Executive, 
thus highlighting the power of the Chief Executive. 

7.2.5.2.3 The resolution of deadlocks relies on the intervention 
of the Chief Executive. This would violate the 
principle of separation of legislative and executive 
powers. Since bills are introduced by the executive 
branch, it is very likely that only those in support of 
the bill in question would be appointed to the 
coordinating committee. 

7.2.5.2.4 In Methods 4, 8 and 10, the power to decide rests with 
the Chief Executive. In addition to the fact that the 
Chief Executive would be selected on an undemocratic 
basis by a grand electoral college, it would give too 
much power to the Chief Executive. 

7.2.5.2.5 Methods 5 and 6 require joint voting of the two 
chambers and the results be dependent on the sum total 
of votes of both chambers, making the "one-council two- 
chamber system" barely distinguishable from a "one- 
council one-chamber" system, with the only difference 
being that the former adopts a two-chamber structure 
for defining the backgrounds and selection methods of 
the Councillors. 

7.2.5.2.6 Method 7 applies the provisions in the Basic Law 

132 



(Draft) on states of emergency and situations where 
the Legislative Council fails to pass the budget. As a 
result, Article 56 would enable the Chief Executive to 
monopolize power while the application of Article 18 
would entail interference from China. 

7.2.5.2.7 According to Method 8, if the two chambers are in 
disagreement, the Chief Executive may dissolve the 
legislature. That could easily happen. On the other 
hand, it takes an agreement between the chambers to 
impeach or remove the Chief Executive, which would be 
extremely difficult. With such an arrangement, the 
Chief Executive could act without any restraint. 

7.2.5.2.8 Method 9 suggests that the passage of bills be decided 
by a referendum. But a referendum cannot even decide 
whether the "one-council two-chamber" system should 
be accepted, let alone future bills in dispute. 

7.2.5.2.9 Method 10 proposes that the Chief Executive, together 
with the Executive Council, may promulgate the bill in 
question as law. This arrangement would allow the 
Chief Executive and the Executive Council to 
substitute the legislature. If bills could become laws 
without going through the legislature, the legislature 
would be useless and the Chief Executive would become 
the only person with the say. In addition, the Sino- 
British Joint Declaration expressly provides that the 
Chief Executive shall be appointed by the Central 
Government. It goes without saying that the Chief 
Executive would be subject to the influence of the 
Central Government. 

7.2.5.2.10 The two chambers representing different interests in 
this bicameral system would stand in opposition to 
each other and it is difficult for them to arrive at 
an agreement. The legislature is meant to represent 
public opinion and exercise checks and balances in 
relation to the executive authorities. But this 
bicameral system would split the legislature 
internally to the effect that the two chambers would 
hold each other up while its monitoring effect on the 
executive authorities would be reduced. Consequently, 
the executive branch could act arbitrarily. 

7.2.6 Other supporting opinions 

7.2.6.1 It may avoid party politics 

To promote the development of political parties by 
speeding up the pace of introducing elections would 
have profound impact on Hong Kong. Party politics 
would result in the monopoly of the political arena by 
political parties, thus making it difficult for those 
who are not affiliated with any group to participate 



133 



in politics. This may not be favourable to Hong Kong. 
In addition, with party politics, it would be likely 
that when a rival party comes to power, policies laid 
down by the previous administration would be 
overturned. This would lead to frequent changes of 
policies in the HKSAR. Hong Kong could not stand the 
instability caused by these policy changes. It is also 
noted that it is inaccurate to say that the "one- 
council two-chamber" model would throttle party 
politics because there are countries with a bicameral 
system where political parties do exist. 

7.2.6.2 Appropriate adjustment 

The "one-council two-chamber" model, using a form of 
balance, allows adjustment in the relationship between 
the two chambers, and there is no need to overturn the 
old system. For example, in a period of social 
instability, an elitist system would be more 
appropriate. But in a period of social stability, the 
grass roots demand for political participation can be 
accommodated . 

7.2.6.3 Other opinions 

According to some opinions, since Hong Kong is a 
capitalist society, there is nothing wrong in giving 
more say to those who pay more tax. 

7.2.7 Other opposing opinions 

7.2.7.1 Lacking in concrete suggestions 

The "one-council two-chamber" model is an "empty 
model". It provides that at least half of the members 
of the elected district chamber shall be returned by 
direct elections in the first and second terms while 
the rest shall come from district organizations, and 
that the elected functional chamber shall be formed by 
the major functional sectors in society. But it does 
not suggest any specific proportions of representation, 
nor does it lay down any clear provisions on "district 
organizations", such as the proportions of seats to be 
taken up by the District Boards, the Urban Council and 
the Regional Council, whether all the members of these 
district organizations shall be returned by direct 
election or half of the seats shall continue to be 
filled by appointment. 

It is pointed out in some opinions that the model does 
not specify the way to deal with the situation when the 
two chambers are in disagreement time and again, making 
it possible to pass a budget or bill. 

According to some opinions, the proponents of the model 

134 



seem to imply that the two chambers have equal status, 
but it is difficult to understand how this could be 
achieved. It is almost certain that the elected 
functional chamber would review the decision of the 
elected district chamber. There is no provisions on 
the scope of the review and the situation under which 
the power of review may be exercised. 

It is noted in some opinions that the model does not 
clearly spell out the terms of reference of the Chief 
Executive. According to the model, the Chief Executive 
shall be elected by an electoral college for the first 
two terms but his power has not been defined. If a bill 
is only passed by one chamber, would the Chief 
Executive have the authority to revoke it or pass it as 
law? This would be the crux of the question. If the 
Chief Executive has such special authority, there would 
not be any democracy in the future political 
development. What is now decided by the "Governor in 
Council" is likely to be decided by the "Chief 
Executive with the elected functional chamber" in the 
future. The elected district chamber is only for 
decoration . 

7.2.7.2 Giving false hope to the public 

The "one-council two-chamber" model has exaggerated 
the importance of the legislature in the political 
structure. This would raise people's expectation and 
mislead them into believing that such a legislature may 
prevent interference from the Central Government. 

7.2.7.3 It cannot avoid party politics 

It is pointed out in some opinions that the "one- 
council two-chamber" model cannot resolve the problems 
that Hong Kong is going to face. It would not 
eliminate the conditions for party politics. Instead, 
it would add to the elements that give rise to opposing 
parties. Councillors from the commercial and 
industrial sectors and the professions may build up a 
bourgeois political party in the elected functional 
chamber while the liberals may form a mass party 
dominated by grass roots interests in the elected 
district chamber. 

7.2.7.4 Election by an electoral college is not desirable as 
Hong Kong's experience in the last few years shows that 
this mode of election has created "small circle" 
politics and those elected are neither directly 
accountable to the voters nor under the supervision of 
voters . 

7.3 Other opinions 



135 



7.3.1 Nature of the model 

The qualities of this model can be summarized into five 
aspects: (1) executive-led since the power of the 
legislature is limited; (2)its political base is narrow 
because it concentrates on the economic interests in 
Hong Kong; (3)the economic forces in society may be 
directly tranformed into political forces without going 
through any intermediary political organizations or 
leaders; (4) the operation of the entire political 
structure does not depend on any strong political party 
or other political organizations as its driving force; 
and (5) political leaders are pillars of the political 
structure in this model. Thus, this model is 
favourable to social stability and the distribution of 
political and economic power in society. But in the 
long run, this model might lead to conflicts among the 
various administrative departments because the future 
executive branch would have to rely on the various 
functional constituencies. Different departments share 
common interests with corresponding functional groups. 
As a result, conflicts among the various functional 
groups would easily give rise to conflicts among the 
various departments. It is therefore suggested that the 
Basic Law (Draft) can be slightly amended to 
incorporate the advantages of the "one-council two- 
chamber" model while avoiding its shortcomings. 
However, if after the amendment, its advantages are not 
fully incorporated while its drawbacks are not 
completely avoided, then it would be better to simply 
adopt the whole model. 

7.4 Suggestions 

7.4.1 It is suggested that the elected functional chamber 
should include the following sectors; hawkers' and 
traders' associations, fisheries, agriculture, 
indigenous inhabitants, rural organizations, Kaifong 
associations and residents of public housing estates. 

7.4.2 Methods to resolve conflicts between the two chambers 

7.4.2.1 The elected functional chamber should have the final 
say, just like the lower house in Japan. This would 
reduce deadlocks. 

7.4.2.2 Deadlocks may be resolved by taking the following 
steps : 

( 1 ) An equal number of councillors from each chamber 
(6+6) shall be appointed to a working committee to 
seek a compromise within two weeks; 

(2) If the effort fails, a second ballot shall be taken 
in both chambers; and 

(3) If a deadlock again occurs, then the elected 

136 



functional chamber shall have the final vote. But a 
two-thirds majority vote is needed to pass the 
bill. If the bill still cannot be passed, it shall 
be shelved for at least half a year before it can 
be retabled. 

The advantages of allowing the elected functional 
chamber to have the final say are: (l)this power will 
not rest with the Chief Executive, thus preventing him 
from being too powerful; (2) the proportions of 
representation in the elected functional chamber is 
relatively balanced while the representativeness of the 
elected district chamber is rather unpredictable. 
Therefore it could better reflect the real 
inclinations, interests and demands of society as a 
whole if the former is given the final say. 

7.4.2.3 When there is disagreement between the two chambers 
over a bill, a coordinating committee formed by members 
from both chambers in equal number should study and 
amend the bill and return it to the two chambers for a 
second vote. If the two chambers still disagree, a 
joint session may be called for joint voting. 

7.4.2.4 The two chambers should be designated as the upper and 
lower houses. The procedure for passing bills should 
be: the lower house should first pass the bill by a 
simple majority vote and submit it to the upper house 
for approval. If the bill is vetoed by the upper house, 
the lower house may pass it by itself after six months. 
But the bill may only take effect with a two-thirds 
majority vote. If the bill is amended, it should be 
submitted again to the upper house for approval. The 
merit of this process is that in the six-month cooling- 
off period, those who are in or out of office may 
conduct in-depth discussions and seek compromises, and 
ensure majority support in the lower house. 

7.4.2.5 The legislative power of the two chambers should be 
restricted by specifying that one chamber shall have 
the power to introduce bills while the other chamber 
shall only have the power of review. 

7.4.2.6 A non-governmental seniors' council should be 
established to appraise and examine the bills in 
dispute. Retired persons (over sixty years of age) may 
apply to join this council and may be admitted as 
members after a review process. 

7.4.2.7 When the two chambers disagree over a bill, the 
Councillors may give marks to the bill in a joint 
session. If the bill scores a certain mark, it is 
deemed to be passed. The amended method for selecting 
the Legislative Councillors may be reported to the 
Standing Committee of the National People's Congress 

137 



for the record. 

7.4.2.8 A joint arbitration committee of the two chambers 
should be set up and its chairman should be appointed 
with the approval of both chambers. The chairman should 
have a casting vote. Where the chairman should refrain 
from using his casting vote in a deadlock, the 
legislature should be dissolved and new elections 
called . 

7.4.3 Other suggestions 

7.4.3.1 Using the model as a base, a small number of appointed 
members should be retained so that those capable people 
who cannot afford the time to stand for election would 
not lose the opportunity of serving the community. 

7.4.3.2 The seats in the elected functional chamber should be 
gradually reduced while the seats returned by general 
election should be increased correspondingly. 

7.4.3.3 If a two-chamber system is adopted for the legislature, 
the Chief Executive may be elected by universal 
suffrage at the same time. 

7.4.3.4 The "one-council two-chamber" model should be modified 
into a bicameral system. Initially, both houses should 
have equal power. A review should be conducted after 
three to five years and the public should decide 
whether the legislative power of a certain house should 
be reduced or restricted. 

7.4.3.5 During the term of office of the third Chief Executive, 
the legislature should conduct a review in the light of 
the situation in Hong Kong at that time. 

7.4.3.6 Support is expressed for the provision in the model 
which allows each voter to have only one vote. It is 
suggested that it should be up to a voter to choose in 
which election (functional constituency or district) he 
would cast his vote. 

7.4.3.7 The proportion of directly elected seats in the elected 
district chamber should be increased. Three-fifths of 
the seats should be filled by district-based general 
election and the remaining two-fifths should be 
returned by the electoral colleges of various 
districts . 

7.4.3.8 To realize the principle of gradual and orderly 
progress towards democracy, the elected district 
chamber should have all its members selected through 
direct elections progressively. 

7.4.3.9 The elected district chamber should be fully elected 



138 



through general election and be called "the Lower 
House". The elected functional chamber should be 
renamed "the Upper House" and its members should 
include functional groups, former Legislative 
Councillors, academics, Councillors appointed by the 
Chief Executive, and members of the grand electoral 
college . 



8. New compromise model (4-4-2 model dated 31 October 

1989) 

This model was jointly proposed by the Business and 
Professional Group of CCBL Members (who take the model 
of the Group of 89 as their basis), the Joint 
Committee on the Promotion of Democratic Government 
(who take the model of the Group of 190 as their 
basis), and seven other groups, namely the Tritolaire 
Academy, University Graduates' Association of Hong 
Kong, Association for Democracy of Hong Kong, Hong 
Kong Chinese Civil Servants' Association, Progressive 
Society of Hong Kong, Hong Kong People's Association 
and New Hong Kong Society (who take the model of the 
Joint Conference of 10 Groups or Moderates as their 
basis ) . 

8 . 1 Contents 

8.1.1 The Legislative Council 

8.1.1.1 The composition of the first Legislative Council in 
1997 shall be as follows: 40%of the seats shall be 
filled by district-based general election, 40% by 
functional constituency election and 20% by election 
through an election committee. 

8.1.1.2 The term of office of members of the first Legislative 
Council shall be four years (from 1997). In 2001, the 
second Legislative Council shall be constituted. The 
objective of this proposal is to ensure stability in 
the early years after 1997 as far as the political 
environment is concerned. 

8.1.1.3 The composition of the second Legislative Council 
shall be as follows: 60% of the seats shall be filled 
by district-based general election and the remaining 
40% by functional constituency election. Seats filled 
by election through the election committee shall be 
abol ished . 

Note: The seven groups held that since the second 
Legislative Council would serve as the mechanism 
in deciding whether the full Legislative Council 
in the third term should be selected by general 
election, it was only fair to have half of the 

139 



second Legislative Council constituted by 
general election and the other half by 
functional constituency election. 

8.1.1.4 The second Legislative Council shall decide after 
review the composition of the Legislative Council for 
the third term (2005), and whether it will entirely be 
formed by general election. 

Note 1: According to the Joint Committee on the 
Promotion of Democratic Government, it should 
be stipulated that all members of the 
legislative in the third term shall be 
selected by general election. 

Note 2: The seven groups maintained that 
constitutional resolutions should only be 
valid with a two-thirds majority vote. If 60% 
of the seats were filled by general election, 
then the passage of such resolutions should 
require a three-fourths majority vote. 

8.1.1.5 The aim that all members of Legislative Council shall 
be selected through general election shall remain 
unchanged. 

8.1.1.6 Elections for the various types of seats in the 
Legislative Council shall be conducted in accordance 
with democratic and open procedures. 

8.1.2 The Chief Executive 

8.1.2.1 The composition of the election committee for 
returning the Chief Executive shall be as follows: 
representatives of functional constituencies -- 50%; 
members of the District Boards and various Councils -- 
50%. 

Note: The Joint Committee on the Promotion of 
Democratic Government held that the second 
category should not include appointed members. 

8.1.2.2 The method for selecting representatives of functional 
constituencies sitting on the election committee shall 
be basically the same as that for functional 
constituencies elections in the Legislative Council, 
that is, through a democratic process. 

8.1.2.3 Each candidate for the Chief Executive shall be 
nominated by at least one-tenth of the members of the 
election committee. 

8.1.2.4 The Chief Executive must be elected by a simple 
majority vote of the members of the election 
committee . 



140 



8.1.2.5 In accordance with the normal schedule, the third 
Chief Executive shall be selected by general election 
and the election committee shall become a nominating 
committee . 

8.1.2.6 The candidate with the highest number of votes in the 
general election of the third term shall be the Chief 
Executive . 

8.2 Opinions 

8.2.1 Basic design principles 

8.2.1.1 Appropriate pace of development 

This model is based upon the principles of maintaining 
stability in the run-up to 1997, ensuring prosperity 
in society and developing democracy in a gradual and 
orderly manner. This model conforms to both the 
principle of gradual and orderly progress and the 
principle of achieving the ultimate aim of general 
election. The pace of development suggested in this 
model is relatively slower than that in the model 
proposed by the Group of 190, but the principle of 
upholding democracy is still maintained. The pace of 
democratization in this model is slower than that in 
the 5-5 model but faster than that in the one-council 
two-chamber model and in the Basic Law (Draft). Thus, 
it can be considered a model that "dwells on the 
happy medium" and is obviously conducive to the 
stability of Hong Kong. It is noted in some opinions 
that this model is so moderate that it should be more 
readily acceptable to the mainland authorities. 
Moreover, the arrangement of allowing the second 
Legislative Council to decide after review how the 
third Legislative Council shall be formed is thought 
to be a flexible way to resolve the existing dispute 
over general election of the full Legislative Council. 

8.2.1.2 Maintaining the merits of the existing political 
structure 

This proposal is in accordance with the concept of 
one-council one-chamber. It is conducive to 
maintaining the present high efficiency and may 
guarantee continuity in the political structure before 
and after 1997. Separation of powers among the 
executive authorities, the legislature and the 
judiciary will be maintained under this model. It is 
also noted that this proposal is favourable to 
maintaining the present capitalist system. 

8.2.1.3 Appropiate method for forming the Legislative Council 



141 



The proposal that 40% of the seats should be filled by- 
general election is in accordance with the demand of 
Hong Kong people for an increased proportion of seats 
filled by general election. It will also ensure that 
the wishes and needs of Hong Kong people will be met 
in the future formulation of policies. As the same 
proportion of seats will be filled by functional 
constituency election, the political tradition of Hong 
Kong can be maintained, allowing functional 
constituencies to continue to make effective 
contribution to society as far as electoral politics 
is concerned. This mode of election is particularly 
advantageous to incorporating opinions from different 
sectors when political parties are not yet developed. 
It is also indicated in some opinions that this model 
is conducive to balancing the interests of different 
social strata as it includes three methods for forming 
the Legislative Council, namely, direct election 
functional constituency election and election by a 
grand electoral college. Moreover, it is thought that 
as the political structure is formed through election 
on a one-person-one-vote basis, it will have the 
legitimacy to deal with all affairs on the behalf of 
the public. 

According to some opinions, the method proposed in 
this model for forming the Legislative Council will 
enhance the efficiency of the Legislative Council and 
the executive authorities. As some of the Legislative 
Councillors shall be selected by the election 
committee, it is thought that the advantages of the 
existing appointment system can be maintained, which 
will bring positive effects on the efficiency and 
stability of the future Legislative Council and 
government. Furthermore, as the election committee 
will gradually fade out, democracy will develop in a 
gradual and orderly manner. 

8.2.1.4 Appropriate method for selecting the Chief Executive 

The election committee comprising representatives of 
different social strata is in line with the spirit of 
selecting the Chief Executive in a democratic manner. 
Under this proposal, ideal candidates are sought and 
selected in such an effective and objective manner 
that the Chief Executive in the early post-1997 years 
will have sufficient experience and qualification for 
conducting administrative affairs. Before the 
emergence of party politics, this mode of election is 
of particular significance. Moreover, this model is 
important to the early operation of the HKSAR as it 
can avoid large-scale elections, thus minimizing any 
unecessary turbulance in society. In addition, as the 
Chief Executive and the Legislative Councillors are 
selected by different methods, checks and balances can 

142 



reasonably be achieved between the executive 
authorities and the legislature so that problems of 
power corruption can be reduced and the rights and 
freedoms of the public can be effectively protected. 

8.2.1.5 Other opinions 

This model is identical to the model stated in the 
Basic Law (Draft) in basic spirit and conforms to the 
stipulations in the Sino-British Joint Declaration. 
Moreover, according to some opinions, this model 
enables the Legislative Council to monitor the 
executive authorities effectively. It is also pointed 
out that this model is more representative because it 
is a compromise model produced by three major camps in 
the spirit of solidarity and with great effort. Thus 
it is an important step in Hong Kong people 
administering Hong Kong and the development of one 
country two systems. It is noted in some opinions 
that this model is barely acceptable but it is already 
the bottom line of Hong Kong people. 

8.2.2 Criticisms 

8.2.2.1 The grand electoral college should not be kept 

Keeping the grand electoral college in Legislative 
Council elections amounts to practising an appointment 
system in a disguised form, which is so bureaucratic 
that it will be suspected of being a means to preserve 
the privileged classes and their privileges. 
Moreover, this mode of election is more susceptible to 
manipulation by people of certain strata, laying the 
foundation for monopoly of power by a small group of 
people, which is against the principle of democracy. 
It is noted in some opinions that there is no specific 
provision on the formation of the grand electoral 
college. Whether it is a "defect" or it is to be 
selected through an open election is still unknown. 
According to some opinions, it is not necessary to 
stipulate rigidly that the third group of members 
shall be selected by a grand electoral college, though 
this may be considered one of the possibilities. 

According to some opinions, if the Chief Executive is 
not selected by direct election but through nomination 
and election by a grand electoral college, greater 
checks and balances would be needed. There should be 
procedures for removing the Chief Executive since 
under the Basic Law (Draft), the Chief Executive may 
dissolve the Legislative Council and it will be 
possible for the Chief Executive who is not selected 
by universal suffrage to take advantage of this legal 
loophole and, for his own interest or the interest of 
the Central Authorities, do something that is 

143 



unfavourable to Hong Kong. Moreover, there is no 

specific provision in the Basic Law (Draft) on how the 

executive authorities will be monitored during the 

three months following the dissolution of the 
Legislative Council. 

Under this model, the Chief Executive shall not be 
selected by general election until the third term. 
And even when he is selected by general election in 
the third term, nominations shall be made by a 
nominating committee of which the composition is 
unknown. Some opinions point out that such an 
arrangement amounts to putting the whole political 
structure in the hands of those who possess special 
power in (or even before) 1997. 

8.2.2.2 Inappropriate pace of democratization 

It is thought that the pace of democratization is too 
slow in this model and retaining the grand electoral 
college and functional constituencies is considered a 
major retrogression in the process of democratization. 
Moreover, the proportion of seats filled by functional 
constituency election in the Legislative Council is 
too large, and the proedures for electing and 
nominating the Chief Executive are conservative and 
not adequately open. Conversely, it is noted in some 
opinions that the pace for introducing general 
election is too fast in this model because it is 
unfair that in 2001 only 40% of the members will be 
selected by functional constituency election as it 
would greatly reduce the role of this kind of members. 

It is also thought that although under this model, the 
proportion of seats allocated to directly elected 
members will be gradually increased, there is no 
guarantee that the whole Council will eventually be 
formed through general election. Thus, it is not in 
line with the selection of the Chief Executive who 
will be returned by general election on a one-person- 
one-vote basis from the third term onwards. Thus, 
when the two methods are listed side by side, the 
objective of the whole political structure seems 
unclear. In addition, it is inconsistent with Article 
67 of the Basic Law (Draft). 

8.2.2.3 Relationship between the executive authorities and the 
legislature 

When the grand electoral college is abolished in 2001 
and officials of the executive authorities are no 
longer able to attend meetings of the Legislative 
Council through the channel of the grand electoral 
college, the procedures for the executive authorities 
to introduce bills to meet administrative needs will 

144 



be much more complicated and the present advantages of 
coordination between the executive authorities and the 
Legislative Council will surely be lost. 

According to some opinions, this model is incompatible 
with some principles concerning the political 
structure, such as: democracy requires adequate 
monitoring; there should be checks and balances among 
pluralistic bodies; and monopoly of power by a handful 
of people should be prevented. 

It is also noted that the relationship of power 
between the legislature and the executive authorities 
is not dealt with in this model, nor is there any 
concrete suggestion for democratic monitoring of the 
executive authorities. 



8.2.2.4 Other criticisms 



If the proportion of seats filled by direct election 
in greater than that by functional constituency 
election in the third Legislative Council, it will be 
unfair. It is thought that the composition of the 
Legislative Council should be further discussed. It 
is also noted that the composition, definition, 
delimitation and mode of election concerning the 
functional constituencies are to be studied. 

According to some opinions, the formulation of a 
political structure involves principles on one hand 
and political procedures on the other, and both 
require compromise. It would be most ideal if the 
three major camps could arrive at a compromise. But 
still it is questionable whether the Chinese 
Government would accept the result of the compromise. 
Thus, the worry is that even though concessions would 
be made by all parties eventually, the principles 
would be forfeited. 

Some opinions point out that this model advocates a 
faster pace of democratization after the Beijing 
events but it does not explain why the pace should be 
speeded up. This consensus without a rationale or 
explanation may exert pressure on the Drafting 
Committee for the Basic Law. It is also thought that 
even though a consensus can be achieved by the Hong 
Kong people, it is not very likely that the Chinese 
Government will accept it. 

It is also noted that when the concept of consensus or 
compromise is over-emphasized, the wishes of the 
public will be confined to several models. 

Some opinions point out that this model lacks a long- 
term plan and there is no concrete suggestion for the 



145 



development of the political structure from the third 
term onwards. 

8.2.3 Suggestions 

8.2.3.1 Formation of the Legislative Council 

8.2.3.1.1 The proportion of seats filled by direct election 
should be reduced. 

8.2.3.1.2 The exact year for introducing general election and 
the ultimate abolition of the grand election college 
should be stated clearly. 

8.2.3.1.3 If the second Legislative Council does not have any 
decision on whether the next Council will be formed 
through general election, review should be held every 
five or ten years until the goal of election by 
universal suffrage is achieved. 

8.2.3.1.4 The third Legislative Council should retain seats 
filled by election through the election committee. 

8.2.3.1.5 The third Legislative Council should adopt the modes 
of election used in the second term. 

8.2.3.1.6 Ten seats should be kept for ex-officio members or 
appointed members in 1995 and a by-election should be 
held in 1997. 

8.2.3.1.7 All members of the Legislative Council should be 
selected by direct election in 2001. 

8.2.3.2 Selection of the Chief Executive 

8.2.3.2.1 The nomination process for the Chief Executive should 
be an open and democratic one, and no initial 
screening should take place. 

8.2.3.2.2 The nomination process for the Chief Executive should 
be an open one. Each candidate shall be nominated by 
at least 500 members of the public. 

8.2.3.2.3 The nomination process for the third Chief Executive 
should be a democratic and open one, and it should no 
longer be necessary for nomination to be made by a 
nominating committee. 

8.2.3.2.4 A candidate may be nominated by any 5% of the members 
of nominating committee. 

8.2.3.2.5 No consultation should be required in the process of 
nomination. A candidate may be nominated by a certain 
percentage (e.g. 10%) of members of the committee. 



146 



8.2.3.2.6 Direct election should be introduced to the selection 
of the Chief Executive one term earlier. 

8.2.3.2.7 The Legislative Council should be involved in 
monitoring the process through which members of the 
election committee for the Chief Executive are 
selected . 

8.2.3.3 Election by the election committee 

8.2.3.3.1 The composition and formation of the election 
committee should be in accordance with democratic and 
open procedures, and no secret appointment should be 
allowed . 

8.2.3.3.2 The election committee should be adequately 
representative . 

8.2.3.3.3 Members of the election committee should be the 
elected Councillors or Board members so that the 
democratic element of the committee is strengthened. 

8.2.3.3.4 Half of the members of the election committee should 
be selected by functional constituencies and the other 
half by direct elections. 

8.2.3.3.5 The election committee should be composed of 800 
members who are Councillors or Board members, 
representatives of the industrial and commercial 
sectors, the professions, labour and functional 
constituencies . 

8.2.3.3.6 It should be necessary to include Hong Kong deputies 
to the NPC or members of the National Committee of the 
CPPCC in the election committee. It is suggested that 
the committee should be composed of members of the 
industrial, commercial and financial sectors, the 
professions, labour, social services, religious 
communities and District Boards. 

8.2.3.4 Functional constituencies elections 

8.2.3.4.1 Representatives of functional constituencies should 
include people from different social strata and 
professions, and be selected through a democratic 
process . 

8.2.3.4.2 The allocation of seats to members elected by 
functional constituencies may follow the way stated in 
the Basic Law (Draft), e.g. distributed among the 
industrial, commercial and financial sectors, the 
professions, labour and social services (religious 
communities may be omitted). The seats should be as 
evenly distributed as possible. In the actual 
situation, flexibility should be allowed. 

147 



8.2.3.4.3 The inclusion of representatives of the Urban and 
Regional Councils in the functional constituencies 
should be considered. 

8.2.3.4.4 The allocation of seats to functional constituencies 
should be on the basis of that adopted for the present 
Legislative Council while other functional sectors in 
society may also be included. 

8.2.4 Areas which have not been provided for 

8.2.4.1 Definition, delimitation and method of formation of 
the functional constituencies. 

8.2.4.2 Whether the election committee in the Legislative 
Council and the election committee for the Chief 
Executive refer to the same organization. 



9. The 5-3-2 model (16 October 1983) 

This model was proposed by the Hong Kong Chinese 
Reform Association. 

9.1 Contents -- The Legislative Council 

There shall be 60 seats in the Legislative Council for 
the first and second terms. Half of the seats shall 
be returned by functional constituency election, 30% 
by direct election, and the remaining 20% by election 
through a grand electoral college. The proportions 
for the third and subsequent terms may be reviewed and 
revised after the Legislative Council of the second 
term is formed. 

9.2 Opinions 

9.2.1 Basic design principles 

9.2.1.1 Pace of development suitable to Hong Kong 

The political model and structure should be able to 
foster harmony in the community and ensure political 
stability. This model exactly follows these 
principles. If the political model does not tie in 
with the reality and development of Hong Kong, the 
initiative of members of society cannot be brought 
into play and there will be passive resistance among 
the various social sectors, thus intensifying 
political conflicts. Once there is social unrest, 
economic development will suffer, which is certainly 
against the wishes of the general public. The 
democratization of the political structure should 
progress in a gradual and orderly manner, taking into 



148 



account the efficiency of the government operation. 
Since Hong Kong has been under colonial rule for a 
long time, political consciousness barely exists in 
the community. Though much has been done to boost the 
political consciousness of the public, electoral 
developments and public response show that Hong Kong 
is not yet ready for a fast pace of political 
development. Thus, it is advisable to have gradual 
and orderly progress as far as democratization is 
concerned. Especially for the first few years of the 
HKSAR, social stability and continuity of the 
political structure should be the order of the day. 
Wilful acceleration of the pace of democratization 
without paying due regard to social reality would not 
be in the overall interest of the community. 

9.2.1.2 Taking care of all social strata 

The political model and structure should be able to 
look after the interests of all social strata and 
ensure that they will play positive roles. Only when 
all strata are represented can their initiative be 
brought into play and fair checks and balances be 
maintained. It is essential that each sector or 
social stratum is entitled to a considerable number of 
seats in the political framework so that they will 
jointly take part in the affairs of society as a whole 
and in the promotion of prosperity and stability. 
This model will balance the interests of various 
strata on one hand and conform to the spirit of 
democracy and the gradual pace of development on the 
other. 

9.2.2 Criticism 

That the proportion of directly elected seats shall 
remain unchanged for ten years as proposed by this 
model is against the principle of gradual 
democratization. It is also indicated in some 
opinions that this model is not acceptable to the 
public and is unlikely to gain the assistance of 
various parties, thus making convergence difficult. 

9.3 Suggestion 

The 5-3-2 model should be adopted in 1997 and remain 
unchanged for ten years. The "new compromise model" 
should gradually be introduced in 2007. Then, there 
should be an overall review every ten years and the 
subsequent pace of development and political model 
should be decided in the light of the actual 
conditions. Such an arrangement would be favourable 
to a smooth transition. 



149 



10. Model proposed by the Hong Kong Federation of Trade 
Unions (27 October 1989) 

10.1 Contents 

10.1.1 The Legislative Council 

10.1.1.1 The composition of the legislature shall be the same 
as that in the bicameral model. That is, the 
Legislative Council shall comprise a functional 
chamber and a district chamber. The term of office 
shall be four years (except for the first term which 
shall be two years, from 1997 to 1999). 

10.1.1.2 The functional chamber and the district chamber shall 
have 30 seats each. 

Functional chamber members: selected by various 
functional constituencies through direct or indirect 
elections. Distribution of seats: one-third for the 
commercial, industrial and financial sectors, one- 
third for the professions, and one-third for labour 
and other grassroots sectors. 

District chamber members: in the first and second 
terms, 80% selected by district-based direct election 
and the remaining 20% selected by an electoral college 
(composed of members of the District Boards and the 
Regional and Urban Councils); in the third term 
(2003), 100% returned by direct election. 

10.1.1.3 Each working committee under the Legislative Council 
shall be composed of members from both chambers in 
equal number. 

10.1.1.4 When the Chief Executive appoints Legislative 
Councillors to the Executive Council, the number of 
members appointed from both chambers shall be equal. 

10.1.1.5 Both chambers shall have equal powers and 
responsibilities. Any motions must be discussed 
separately in both chambers and passed by a majority 

vote . 

10.1.1.6 If one chamber passes a motion while the other rejects 
it, the case shall be resolved in the spirit of 
compromise according to the following procedure: As 
the first step, the relevant permanent working 
committee under the two chambers shall, after 
consultation, submit a proposal for resolving the 
issue to the two chambers for a second round of 
voting. If the two chambers still disagree, then the 
second step shall follow. A special coordination 
committee shall be formed by members from both 
chambers in equal number to submit, after 

150 



consultation, a compromise motion to the two chambers 
for a further round of voting. If it is passed by one 
chamber but rejected by the other, the third step 
shall be taken. The coordination committee may have 
two alternatives for dealing with the issue: (l)Both 
chambers shall each call a meeting to review and vote 
on the rejecting opinion. The rejecting opinion 
shall be upheld if the affirmative votes of the two 
chambers add up to two-thirds of the total votes cast, 
otherwise the compromise motion shall be carried. 
(2)The motion shall be shelved. 

10.1.1.7 In the course of reaching a compromise, if the 
proponent of the original motion objects to the 
modification of the motion, he may withdraw the motion 
so that it will not be put to a vote. 

10.1.1.8 During the third term of the Legislative Council, a 
review shall be conducted on the composition and 
operation of the legislature in order to meet the 
prevailing social conditions and public demands. 
Results of the review must be passed by a two-thirds 
majority of the joint session of the Legislative 
Council, endorsed by the Chief Executive and reported 
to the Standing Committee of the NPC for approval. 

10.1.2 The Chief Executive 

The term of office shall be five years. For the first 
two terms, the Chief Executive shall be selected by 
indirect election. For the third and subsequent 
terms, the Chief Executive shall be selected by 
general election. The details shall be as follows: 

10.1.2.1 The first and second terms 

The Chief Executive shall be selected through election 
by a broadly representative Election Committee. The 
Committee shall have approximately 300 members with 
the following composition: representatives of the 
commercial, industrial and financial sectors -- 20%; 
representatives of the professions -- 20%; 
representatives of labour -- 15%; representatives of 
grass roots — 10%; all members of the Legislative 
Council -- 20%; representatives from the District 
Boards, Urban Council and Regional Council -- 10%; and 
representatives of Hong Kong deputies to the NPC and 
of members of the National Committee of the CPPCC 
5%. 

In the Election Committee, the representatives of 
functional constituencies shall be selected through 
one-person/organization-one-vote election. Representa- 
tives of the District Boards, Regional Council and 
Urban Council shall be elected by members of these 



151 



bodies from among themselves. Hong Kong deputies to 
the NPC and members of the National Committee of the 
CPPCC shall elect their representatives from among 
themselves. Members of the Legislative Council shall 
automatically become members of the Election 
Committee . 

Each candidate for the office of Chief Executive must 
be nominated by ten members of the Election Committee 
and shall become the Chief Executive should he win 
more than half of the votes. If no one wins more than 
half of the votes in the first ballot, the candidate 
with the least votes shall be eliminated. Further 
ballot(s) shall be taken until a candidate manages to 
win more than half of the votes. The elected 
candidate shall be reported to the Central People's 
Government for appointment. 

The first Election Committee shall be formed by the 
Preparatory Committee of the HKSAR established by the 
NPC in 1996. The Preparatory Committee shall be 
composed of mainland members and of Hong Kong members 
who shall constitute not less than 50% of the total 
membership. The chairman and members of the 
Preparatory Committee shall be appointed by the 
Standing Committee of the NPC. The Committee shall 
be in charge of the preparations for the establishment 
of the HKSAR. 

10.1.2.2 The third and subsequent terms 

From the third term onwards, the Election Committee 
shall become the committee for nominating the 
candidates for the office of Chief Executive. The 
method for constituting this Nominating Committee 
shall be the same as that for forming the Election 
Committee. Each candidate must be nominated by ten 
members of the Nominating Committee and have the 
support of at least half the members of the Committee. 
Those with the highest number of votes (not more than 
five persons) shall be the candidates who shall stand 
for a territory-wide election on a one-person-one-vote 
basis. The elected candidate shall be reported to the 
Central People's Government for appointment. 

10.2 Opinions 

10.2.1 Basic design principles 

10.2.1.1 Incorporating the merits of the various models 

This model incorporates the merits of •various models, 
thus serving the function of a compromise model. The 
model adopts the bicameral system of the "one-council 
two-chamber" model as well as the proportions of 

152 



representation in the new compromise model. 

10.2.1.2 Eliminating the drawback of the "one-council two- 
chamber" model 

Three steps have been suggested in this model to 
resolve the deadlock between the two chambers without 
inflating the power of the Chief Executive. In 
addition, the number of directly elected seats in the 
district chamber as proposed in this model is greater 
than that in the "one-council two-chamber" model. 
Moreover, the full chamber will be directly elected in 
the third term. Thus, the pace of democratization 
will be speeded up. This model is more thorough and 
rational than the "one-council two-chamber" model and 
the 5-5 model . 

10.2.1.3 Other principles 

This model can meet the demand for a faster pace of 
democratization without sacrificing stability. It 
takes account of the principle of balanced 
participation of all sectors in politics. On one 
hand, it will enable the legislature to effectively 
exercise its functions of monitoring as well as checks 
and balances in relation to the executive authorities. 
On the other hand, it will foster the coordination 
between the two branches. It is noted in some 
opinions that this model is appropriate to the actual 
conditions of Hong Kong and is favourable to the 
smooth transfer of sovereignty. In addition, this 
model ensures that labour and grass roots will be 
entitled to one-third of the seats in the functional 
chamber . 

10.2.2 Criticism 

This model will make the Chief Executive too powerful. 
Some opinions also point out that this model allows a 
handful of people to fill half of a certain chamber, 
enabling them to gain control and have greater 
bargaining power. 



11 Other Proposals 

11.1 Model 1 

11.1.1 The Legislative Council 

11.1.1.1 The Legislative Council shall be composed of 55 
members in the first term. Among them, 19 members 
shall be from the districts, 12 from the industrial 
and commercial sectors, 12 from the professions and 12 
from labour and other sectors. In the second term, 



153 



there shall be 75 members in the Legislative Council, 
with the number of members from the districts being 
increased to 29 while that from the other sectors 
remaining the same. In the third term, there shall be 
80 members in the Legislative Council in which the 
number of members from the districts shall expand to 
44 while that from the other sectors shall remain 
unchanged . 

11.1.1.2 A referendum shall be held during the third term of 
the Legislative Council to decide whether all 
Legislative Councillors shall be selected by general 
election from the fourth term onwards. 

11.1.2 The Chief Executive 

11.1.2.1 The first Chief Executive shall be selected through 
consultation or through election after consultation by 
an election committee. The election committee shall 
have 400 members who are selected by general election. 
The composition of the committee is as follows: 
industrial, commercial and financial sectors -- 1/4 of 
the seats; the professions -- 1/4 of the seats; 
labour, grassroots and religious communities -- 1/4 of 
the seats; former political figures, Hong Kong 
deputies to the NPC , and representatives of Hong Kong 
members of the National Committee of the CPPCC -- 1/4 
of the seats. 

11.1.2.2 The second Chief Executive shall be selected by an 
election committee of 800 members who are selected by 
general election. Its composition shall be the same 
as that of the first term. 

11.1.2.3 A referendum shall be held during the term of office 
of the second Chief Executive to decide whether the 
Chief Executive shall be selected by general election 
from the third term onwards. 

11.2 Model 2 

11.2.1 The Legislative Council 

11.2.1.1 There shall be 65 members in the first Legislative 
Council. Among them, 25 members shall be from 
district-based general election, 14 members from the 
industrial, commercial and financial sectors, 12 
members from the professions and 14 members from 
labour, social services, religious communities and 
other sectors. 

11.2.1.2 There shall be 80 members in the second Legislative 
Council. Among them, 40 members shall be from 
district-based general election, 14 members from the 
commercial, industrial and financial sectors, 12 

154 



members from the professions and 14 members from 
labour, social services, religious communities and 
other sectors. 

11.2.1.3 A referendum shall be held during the second term of 
the Legislative Council to decide whether all members 
of the Legislative Council shall be selected by 
general election from the third term onwards. If the 
referendum decides that the method of selection shall 
remain unchanged, a referendum shall be held every ten 
years . 

11.2.2 The Chief Executive 

The first two Chief Executives shall be selected by an 
electoral college in a manner similar to that 
prescribed in the Basic Law (Draft). But a referendum 
shall be held in the term of office of the second 
Chief Executive to decide whether the Chief Executive 
shall be selected by general election from the third 
term onwards. If the referendum decides that the 
method of selection shall remain unchanged, a 
referendum shall be held every ten years. 

11.3 Model 3 

11.3.1 The Legislative Council 

All members shall be selected by district-based 
general election in which all voters in Hong Kong 
shall cast their votes on a one-person-one-vote basis 
in their own districts. 

11.3.2 The Chief Executive 

11.3.2.1 Candidates for the Chief Executive shall stand for 
district-based general election after being nominated 
by a broadly representative nominating committee. 

11.3.2.2 There shall be 1000 members in the nominating 
committee. Every 100 members may nominate one 
candidate. The composition of the committee is as 
follows: industrial, commercial and financial sectors 
-- 250 seats; the professions -- 300 seats; labour, 
social services, religious communities and other 
sectors -- 250 seats; Legislative Councillors, 
representatives of members of district organizations, 
Hong Kong deputies to the NPC, representatives of Hong 
Kong members of the National Committee of the CPPCC -- 
200 seats. 

11.4 Model 4 

11.4.1 The Legislative Council 



155 



In 1997, half of the seats in the Legislative Council 
shall be filled by general election and the other half 
by functional constituency election. The number of 
seats filled by general election shall be increased to 
two-thirds of the seats in the Legislative Council in 
1999. A referendum shall be held in 2003 to decide 
whether all members shall be selected by general 
election . 

11.4.2 The Chief Executive 

The first Chief Executive shall be selected by a grand 
electoral college of 800 members. The number of 
candidates shall not exceed eight and each of them 
shall be nominated by at least one-eighth of the 
members of the grand electoral college. Each member 
of the grand electoral college may only nominate one 
candidate. In 2002, the Chief Executive shall be 
nominated by the grand electoral college and selected 
by general election. 

11.5 Model 5 

11.5.1 The Legislative Council 

In 1997, more than half of the members shall be 
selected by direct election while members selected by 
functional constituency election shall fill less than 
half of the seats. In 2001, all members shall be 
selected by direct election. 

11.5.2 The Chief Executive 

The Chief Executive shall be selected by a grand 
electoral college but in 2001, he shall be selected by 
general election. 

11.6 Model 6 

11.6.1 The Legislative Council 

In 1997, 40% of the seats shall be filled by direct 
election, 40% by functional constituency election and 
20% by election through a grand electoral college. In 
the second term, 60% of the seats shall be filled by 
direct election and 40% by functional constituency 
election. In the third term, all members of the 
Legislation Council shall be selected by general 
election . 

11.6.2 The Chief Executive 

Tn 1997, the Chief Executive shall be nominated and 
elected by the Legislative Council. The second Chief 
Executive shall be nominated by the Legislative 

156 



Council and elected by Hong Kong people on one-person- 
one-vote basis. Candidates for the third Chief 
Executive shall be nominated by members of the public 
and shall stand for a territory-wide direct election 
held on one-person-one-vote basis. 

11.7 Model 7 

11.7.1 The Legislative Council 

In 1997, one-third of the seats shall be filled by 
direct election. In 1999, half the members shall be 
directly elected. In 2003, the decision on whether 
all members shall be directly elected shall be made in 
light of the actual situation. 

11.7.2 The Chief Executive 

The Chief Executive shall be selected by general 
election in 2005. 

11.8 Model 8 

11.8.1 The Legislative Council 

There shall be 60 member, all of whom shall be 
selected by district-based general election. Each 
voter may have only one vote. 

11.8.2 The Chief Executive 

Each candidate for the Chief Executive shall be 
nominated by at least 100 voters of the HKSAR and each 
voter may only nominate one candidate. The Chief 
Executive shall be selected by general election. 

11.9 The following proposals only contain opinions on the 
formation of the Legislative Council. 

11.9.1 The legislature in two houses 

11.9.1.1 The legislature shall comprise two houses - one is the 
functional house and the other is the district house. 
There shall be 60 seats which shall be evenly divided 
between the two houses. Any speech or expression of 
opinions shall take the overall interest of the 
community of Hong Kong as top priority. Important 
bills shall take effect only if they are passed by a 
majority vote in both houses separately. Important 
bills refer to: 

(1) bills or bills of a nature which can be expressly 
defined by law as important. (The budget is an 
example of the former. ) 



157 



(2) bills which are announced by the president of the 
legislature as "important bills" before 
discussion. However, the president's decision may 
be vetoed by a majority (three-fourths) vote of 
the members. 

(3) bills which are considered "important bills" by 
two-thirds of the members. 

(4) bills which are considered important by the 
majority of the public and public opinion, and 
subsequently decided as such by a majority vote in 
the legislature. 

(5) Those bills which are not specified as important 
bills shall be treated as ordinary bills which 
shall take effect when passed by more than half of 
all members. 

11.9.1.2 The Legislative Council shall be constituted by 
functional constituency election and district-based 
direct election. As for the functional constituency 
election, candidates shall be selected by functional 
constituencies. (The qualification for standing for 
election and for voting by members of the various 
functional groups should be stipulated, e.g. only 
those who have been practising in a particular 
profession for not less than three years are qualified 
to vote.) Regarding district-based election, Hong 
Kong shall be divided into three constituencies, e.g. 
Hong Kong Island, Kowloon and the New Territories. If 
the population in Kowloon is so large that there would 
be difficulty in the allocation of seats, Kowloon may 
be subdivided into two constituencies, namely eastern 
and western. Thus, Hong Kong shall be divided into 
four constituencies. Candidates shall be selected 
from district organisations such as the Urban Council, 
Regional Council, District Boards, District 
Committees, Owners' Corporations and Mutual Aid 
Committees. Whoever nominated by 100 (or a specified 
number of) voters in a constituency shall become a 
candidate and stand for district-based general 
election. Voters can only vote in either type of 
election of their choice in every round of elections. 

11.9.2 In the first term, at least half of the seats in the 
Legislative Council shall be filled by direct 
election, while the remaining seats shall be evenly 
allocated to district organisations and functional 
constituencies. In the second term, all members of 
the Legislative Council shall be selected by direct 
election . 

11.9.3 Half of the seats in the first Legislative Council 
shall be filled by general election, 30% by functional 

158 



constituency election and 20% by election through a 
grand electoral college. But from the second term 
onwards, all members of the Legislative Council shall 
be selected by general election. 

11.9.4 In the first term, half of the seats of the 
Legislative Council shall be filled by direct election 
while the remaining seats by indirect election in 
functional constituencies. In the second term, 75% of 
the members of the Legislative Council shall be 
selected by direct election while 25% by functional 
constituency election. All members shall be selected 
by direct election from the third term onwards. 

11.9.5 In the first term, half of the seats in the 
Legislative Council shall be selected by direct 
election while the other half by functional 
constituency election. In the second term, 70% of the 
members of the Legislative Council shall be selected 
by direct election while 30% by functional 
constituency election. In the third term, all members 
shall be selected by direct election. 

11.9.6 There shall be 60 to 90 members in the first 
Legislative Council. Half of the members shall be 
selected by district-based general election and the 
other half by functional constituency election. The 
size of membership shall remain unchanged in the 
second term, with two-thirds being selected by general 
election while the remaining one-third by functional 
constituency election. All members shall be selected 
by general election from the third term onwards. 

11.9.7 In 1997, 60% of the seats in the Legislative Council 
shall be filled by direct election and 40% by 
functional constituency election. In 2001, 70% of the 
seats shall be filled by direct election and 30% by 
functional constituency election. In 2005, all 
members of the Legislative Council shall be selected 
by direct election. 

11.9.8 The Legislative Council of 1995 shall remain in office 
in 1997. Two-thirds of the seats shall be filled by 
direct election while the remaining one-third shall be 
filled by indirect election/functional constituency 
election/ex-of f icio members. In 1999, all members 
shall be selected by general election. 

11.9.9 In 1997, there shall be 60 seats in the Legislative 
Council. Two-thirds of the seats shall be filled by 
direct election while one-third by functional 
constituency election. In 2000, all 90 seats shall be 
selected by direct election. 

11.9.10 In 1997, three-fourths of the seats of the Legislative 

159 



Council shall be filled by direct election while the 
remaining seats shall be equally divided between 
members elected by functional constituencies and those 
elected by an electoral college. In 2000, all members 
shall be selected by direct election. 

11.9.11 The Legislative Council of 1995 shall remain in office 
in 1997 under the through-train arrangement. Among 
the Legislative Councillors, 75% shall be directly 
elected. All members of the Legislative Council shall 
be selected by general election in 1999. 

11.9.12 There shall be 60 members in the first term, of whom 
30 shall be selected by direct election, 12 shall be 
from the industrial, commercial and financial sectors, 
9 from the professions and 9 from labour, social 
services, religious communities and other sectors. 
All members shall be selected by general election from 
the second term onwards. 

11.9.13 There shall be 65 members in the first Legislative 
Council. Among them, 17 shall be selected by direct 
election, 17 by functional constituencies (including 
the industrial and commercial sectors, the professions 
and the financial sector), 19 by labour, social 
services and religious communities and 19 by 
representatives of District Boards (each of which 
selects one representative). In the second term, 
there shall be 80 members in the Legislative Council. 
Among them, 26 shall be selected by direct election, 
23 by functional constituencies and the rest of the 
composition shall remain unchanged. There shall be 85 
members in the third term. Among them, 30 shall be 
selected by direct election, 24 by functional 
constituencies and the rest of the composition shall 
remain the same. 

11.9.14 In the first term, at least 40% of the seats in the 
Legislative Council shall be filled by general 
election on a one-person-one-vote basis, while the 
remaining seats shall be allocated to functional 
constituencies in which indirect election shall be 
held. Constituencies shall be drawn up in such a way 
as to cover as many social strata as possible, and 
prior consultations with the public should be held. 
The proportion of directly elected members shall 
increase to 75%. From the third term onwards, all 
members shall be selected by direct election. 

11.9.15 In the first term, 40% of the seats shall be filled by 
general election, 40% by functional constituency 
election and the remaining 20% by election through an 
electoral college. The term of office of the first 
Legislative Council shall be two years. In the second 
term, 60% of the seats shall be filled by general 

160 



election and 40% by functional constituency election. 
The term of office of the Legislative Council shall be 
four years from the second term onwards. In the third 
term, 80% of the seats shall be filled by general 
election and 20% by functional constituency election. 
All members of the Legislative Council shall be 
selected by direct election from the fourth term 
onwards . 

11.9.16 In 1997, 40% of the seats in the Legislative Council 
shall be filled by functional constituency election, 
40% by general election and 20% by election through an 
electoral college. In 2001, 40% of the seats shall be 
filled by functional constituency election and 60% by 
general election. In 2005, all members shall be 
selected by general election. 

11.9.17 In 1997, 40% of the seats shall be filled by direct 
election, 40% by functional constituency election and 
20% by election through an electoral college. In 
2003, 60% of the seats shall be filled by direct 
election, 30% by functional constituency election and 
10% by election through an electoral college. In 
2012, the composition shall be decided by the 
Legislative Council in office then. 

11.9.18 There shall be 60 seats in the Legislative Council for 
the first and second terms. Among them, 20 shall be 
filled by direct election and 40 by functional 
constituencies. In the third term, the number of 
seats shall be increased to 80, half of which shall go 
to directly elected members and the other half to 
members elected by functional constituencies. The 
allocation of seats to various functional 
constituencies shall be as follows: 14 seats to 
labour, social services and Hong Kong deputies to the 
NPC , 14 seats to the industrial, commercial and 
financial sectors and 12 seats to the professions. An 
overall review of the political structure shall be 
held during the third term of the Legislative Council 
and its results shall be passed by two-thirds of the 
members of the Legislative Council and reported to the 
Standing Committee of the NPC for the record. 

11.9.19 In 1997, the seats in the Legislative Council shall be 
equally distributed among directly elected members, 
members elected by functional constituencies and 
members returned by an electoral college. In 2001, 
the seats shall be equally divided between directly 
elected members and members elected by the functional 
constituencies. In 2005, all members shall be 
selected by direct election. 

11.10 The following proposal only contains opinions on the 
selection of the Chief Executive. 

161 



Each candidate for the first Chief Executive shall be 
nominated by 10 Legislative Councillors. The Chief 
Executive shall be elected by a majority vote of the 
Legislative Council. The candidates for the second 
Chief Executive shall still be nominated by 
Legislative Councillors but shall stand for election 
by Hong Kong people on a one-person-one-vote basis. 



12 Conclusion 



This report gives a detailed account of the nine 
proposals which are of much public concern, as well as 
the comments on them. In addition, 28 proposals from 
individuals or groups are also presented. The 
quantity of the comments reflects not only the 
public's keen interest in the design of the future 
political structure, but also the divergence of views 
in this area. In any case, these opinions will give 
the members of the Drafting Committee a comprehensive 
picture when designing the political structure of the 
Hong Kong Special Administrative Region. 



If there is any discrepancy between the Chinese and the 
English versions, the Chinese version shall prevail. 



162 



PACE OF DEVELOPMENT OF THE 
POLITICAL STRUCTURE 



Contents 



1. Introduction 

2. Relevant provisions in the Basic Law (Draft) 

3. Factors to be considered 



4. Principles for designing the development programme of the 
political structure 



5. Discussion on various development mechanisms for the 
political structure 

6. Conclusion 



1. Introduction 



After its reversion to China in 1997, Hong Kong will be 
converted from a British colony into a special 
administrative region of China enjoying a high degree of 
autonomy. Its political structure will undergo some 
changes correspondingly, in order to realize the 
objective of "Hong Kong people administering Hong Kong". 
What kind of a political structure will suit the Hong 
Kong Special Administrative Region best in the long run? 
This has been one of the most controversial questions in 
the drafting of the Basic Law, sparking off a debate in 
which not only the ways of selecting the Chief Executive 
and forming the legislature have aroused considerable 
public concern, the pace of development of the political 
structure has also prompted much discussion. A number 
of political models have been put forward by various 
sectors in the community, each with its own starting 
point and evolution procedure. 

This report will focus on the proposals and opinions 
with regard to the development programme of the future 
political structure as in the various models. 



2. Relevant provisions in the Basic Law (Draft) 

The pace of development of the political structure is an 
issue that arises from the discussion on the selection 
of the Chief Executive and Legislative Councillors. The 
provisions on the the selection of the Chief Executive 
and the Legislative Councillors are Articles 45 and 67 
in the Basic Law (Draft) respectively. These articles 
lay down the principles that govern the methods of 
selection of the Chief Executive and the Legislative 
Councillors, while the specific methods of selection are 
set out in Annexes I and II to the Basic Law (Draft). 

2.1 Article 45: "The Chief Executive of the Hong Kong 
Special Administrative Region shall be selected by 
election or through consultations held locally and be 
appointed by the Central People's Government. 

"The method for selecting th eChief Executive shall be 
specified in the light of the actual situation in the 
Hong Kong Special Administrative Region and in 
accordance with the principle of gradual and orderly 
progress. The ultimate aim shall be the selection of 
the Chief Executive through general election. 

"The specific method for selecting the Chief Executive 

is prescribed in Annex I: 'Method for the selection of 

the Chief Executive of the Hong Kong Special 
Administrative Region'." 



165 



2.2 Article 67: "The Legislative Council of the Hong Kong 
Special Administrative Region shall be constituted by 
election . 

"The method for forming the Legislative Council shall be 
specified in the light of the actual situation in the 
Hong Kong Special Administrative Region and in 
accordance with the principle of gradual and orderly 
progress. The ultimate aim shall be the selection of 
all the members of the Legislative Council through 
general election. 

"The specific method for forming the Legislative Council 
is prescribed in Annex I: 'Method for the Formation of 
the Legislative Council of the Hong Kong Special 
Administrative Region'." 

2.3 Annexes I and II 



3. Factors to be considered 

There is neither a set of objective criteria nor any 
scientific means to govern the pace of political 
development. Different schedules for political 
development have been proposed by people who have 
different understanding of the social situation and 
varied outlook on some fundamental objectives and 
concepts: hence the divergence of views on the pace of 
political development. The following are a number of 
issues which are often touched on in the discussion of 
the pace of political development. A brief comparison 
between the views of those who support a faster 
development and those who support a slower development 
is also made in relation to those issues. 

3.1 Safeguard of vested interest 

3.1.1 Some sectors in Hong Kong, in particular, the 
industrial, commercial and professional sectors, have 
all along been making valuable contribution to society. 
There are a number of elite members in these sectors who 
are not keen on running for elected offices and who do 
not stand much chance of success in direct elections. 
Hence, if the senior management of the government wants 
to tap the expertise of these people, channels other 
than direct election must be set up. Some suggest that 
if the Legislative Council is to operate smoothly and 
if the system of appointing members to the Council is to 
be abolished on the premise of promoting democracy, then 
some of the seats in the Council must be reserved for 
functional constituencies elections. 

3.1.2 However, if the electoral system (functional 
constituencies elections) confirms the status of these 

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interests groups which exist in society due to 
circumstantial reasons, then their interests would 
become institutionalized, thereby splitting up the 
political system. Specifically, each member would only 
strive for the interests of the group he belongs to and 
overlook the interests of society as a whole. Thus, the 
function of the political structure in representing 
society and protecting its interests would be 
undermined . 

In practice, it is hard to decide which functional 
constituencies should be included and the proportions of 
seats to be distributed among these constituencies. 
Moreover, the social conditions are in constant change 
while the electoral system lacks the flexibility to keep 
up with these changes. It would be all the more 
difficult for the electoral system to accurately reflect 
the existence of the interest groups that prevail in 
society . 

3.1.3 The principle that the political structure must be 
established in such a way as to ensure the confidence of 
businessmen and investors is not an essential one. The 
Basic Law, as the realization of the Sino-British Joint 
Declaration, gives due and unequivocal assurance that 
capitalism shall continue to be practised in Hong Kong. 
Since the industrial and commercial sectors have always 
enjoyed certain benefits in capitalistic societies, 
there is no reason why they should insist on keeping the 
political structure unchanged and object to a faster 
pace of political development just to protect their own 
interests . 

3.1.4 Nevertheless, even if it is now firmly established that 
capitalism shall remain in practice in Hong Kong, there 
is a diversity of capitalistic forms. The industrial 
and commercial sectors that are enjoying certain 
benefits in Hong Kong may not be in the same favourable 
position after the establishment of the HKSAR. Hence, 
it is only natural that they should fight for their own 
interests when the political system is still on the 
drawing board. 

3.2 The legitimacy of the government 

3.2.1 Under the principle of Hong Kong people administering 
Hong Kong, though the authority of the HKSAR Government 
shall come from the Central People's Government, it is 
still important for the government to gain the support 
and trust of the people, or else, a confidence crisis 
may erupt. It is only by speeding up the 
democratization process could the legitimacy of the 
government be enhanced. 

3.2.2 The importance of the legitimacy of the government is 

167 



correlated to the public enthusiasm for political 
participation. When the present situation is such that 
people are uninterested in politics, there is no longer 
the issue of whether it is necessary to introduce direct 
election or what electoral system should be adopted. It 
is therefore unnecessary to increase the proportion of 
directly elected seats to satisfy people's demand for 
participation . 

3.2.3 The enthusiasm of people to participate in politics and 
the openness of the system are interdependent. So one 
of the objectives in the design of the political system 
is to encourage more people to participate by offering 
them more opportunities. 

3.3 Political awareness of the citizens 

3.3.1 Hong Kong is a place that enjoys a high educational 
standard. Since the development of the representative 
government in Hong Kong in the 80s, the political 
awareness of the people ha's reached a certain standard. 
Accordingly, there must be a faster pace of political 
development to keep up with the heightening political 
awareness of the people. 

3.3.2 Hong Kong has long been a colony and its people have but 
little political awareness. They are complete strangers 
to a democratic political structure and they do not yet 
possess a full-fledged political party system. Instead, 
they have a highly efficient and stable government to 
which they give their acclaim. In Hong Kong where there 
is not yet a well established democratic tradition, 
hasty introduction of excessive democracy would only 
lead to democracy on the surface while bringing about 
social disorder and unrest, or worse still, the 
undesirable consequence of foreign intervention. 
Moreover, since Hong Kong people have very little 
experience of democracy, there should be a transition 
period after the handover of sovereignty in which no 
change should be introduced, so that the Hong Kong 
people could learn how to administer Hong Kong. 

3.4 On stability and change 

3.4.1 Hong Kong is constantly changing. A democratic 
political structure is indispensable to the development 
of a capitalistic society. In recent years, the middle 
class voices its demand for participation in politics 
while the political awareness of the people continues to 
grow. There are signs that this trend will gather 
further momentum. As people become more sophisticated, 
it is difficult to make them accept a privilege-styled 
political power which does not come from direct 
election. Furthermore, with the transfer of 
sovereignty, changes to the political system are 

168 



inevitable. A conservative attitude towards the 
development of political structure would be wanting in 
f lexibil ity . 

3.4.2 The introduction of direct election on a large scale 
would have bearing on the present distribution of the 
right to speak on political issues. The reform of the 
political structure in the light of the transfer of 
sovereignty aims at preserving the status quo. If the 
reform of the political structure would lead to a change 
in the political situation, it would defeat original 
purpose . 

3.5 On the transitional period 

3.5.1 There should be a relatively long transitional period 
before and after 1997 to facilitate the smooth handover 
of political power and to maintain the social stability. 
The political structure should be preserved as far as 
possible to minimize uncertainties. 

3.5.2 If the transitional period is too long and the social 
structure remains unchanged, then the political 
development would not be able to tie in with the 
development in other areas. 

3.6 Sino-Hong Kong relationship 

3.6.1 As the drafting of the Basic Law is the affairs of 
China, the wish of China must not be given short shrift 
when designing the political structure. China has 
expressed reservations about the premature introduction 
of general election, so from the pragmatic point of 
view, the pace of political development should be a 
steadier one. 

3.6.2 A democratically elected (popularly elected) government 
should be established before 1997. Only such a 
government would be strong enough to prevent and resist 
any intervention from the Central Government. 

3.6.3 After 1997, Hong Kong will become a special 
administrative region of China. The design of the 
political structure should not and could not be based 
on the assumption that the Central People's Government 
would be an imaginary enemy to be fought against. 

3.6.4 The disagreement between China and Hong Kong over the 
political system is an illustration of the differences 
that exist between them. No matter what the pace of 
political development would be and no matter what the 
future political system would be, such differences 
cannot be ironed out. Moreover, the success of the "one 
country two system" concept lies in the full realization 
of "Hong Kong people administering Hong Kong". A faster 

169 



pace of democratization is a better alternative as it 
will help Hong Kong realize a high degree of autonomy. 

3.7 The impact of the Beijing incident 

3.7.1 After the Beijing incident, be it for restoring the 
confidence of the people or be it for protecting human 
rights and freedom in future, it is essential to have a 
democratic political structure which is representative 
and legitimate. The people's reaction to the Beijing 
incident demonstrates their enthusiasm for participation 
in social affairs as well as their heightened political 
awareness. The pace of political development should be 
speeded up correspondingly. 

Furthermore, Hong Kong should become a place for China 
to inject democracy and to suppress autocracy. After 
1997, the development of the political structure would 
very much be out of the hands of Hong Kong people, it is 
thus hoped that the democratization process could be 
completed before the transfer of sovereignty. 

3.7.2 Hong Kong people reacted emotionally towards the Beijing 
incident. Such emotions erupted in a disorganized 
manner without a unified goal. These emotions will soon 
die down and Hong Kong people will resume their 
apathetic attitude. Such emotions demonstrate the 
immaturity of Hong Kong people which further proves that 
the introduction of democracy must not be hasty. As the 
emotions of Hong Kong people have been stirred up, they 
tend to select radical leaders. Those who are 
originally interested in joining the political arena 
would be discouraged. This is indeed unfavourable to 
democratic development. 

3.7.3 The Beijing incident should not become a consideration 
that influences the pace of political development 
because the incident is an isolated one and should be 
interfere with the general direction of political 
development in Hong Kong. Hong Kong people must abide 
by the principle of gradual and orderly progress with a 
view to build up democracy upon the existing foundation. 
"Resisting communism with democracy" is only a 
subjective wish. Objectively speaking, Hong Kong must 
still maintains a good relationship with China, and 
develop a political structure acceptable to all under 
the "one country two systems" principle. 

4. Principles for designing the development programme of 
the political structure 

Based on their different assessments of the social 
situation and varied outlooks on fundamental concepts, 
people have divergent views on the programme of 

170 



political development. A brief description of this issue 
follows : 

4.1 The need for a definite programme of development 

4.1.1 The programme of political development should be 
expressly drawn up. For the "timetable", "trigger 
point" or any other development mechanisms which 
addresses the pace of political development, it is 
necessary to make the people aware of the evolutionary 
path so that they are prepared for and confident in the 
development of the political structure. 

4.1.2 The development of the political structure should not be 
restricted by a set programme. The design of the 
political structure must not deviate from reality. If 
the set procedure is not in line with the actual social 
situation, it must be changed accordingly. Instead of 
having a set of specific long-term development plan, 
it would be better to just map out the political 
structure for the first term and then design the 
structure for the following terms in the light of the 
actual situation. 

4.1.3 A definite programme of political development should be 
expressly established but care should be taken to avoid 
an unduly long programme. Political development is 
subject to the influence of numerous outside and 
unforeseeable factors. The longer the development 
programme, the more difficult it will be to predict 
these factors, and the less likely that a realistic 
political structure will be designed. Thus, it is 
more practical to have a short programme of political 
development . 

4.1.4 In view of the impact of the Beijing incident on Hong 
Kong people, only the broad principles for development 
should be laid down in the Basic Law. The specific 
development programme of the political structure and 
details of its design should be omitted. They should be 
determined in the future at the HKSAR Government's 
discretion . 

4.2 Whether general election should be introduced for the 
selection of the Chief Executive and the formation of 
the Legislative Council at the same time 

This is of course an important consideration in drawing 
up the "timetable". It is also an important factor in 
the review of the political development, in the timing 
of holding a referendum and in the decision on whether 
it is necessary to devise two different sets of 
conditions which serve as an indicator for further 
development of the selection method for the Chief 
Executive and Legislative Councillors. The following 

171 



are the views of members of the public: 

4.2.1 General elections for selecting all Legislative 
Councillors and for selecting the Chief Executive should 
be introduced on the same date. In this way, a scenario 
where the representativeness of one being stronger than 
the other can be avoided, thus fostering a better 
relationship between the two. 

4.2.2 Since the role of the Legislative Council is different 
from that of the Chief Executive, even when the Chief 
Executive is returned by general election, members 
returned by functional constituencies elections would 
still have their functions in the Legislative Council. 
Some opinions suggest the reverse: general election 
should be introduced first in the formation of the full 
Legislative Council, while general election of the Chief 
Executive should come at a later stage. 

4.2.3 If the Chief Executive is already returned by general 
election while not all Legislative Councillors are 
selected by general election, it is even more difficult 
for a Chief Executive who already enjoys much authority 
to be monitored by a Legislative Council which is less 
representative than the Chief Executive himself. 

4.3 Disagreement over the ultimate aim of the political 
structure 

Members of the public have had relatively few 
discussions on the ultimate aim that the Chief Executive 
be selected by general election. Instead, much dispute 
has been centred round the aim that all Legislative 
Councillors be selected by general election. Some are 
of the view that functional constituencies election has 
its merits and should be retained. Others contend that 
the value of functional constituencies election is 
inferior to that of general election and should 
therefore be abolished. The conclusion on this issue 
would obviously alter the development mechanism for the 
political structure. If it has been confirmed that the 
aim is to select all the Councillors by general 
election, then the development mechanism must be so 
devised to allow for full general election; it should 
also be stipulated clearly that this is the objective 
for the next step of development. If the decision is 
otherwise, then neither the above mechanism nor the 
stipulation would be required. 



5. Discussion on various development mechanisms for the 
political structure 

After the publication of the Basic Law (Draft), the 
development mechanism for the political structure 

172 



contained in it, i.e. referendum, has aroused extensive 
discussions by members of the public. Apart from 
commenting on this mechanism, other evolutionary 
mechanisms are also proposed to assess and decide 
whether there are the right conditions in society for 
further development of the political structure. The 
development mechanisms would be looked at individually 
in the following paragraphs : 

5.1 Timetable 

The so-called "timetable" mechanism refers to the fixing 
of a specific date in the Basic Law for the introduction 
of general election of the Chief Executive. The 
proportion of directly elected seats in the Legislative 
Council and its pace of increment should also be spelt 
out in unequivocal terms. Out of the models proposed 
during the second round of consultations, the 5-5 model, 
bicameral model, new model from the Group of 190 (on the 
formation of the Legislative Council), model proposed by 
the Moderates (on the selection of the Chief Executive) 
and the 4-4-2 model (on the selection of the Chief 
Executive) are all in favour of this mechanism. 
Discussions of the public on the "timetable" mechanism 
focus mainly on the following points: 

5.1.1 Those who suggest that development should only follow 
the "timetable" and not other mechanisms argue that both 
referendum and review of political development contain a 
timetable element in that both mechanisms presume that 
the time for holding a referendum or reviewing the 
political system is the right time for switching to 
general election. As the proposal for general election 
may be rejected in these two mechanisms and a date needs 
to be set again for conducting another referendum or 
review, the state of uncertainty in terms of political 
development may be protracted for an indefinite period. 
On the other hand, if the date for general election is 
fixed, those who intend to stand for election, investors 
and others who are closely related to the development of 
the political structure may then go by the target date 
indicated in the timetable to make the necessary 
arrangements and preparations. 

5.1.2 However, the "timetable" mechanism alone does not offer 
enough flexibility. If at the time specified by the 
Basic Law, the actual situation does not warrant the 
introduction of general election yet the people and the 
government are compelled to follow the timetable, the 
consequence may be very serious. 

5.1.3 In view of the above problem, some suggestions have 
been made : 

5.1.3.1 Review of the development of the political structure or 

173 



referendum should replace the "timetable" mechanism. 

5.1.3.2 Since the methods for selecting the Chief Executive and 
forming the Legislative Council are only outlined in the 
annexes, when the conditions prescribed in the timetable 
does not tally with the actual situation, the annexes 
can be amended by following the normal procedure 
obtaining the approval of a two-thirds majority of the 
Legislative Council and the consent of the Chief 
Executive, and reporting to the Standing Committee of 
the National People's Congress for the record. 

5.1.3.3 A timetable covering a shorter time span should be drawn 
up to plan for the foreseeable future only. 

5.1.3.4 A more flexible timetable should be drawn up. For 
instance, the model of the Moderates proposes that 
general election should be held between the third and 
the fifth terms for the selection of the Chief Executive 
while the decision on the specific date is left to the 
government at that time. 

5.2 Review of the development 

It is suggested that a specified government body should, 
within a specified period, sum up the experience in the 
operation of the political structure, list out the 
merits and demerits and deliberate on the future 
direction of political development based on the actual 
situation at that time. The results of the review may 
bring about total change to the political structure or 
the original development programme may remain in place. 
All would hinge on the government body's judgment of the 
social conditions at that time and the decision thus 
made. The bicameral model, 4-4-2 model and 5-3-2 model 
all propose that the Legislative Council should be 
allowed to decide on its own development. In fact, the 
scope of review of the development could also cover the 
date of general election of the Chief Executive. The 
following are the comments on the suggestion to review 
the development: 

5.2.1 This mechanism offers a more comprehensive and flexible 
approach to deal with the issue of political 
development. Its inclusion of social conditions other 
than the gauging of opinions of the public is a more 
rational approach. It also proposes a review in each 
term so that political development will not be out of 
line with other social developments. 

5.2.2 The nature of the political review restricts the 
participation of the public. Such a review in effect 
delegates the decision-making authority to the 
Legislative Councillors or a small team of experts who 
are accountable to the government. 

174 



5.2.3 This proposal cannot guarantee the development of the 
political structure. As the method of selecting 
successors to the Legislative Councillors or the Chief 
Executive is for the government to decide, government 
officials would have the opportunity to devise 
favourable election methods for their chosen candidates 
(who could be the officials themselves), thereby causing 
injustice. Furthermore, if the incumbent Councillors or 
Chief Executive could be elected through the original 
election method and if the chosen candidates have 
similar background as themselves (which is likely), then 
they would tend to be conservative in making a decision, 
thus slowing down the process of political development. 

5.2.4 Even if the government is impartial when it reviews the 
political system, the public would still point an 
accusing finger at the government if its decision is not 
in line with their wishes. 

5.2.5 The following are some suggestions to boost the 
confidence of the people in the government's review of 
political development : 

5.2.5.1 The crux of the matter lies in the legitimacy of the 
government. If the proportion of democratic elements is 
high in the constitution of the government, people would 
regard the government as their representative. The 
review conducted by the government would then gain the 
confidence of the people. With this argument, it is 
suggested that the seats of the Nominating Committee and 
Election Committee in the first and second terms should 
first be clearly distributed among all the sectors, and 
all members should then be selected by direct election. 
For the first term of the Legislative Council, one-third 
of the seats should be returned by general election, the 
remaining two-thirds of the seats for the functional 
constituencies should also be returned by direct 
election . 

5.2.5.2 Provisions can be made in the Basic Law for a review of 
political development to be conducted during the term of 
office of the second Chief Executive while stipulating 
that the review should only result in advancement 
towards democracy and not retrogression. As for the 
format of the review, a referendum may be included. In 
any case, the review format and its results must be 
endorsed by the majority of members of the Joint 
Conference of Legislative Councillors and Hong Kong 
deputies to the NPC and the results of the review will 
be reported to the Standing Committee of the NPC for the 
record . 

5.3 Trigger point 



175 



The so-called "trigger point" proposal refers to some 
objective indicators in the community that form a 
trigger mechanism for further political development. 
There are relatively few advocates of the "trigger 
point" mechanism. It is mainly proposed by the Group of 
89. In their model, the trigger point for direct 
election of the full Legislative Council hinges on the 
turnout rate of voters: when 50 per cent of the eligible 
voters turn up in an election of the Legislative 
Council, all Legislative Councillors and the Chief 
Executive will be selected by general election. Views 
on this mechanism are as follows : 

5.3.1 When 50 per cent of the eligible voters turn up in an 
election of the Legislative Council, it is an indication 
of the voters' full-blown political awareness and strong 
political interest, signifying that it is the right time 
for holding general election. This mechanism is 
generally considered to display great flexibility in 
that political development can be closely linked with 
the political maturity level of the public. 

5.3.2 ' This mechanism does not rule out the concurrent adoption 

of other evolutionary mechanisms such as a development 
review. In addition, this mechanism can be applied 
frequently without incurring extra costs to the 
community. There is another proposal that the "trigger 
point" should be 50 per cent turnout rate of the 
registered voters instead of eligible voters, along with 
the consent of a two-thirds majority of Legislative 
Councillors. When these criteria are reached, general 
election should be introduced in the next term. 

5.3.3 However, some challenge this mechanism with the argument 
that voters' turnout rate is not a good indicator. 
Members of the public do not cast votes probably because 
the voting exercise does not carry much significance. 
It has nothing to do the people's political awareness or 
interest. Furthermore, the 50 per cent requirement is 
far too high. 

5.4 Referendum 

A referendum allows eligible voters to make the decision 
on a certain issue by way of voting. The results of the 
referendum may serve as a reference for consideration by 
the body which is responsible for drawing up the 
political development programme. These results are not 
binding on the decision-maker. 

The political model contained in the Basic Law (Draft) 
is a conclusive one in the first round of 
consultations. This model has attracted more attention 
from the public than any other model. The evolutionary 
mechanism spelt out therein - "referendum" - is a new 

176 



concept which prompted much discussion amongst various 
sectors. Such discussions are far more detailed than 
those on other evolutionary mechanisms. 

5.4.1 The significance of holding a referendum 

5.4.1.1 The wish of the majority in society should not give way 
to analysis and decision made by a handful of people 
when it comes to issues which are of significance and 
concern the people's immediate interests. Referendum 
offers a fair and formal means of handing the decision- 
making power to the general public. 

5.4.1.2 The interests of the majority and the overall interests 
of society may not be consistent. If policy decisions 
are based on the interests of the majority, then the 
interests of certain important minority groups may be 
neglected, which would in turn damage the interests of 
the whole community. 

5.4.1.3 Referendum is the ultimate embodiment of democracy. As 
the community is still engaged in a debate on the pace 
of democratization (i.e. when to introduce one-person- 
one-vote general election), it is self-contradictory to 
settle such debate by a one-person-one-vote referendum. 

5.4.1.4 If the future political development is to be decided by 
a referendum, then the efforts of various sectors and 
members of the Drafting and Consultative Committees for 
the Basic Law would have been in vain. 

5.4.2 How rational the public are at a referendum 

As referendum provides the public with the decision- 
making power, how rational they can be at the time of 
voting would have a direct bearing on the quality of 
that decision. 

5.4.2.1 The discussion of the Basic Law has been going on for 
several years, so the public now have a good grasp of 
its contents. If the relevant body could coordinate 
promotion and education before a referendum is held, the 
public would be able to gain sufficient knowledge and 
make the right decision in the referendum. Referendum 
is concerned with facts and not with individuals, so the 
public would probably be more rational. Moreover, 
holding a referendum is conducive to the political 
awakening of the public. 

5.4.2.2 Hong Kong has always been lacking in a democratic 
tradition. The public has little understanding of the 
issues concerning the political structure in the Basic 
Law. Hence, they may be vulnerable to manipulation by 
outside forces. On top of that, it is impossible for 
the general public to take part in the discussion of the 

177 



political structure directly. There may be conflicting 
reasons behind the same decision made. In the end, the 
outcome may contradict the wishes of the people. A 
referendum held against such a background would hardly 
yield a satisfactory result. 

5.4.3 The limitations of referendum 

5.4.3.1 Only questions leading to simple answers of yes or no, 
or multiple choice questions could be set in a 
referendum. As for the question of implementation 
method, it cannot be addressed in this way. 

5.4.3.2 A good political development does not necessarily 
guarantee a good development of society as a whole, in 
particular, that of the economy. A referendum to decide 
on the introduction of general election would only 
address the issue of development of the political 
structure while failing to cater for other important 
aspects . 

5.4.4 The development mechanism of the political structure 
provided for in the Basic Law (Draft) 

The operational procedure of a referendum is spelt out 

in the Basic Law (Draft) in such great detail that the 

views of the public in response to the procedure are 

also thorough. The specific operational procedure has 

crucial influence on this mechanism and may alter the 

pace of political development. Views from members of 

the public on the referendum mechanism in the Basic Law 
are listed below : 

5.4.4.1 The timing for holding a referendum 

In the Basic Law (Draft), it is proposed that a 
referendum be held during the term of office of the 
third Chief Executive to determine whether the Chief 
Executive should be popularly elected from the fourth 
term onwards. It is also proposed that a similar 
referendum should take place during the fourth term of 
the Legislative Council to decide if the full 
Legislative Council should be formed by general election 
starting from the fifth term. Views on the time for 
holding a referendum are as follows : 

5.4.4.1.1 A referendum should be held during the transitional 
period, that is, before 1997. 

5.4.4.1.2 If the only reason for confining a referendum to after 
1997 is the realization of sovereignty, then a 
referendum should be held during the term of office of 
the first Chief Executive, lest the development should 
be delayed. 



178 



5.4.4.1.3 The time of the referendum as set out in the Basic Law 
(Draft) is too late, rendering the political 
development conservative. It is more reasonable to 
advance the referendum to the term of office of the 
second Chief Executive. 

5.4.4.1.4 A sound and appropriate approach is to hold a 
referendum during the term of office of the third 
Chief Executive. 

5.4.4.1.5 A referendum should be held in 2001. 

5.4.4.1.6 The deferment of a referendum would only mean the 
deferment of possible instability and disputes sparked 
off by the referendum but not the avoidance of such 
instability. In this case, would it not be best to 
bring forward a referendum so as to find a solution to 
the problem as early as possible? 

5.4.4.2 The formulation of the prerequisites 

In this model, the majority endorsement of the 
Legislative Council, consent of the Chief Executive 
and approval of the Standing Committee of the NPC must 
be sought before a referendum can be held. 

5.4.4.2.1 Views 

5.4.4.2.1.1 Allowing the government to determine the 
prerequisites of a referendum would be equivalent to 
handing the decision-making power on the development 
of the political structure to the government while 
the public could only acknowledge the decision so 
made. This would weaken the people's sense of 
participation in the discussion of political 
development, thus defeating the purpose of a 
referendum. 

5.4.4.2.1.2 There are too many hurdles to be cleared before a 
referendum could be held. This would substantially 
reduce the possibility of holding a referendum. 
Furthermore, the incumbent Chief Executive and 
Legislative Councillors are beneficiaries of the 
existing electoral system. It is unlikely that they 
would come to a decision which may create 
opportunities for the established electoral system 
to be changed. 

5.4.4.2.1.3 It is doubtful as to how representative the Chief 
Executive and the majority of the Legislative 
Councillors could be. Their decision does not 
necessarily conform to the wishes of the people. 

5.4.4.2.1.4 The "approval of the Standing Committee of the 
National People's Congress" as a prerequisite for 

179 



holding a referendum is contradictory to the spirit 
of "a high degree of autonomy" of the HKSAR. 
Moreover, the Standing Committee may tend to be more 
conservative and hold views that are different from 
those of Hong Kong people. 

5.4.4.2.2 Suggestions 

5.4.4.2.2.1 One of the conditions for holding a referendum is 
the approval of the Standing Committee of the NPC. 
This condition should be removed on the grounds that 
the decision on a referendum only involves affairs 
of the HKSAR. In fact, when the Standing Committee 
of the NPC passes the Basic Law, it already empowers 
Hong Kong to hold referendums. There is no need to 
seek approval from the Standing Committee the second 
time. A report of the referendum result to the NPC 
for the record should suffice. 

5.4.4.2.2.2 The prerequisites of obtaining the consent of the 
Standing Committee of the NPC and/or Chief Executive 
and/or the majority of Legislative Councillors 
should be abolished. 

5.4.4.2.2.3 If a referendum is not granted, the authorities 
concerned owe Hong Kong people a detailed 
explanation as well as a referendum in every 
subsequent term. 

5.4.4.3 The formulation of validity criteria 

It is stipulated in the politcal model of the Basic 
Law (Draft) that "the result of the referendum shall 
only be valid and effective with the affirmative 
vote of more than 30 per cent of the eligible 
voters" . 

5.4.4.3.1 The significance of specifying a validity rate 

5.4.4.3.1.1 If the result of the referendum is based on a simple 
majority count, when the turnout rate is low, the 
outcome decided simply by more votes in favour of 
one way or the other would not command the respect 
and trust of the public. 

5.4.4.3.1.2 An issue to be decided by a referendum is one that 
concerns every member of the public who should then 
fulfil his/her civic obligation by voting. 

5.4.4.3.1.3 If a reasonable minimum turnout rate could be set, 
it would mitigate the effect of syndicate touting so 
that the outcome of the referendum would not be 
manipulated by a handful of syndicates. 

5.4.4.3.1.4 Keeping silent is a personal attitude. People have 

180 



the right not to vote. If they are forced into it, 
it would lead to an unpleasant scenario. 

5.4.4.3.1.5 If the people do not vote, it means that they 
tacitly agree to allow those who vote to determine 
the issue on their behalf. For this reason, 
whatever the result, they would have to accept it. 

5.4.4.3.2 Suggestions on the validity rate 

5.4.4.3.2.1 The validity rate proposed in the Basic Law (Draft) 
is acceptable. 

5.4.4.3.2.2 The result of the referendum should only be valid 
and effective with a turnout rate of 50 per cent of 
the eligible voters, out of whom half cast the 
affirmative vote. 

5.4.4.3.2.3 The validity rate of the referendum should be 80 per 
cent of the District Board turnout rate. 

5.4.4.3.2.4 The result of a referendum should be determined by a 
simple majority vote count. 

5.4.4.4 On the stipulation of a re-vote ten years after the 
veto 

In the Basic Law (Draft), there is the provision that 
"if it is decided otherwise by the referendum, 
referendum shall be held every ten years ". 

5.4.4.4.1 This stipulation would only push back the 
uncertainties in the development of Hong Kong every 
ten years. It would be for people in Hong Kong to 
make any long-term plan. 

5.4.4.4.2 If it is decided by the referendum that no changes 
should be made, then a referendum could be held every 
other term or it can be left to the Legislative 
Council to decide, provided that only one referendum 
could be held within each term. 

5.4.4.4.3 If it is decided by the referendum that the status quo 
should be maintained, then a referendum should be held 
every one, three, five or ten years. 

5.4.4.5 Providing for the holding of a referendum and the 
relevant details in the Basic Law 

5.4.4.5.1 On setting the date of the referendum in the Basic 
Law, some are of the opinion that this is an 
outstanding issue in the development of the political 
structure for the government of the third term. 
Prescribing well in advance that the decision-making 
power shall be vested in the people of Hong Kong is an 

181 



indication that people have no confidence in the 
future government. 

5.4.4.5.2 Since referendum is a democratic process, its 
implementation should be based on the needs of the 
people: it is implemented not simply because the Basic 
Law so provided. 

5.4.4.5.3 Besides, specifying the validity rate in the Basic Law 
well in advance would result in the lack of 
flexibility . 

5.4.4.6 Overall views 

5.4.4.6.1 Owing to the above-mentioned limitations of a 
referendum in terms of the area it can deal with, a 
referendum should only be held to determine whether 
the present political structure should be changed. If 
the result is that there should be further development 
in the political structure, then constitutional 
experts, representatives of the public and academics 
should be commissioned to look into the ways of 
reform. Review as a more flexible means allows 
greater freedom in development. 

5.4.4.6.2 Furthermore, the provision on the development 
mechanism of the political structure in the Basic Law 
(Draft) has undermined the function of referendum as a 
political development mechanism, thus leading to 
reduced public support for referendum. It is 
suggested that review of the political structure be 
adopted instead. 

5.4.4.6.3 The pace of democratization of the Legislative 
Council could be speeded up. By so doing, the public 
would be able to judge the performance of a fully 
elected Legislative Council after the first successful 
referendum. It would help in their decision at a 
later stage as to whether the Chief Executive should 
also be popularly elected. In this approach, the two 
referenda would be held to ensure that stability would 
be maintained while democratization is in progress. 

5.4.4.6.4 It should be expressly provided in the Basic Law that 
the third Chief Executive shall be selected by general 
election. If this date has to be deferred, the 
provision in the Basic Law must be vetoed by a two- 
thirds majority of the Legislative Councillors and of 
Hong Kong deputies to the NPC in the second term. 
However, if the turnout rate in the district 
elections to the Legislative Council amounts to 50 per 
cent of the eligible voters, then the veto by the 
Legislative Councillors and Hong Kong deputies to the 
NPC would become void. Accordingly, the Chief 
Executive would be popularly elected from the third 

182 



term onwards. As for the Legislative Council, the 
Basic Law should also expressly provide that all of 
its members shall be selected by general election. If 
the Chief Executive is popularly elected, then all 
seats in the Legislative Council should also be 
returned by general election, free from any 
interference or delay by the Legislative Councillors 
or Hong Kong deputies to the NPC. 

5.4.4.6.5 The ultimate goal of political development is not 
necessarily general election. Hence, a referendum 
should be held in accordance with the details 
stipulated in the model in the Basic Law (Draft), 
except that the decision to be made is on whether the 
proportions of representation in the Legislative 
Council should be revised with the seats for 
functional constituencies being retained. 

5.4.4.6.6 To ensure that the ultimate goal of development is the 
selection of the Chief Executive by general election, 
it should be stipulated that the Chief Executive must 
be returned by general election no later than the 
fifth term. If this proposal is not accepted, then a 
referendum should be held during the fifth term. This 
referendum should only be withheld if two-thirds of 
the Legislative Councillors along with the Chief 
Executive and the Standing Committee of the NPC raise 
their objection. 

5.4.4.6.7 It is contradictory to resort to referendum for a 
decision on the introduction of general election 
(which is itself a form of referendum). The 
suggestion is that an opinion poll should be held in 
place of a referendum. 



Conclusion 

The pace of development of the political structure has 
long been a contentious subject in the discussion of 
the Basic Law. Although it does not make up the 
entire issue on political structure, it is indeed an 
important part of it. Public concern on this subject 
has transformed the otherwise simple issue of a faster 
or slower pace of development into a complicated and 
cumbersome one. This report is an attempt to 
summarize and organize the relevant arguments so as to 
give the reader a better understanding of the issue. 



* If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



183 



RELATIONSHIP BETWEEN 
THE EXECUTIVE AUTHORITIES AND THE LEGISLATURE 



Contents 

1 . Introduction 

2. Model based on integration of powers 

3. Model based on separation of powers 

4. Basis of discussion 

5. Views related to the model based on integration of 
powers 

6. Views related to the model based on separation of powers 

7 . Conclusion 



1. Introduction 

1.1 Discussions on the Basic Law (Draft) are mainly on the 
methods for selecting the Chief Executive and for 
forming the legislature. Relatively speaking, the 
relationship between the executive authorities and the 
legislature has been overlooked. In the design of the 
political structure, the relationship between the two 
branches is in fact highly important and the methods 
for forming the two branches are inseparable. This 
report summarizes the views on this issue for the 
discussion of the Drafting Committee and the public. 

1.2 Previous discussions on the relationship between the 
executive authorities and the legislature have all along 
been based on two fundamental models: the parliamentary 
system where the executive and the legislative are 
integrated; and the presidential system where the 
executive and legislative powers are separated. This 
report first introduces the characteristics of these two 
systems and then presents the analyses and proposals on 
the relevant articles of the Basic Law (Draft) put 
forward by members of various sectors with respect to 
these two main systems. 



Model based on integration of power 

This model which originates from Britain is also known 
as the parliamentary system or the cabinet system. 
Besides Britain, the Netherlands, Canada, and Singapore 
also practise this system. Under this system, the 
parliament is not only the legislature but is also the 
organ of supreme power. The political party (or the 
coalition of political parties) which wins the 
parliamentary election and gains the majority of seats 
will also be responsible for forming the government. 
Hence, the executive is said to be established on the 
legislature. The prime minister (premier) and cabinet 
members (principal ministers) are concurrently members 
of the legislature. Members of the cabinet apart from 
being responsible for running the government, take part 
in the legislative work of the parliament. Thus, the 
legislative work of the parliament is in fact carried 
out under the direction of the cabinet. The prime 
minister (premier) is the leader of the majority party 
while members of the cabinet represent the core of 
leadership of the ruling party. The prime minister 
(premier) is usually able to control and manipulate the 
parliament through the parliamentary caucus. On the 
other hand, the government is accountable to and 
monitored by the parliament. Should the prime minister 
(premier) be unable to control the parliament, or the 
parliament not agree to the policies of the government 
and pass a vote of no confidence, the government has to 



187 



resign or the head of state may be asked to order the 
dissolution of the parliament and a re-election, so that 
a new government can be formed by the majority. 
Generally speaking, under the parliamentary system, the 
executive authorities and the legislature overlap each 
other in terms of their constitution and operation. 



Model based on separation of powers 

This model is also known as the presidential system. The 
United States is the first country to adopt the 
presidential system. Other countries which practise 
this system include Mexico, Colombia and Indonesia. 
Under the presidential system, the president is 
concurrently the head of state and the chief of the 
executive authorities. The president is in charge of 
internal and foreign affairs, appoints the judges of the 
Supreme Court, commands the military forces, and has the 
power to declare states of emergency. His status is 
therefore above the legislative, executive and judicial 
branches. The president and members of the legislature 
are selected through different election procedures. 
Their terms of office are also different. The majority 
party is not necessarily the party in power. The 
president is accountable to the electorate and not the 
congress. Unless the president has committed a criminal 
offence, the congress cannot pass a vote of no 
confidence against him or a resolution to remove him 
from office. The president on the other hand cannot 
dissolve the congress. The relationship between the 
president and the congress is one of checks and balances 
between the executive and the legislature. Executive 
officials are not allowed to concurrently be members of 
the legislature. The president and executive officials 
are not allowed to attend congress discussions on bills 
or take part in their voting. All bills are proposed by 
congressmen. The president has the authority to appoint 
and remove heads of all departments and senior executive 
officials who are accountable to the president and not 
the legislature (congress). The president has the right 
to veto bills passed by the congress. Unless the vetoed 
bill is again supported by a two-thirds majority of the 
members of the congress, it will not become law. The 
president may, through the "State of the Union Message", 
exercise partial initiative in legislation, or may 
exercise the legislative power by issuing legally- 
binding executive orders. When appointing the heads of 
various departments, the president normally bases his 
decision on actual needs rather than on the party 
affiliations of the candidates. Although the candidates 
for presidency are recommended by political parties, 
after a candidate has been elected, the party which 
recommended the candidate does not have a great deal of 
influence on the president. On the contrary, as the 



188 



leader of a political party, the president may influence 
members of his own party sitting on the congress. 



4. Basis of discussion 

Numerous opinions have been put forward on the 
relationship between the executive authorities and the 
legislature, and each kind of opinions is based on 
certain assumptions regarding the design of the 
political structure. Some of them adopt the 
parliamentary system or the presidential system as 
their model; some tend to favour an executive-led or 
legislature-led framework; and some take into 
consideration the actual conditions and put forward new 
ideas by modifying the existing system. With the 
various assumptions, there bound to be divergent or 
contradictory opinions. The opinions put forward can be 
categorized into: (1) views related to the model based 
on integration of powers and (2) views related to the 
model based on separation of powers. 

5. Views related to the model based on integration of 
powers 

5.1 The power of the Chief Executive to approve the 
introduction of motions regarding government revenues 
and expenditure 

Article 48(10) of the Basic Law (Draft) provides that 
the Chief Executive shall have the power to approve the 
introduction of motions involving revenues or 
expenditure to the Legislative Council. This provision 
is different from the present practice and the French 
parliamentary system. 

Article 23 of the present "Standing Orders of the 
Legislative Council of Hong Kong" is on motions. It 
prescribes: "A motion or amendment, the object or effect 
of which may, in the opinion of the President or 
Chairman, be to dispose of or charge any part of the 
revenue or other public moneys of Hong Kong, shall, 
unless moved by an ex officio Member or an Official 
Member, require the recommendation of the Governor, 
which shall be notified by the Unofficial Member when 
moving the motion or amendment." However, this is only a 
very general provision. In practice, taxation may be 
increased but not reduced whereas expenditure may only 
be reduced. So the provision in the Basic Law (Draft) 
does not maintain the present system but expands the 
fiscal power of the executive authorities. 

5.2 Proposal on motions relating to government expenditure 

It has been proposed that Article 48(10) should be 

189 



amended to read: "To approve the introduction of motions 
regarding the reduction of revenues or the increase of 
expenditure to the Legislative Council;" so that the 
present practice may be maintained. However, according 
to some opinions, such an amendment should take into 
consideration the provision of Article 73 and may take 
the practice in France as reference, that is all 
proposals should be called bills or amendments and not 
motions. In Hong Kong, only bills and amendments have 
legal force but not motions. So the practice in France 
is more flexible than that in Britain or in Hong Kong. 
Nevertheless, the most important thing is that under the 
parliamentary system, fiscal power is not monopolized 
by the executive authorities. 

5.3 The power of the Legislative Council to introduce 
motions 

Article 73 of the Basic Law (Draft) provides: "Members 
of the Legislative Council of the Hong Kong Special 
Administrative Region may introduce bills in accordance 
with the provisions of this Law and legal procedures. 
Bills which do not relate to public expenditure or the 
structure and operation of the government may be 
introduced individually or jointly by members of the 
Council. Written consent of the Chief Executive shall be 
required before bills relating to government policies 
are introduced." Under a parliamentary system, motions 
which involve either government revenues and 
expenditure or government policies must have the consent 
of the executive authorities, otherwise the 
implementation of policies will be adversely affected. 
However, motions on government operation which do not 
relate to government finance or tax reduction should 
be accepted provided that they are expressed in the 
requested form. Otherwise, it will impose unnecessary 
restrictions on the Legislative Council, depriving the 
Legislative Council of an opportunity to reflect the 
wishes and opinions of the people. 



5.4 The time limit within which the Chief Executive should 
return bills 

Article 49 of the Basic Law (Draft) stipulates that the 
Chief Executive may return a bill passed by the 
Legislative Council for reconsideration within three 
months. This provision is too flexible. In France, the 
time limit is 15 days. 

5.5 The Chief Executive's power to appropriate public funds 

Article 51 of the Basic Law (Draft) stipulates: "If the 
Legislative Council refuses to pass the appropriation 
bill introduced by the government, the Chief Executive 

190 



may apply to the Legislative Council for temporary 
appropriations. If appropriation of public funds cannot 
be approved because the Legislative Council has already 
been dissolved, the Chief Executive may approve 
temporary short-term appropriations according to the 
level of the previous fiscal year's expenditure prior to 
the election of the new Legislative Council." Except for 
Germany, the executive authorities of all countries 
adopting the parliamentary system do not have this kind 
of power. 

5.6 Arrangements in case the Chief Executive is unable to 
discharge his/her duties 

Article 53 of the Basic Law (Draft) stipulates: "If the 
Chief Executive of the Hong Kong Special Administrative 
Region is not able to discharge his/her duties for a 
brief period, such duties shall temporarily be assumed 
by the Administrative Secretary, Financial Secretary or 
Secretary of Justice in this order of precedence. In the 
event that the office of Chief Executive becomes vacant, 
a new Chief Executive shall be selected within six 
months in accordance with the provisions of Article 45 
of this Law. During the period of vacancy, his/her 
duties shall be assumed according to the provisions of 
the preceding paragraph." 

In other countries adopting the parliamentary system, 
the duties will be temporarily assumed by the person 
superior to the Chief Executive, e.g. the chairman of 
the upper house. In France, it is stipulated that in 
case such office becomes vacant, it should be filled 
within 20 to 35 days instead of six months. Otherwise, 
once the Chief Executive has fallen from power upon 
impeachment, the appointee will be in power for six 
months . 

5.7 The accountability of the executive authorities to the 
legislature 

Article 64 of the Basic Law (Draft) which provides for 
the accountability of the executive authorities to the 
legislature has failed to accurately describe their 
existing relationship within the context of legal 
principles. Further, under Article 72(9), as far as 
legal principles are concerned, the legislature may pass 
a motion of no confidence against the Chief Executive 
but the government will not necessarily fall from power. 
Yet, in reality, the political consequence of a vote of 
no confidence against the head of a government will lead 
to the downfall of the government, which is a very 
serious consequence. 

For the successful operation of a parliamentary system, 
the practice in France may be taken as an example. 

191 



According to Article 49 of the Constitution of the 
Republic of France, if the motion of no confidence 
proposed by one-tenth of the members of parliament is 
passed, the government must fall from power. In that 
case, the President may dissolve the parliament whose 
reconstitution awaits the decision of the people. If 
the motion of no confidence is not passed, the members 
who proposed the motion will not be allowed to put 
forward the motion again within the same term. In 
addition, the government may request the parliament to 
accept without any change, the general direction of 
government administration or of specific policies, or 
even a certain document or bill. If one-tenth of the 
members of parliament do not accept any of the above, 
they may propose a motion of no confidence. Then, the 
motion of no confidence will be put to a vote. If more 
than half of the members of parliament support the 
motion of no confidence, the motion will be passed. If 
the motion of no confidence has the support of less than 
half of the members, it will not be passed and the 
policy or document to be voted through will be passed 
without any change. In the future, Hong Kong may take 
such a practice as reference. 

5.8 Time limit for the reconstitution of the Legislative 
Council 

Article 69 of the Basic Law (Draft) stipulates that 
after the Legislative Council is dissolved, it shall be 
reconstituted by election within three months. However, 
under the system in France, the parliament will be 
reconstituted by election within 20 to 40 days after its 
dissolution. Further, the article fails to stipulate 
clearly whether the Legislative Council shall be 
considered having completed its term upon its 
dissolution, or whether the newly elected Legislative 
Councillors shall continue to serve the remaining term 
of the dissolved Legislative Council. The usual practice 
in countries adopting the parliamentary system is that 
the newly elected parliament will begin a new term. 

5.9 The Chief Executive's signing of the bills passed by the 
Legislative Council 

Article 75 of the Basic Law (Draft) stipulates: "A bill 
passed by the Legislative Council of the Hong Kong 
Special Administrative Region shall take effect only 
after it is signed and promulgated by the Chief 
Executive." This provision can be interpreted two ways. 
It may mean that the Chief Executive has absolute power 
of veto over the bills: a bill will become null and void 
once the Chief Executive refuses to sign it. Another 
possible meaning is that a bill will be returned to the 
Legislative Council for reconsideration if the Chief 
Executive refuses to sign it. The true interpretation of 

192 



this provision has yet to be clarified. Another related 
question is whether the Chief Executive should make 
his/her decision (whether to sign the bill or not) 
within a time limit. The present legislature of Hong 
Kong comprises the Governor and the Legislative Council. 
Hence, the case where a passed bill fails to take effect 
does not exist. The same applies in Britain as the 
legislature comprises both the Queen and Parliament. 
But, what kind of system will be adopted in Hong Kong 
in the future? 

5.10 The power of the Legislative Council to hold debates 

Article 72(6) of the Basic Law (Draft) stipulates that 
the Legislative Council may hold debates on any issue 
concerning public interests but does not indicate 
clearly whether this power include the power to move 
motions. If so, does it include the power to move 
motions of no confidence? 



6. Views related to the model based on separation of powers 

6.1 The question of the executive authorities being 
accountable to the legislature 

6.1.1 The definition of the term "accountable" has all along 
been considered ambiguous and given rise to much 
controversy. When the Sino-British Joint Declaration was 
first published, many people tended to interpret the 
terra "accountable" within the context of a parliamentary 
system. That is, the future Legislative Council will be 
a representative body equivalent to the parliament of a 
state, to which the government will be accountable. 
However, such an interpretation means that the two 
branches will have a subordinate relationship and that 
the government will be under the direction of the 
pari iament . 

6.1.2 Article 64 of the present Basic Law (Draft) provides an 
interpretation of the term "accountable" , which is not 
in accordance with the practice under a parliamentary 
system. The tradition of the parliamentary system is 
marked by the dictatorship of the parliament, or the 
dictatorship of the majority, to which the executive 
authorities are accountable. In Britain, supreme power 
resides in Parliament, but the monarch is also being 
highly regarded. Thus, the bills passed by Parliament 
are in fact passed in the name of the Queen in 
Parliament. If the meaning of the term "accountable" is 
interpreted within the context of a parliamentary 
system, the government will be accountable to the 
highest organ of state power, i.e. the parliament. Such 
a practice will constitute a subordinate relationship 
between the executive authorities and the legislature. 



193 



Moreover, as the parliament is the centre of power and 
is constituted by elections, in order to ensure that its 
opinions are not divided or disparate, Western countries 
allow the development of party politics which ultimately 
leads to the formation of a ruling group. This group 
will, through the control of the majority of seats in 
the parliament, organize a government to lead the civil 
service in implementing policies, thus ensuring 
coordination between the executive and the legislative 
branches. So stable party politics may minimize the 
unpredictable in elections and reduce political 
instability. In addition, the civil service will, to a 
certain extent, be conducive to the continuity in the 
implementation of government policies. 

6.1.3 The present system in Hong Kong is a dictatorship with 
the Governor as the core, who is subject to the British 
Government and is accountable not to the local 
legislature but to the British Parliament through the 
British Government. Thus, the question of the executive 
authorities being accountable to the legislature does 
not exist in Hong Kong. The executive and the 
legislative powers are, after all, vested in the 
Governor. Only because of various historical factors, 
these two powers have to a certain extent been 
separated. However, according to legal principles, both 
the Executive Council and the Legislative Council are 
advisory bodies to the Governor, with a certain 
complementary mechanism, i.e. the system of appointment, 
to ensure that members of the two councils do not "go 
against" the Governor. Although what is provided for in 
the Basic Law (Draft) is similar to the present 
practice, i.e. the legislature will have the power to 
pass bills for the appropriation of funds, to receive 
reports on the work of the government presented by the 
executive authorities, and to raise questions to the 
Chief Executive, it does not amount to "accountability" 
under the parliamentary system. 

6.1.4 After 1997, the Hong Kong Special Administrative Region 
may modify its existing practice to give expression to 
the change in the political status of Hong Kong. After 
1997, the previous system with the Governor as the 
dictator accountable to the British Parliament should be 
changed into one where the organs of executive power 
shall be accountable locally, switching allegiance from 
the British Parliament to the local legislature. 
However, the executive authorities may be granted more 
initiative, e.g. they may have the privilege to propose 
bills concerning public interests and to propose 
appropriation bills. The main reason for granting so 
much power to the executive authorities is that, under a 
parliamentary system, the executive authorities are 
ultimately accountable to the parliament and the 
government is assumed to be supported by the parliament. 

194 



The coordination between the executive and the 
legislative branches may be effected through political 
parties . 

6.1.5 Nevertheless, in the Basic Law (Draft), no obvious 
characteristics of a parliamentary system are 
manifested. On the contrary, the executive authorities 
and the legislature are constituted and empowered 
independently. It is therefore impossible for them to 
have a subordinate relationship because they may be said 
to have the trust of and are empowered independently by 
the people. If they do not have a subordinate 
relationship, the question of accountability will not 
arise. What is indicated in the Basic Law (Draft) is 
that the legislature has the power to monitor the 
executive authorities, but that is not the same as the 
executive authorities being accountable to the 
legislature . 

6.1.6 Proposal 

Since the two branches are formed independently, it is 
very difficult to make one accountable to the other. To 
insist on such an interpretation will only distort the 
meaning of the term "accountable". Some opinions 
therefore propose deleting Article 64 of the Basic Law 
(Draft) and stating clearly in specific articles that 
the Legislative Council will have the power to raise 
questions and to hold debates. There is no need to 
mention the term "accountable" because such a 
relationship just does not exist. 

6.2 Checks and balances between the executive authorities 
and the legislature 

6.2.1 According to the Basic Law (Draft), the relationship 
between the executive authorities and the legislature is 
characterized by the following: 

The executive authorities and the legislature shall be 
constituted independently; and they shall each perform 
their own roles. 

6.2.1.1 Powers of the Chief Executive: 

(1) Initiative in formulating public policies; 

(2) Initiative in finance; and 

(3) Initiative in legislation. 

6.2.1.2 Powers of the Legislative Council: 

(1) Power of monitoring: power of veto, power of raising 
questions, power of investigation, power of debate, 

195 



and power of impeachment; 

(2) Power of representation: The Legislative Council 
shall represent different interests and views in the 
community and receive complaints from the public; 

(3) Powers in respect of public policies, budgets and 
legislation; these powers are subject to restriction 
(Article 49) because the Legislative Council will 
lack the abundant resources and research facilities 
of a committee system, nor will there be any staff 
to cope with the work involved. 

(4) Power in policy-making: This power is governed by 
Article 73 which limits it to those policies not 
involving public expenditure or the structure or 
operation of the government. Written consent of the 
Chief Executive shall be required before bills 
relating to government policies are introduced. But 
on the other hand, Article 49 permits the 
Legislative Council to pass by no less than a two- 
thirds majority a bill which has been returned by 
the Chief Executive for reconsideration. Thus, with 
the support of more than two-thirds of its members, 
the Legislative Council will be able to execise 
policy-making power to a certain degree. 

6.2.2 Checks and balances 

6.2.2.1 Legislative power and fiscal power -- If the concept of 
checks and balances in the Basic Law (Draft) is 
understood according to the interpretation of checks 
and balances of powers adopted in the US, it will be 
found that under the Basic Law (Draft), the legislature 
does not have the initiative in legislation and 
financial affairs. These powers are vested in the 
executive authorities. 

6.2.2.2 Power of investigation -- Under the system of checks and 
balances, the legislature generally exercises its power 
of investigation. However, under the Basic Law (Draft), 
the power of investigation of the legislature is 
restricted. For instance, the Chief Executive may, on 
the grounds of public interests, refuse to allow any 
government official to testify before the Legislative 
Council. And the term "public interests" is so vague 
that it may be abused by the Chief Executive. As the 
future Legislative Council will not have access to 
information, it will not be able to effectively monitor 
or maintain checks and balances with the executive 
authorities . 

6.2.2.3 Power of dissolution -- Under the parliamentary system, 
when a political conflict cannot be resolved in the 
parliament, it is possible to dissolve the parliament on 

196 



the basis that the final decision rests with the people 
since the parliament is elected by the people. The power 
of final decision in resolving the conflict will be 
exercised by the people through re-election of the 
parliament. But under the presidential system, the 
executive and the legislative branches are separately 
elected by the people, and they therefore have a 
relationship of checks and balances. Since both sides 
try to avoid a crisis of conflicting representation, a 
political culture of compromise is formed. So in theory, 
there may be confrontation between the two branches, 
but in practice, the checks and balances between them 
has ironically made them ready to compromise. 

According to the Basic Law (Draft), the Chief Executive 
has the initiative to dissolve the Legislative Council. 
Since Legislative Councillors will definitely be 
reluctant to experience frequent re-elections which are 
a waste of money and manpower, and there is the 
possibility that they might lose, the power of the 
Chief Executive to dissolve the Legislative Council 
poses serious threats to Legislative Councillors. Under 
a situation where the powers are not balanced, the 
objective of checks and balances can hardly be achieved. 
(However, some opinions hold that to maintain checks 
and balances does not necessarily require a balance of 
powers. Furthermore, since the executive authorities 
and the legislature are different in composition, nature 
and functions, they will never be equal in power. ) 

6.2.2.4 There may be confrontation and stalemate in the 
Legislative Council, making the formulation of policies 
quite impossible. 

6.2.2.4.1 Provisions of the Basic Law (Draft) 

Legislative Councillors may, on the grounds of looking 
after special interests, abuse the power of veto to 
influence the operation of the government, thus making 
the process of legislation and policy-making quite 
irrational. Or, the Chief Executive may, in accordance 
with Article 48(11), arbitrarily apply the clause "in 
the light of security and vital public interests" in 
not allowing government officials to testify or give 
evidence before the Legislative Council or its 
committees, thus hindering the exercise of monitoring 
power by the Legislative Council. Or, in accordance 
with Article 73, the Chief Executive defines what are 
government policies in order to restrict the power of 
the Legislative Council to introduce bills, and/or to 
restrict the financial resources of the Legislative 
Council. Under such circumstances, should a stalemate 
emerge, it will be difficult to end it. 

6.2.2.4.2 Other situations 

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( 1 ) All Legislative Councillors will be unanimously 
against the Chief Executive if the Chief Executive 
represents China's interests. However, the 
possibility of the emergence of such a situation is 
very slim. 

(2) Hong Kong lacks powerful political organizations to 
coordinate between the executive authorities and 
the legislature. 

(3) Since the Chief Executive will not be the President 
of the Legislative Council, he/she will be unable to 
control the agenda or the timetable for Legislative 
Council meetings. 

(4) The standing orders should be dealt with carefully, 
otherwise a small technical problem will lead to the 
collapse of the whole bill. 

6.2.2.5 Methods for ending a stalemate 

Methods which cannot be adopted in Hong Kong: 

(1) At present, the Governor is the President of the 
Legislative Council who has the power to appoint 
Councillors, and to control the agenda and 
timetable for Legislative Council meetings. After 
1997, this practice will not be maintained as the 
Chief Executive will not be the President of the 
Legislative Council in the future. This will be an 
enormous change to the present system and such a 
change -- a slight move in one part -- will affect 
the situation as a whole. Even though we have been 
talking about retaining the previous systems after 
1997 all the time, it seems that we have forgotten 
the most fundamental principle which should be 
upheld . 

(2) The cabinet system. 

(3) The presidential system. The future Chief Executive 
will not have independent legislative power because 
all bills must be passed by the Legislative Council. 

6.2.2.5.1 Methods which may be considered: 

6.2.2.5.1.1 Non-constitutional arrangements 

(1) Unofficially invite Legislative Councillors to 
participate in the formulation of policies for the 
purpose of receiving their opinions first. 

(2) Constantly discuss and negotiate with Legislative 
Councillors, lobby them and have mutual exchange of 



198 



interests with them. 

(3) Pressurize the Legislative Council by mobilizing 
public and expert opinions outside the Council. 

(4) Establish proper channels of communication between 
the legislature and the executive authorities. For 
instance, the US President has established 
congressional liaison groups to coordinate with the 
corresponding policy committees under the 
legislature and conduct lobbying in Congress with 
regard to the policies of the executive authorities. 

(5) Establish a political coalition which may be 
permanent or ad hoc in nature. However, the 
possibility of such a development in future is still 
uncertain . 

(6) Grant substantive advantages to individual 
Legislative Councillors because many Councillors 
will need to rely on the advantages granted to them 
by the Chief Executive or the executive authorities 
to appease the voters who, they hope, will elect 
them again in the next election. 

(7) Establish an independent apolitical executive 
organization which will not be under the direct 
supervision of the Legislative Council. This kind of 
organizations will not be bothered by any political 
disputes between the parliament and the chief 
executive, and can therefore function 
independently. This practice is common in Singapore 
and Italy. Hong Kong is trying to follow their 
examples . 

(8) Acquire leadership by making use of the executive 
structure and its advantageous position in obtaining 
knowledge and information. 

(9) The Chief Executive should appoint members of the 
Legislative Council as chairmen and members of 
important boards and committees, similar to the 
present advisory committee system. 

Specific proposals include: (1) The seats of such a 
board or committee are allocated equally among 
appointed members, Legislative Councillors and 
government officials, who will be in charge of 
monitoring the policies of various departments. But 
these members should not be admitted to the 
Executive Council, lest the checks and balances 
between the executive authorities and the 
legislature should be impossible. (2) These 
important boards and committees are to oversee and 
assume responsibility for policy areas for which 



199 



they will be accountable to the Legislative Council. 
Chairmen of these boards and committees shall be 
appointed by the Chief Executive from among 
Legislative Councillors. Each board or committee 
shall be served by three to four Legislative 
Councillors along with other lay members to advise 
the government on policy making. About 10 to 12 
chairmen of these important boards and committees 
shall sit on the Executive Council to resolve the 
relationship between the executive authorities and 
the legislature and to make it possible that the 
executive authorities will be accountable to the 
legislature. (3) It has also been suggested that the 
Chief Executive should appoint as many chairmen of 
these important boards and committees to the 
Executive Council as possible whether they are 
Legislative Councillors or not. 

The merits of these proposals are: (1) It would 
retain the present advisory committee system which 
is a fine system. (2) It would grant Legislative 
Councillors the right to take part in policy making. 
(3) As Legislative Councillors who serve these 
boards and committees would have a better 
understanding of the policies concerned, they could 
make policy recommendations to their fellow 
Legislative Councillors and get their support so 
that the policies could be passed smoothly. (4) The 
Chief Executive would have the support of the 
Legislative Council, thus avoiding confrontation 
between the executive authorities and the 
legislature . 

But some opinions question the status and role of 
these committees and their chairmen. Since these are 
advisory committees and not decision-making bodies, 
they cannot "assume responsibility for policy 
areas". Since the chairmen of these important 
boards and committees are members of the Executive 
Council who collectively decide on policies and 
collectively assume responsibility for government 
policies decided upon, and obviously whoever makes 
the policies assumes responsibility for them, it is 
not clear whether the policies will be formulated by 
the relevant committees or the relevant Secretaries. 
If these committees are purely advisory, it would be 
inappropriate to hold them accountable to the 
Legislative Council. 

(10) It is suggested that the Chief Executive should 
appoint the chairmen of the select committees under 
the Legislative Council as members of the Executive 
Council, in order to strengthen the communication 
between the executive authorities and the 
legislature . 



200 



However, it is pointed out in some opinions that the 
appointment of these chairmen as members of the 
Executive Council may give rise to confrontation 
between the executive authorities and the 
legislature. Even if these Legislative Councillors 
do join the Executive Council, they might not be 
able to canvass more votes in the Legislative 
Council to support the Chief Executive. If the 
chairmen of the select committees are selected by 
the Legislative Councillors from among themselves 
and appointed by the Chief Executive automatically, 
other problems may arise: (1) These chairmen 
selected may not necessarily be of Chinese 
nationality. (2) If the future Executive Council 
adopts the present practice of keeping affairs in 
strictest confidence while all Legislative 
Councillors are elected, these Legislative 
Councillors will be put in an embarrassing position 
in terms of their functions and accountability. (3) 
If the chairmen of the select committees are 
appointed by the Chief Executive, there may be 
allegations of political interference since the 
power to appoint chairmen of the select committees 
should be vested in the President of the Legislative 
Council . 

6.2.2.5.1.2 Constitutional arrangements 

(1) Methods provided for in the Basic Law (Draft) -- but 
these methods have the following drawbacks: 

1) The methods provided for in the Basic Law (Draft) 
are methods which can be applied only under 
extreme circumstances to end a stalemate or 
conflicts between the legislature and the 
executive authorities. Furthermore, the 
effectiveness of these methods is being 
restricted. For instance, with respect to the 
power to dissolve the Legislative Council, the 
Chief Executive may dissolve the Legislative 
Council only once in his/her term of office. 
Hence, in relation to the new Legislative 
Council, the Chief Executive will have no way to 
exercise checks and balances. As a matter of 
fact, the election of new Legislative Councillors 
will not pose any serious threats to a 
Legislative Council which is partly constituted 
by election by functional bodies, because 
election by functional bodies does not require 
too much lobbying or electioneering. Moreover, 
the general public will tend to support those 
candidates who are against the Chief Executive. 
Hence, the dissolution of the Legislative Council 
in fact will not pose any threats to the 



201 



Legislative Council. Also, after the Chief 
Executive has dissolved the Legislative Council 
once, he/she will be put in a quite passive 
position . 

The power of impeachment is also to be exercised 
by the Legislative Council against the Chief 
Executive only under extreme circumstances. And 
even if the Chief Executive is impeached, he/she 
will not necessarily fall out of power because 
whether he/she will leave office will depend on 
the decision of the Central People's Government. 

2 ) There is no specific arrangement to ensure that 
the executive authorities and the legislature 
will each perform their own roles under normal 
circumstances, nor is there any regular procedure 
to end confrontation and conflicts. All these 
will be unfavourable to the relationship between 
the legislature and the executive authorities. 
For instance, with respect to the Chief 
Executive's appointment of Legislative 
Councillors as members of the Executive Council 
for sake of communication or liaison, two 
problems may arise: (1) the appointed Legislative 
Councillors may not be able to motivate other 
Legislative Councillors to support the Chief 
Executive because they may be regarded as 
henchmen of the Chief Executive; and (2) the 
Chief Executive may only appoint Chinese 
nationals as members of the Executive Council, 
but if the majority of the Legislative 
Councillors hold foreign passports, the Chief 
Executive will be unable to make the appointment, 
unless this restriction is abolished which may be 
considered too high a price to pay. In addition, 
the procedures for legislation, appropriation of 
funds and monitoring are vague and insufficient. 
For instance, Article 51 stipulates: "If the 
Legislative Council refuses to pass the 
appropriation bill introduced by the government, 
the Chief Executive may apply to the Legislative 
Council for temporary appropriations." The 
problem with this provision is that it does not 
provide a solution. And Article 71(2) 
stipulates: "..., giving priority to bills 
introduced by the government for inclusion in the 
agenda;". What is meant by "priority"? The term 
"priority" does not denote that the introduction 
of these bills should not be delayed. 

(2) Proposal that regular constitutional procedures 
should be added to deal with stalemate which 
normally occurs between the legislature and the 
executive authorities and to ensure that the two 



202 



branches will each perform their own functions. 

The influence of the Chief Executive on the agenda 
and timetable for Legislative Council meetings 
should be approporiately increased so that the 
public policies formulated by the government will be 
comprehensive, consistent, timely and coherent: 

1) The Chief Executive may decide the order of 
priority of bills introduced by the government 
and the Legislative Council will examine these 
bills according to this order of priority. 

2) The Chief Executive may, under certain 
restraints, exercise the power of "cloture" (or 
"closure"). That means, the Chief Executive may 
demand the Legislative Council to terminate the 
debate on a bill introduced by the government and 
to put it to a vote. Its aim is to allow the 
Chief Executive to make the Legislative Council 
realize the urgency of the bill. The Legislative 
Council is compelled to vote in order to prevent 
a handful of Councillors from delaying by various 
means the vote on the bill for some time or even 
indefinitely. On the other hand, to prevent the 
abuse of power by the Chief Executive and to 
ensure those bills will still be debated and 
passed by the Legislative Council, it may be 
stipulated that within a period of time, the 
Chief Executive may only exercise the power of 
cloture on no more than two bills introduced by 
the government, and that the power of cloture may 
only be exercised after a bill introduced by the 
government has been debated by the Legislative 
Council for some time, otherwise the Legislative 
Council will be unable to perform its functions 
of debate and examination. 

3) The Chief Executive should have the power of veto 
over the motions of amendment proposed by the 
Legislative Council on government bills or 
motions. The objective is to prevent the 
following: (1) the Legislative Council, through 
motions of amendment, changes or distorts the 
government bills to the extent that they lose 
their true intents or become discriminatory 
against certain sectors, and ultimately the 
Chief Executive has to refuse to sign these bills 
or motions which were originally put forward by 
the government; and (2) the abuse of the 
amendment power by a handful of Legislative 
Councillors to strangle government bills or 
motions. Of course, the Chief Executive shall 
have the power to amend government bills or 
motions after considering the opinions of the 



203 



Legislative Council and to refer these amended 
bills or motions to the Legislative Council for a 
vote . 

4) According to Article 51, the Chief Executive may 
apply to the Legislative Council for temporary 
appropriations. But if such an application is not 
approved, the injured party will be the public 
and not the Chief Executive. The Chief Executive 
should therefore have the power to call upon the 
Legislative Council to discuss major matters, and 
to address the Legislative Council on major 
matters or policies or to demand the Legislative 
Council to consider certain important issues. All 
in all, the Chief Executive should take the 
initiative to seek the channel for communication 
with the Legislative Council. 

( 3 ) Proposals for strengthening the monitoring power of 
the Legislative Council 

1 ) Grant the Legislative Council the power to 
censure principal officials. As impreaching the 
Chief Executive will lead to the downfall of the 
government and the government should not be a 
system of collective responsibility, it should 
be possible to censure individual principal 
officials. As to whether the censured officials 
should resign, it will be up to the Chief 
Executive to decide. This will mitigate the 
responsibility of the Chief Executive. 

2) The Legislative Council should have regular 
question time with the Chief Executive or 
principal officials. Question time is different 
from inquiries. It takes place on a regular 
basis and is secondary to inquiries. Inquiries 
are extreme measures taken in extraordinary 
times . 

3) May consider strengthening the Legislative 
Council's power to obtain information from the 
executive authorities. But this is a matter of 
principle. To spell it out in the Basic Law will 
be very difficult. 

6.3 Proposal that the political structure should be 
executive-led 

6.3.1 Views on the relevant provisions in the present Basic 
Law (Draft) 

6.3.1.1 Government policies will entirely be proposed by the 
executive officials of the government, the Executive 
Council and special committees. The legislature's 

204 



monitoring and influence on the formulation of policies 
will be insufficient. This is obviously related to the 
definition of the initiative of the legislature. The 
present provisions are inadequate as far as the 
legislature is concerned. 

6.3.1.2 The legislature's monitorng and influence on policies 
will depend, to a very large extent, on the organized 
political forces in the community, their representation 
in the legislature, and the maturity of political 
parties . 

6.3.1.3 There are certain grey areas in the provisions on 
political structure: the status of special committees 
and independent authorities in the government structure 
is not clearly defined and awaits clarification. 

6.3.1.4 The emphasis of the Basic Law (Draft) provisions on 
preserving the powers of the Chief Executive is 
understandable in an executive-led structure. But since 
the concept of separation of powers does not apply to 
the relationship between the executive and the 
legislature, this emphasis does not imply a curtailment 
of the power of the legislature. 

6.3.1.5 The various parties involved in the discussions on 
political structure in Hong Kong often mention the need 
for maintaining efficiency in the work of the 
government. With regard to efficiency, it is essential 
to clearly specify that once a government policy has 
been passed, it should be put into practice and 
implemented without delay. It should not be taken to 
mean that in the formulation of policies, the executive 
authorities can be left unchecked and have their own way 
without being subjected to any supervision. 

6.3.1.6 The coordination and checks and balances between the 
executive authorities and the legislature are to a very 
large extent achieved through non-constitutional 
measures. In other words, one should not expect the 
provisions, however well-defined, to guarantee a 
rational relationship between the two branches. 

6.3.2 Specific proposals 

6.3.2.1 The initiative of the legislature should be duly 
strengthened 

6.3.2.2 Importance should be attached to the permanent special 
committees under the legislature 

It is feasible and effective to set up under the 

legislature permanent special committees comprising 

mainly of Legislative Councillors. This would on the 

one hand consolidate the political forces within the 

205 



legislature, and on the other hand strengthen the 
communication and cooperation among parties of different 
opinions over specific issues. 

6.3.2.3 Supervision on independent authorities should be 
specifically provided for 

It is necessary to clearly define the status of 
independent authorities, the Land Development 
Corporation and special committees in the government 
structure. There should be legislation passed by the 
legislature for monitoring these bodies. 

6.3.2.4 The legislature should have the power to propose the 
removal of the Chief Executive 

At present, no provisions clearly specify who shall have 
the power to remove the Chief Executive from office. In 
terms of legal principles, it can be understood that 
since the Chief Executive is appointed by the Central 
People's Government, only the Central People's 
Government will have the power to remove him from 
office. This is the very reason why the legislature of 
the HKSAR should have the power to propose the removal 
of the Chief Executive, apart from the power of 
impeachment. Otherwise, if only the Central People's 
Government could propose removal, there would be serious 
consequences . 



7 . Conclusion 

Though the opinions mentioned above are based on 
different assumptions, they all suggest that in order 
to resolve the problems between the executive 
authorities and the legislature, there should be non- 
constitutional arrangements (in addition to 
constitutional provisions) for ensuring a "proper" 
relationship between the executive and the legislature 
so that the two branches will function smoothly and 
government decrees will be carried out efficiently. 
This will be conducive to social stability and 
prosperity. Another important point raised is that when 
deciding on or modifying the political structure, be it 
a parliamentary system, a quasi-parliamentary system, a 
system of checks and balances with separation of powers, 
or a system based on the existing one with 
modifications, one should, besides giving due 
consideration to the basic principles and the actual 
circumstances in Hong Kong, be aware of the possible 
consequences brought about by any modification or 
combination because a slight move in one part may affect 
the entire structure. Thus, when making one's choice, 
one should note the corresponding changes that may 
possibly result from his choice. All in all, the 

206 



relationship between the executive authorities and the 
legislature is an important area in the design of the 
whole political structure and should be seriously 
considered . 



* If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



207 



ELECTORAL LAW 



Contents 



1. Introduction 



2. The electoral system and electoral ordinances presently 
applied in Hong Kong 



3. Electoral provisions contained in the Basic Law (Draft) 
and relevant opinions and suggestions 

3.1 The principles concerning the enactment of the 
electoral law of the HKSAR and the electoral law 
presently in force in Hong Kong 

3.2 The issue of nationality 

3.3 The right to vote and the right to stand for 
election 

3.4 The rights enjoyed by a civil servant in elections 

3.5 The electoral system 

3.6 The supervision, disputes and arbitration relating 
to election activities 



4 . Conclusion 



1 . Introduction 

Electoral law is a generic representation of provisions 
that govern the electoral system for electing 
representatives to government bodies or holders of public 
office. The issue of electoral law is not specifically 
dealt with in the Basic Law(Draft). It was only in the 
recent round of consultations, towards the end of the 
consultation period, that the issue aroused the concern 
of some local bodies and people. It is worth noticing 
that the enactment of the electoral law has a direct and 
immediate effect on the results of elections. Election 
procedures are seemingly a matter of technicality. 
However, it must be realized that different election 
procedures applied to different political environments 
may lead to different political consequences. It is 
understandable that some local bodies and people seized 
the opportunity to air their opinions on the issue before 
the consultation period ended. 

The present report attempts to record the opinions 
collected from various sectors on the Basic Law in 
respect of the electoral law and other matters relating 
to the constitution by election of the government bodies 
of the HKSAR, and provide a brief introduction to the 
electoral ordinances presently in force in Hong Kong for 
the consideration of the Drafting Committee. 

2. The electoral system and electoral ordinances presently 
applied in Hong Kong 

2.1. Ever since Hong Kong came under British rule and until 
1982, the system of general election has never been 
practised in the territory. In 1850, a group of justices 
of the peace formed an organization similar in nature to 
an electoral college and eventually two members were 
selected to sit on the Legislative Council. In 1884, the 
Hong Kong General Chamber of Commerce elected, for the 
first time, its representatives to sit on the Legislative 
Council. Since then, election activities that take place 
in the central authorities of Hong Kong have been 
basically unchanged. 

2.2 In 1888, rates payers who were also on the jury list were 
entitled to vote for unofficial members of the Sanitary 
Board. Later in 1936, it was prescribed that a person who 
was on the jury list was entitled to vote at Urban 
Council elections. The franchise of the Urban Council 
election was extended in 1953 to persons who were not 
less than 21 years of age and had never been found guilty 
of corrupt practices or convicted and imprisoned for a 
term exceeding six months, and they must also be persons 
qualified for serving as juror, exempt from jury service 



211 



on certain grounds, qualified teachers, taxpayers under 
the Inland Revenue Ordinance, or members of the Defence 
Force or Auxiliary Services. 

2.3 From 1982 onwards, a person who is not less than 21 years 
of age and has resided in Hong Kong for more than seven 
years has the right to vote in the District Board, Urban 
Council and Regional Council elections unless he violates 
relevant provisions. The right to vote is provided by 
ordinances which are passed by the Legislative Council of 
Hong Kong. The Legislative Council may, taking into 
account the prevailing situation, amend such ordinances 
to modify the right to vote of the people of Hong Kong. 
At the end of 1988, the registers applicable to the 
district-based direct elections of members to the Urban 
Council, Regional Council and District Boards recorded 
1,604,048 electors, accounting for 45.1% of the estimated 
3.6 million people entitled to register as electors. 

2.4 At present, the system of district-based general election 
applies only to a percentage of seats in the District 
Boards, Urban Council and Regional Council in Hong Kong. 
The District Boards are advisory bodies of the government 
and have no authority of any kind. The Urban Council and 
Regional Council, on the other hand, deal only with 
municipal and regional services as well as cultural and 
recreational activities, and they do not participate in 
policy-making or the affairs of the central authorities. 

2.5 As regards election within the central authorities of 
Hong Kong, the Governor of Hong Kong is appointed by the 
British Government on behalf of the Queen. In September 
1985, the Legislative Council first introduced an 
electoral system under which 24 members were elected 
from functional constituencies and district-based 
constituencies. Of these 24 members, 12 were returned 
from the nine designated functional constituencies. They 
came from organizations and professional bodies 
representing the commercial, industrial, financial, 
labour, social services, medical, legal, teaching and 
engineering and other professional sectors in Hong Kong. 
The other 12 members returned by district-based 
constituencies were elected from an electoral college 
which comprised members of the Urban Council, Regional 
Council and all District Boards. The electoral college 
was divided into 12 groups, ten of which were formed by 
District Board members, and the remaining two by Urban 
Council and Regional Council members respectively. 

The Legislative Council had a membership of 56 in 1988, 
comprising ten official members, 20 appointed members, 14 
elected members from the functional constituencies and 12 
elected members from the electoral college. In the White 
Paper: The Development of Representative Government: The 



212 






Wav Forward published in February 1988, the Government of 
Hong Kong decided that by 1997 there should be ten 
directly elected seats in the Legislative Council, one 
from each of the ten district-based constituencies. These 
directly elected seats should replace the ten seats 
currently filled by elected members returned by the 
District Boards through indirect election. Two special 
constituencies would be retained for the Urban Council 
and Regional Council, each of which would elect one 
member to the Legislative Council. 

2.6 At present, the election to the Legislative Council is 
prescribed by the Legislative Council (Electoral 
Provisions) Ordinance (Cap. 381) which lays down 
provisions for electoral franchise, qualification for 
candidature, electoral college constituencies, functional 
constituencies and the proceedings and arbitration 
relating to election. As regards the election to the 
District Boards, Regional Council and Urban Council, 
provisions concerning electoral franchise, qualification 
for candidature and the proceedings and arbitration 
relating to election are contained in the Electoral 
Provisions Ordinance (Cap. 367). Section 3 of this 
ordinance further provides that the Governor in Council 
may, by order published in the Gazette, declare any area 
of a District in the Urban Council area to be a 
constituency for the purpose of the election of persons 
to act as members of the Urban Council; declare any area 
of a District in the Regional Council area to be a 
constituency for the purpose of the election of persons 
to act as members of the Regional Council; declare any 
area of a District to be a constituency for the purpose 
of the election of persons to act as members of the 
District Board established for that District; and, in 
respect of any constituency declared above, declare the 
number of vacancies for members of that constituency. 

The above-quoted ordinances also lay down that the 
Governor in Council may formulate regulations to provide 
for the supervision, the general conduct and procedures 
of elections, including the conduct of polling stations 
and the regulation of the ballot, the counting of votes, 
the countermanding of elections and the declaration of 
the results of elections. Therefore, it can be seen that 
the present practice in Hong Kong is that matters 
relating to election are prescribed by ordinances passed 
by the Legislative Council, and the Governor in Council 
may exercise the powers granted under such ordinances to 
make regulations for important issues such as the drawing 
up of constituencies, regulation of the ballot, counting 
of votes and the declaration of the results of elections. 



213 



3. Electoral provisions contained in the Basic Law (Draft) 
and relevant opinions and suggestions 

3.1 The principles concerning the enactment of the electoral 
law of the HKSAR and the electoral law presently in force 
in Hong Kong 

3.1.1 The electoral law covers both the principles of election 
(such as the provisions governing electoral franchise and 
qualification for candidature) and the technicalities of 
election (such as the procedure and conduct of election, 
and the positions to be elected), including, for example, 
the drawing up of constituencies, voting system, election 
activities and the resolution of disputes. 

3.1.2 During the consultation period of the Basic Law (Draft), 
many people expressed their opinions on the principles of 
formulating the electoral law of the HKSAR. 

3.1.2.1 Some people are of the opinion that the electoral law 
should avoid, as far as possible, favouring a particular 
class or group of people, otherwise the persons elected 
will lack representativeness. 

3.1.2.2 Other people hold that as the HKSAR is governed by an 
autonomous government, its electoral law should be able 
to ensure that elections are conducted under the 
principle of fairness, otherwise the electoral law will 
be unlikely to be accepted by the electors in Hong Kong, 
thus impairing the stability and harmony of the HKSAR. 
Where the Basic Law (Draft) is concerned, it is obvious 
that its electoral provisions favour some sectors (in 
particular, the industrial, commercial, financial and 
professional sectors), resulting in inequality in the 
entitlement to vote. In addition, it entails an electoral 
system which is very conservative, so much so that it 
will likely remain poorly developed in the 20 years 
following 1997. Moreover, the electoral provisions 
contained in the Basic Law (Draft) are complicated and 
not readily comprehensible. Therefore, it is suggested 
that the enactment of the electoral law of the HKSAR 
should adhere to three principles: 

(1) to expand the franchise; 

(2) to maintain equality in the entitlement to vote in 
order to avoid a portion of electors having more 
weight in elections; 

(3) to ensure that the voting system can reflect the 
will of the electors and that the result of 
elections can be as close to the expectation of the 
electors as possible. 



214 



3.1.3 There are varied opinions on how the HKSAR should treat 
the electoral ordinances presently in force in Hong Kong. 

3.1.3.1 Some people are of the opinion that in order to speed up 
the process of enacting the electoral law by the 
Legislative Council of the HKSAR, the present practice 
should be maintained. In other words, the provisions 
covering the entitlement to vote and qualification for 
candidature, drawing up of constituencies, supervision 
and proceedings should be prescribed by regulations to be 
enacted by the Legislative Council of the HKSAR. Other 
procedures such as the declaration of an area as a 
constituency, implementation of voting systems, counting 
of votes and election activities should be governed by 
subsidiary legislation. 

3.1.3.2 However, some people hold that the method to be used in 
the counting of votes is a crucial element of election 
and should form part of the regulations passed by the 
Legislative Council of the HKSAR. 

3.1.3.3 Some people suggest that as the electoral law will have a 
direct effect on the results of elections, there should 
be basic provisions in the Basic Law to deal with this 
issue . 

3.1.4 Associated questions 

Article 67 of the Basic Law (Draft) prescribes that the 
Legislative Council of the HKSAR shall be constituted by 
election and the ultimate aim shall be the selection of 
all the members of the Legislative Council through 
general election. Also, Annex II to the Basic Law (Draft) 
provides that in the election of members to the 
Legislative Council of the HKSAR, each elector shall have 
one vote only. Do these two provisions imply that the 
enactment of laws relating to Legislative Council 
elections should follow certain principles? If so, what 
are these principles? What principles are to be followed 
in the enactment of the electoral law governing elections 
at other levels of the HKSAR? How should the Legislative 
Council of the HKSAR deal with matters relating to the 
enactment of the electoral law of the HKSAR? To what 
extent should it participate in the process of the 
enactment of the electoral law? What will be its 
relationship with the executive authorities and the 
judiciary? 

3.2 The issue of nationality 

3.2.1 Citizenship and nationality are often interrelated. A 
person who has acquired the nationality of a country is 
normally recognized as a citizen of that country. The 
right to vote and the right to stand for election are 



215 



basic political rights that only citizens may enjoy. In 
the implementation of the electoral law, many countries 
take citizenship as a criterion for granting a person the 
right to vote and the right to stand for election. 

3.2.2 Article 34 of the Constitution of the People's Republic 
of China states: "All citizens of the People's Republic of 
China who have reached the age of 18 have the right to 
vote and stand for election, regardless of nationality, 
race, sex, occupation, family background, religious 
belief, education, property status, or length of 
residence, except persons deprived of political rights 
according to law." The Chinese Constitution also states 
that all persons holding the nationality of the People's 
Republic of China (PRO are citizens of the PRC . 

3.2.3 The electoral ordinances in force in Hong Kong do not 
take citizenship and nationality into account in granting 
the right to vote and stand for election. They use the 
length of residence in Hong Kong as a basic criterion. 
However, Section 21 of the Legislative Council (Electoral 
Provisions) Ordinance provides: "A person shall be 
disqualified from being nominated as a candidate in an 
election or holding office as an elected member if he has 
been convicted of treason." Similarly, Section 19 of the 
Electoral Provisions Ordinance applicable to the 
elections of members of the District Boards, Urban 
Council and Regional Council states: "A person shall be 
disqualified for being elected or being nominated as a 
candidate or holding office as a member if he has been 
convicted of treason." As Hong Kong is still under 
British rule, the term "treason" referred to in the 
ordinances should be taken to mean treason against the 
United Kingdom. 

3.2.4 During the consultation period of the Basic Law (Draft), 
different opinions on the the right to vote and the right 
to stand for election were solicited. 

3.2.4.1 Some people are of the opinion that a person who holds a 
foreign passport or has the right of abode in a foreign 
country may not hold office as a member of the 
Legislative Council of the HKSAR. If a person, during his 
term of office as a member of the Legislative Council, 
obtains a foreign passport or is given the right of abode 
in a foreign country, he must immediately resign. The 
reason is that there is doubt whether the person is loyal 
to the PRC and to the HKSAR and, therefore, he should not 
hold office as a member of the Legislative Council of the 
HKSAR. 

3.2.4.2 Some people hold that the franchise of future Legislative 
Council elections should be extended to permanent 



216 



residents of Hong Kong instead of restricted only to 
those people of Hong Kong who have Chinese nationality. 

3.2.4.3 Others hold that the general elections to the legislature 
of the HKSAR after 1997 are different in nature from the 
elections held before 1997. This is because Hong Kong 
will become a special administrative region directly 
under the PRC after 1997 and in the region, every Chinese 
citizen has the political right to take part in general 
elections. In the light of this, the Basic Law should 
specify that only Chinese citizens who are permanent 
residents of the HKSAR may register as electors or 
candidates for general elections. 

3.2.4.4 Some people suggest that the right to vote and the right 
to stand for election are civil rights, and the basic 
criterion for granting such civil rights is nationality. 
In enacting its electoral law, the HKSAR should lay down 
the requirement that only Chinese citizens who are 
permanent residents of the HKSAR may enjoy the right to 
vote and the right to stand for election. Permanent 
residents of the HKSAR who do not have Chinese 
nationality may only enjoy these rights as prescribed by 
the laws of the HKSAR. 

3.2.4.5 Associated questions 

Article 26 of the Basic Law (Draft) states : "Permanent 
residents of the Hong Kong Special Administrative Region 
shall have the right to vote and the right to stand for 
election in accordance with law." This implies that the 
right to vote and the right to stand for election enjoyed 
by the permanent residents of the HKSAR are subject to 
the laws of the Region. The question is, therefore, what 
principles the HKSAR will follow in the enactment of such 
applicable laws. 

Further, the right to vote and the right to stand for 
election are generally recognized as basic political 
rights enjoyed exclusively by citizens. Is it necessary 
to differentiate the permanent residents of the HKSAR who 
have Chinese nationality from those permanent residents 
who do not have Chinese nationality after 1997? If so, 
what principles should be followed in differentiating the 
rights relating to election enjoyed by one type of 
permanent residents from those enjoyed by the other? 

3.3 The right to vote and the right to stand for election 

3.3.1 Election is an act that the citizens of a country choose 
of their own free will certain holders • of public office 
in a manner as prescribed by law. In most countries, 
there are explicit provisions in the electoral law to 
specify who have the right to vote at an election, and 



217 



who can be qualified for candidature. The right to vote 
is a right enjoyed by a citizen to elect representatives 
to government bodies. The right to stand for election is 
a right enjoyed by a citizen to be nominated as a 
candidate for a public office. 

3.3.2 Section 6 of the Electoral Provisions Ordinance 
applicable to the District Boards, Urban Council and 
Regional Council elections states: "A person shall be 
entitled to vote at an election if he is registered as an 
elector in the final register of electors in force on the 
date of the election." However, a person shall be 
disqualified from being registered as an elector if: 

(1) he has not ordinarily resided in Hong Kong for seven 
years ; 

(2) he has not attained the age of 21 years in the year 
in which he applies for inclusion in such register; 

(3) he has in Hong Kong or any other territory or 
country been sentenced to death or imprisonment for 
a term exceeding six months and has not either 
suffered the punishment to which he was sentenced or 
such other punishment as may by competent authority 
have been substituted therefor or received a free 
pardon ; 

(4) he is the subject of a decision under the Mental 
Health Ordinance that he is of unsound mind and 
incapable of managing himself and his affairs; 

(5) he is a member of the regular armed forces of the 
Crown, not being a locally enlisted member of such 
forces ; 

(6) where the election is to be held within seven years 
from the date of conviction, he has been convicted 
(i) of a corrupt practice or of an illegal practice 
within the meaning of the Corrupt and Illegal 
Practices Ordinance or of a corrupt or illegal 
practice within the meaning of any other enactment 
for the time being in force providing for 
the punishment of corrupt or illegal practices; 
(ii) of any offence under the Prevention of Bribery 
Ordinance; or 

(7) on the date he applies for registration or on the 
date of the election, he is serving a sentence of 
imprisonment . 

3.3.3 Section 18 of the Electoral Provisions Ordinance also 
provides that a person shall be qualified for candidature 
if he is entitled to be and is registered as an elector. 



218 



No elector shall be qualified for candidature unless he 
has ordinarily resided in Hong Kong for the ten years 
immediately preceding the date of his nomination. 
However, a person shall be disqualified for being elected 
or being nominated as a candidate or holding office as a 
member if: 

(1) he holds any public office (other than as a member 
of an auxiliary force) or any office of emolument in 
the gift or disposal of the Urban Council, or of the 
Regional Council, or any committee thereof or having 
held such office has been dismissed therefrom; 

( 2 ) he has in Hong Kong or any other territory or 
country been sentenced to death or imprisonment for 
a term exceeding three months and has not either 
suffered the punishment to which he was sentenced or 
such other punishment as may by competent authority 
have been substituted therefor or received a free 
pardon ; 

(3) he has been convicted of treason; 

(4) he is disqualified for being elected or being 
nominated as a candidate or holding office as a 
member under any enactment; 

(5) he is a member of any parliament, assembly or 
council, whether central or local, of any place 
outside Hong Kong or a salaried functionary of a 
government of such place; 

(6) he is an undischarged bankrupt or, within the 
previous five years, has either obtained his 
discharge in bankruptcy or has entered into a 
composition with his creditors, in either case 
without paying his creditors in full; 

( 7 ) where the election is to be held or is held within 
ten years from the date of conviction, he has been 
convicted ( i ) of any offence in Hong Kong or any 
other territory or country and sentenced to 
imprisonment, whether suspended or not, for a term 
exceeding three months without the option of a fine; 
(ii) of a corrupt practice or illegal practice 
within the meaning of the Corrupt and Illegal 
Practices Ordinance or of a corrupt or illegal 
practice within the meaning of any other enactment 
for the time being in force providing for the 
punishment of corrupt or illegal practices; (iii) of 
any offence under the Prevention of Bribery 
Ordinance ; 



219 



(8) on the date of nomination or of the election, he is 
serving a sentence of imprisonment; or 

(9) he is the subject of a decision still in force under 
the Mental Health Ordinance that he is of unsound 
mind and incapable of managing himself and his 
affairs; but he shall be eligible for re-election if 
under that Ordinance it is subsequently found that 
his unsoundness of mind has ceased. 

3.3.4 As regards Legislative Council elections, Section 12 of 
the Legislative Council (Electoral Provisions) Ordinance 
provides that "a person shall be entitled to vote at an 
election in an electoral college constituency if that 
person is registered as an elector in that 

constituency a person shall be entitled to vote at 

an election in a functional constituency if that person 
is registered as an elector in that constituency." 
Moreover, no individual shall be entitled to be 
registered as an elector in a functional constituency 
unless he is registered or entitled to be registered as 
an elector under the Electoral Provisions Ordinance. 
Section 22 of the Legislative Council (Electoral 
Provisions) Ordinance also lays down that no person shall 
be nominated in an election as a candidate in more than 
one constituency. A person registered in an electoral 
college constituency or a functional constituency as an 
elector shall be disqualified from voting at a 
Legislative Council election if: 

( 1 ) he has in Hong Kong or any other place been 
sentenced to death or imprisonment for a term 
exceeding six months and has not either suffered the 
punishment to which he was sentenced or such other 
punishment as may by competent authority have been 
substituted therefor or received a free pardon; 

( 2 ) there is in force a decision under the Mental Health 
Ordinance that he is of unsound mind and incapable 
of managing himself and his affairs; 

(3) he is a member of the regular armed forces of the 
Crown, not being a locally enlisted member of such 
forces ; 

(4) where the election is to be held within seven years 
from the date of his conviction, he has been 
convicted ( i ) of a corrupt practice or of an illegal 
practice within the meaning of the Corrupt and 
Illegal Practices Ordinance, or of a corrupt or 
illegal practice within the meaning of any other 
enactment providing for the punishment of corrupt or 
illegal practices; (ii) of any offence under the 
Prevention of Bribery Ordinance; or 



220 



(5) on the date he applies for registration or on the 
date of the election, he is serving a sentence of 
imprisonment . 

3.3.5 A person shall be qualified for candidature in a 
Legislative Council election if, in the case of an 
electoral college constituency, he is entitled to be and 
is registered as an elector under the Electoral 
Provisions Ordinance; or, in the case of a functional 
constituency, he is entitled to be and is registered as 
an elector under the Electoral Provisions Ordinance and 
he shows to the satisfaction of the registration officer 
that he has a substantial connexion with that 
constituency. No person shall be qualified for 
candidature in an election unless he has ordinarily 
resided in Hong Kong for the ten years immediately 
preceding the date of his nomination. However, a person 
shall be disqualified from being nominated as a candidate 
in an election or holding office as an elected member if: 

(1) in the case of a functional constituency, he has 
ceased to have a substantial connexion with that 
constituency; 

(2) he holds any public office or any office of 
emolument in the gift or disposal of a public body 
or any committee thereof or having held such office 
has been dismissed therefrom; 

( 3 ) he has in Hong Kong or any other place been 
sentenced to death or imprisonment for a term 
exceeding three months and has not either suffered 
the punishment to which he was sentenced or such 
other punishment as may by competent authority have 
been substituted therefor or received a free pardon; 

(4) he has been convicted of treason; 

(5) he is a member of any parliament, assembly or 
council, whether central or local, of any place 
outside Hong Kong or a salaried functionary of a 
government of such place; 

(6) he is an undischarged bankrupt or, within the 
previous five years, has either obtained his 
discharge in bankruptcy or has entered into a 
composition with his creditors, in either case 
without paying his creditors in full; 

(7) where the election is to be held or is held within 
ten years from the date of his conviction, he has 
been convicted ( i ) of any offence in Hong Kong or 
any other territory or country and sentenced to 



221 



imprisonment, whether suspended or not, for a term 
exceeding three months without the option of a fine; 
(ii) of a corrupt practice or illegal practice 
within the meaning of the Corrupt and Illegal 
Practices Ordinance or of a corrupt or illegal 
practice within the meaning of any other enactment 
for the time being in force providing for the 
punishment of corrupt or illegal practices; (iii) of 
any offence under the Prevention of Bribery 
Ordinance ; 

(8) on the date of nomination or of the election, he is 
serving a sentence of imprisonment; or 

(9) there is in force a decision under the Mental Health 
Ordinance that he is of unsound mind and incapable 
of managing himself and his affairs; but he shall be 
eligible for re-election if under that Ordinance it 
is subsequently found that his unsoundness of mind 
has ceased. 

3.3.6 During the consultation period of the Basic Law (Draft), 
people from various sectors expressed their opinions on 
the right to vote and the right to stand for election in 
relation to elections to be conducted in the HKSAR. 

3.3.6.1 Some people hold that the age of entitlement to vote or 
stand for election at all levels of elections in the 
HKSAR should be lowered to 18 years. 

3.3.6.2 Others suggest that in both the election of the Chief 
Executive of the HKSAR and the election of Legislative 
Councillors of the HKSAR, a member of a corporate body 
which forms part of a functional constituency should 
register as an elector belonging to that particular 
corporate body, and should notify the election office of 
the constituency or subgroup in which he chooses to be an 
elector. A person who holds membership in more than one 
corporate body may not register as elector in two or more 
constituencies. The inclusion of a corporate body into a 
functional constituency should be considered on the basis 
of the number of registered electors it comprises. A 
corporate body whose number of electors represents 0.5% 
of the total number of electors registered in a 
functional constituency may become an independent 
constituency itself. A corporate body whose number of 
electors represents 0.1% to below 0.5% of the total 
number of electors registered in a functional 
constituency may be categorized as a subgroup in a 
functional constituency that is related to its area of 
operation. A corporate body whose number of electors is 
less than 0.1 % of the total number of electors 
registered in a functional constituency may not be 
included in any constituency. 



222 



3.3.7 Associated questions 

The electoral ordinances presently in force in Hong Kong 
impose certain restrictions on the right to vote and the 
right to stand for election enjoyed by the residents of 
Hong Kong. Will these restrictions be inconsistent with 
the Basic Law? If so, what would be the solution? Subject 
to what principles should the HKSAR make regulations to 
provide for the right to vote and the right to stand for 
election to be enjoyed by the residents of the HKSAR? 

3.4 The rights enjoyed by a civil servant in elections 

3.4.1 There are concerns about the rights to be enjoyed by a 
civil servant in elections at all levels to be conducted 
in the HKSAR. It is generally conceived that as Hong Kong 
is a territory under British rule, its civil servants 
should comply with the code of practice adopted by the 
civil servants of a Western society, i.e. to remain 
politically neutral and refrain from taking part in 
political activities. However, this conception is 
gradually changing. Some people suggest that following 
the transfer of power, the original restrictions imposed 
on the rights enjoyed by a civil servant in elections 
should be modified accordingly after the formation of the 
HKSAR. 

3.4.2 The present electoral ordinances prohibit any person 
holding public office from standing for election. A 
holder of public office who wishes to stand for election 
must first resign his post in the government. However, no 
provision in these ordinances deny a person holding 
public office the right to vote at an election at the 
levels of the District Boards, Regional Council and Urban 
Council . 

3.4.3 During the consultation period of the Basic Law (Draft), 
people from different sectors aired their opinions on the 
right to vote and the right to stand for election to be 
enjoyed by the civil servants of the HKSAR. 

3.4.3.1 Some people hold .that the civil servants of the HKSAR 
should continue to remain politically neutral after 1997 
so as to avoid role conflict. 

3.4.3.2 There are others who propose adopting a flexible 
arrangement whereby civil servants at low or middle ranks 
may stand for election and will only be required to 
resign their posts when they win in the election. A 
holder of directorate office, however, must resign when 
he stands for election and, whether elected or not, may 
not resume his duty. 



223 



3.4.3.3 It is noted in some opinions that it is a basic civil 
right to stand for election and civil servants should not 
be deprived of this right. 

3.4.3.4 According to some opinions, it is not advisable to 
prohibit all civil servants from standing for election 
and consideration should be given to allowing civil 
servants of particular ranks or positions to stand for 
election . 

3.4.3.5 Some people are of the opinion that whether a civil 
servant is allowed to stand for election should not be 
expressly prescribed by law. It should be left to the 
civil servant concerned to determine at his discretion 
whether his participation in a particular election will 
affect his political neutrality. 

3.4.4 Associated questions 

Article 26 of the Basic Law (Draft) states : "Permanent 
residents of the Hong Kong Special Administrative Region 
shall have the right to vote and the right to stand for 
election in accordance with law." Therefore, a permanent 
resident of the HKSAR, may he be a civil servant or not, 
is entitled to take part, in accordance with this 
Article, in elections at all levels conducted in the 
HKSAR. The exercise of these rights may be governed by 
relevant laws. A series of questions are raised 
concerning this issue. What principles should be adhered 
to in formulating the electoral law applicable to the 
civil servants in the HKSAR? Are the present ordinances 
of Hong Kong which prohibit civil servants from taking 
part in election activities inconsistent with the Basic 
Law? If so, what principles should be applied in solving 
the problem of inconsistency? Should there be provisions 
to differentiate the right to vote and to stand for 
election enjoyed by civil servants of a particular rank 
or position from that enjoyed by those of other ranks and 
positions in elections of all levels conducted in the 
HKSAR? If so, what principles should be followed in 
enacting such provisions? 

3.5 The electoral system 

3.5.1 The two main elements of an electoral system are 
constituency and voting system. Normally, a constituency 
is drawn up based on population or the characteristics of 
the districts included. The drawing up of constituency is 
regarded as a political issue because it may influence 
significantly the results of elections. 

Generally, a country draws up constituencies based on 
geographical boundaries or population ratio in 
accordance with the nation's constitution and electoral 



224 



law for the purpose of electing one or more 
representatives from each constituency. A constituency 
where only one representative may be elected is known as 
a single-seat constituency or small constituency. A 
constituency where more than one representative may be 
elected is known as a multiple-seat constituency or 
medium or large constituency. 

3.5.2 As regards voting system, it can broadly be divided into 
two categories, namely the majority system and the 
proportional representation system. 

Under the majority system, the candidate or political 
party winning the greatest number of votes in a 
constituency gets the seat or all the seats in that 
constituency. The majority system can be sub-divided into 
the relative majority system and the absolute majority 
system. (1) The relative majority system is also known as 
the single ballot system. Under this system, a candidate 
or political party winning a number of votes greater than 
any other candidates or political parties is elected or 
gets all the seats in the constituency. The candidate or 
the political party is not required to win more than 50% 
of the votes cast. At present, the election of Parliament 
in the United Kingdom adopts the single-seat constituency 
relative majority system. (2) The absolute majority 
system is also known as the simple majority system. Under 
this system, one or more candidates must win more than 
50% of the votes cast in a constituency in order to win 
an election, and repeated pollings may have to take place 
before the result is known. 

In the proportional representation system, a political 
party is allocated a number of seats in its constituency 
according to the proportion of votes it wins in that 
constituency in the election. 

3.5.3 At present, the relative majority system is used in the 
district-based direct elections to the District Boards, 
Regional Council and Urban Council, disregarding whether 
the district is a single-seat or double-seat 
constituency. The candidate who wins the greatest number 
of votes cast will be elected. If there is more than one 
seat in a constituency, more than one candidate will be 
elected . 

As for the functional constituency and electoral college 
elections to the Legislative Council, the "preferential 
elimination" voting system has been adopted since 1988. 
This is one form of absolute majority system. Under this 
voting system, electors are required to mark down their 
preferences on the ballot paper. If no candidate receives 
an absolute majority of votes in the first count, a 
second count will be taken. Before the second count takes 



225 



place, the candidate with the fewest first preference 
votes in the first count is eliminated and his votes are 
redistributed to the remaining candidates, according to 
the second preferences marked on the ballot papers. This 
process is repeated until a candidate is elected by an 
absolute majority of votes. 

3.5.4 According to the W hite Paper: Hie Development o_f 

Representative Gov e rnment ; Ike Way Fo rw ard published in 

February 1988, it is decided that in 1991 there will be 
ten directly elected seats in the Legislative Council, 
one from each of the ten district-based constituencies. 
Paragraph 30 of the White Paper points out that detailed 
arrangements for the conduct of direct elections, 
including the drawing up of constituencies, will be 
devised over the next two or three years. Reportedly, the 
Government has not yet decided the method of drawing up 
constituencies and the voting system to be adopted in 
1991. During the consultation period of the Basic Law 
(Draft), many people expressed their views on how the 
Government of Hong Kong should draw up constituencies and 
decide the voting system for the first district-based 
direct election to the Legislative Council to be 
conducted in 1991. 

3.5.4.1 Some people propose applying the electoral system adopted 
by the Diet of Japan to Hong Kong. In so doing, the 
territory would be divided into several constituencies 
(about four to six) and, from each constituency, several 
members (about three or four) of the Legislative Council 
may be elected. However, each elector of a constituency 
may only vote for one candidate in that constituency. The 
first few candidates who win more votes than others will 
be elected. The rationale of this suggestion is as 
follows : 

( 1 ) The method ensures a more balanced representation in 
the Legislative Council in future such that the 
overall interests of society can be reflected and 
the domination by a single party can be prevented; 

(2) The method helps boost the development of political 
parties because constituencies of larger size 
usually call for more resources to be involved in 
the course of election; 

(3) The method helps protect the political rights of 
the minorities and may attract more candidates from 
the commercial and industrial sectors; 

(4) As each elector is allowed to support only one 
candidate and the votes cast by all electors carry 
equal weight, the problem of unfairness can be 
eliminated . 



226 



3.5.4.2 Some people oppose to the suggestion of adopting an 
electoral system similar to the one used by the Diet of 
Japan. The reasons are as follows: 

( 1 ) The method causes unfairness because the proportion 
of support a political party has may not correspond 
to the proportion of seats it gains; 

(2) The method curtails the right to vote enjoyed by 
the residents. If, for example, four seats are 
allocated to a constituency, the fairest arrangement 
is to allow each elector to choose concurrently four 
representatives . 

3.5.4.3 It is also suggested that if 50% of the seats in the 
Legislative Council (30 seats) are open to fair, direct 
general elections in 1991, 15 seats should be allocated 
to single-seat or double-seat constituencies and elected 
under the relative majority system. The other 15 seats 
should be elected under the closed list proportional 
representation system with the whole of Hong Kong being 
taken as one constituency. (Each political party taking 
part in the election draws up a list of candidates, the 
number of whom should not exceed the total number of 
seats available, and the electors vote for that party 
must elect all the candidates on the list. ) 

3.5.4.4 Some people suggest that if 50% of the seats in the 
Legislative Council (30 seats) are open to fair, direct 
general elections in 1991 and all the seats (60) are open 
to fair, direct general elections from 1995 onwards, then 
the whole of Hong Kong should be divided into five 
constituencies and from each constituency six members 
should be elected using the closed list proportional 
representation system. Therefore, a total of 30 members 
to the Legislative Council may be elected in this manner. 

3.5.4.5 Other people suggest that if less than 50% of the seats 
in the Legislative Council (29 seats or less) are open to 
fair, direct general elections in 1991, all these seats 
may be allocated to the five to 29 single-seat or 
multiple-seat constituencies, and the members may be 
elected under the relative majority system. 

3.5.4.6 Some people support the view that if direct election is 
to be introduced into Legislative Council elections in 
1991, the size of population of each constituency should 
be limited to 300,000 to 500,000. If the size of 
population of a constituency amounts to one million, 
those candidates who are well known and financially 
strong will have advantage over the others. It follows 
that too small a population size in a constituency will 



227 



impair the representativeness of the members elected from 
that constituency. 

3.5.4.7 It is pointed out that when direct election by 
constituency is introduced in 1991, the whole of Hong 
Kong may be divided into several constituencies based on 
population, and one Legislative Council member may be 
elected from each constituency. 

3.5.5 Annex II to the Basic Law (Draft) contains a suggested 
method for constituting the Legislative Council of the 
HKSAR. It specifies that the Legislative Council of the 
first four terms shall be constituted both by district- 
based general elections and elections by sectors. It also 
states: "The division of constituencies, voting method, 
delimitation of various sectors and corporate bodies 
therein, allocation of seats, election method, etc. shall 
be specified by the electoral law of the Hong Kong 
Special Administrative Region." A number of people have 
expressed their opinions on the drawing up of 
constituencies and the voting system to be adopted in the 
future HKSAR. 

3.5.5.1 Some people hold that constituencies of larger size 
should be drawn up for the future elections to the 
legislature so as to avoid geographical parochialism and 
to ensure that members elected are truly representative. 

3.5.5.2 It is noted that a constituency should be drawn up on the 
basis of the number of registered electors rather than 
the number of residents in an area. 

3.5.5.3 Some people hold that if the legislature of the HKSAR is 
to comprise an elected functional chamber and an elected 
district chamber, 50% of the members from the elected 
district chamber (30 members in total) should be elected 
by direct elections and the other 50% should be elected 
from district-based electoral colleges (formed by 
District Board members). As regards direct general 
elections, the HKSAR can be divided into five 
constituencies (one for Hong Kong Island, two for Kowloon 
and two for the New Territories), and each constituency 
is allocated three seats. There is no limit to the number 
of candidates but a person is not qualified for 
candidature unless he is nominated by not less than 100 
electors. In respect of the electoral colleges formed by 
District Board members, 20 District Boards will be set up 
in the HKSAR and four District Boards will form one 
electoral college. Three members may be elected from each 
electoral college to the elected district chamber. Only 
District Board members who are nominated by not less than 
ten District Board members are qualified for candidature. 
The relative majority system may be adopted in voting. 



228 



3.5.5.4 It is indicated in other opinions that if all the 60 
seats in the legislature are open to fair, direct general 
elections from 1995 onwards, 30 seats should be allocated 
to single-seat or double-seat constituencies for election 
under the relative majority system. The remaining 30 
seats should be elected under the closed list 
proportional representation system taking the whole of 
Hong Kong as a constituency. 

3.5.5.5 Some people are of the opinion that if all the 60 seats 
in the legislature are open to fair, direct general 
elections from 1995 onwards, five constituencies may be 
drawn up in Hong Kong and each constituency should be 
allocated 12 seats. Under this system, all the 60 members 
of the Legislative Council may be elected by means of the 
closed list proportional representation system. 

3.5.5.6 Others suggest that if all the members of the legislature 
of the HKSAR are to be elected by direct elections in 
2003, the model of central-cum-district election can be 
adopted. In a central election, a single list of 
candidates is used for the whole of Hong Kong, whereas in 
a district-based election, the Region is geographically 
divided into six constituencies and each constituency is 
drawn up based on population and geographical 
considerations. A district with a population of one 
million forms a constituency but the New Territories can 
be divided into three constituencies, namely the Western, 
Southern and Eastern constituencies. Two constituencies 
should be drawn up for Kowloon, and Hong Kong Island will 
form one constituency. A candidate may only stand for 
election in one constituency. This will help maintain a 
balance of powers in the central government and ensure 
that the legislature is truly representative. 

3.5.5.7 Some people point out that as the single-seat 
constituency election by means of the relative majority 
system presently adopted in the United Kingdom can 
neither bring extensive support for the Legislative 
Council of the HKSAR nor lead to any consensus, the 
double-seat constituency election under the surplus votes 
counting system may be considered to be an alternative. 

3.5.5.8 Some people are of the opinion that the voting system 
adopted for elections to various councils of the HKSAR 
should be as simple as possible, or the electors will 
become apathetic. 

3.5.5.9 Some people hold that the electoral law of the HKSAR 
should specify the adoption of the proportional 
representation system in elections to the Legislative 
Council in order to reinforce the relations between the 
electors and the elected members. This system also 
eliminates the possible impact of the relative majority 



229 



system on the political situation of Hong Kong because 
the latter is only suitable for elections in 
constituencies where population, social class and 
occupation are distinctive demarcation features. The 
result is that different political parties may dominate 
different constituencies. If the support for each party 
is even and the class system is less entrenched after 
1997, under the relative majority system the parties that 
receive only a small number of votes (say less than 30%) 
may still have the chance to win an election, thus 
rendering the legislature of the HKSAR so formed lack of 
representativeness. On the contrary, if the proportional 
representation system is adopted in elections to the 
Legislative Council after 1997, the possibility of 
political instability likely to be caused by the relative 
majority system can be eliminated. 

3.5.6 Associated questions 

Annex II to the Basic Law (Draft) prescribes that the 
division of constituencies for district-based general 
elections shall be specified by the electoral law of the 
HKSAR. Moreover, Article 8 of the Basic Law (Draft) 
states: "The laws previously in force in Hong Kong, that 
is, the common law, rules of equity, ordinances, 
subordinate legislation and customary law shall be 
maintained, except for those that are inconsistent with 
this Law or have been amended by the legislature of the 
Hong Kong Special Administrative Region." 

At present, the drawing up of constituencies and the 
voting system for the elections to the District Boards, 
Urban Council and Regional Council as well as the voting 
system adopted in the elections to the Legislative 
Council are decided by the Governor in Council in 
accordance with relevant ordinances. The concerns aroused 
are manifold. Is the method for drawing up 
constituencies and the voting system presently adopted 
inconsistent with the Basic Law? Is the practice of 
allowing the executive authorities to draw up 
constituencies and to decide on the voting system 
inconsistent with the Basic Law? If so, what principles 
should be followed in solving the problem of 
inconsistency? If the HKSAR decides to enact an entirely 
new electoral law, what principles should be followed in 
drawing up constituencies and to decide on the voting 
system? 

3.6 The supervision, disputes and arbitration relating to 
election activities 

3.6.1 Generally, the electoral law contains provisions 
prescribing the supervision of election activities. It 
also specifies what arbitration procedures are to be 



230 



followed and who shall act as arbitrators when disputes 
arise in elections so as to ensure that elections are 
conducted in a fair and objective way. There are, in 
general, four methods of handling disputes arising from 
election activities: 

(1) The disputes are handled by the judiciary: The 
United Kingdom and most of the Commonwealth 
countries adopt this method whereby a dispute 
arising from election activities is resolved through 
ordinary legal procedures and a person who does not 
accept the ruling of the court may appeal to the 
highest level of the judiciary. 

(2) The disputes are handled by an independent 
supervisory committee: Since its fifth republic, 
France has set up a constitution committee to 
exercise the constitution's power of supervision 
over election. Members of the committee are 
appointed by the President, the president of the 
National Assembly and the president of the Senate. 
The term of office of each member is nine years and 
one-third of the members are replaced every three 
years. No member may serve two or more consecutive 
terms. The result of an election must first be 
examined by the committee before it becomes valid. 

( 3 ) The disputes are handled by a special judicial 
system: A court of election is formed by judges with 
special knowledge of election to handle the 
complaints and disputes arising from election 
activities . 

(4) The disputes are handled by the legislature: As the 
legislature is the government body with supreme 
power, any dispute arising from the election of its 
members should not be referred to subordinate 
bodies for arbitration. In some countries, the newly 
elected legislature examines, at the very beginning 
of its term, the qualification of its members for 
holding office as elected members. If a member is 
found to be disqualified and his office is therefore 
vacant, a by-election will be held in his 
constituency. 

3.6.2 Section 30 of the Electoral Provisions Ordinance provides 
that an election may be questioned by an election 
petition on the following grounds or any of them: 

( 1 ) that the election was wholly avoided by general 
bribery, treating, undue influence, or personation; 

(2) that the election was avoided by corrupt practices 
or by illegal practices committed at the election; 



231 



( 3 ) that the person whose election is questioned was at 
time of the election disqualified; 

(4) that the person whose election is questioned was not 
duly elected; 

(5) that illegal practices committed in reference to the 
election of a candidate thereat, so extensively 
prevailed that they may be reasonably supposed to 
have affected the result of the election; or 

(6) on any other ground provided by any enactment 
whereon an election may be questioned. 

Any complaint or information in respect of the commission 
of an offence against this ordinance shall be laid within 
three years from the date of such commission. Section 34 
of this ordinance also provides that the court of first 
instance of the Supreme Court of Hong Kong shall have 
jurisdiction, powers and authority in respect of an 
election petition and all proceedings thereon. At the 
conclusion of the trial of an election petition, the 
court of first instance of the Supreme Court shall 
determine whether the person being complained of was duly 
elected or whether the election was void. 

3.6.3 Section 29 of the Legislative Council (Electoral 
Provisions) Ordinance also provides that an election may 
be questioned by an election petition on the following 
grounds or any of them: 

(1) that the election was avoided by general bribery, 
treating, undue influence, or personation; 

(2) that the election was avoided by corrupt practices 
or by illegal practices committed in respect of the 
election ; 

(3) that the person whose election is questioned was at 
time of the election disqualified from being 
nominated as a candidate in an election or holding 
office as an elected Member; 

(4) that the person whose election is questioned was not 
duly elected. 

The ordinance also states that any complaint or 
information in respect of the commission of an offence 
against the ordinance shall be laid within three years 
from the date of such commission. At the conclusion of 
the trial of an election petition, the court of first 
instance of the Supreme Court shall determine whether any 
decision of the returning officer as to the validity of 



232 



any nomination was correct, or whether the person whose 
election is questioned or any other person was duly 
elected, or whether the election was void. 

3.6.4 In addition, the Electoral Provisions Ordinance and the 
Legislative Council (Electoral Provisions) Ordinance 
provide that the Governor in Council may by regulation 
provide for the general supervision of and procedure at 
elections including the supervision of every polling 
station, the regulation of the ballot, the procedure for 
voting, the counting of votes, the countermanding of any 
election and the assistance to a candidate in connection 
with the election. 

3.6.5 During the consultation period of the Basic Law (Draft), 
various opinions on the supervision, disputes and 
arbitration relating to election activities were 
solicited. 

3.6.5.1 Some people hold that an election committee should be set 
up in the HKSAR to deal with all the complaints relating 
to elections and to supervise the conduct of elections 
with the aim of curbing illegal practices. The election 
committee should be established before a particular 
election takes place and its members should be nominated 
by the Chief Executive and approved by the Legislative 
Council. Electors and candidates standing for election 
should not be nominated as members of the election 
committee . 

3.6.6 Associated questions 

Are the present practices relating to the supervision of 
and complaints about elections in Hong Kong inconsistent 
with the Basic Law? When the HKSAR is enacting its 
electoral law, what method it should adopt to handle 
disputes arising from elections? 



4. 



Conclusion 

It is specified in the Basic Law (Draft) that the 
electoral law of the HKSAR shall be enacted by the HKSAR 
on its own. However, it must be realized that the conduct 
of elections often has an effect on the results of 
elections. In some of the alternatives proposed for the 
political structure of the future HKSAR, the election 
method forms an important element. Therefore, the method 
of election must be given due consideration in drafting 
the Basic Law. Whether the Basic Law should include 
electoral provisions is another controversial issue. 
Nevertheless, it should be noted that the discussions on 
issues relating to the electoral law are indispensable to 



233 



the final decision on the political system of the future 
HKSAR. 



* If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



234 



CIVIL SERVANTS AND POLITICS 



Contents 



1. Introduction 

2. Political role of civil servants 

3. Involvement of civil servants in politics 

4. The principle of political neutrality of civil servants 

5. Civil service in Hong Kong 



6. Relevant provisions in the Sino-British Joint 
Declaration and the Basic Law (Draft) 



7. Controversial issues and related opinions 



8. Conclusion 



1 • Introduction 

1.1 Civil servants refer to those who work in the 
administrative departments of the government. They 
include officials at various levels and experts, as well 
as technicians, clerks and sundry workers. The civil 
service of the Hong Kong Government has along been 
engaged in all the activities within the polity, from 
formulating and implementing policies to drafting and 
enforcing laws. Hence, the changes consequent on the 
transfer of sovereignty of Hong Kong will have important 
bearing on the role of civil servants. 

1.2 As electoral politics develops in Hong Kong with more 
and more elected seats being introduced to the polity of 
Hong Kong through the District Boards and Legislative 
Council, the political role of civil servants has 
already been affected to a certain extent. After 1997, 
Hong Kong's political structure will take on a new look. 
This new political machinery will obviously make great 
impact on the work of civil servants. 

1.3 The political role of civil servants has bearing on 
their involvement in politics. The development of 
electoral politics has prompted more discussions on the 
involvement of civil servants in politics. Whether the 
political activities of civil servants such as standing 
for elections, joining political groups, etc. should be 
subject to restrictions, and what kinds of restriction 
they should be subject to are issues of concern. The 
question as to what provisions should be laid down 
regarding the involvement of civil servants in politics 
in the post-1997 political machinery should be studied 
i n detail . 

1.4 In the discussion on the relationship between civil 
servants and politics in this report, civil servants are 
classified into senior civil servants and ordinary civil 
servants. Senior civil servants refer to those who are 
closely connected with the formulation of policies. 
There is a distinct difference between senior civil 
servants and ordinary civil servants in their political 
roles and involvement in politics. This report attempts 
to explore the issues concerning these two aspects. 



2. Political role of civil servants 

Generally speaking, the role of civil servants in the 
political machinery is closely related to the political 
system. To put it in simple terms, under a system of 
electoral politics, the councillors are responsible for 
formulating policies while the civil servants are 
responsible for implementing those policies. However, in 
actual operation, the two functions are ->ot totally 

237 



independent of one another because in the process of 
formulating and implementating policies, there is much 
room for civil servants to influence policies, while the 
councillors often have to rely on civil servants for 
information and opinions in policy-making. Hence, the 
importance of the political role played by civil 
servants depends on the operation of the polity they 
are in and on how strictly they observe the principle of 
political neutrality. 



3. Involvement of civil servants in politics 

Involvement of civil servants in politics means their 
participation in political activities. Political 
activities refer to those political activities which 
civil servants join in their capacity as private 
citizens, such as campaigning and electioneering, 
joining political groups, and other activities involving 
politics. Civil servants in different countries are 
subject to restriction of varying degrees when 
participating in these activities. The stance of the 
state regarding civil rights, the political neutrality 
of civil servants, and the principle of handling matters 
strictly according to rules, will have bearing on the 
restrictions imposed on the involvement of civil 
servants in politics. In Sweden, France and Australia, 
civil servants enjoy as many rights as any other 
citizen. In Sweden, civil servants may publicly 
criticize their own superiors or even the government 
provided they do not contravene the official secrecy 
regulations. They may join political parties and even 
stand for election without taking a leave of absence 
from their job. But if they are elected, they must take 
a leave absence from their official duties. However, 
upon termination of their elective office, they have the 
right to full reinstatement to the civil service to a 
post comparable to that which they held prior to their 
leave of absence. Countries which impose stringent 
restrictions on the involvement of civil servants in 
politics include Canada, the United Kingdom, the United 
States and Japan. In Japan, civil servants may not 
publicly express their views on government policies or 
practice, nor may they engage in political activities or 
become members of political parties, nor may they seek 
or hold public elective office. However, they have the 
right to vote. With their differences in political 
tradition and in the interplay of political and 
administrative interest, these countries impose 
restrictions of varying degrees on the participation of 
civil servants in politics. 



4. The principle of political neutrality of civil servants 



238 



4.1 The principle of political neutrality of civil servants 
is of utmost importance in Western countries which 
practise electoral and party politics. By following this 
principle, the party elected to power may effectively 
control the administrative system of the government and 
command its service. In other words, irrespective of 
who the policy-maker is, civil servants will 
conscientiously implement policies without the slightest 
deviation. Even if a civil servant does not agree to a 
certain policy, he should still implement it 
faithfully . 

4.2 The principle of political neutrality is necessary for 
putting into practice the spirit of democratic politics. 
In democratic politics, the change over of governments 
and the modification of policies should be in accordance 
with the results of political elections and certain 
legal procedures. The principle of political neutrality 
ensures that civil servants will not be drawn into 
political contention, thus remaining neutral in the 
implementation of policies. In this way, the politicians 
will be held fully responsible for the quality of the 
government and the results of policies, be they good or 
bad. And since it is possible for civil servants to 
discharge duties conscientiously, a new government 
constituted by political contention may retain those 
civil servants left by the previous government, thus 
ensuring that the efficiency of the government will not 
be seriously affected by the government reshuffle. 

4.3 Under the principle of neutrality in politics, civil 
servants must implement determined policies impartially 
and in accordance with law without regard to political 
or personal considerations or influence. Under modern 
capitalism, the role played by the government in 
allocating resources is of considerable importance. 
Hence, to discharge duties conscientiously is a 
principle which must be strictly observed by civil 
servants . 



5. Civil service in Hong Kong 

5 . 1 Structure 

In Hong Kong, there are more than 186,000 civil servants 
in 430 job categories and in over 1,100 ranks. The 
civil servants in Hong Kong can roughly be divided into 
two types: versatile personnel and specialized 
personnel. The former include Administrative Officers, 
Executive Officers and Information Officers who may be 
assigned to any government department, whereas the 
latter are generally assigned to a certain department on 
a long-term basis. They include disciplinary personnel, 
teachers, nurses, lawyers and architects. Administrative 

239 



Officers are generally regarded as the elite of the 
government because they are involved in policy- 
designing. The heads of most departments are former 
Administrative Officers promoted to these posts. 

5.2 Political role 

5.2.1 Since Hong Kong is under colonial rule, politics and 
administration are integrated into a bureaucratic 
system. Even with electoral politics being gradually 
promoted in Hong Kong by introducing general elections 
at district level and elections by an electoral college 
and functional constituencies in the Legislative 
Council, no political parties or other forms of 
developed political organizations have so far emerged in 
Hong Kong. Furthermore, the politicians emerging from 
electoral politics do not have actual decision-making 
power in the formulation of policies. Hence, these 
politicians cannot be put on a par with politicians in 
Western countries as they only play an insignificant 
role in the process of policy-making or in the whole 
political machinery. Under a system which remains 
executive-led, senior civil servants in Hong Kong are 
the main body of political activities, thus having 
tremendous influence within the polity of Hong Kong. 

5.2.2 At present, the Secretaries of the Hong Kong Government 
are responsible for the coordination of policies and not 
directly in charge of government departments. Only the 
Chief Secretary and the Financial Secretary (with 
respect to financial matters) have the power to issue 
orders to the heads of departments. Nevertheless, the 
Secretaries of the Hong Kong Government still have 
important influence on the government's policy-making. 
In the Executive Council, the Chief Secretary, the 
Attorney General and the Financial Secretary are ex- 
officio members. The Governor in Council (i.e. the 
Governor consults the Executive Council before making 
decisions) is the executive hub of the greatest power in 
Hong Kong. The role played by the Secretaries in the 
Legislative Council (the legislature) is also very 
important. The maximum membership of the Legislative 
Council is 57. Apart from the Chief Secretary, the 
Financial Secretary and the Attorney General who are the 
ex-officio members, there are seven official members. 
They are responsible for introducing bills to the 
Legislative Council and answering questions raised by 
other members on government administration. It is 
evident that the Secretaries are playing quite an 
important political role. 

5.3 Restrictions on civil servants' political activities 

5.3.1 The participation of civil servants in political 
activities is subject to restriction by law. According 

240 



to the Civil Service Regulations of Hong Kong, civil 
servants are subject to the following restrictions in 
publishing statements (Note 1): 

5.3.1.1 Civil servants are not allowed to make public comments 
of a political nature in their private capacity. Whether 
at work or on leave, civil servants may not publish 
anything of a political or administrative nature 
without first obtaining the permission of the head or 
deputy head of their departments or head of grades. 
(However, senior civil servants are encouraged to 
discuss in their official capacity issues of public 
concern in public in a constructive way. ) 

5.3.1.2 Heads of departments should seek comments from the 
appropriate branch of the Government Secretariat on the 
contents of speeches or papers to be published on 
controversial subjects of considerable public interest. 

5.3.1.3 Civil servants may not call or attend public meetings, 
distribute political publications, or sign or procure 
signatures with a view to affecting government's actions 
and decisions. 

5.3.2 As regards election campaigns, according to the 
Electoral Provisions Ordinance [1984], civil servants 
are subject to the following restrictions: 

5.3.2.1 Anyone holding public office (Note 2) is disqualified 
from standing for election. 

5.3.2.2 Civil servants may not canvass support for a candidate. 

5.3.2.3 Civil servants must first resign from the civil service 
if they wish to run for an elected office. 

5.3.3 As regards the joining of political organizations, since 
political organizations began to appear in embryonic 
form recently in Hong Kong, the government is drawing up 
regulations to restrict the participation of civil 
servants in political organizations. (Note 3) 

5.4 The principle of political neutrality 

As all decision-makers of the Hong Kong Government 
(including the Governor-, members of the Executive 
Council and Legislative Council, and principal 
government officials) are appointed, the question of 
contention among political parties does not arise. 
Although senior civil servants have to be politicians 
and administrators of policies concurrently, so far 
there is no local political force in Hong Kong which is 
able to affect the functioning of the civil service such 
as the appointment, promotion and disciplining of civil 
servants. On the other hand, civil servants are unable 

241 



to actively or wholeheartedly get involved in political 
activities. Hence, it is generally held that the civil 
servants in Hong Kong are politically neutral. 

6. Relevant provisions in the Sino-British Joint 
Declaration and the Basic Law (Draft) 

6.1 Though the Sino-British Joint Declaration does not 
elaborate on the political role of civil servants in the 
Hong Kong Special Administrative Region, it provides the 
f ol lowing : 

6.1.1 Section I of Annex I: "Principal officials (equivalent 
to Secretaries) shall be nominated by the chief 
executive of the Hong Kong Special Administrative Region 
and appointed by the Central People's Government. The 
legislature of the Hong Kong Special Administrative 
Region shall be constituted by elections." (However, it 
does not specify whether civil servants may stand for 
election or whether the seats of official members 
in the present Legislative Council will be retained 
through elections. ) 

6.1.2 In the Sino-British Joint Declaration, the principal 
officials of the post-1997 government are regarded as 
equivalent to existing Secretaries. However, there is no 
provision on whether principal officials will be 
considered civil servants. 

6.2 The Basic Law (Draft) contains the following provisions: 

6.2.1 Article 48: "The Chief Executive of the Hong Kong 
Special Administrative Region shall exercise the 
following powers and f unctions :...( 5 ) To nominate and to 
report to the Central People's Government for 
appointment the following principal officials: 
Secretaries and Deputy Secretaries of Departments, 
Directors of Bureaus, Commissioner Against Corruption, 
Director of Audit and Commissioner of Police;...;" 

6.2.2 Article 100: "The Government of the Hong Kong Special 
Administrative Region may employ British and other 
foreign nationals previously serving in the public 
service in Hong Kong, or those holding permanent 
identity cards of the Region, to serve as public 
servants at all levels, but only Chinese citizens among 
permanent residents of the Region may fill the following 
posts: the Secretaries and Deputy Secretaries of 
Departments, Directors of Bureaus, Commissioner Against 
Corruption, Director of Audit and Commissioner of 
Pol ice . . . . " 

6.2.3 Article 55: "Members of the Executive Council of the 
Hong Kong Special Administrative Region shall be 

242 



appointed by the Chief Executive from among the 
principal officials of the executive authorities, 
members of the Legislative Council and public figures. 
Their appointment or removal shall be decided by the 
Chief Executive...." 

6.2.4 Article 67: "The Legislative Council of the Hong Kong 
Special Administrative Region shall be constituted by 
election . . . . " 

6.3 Article 100 of the Basic Law (Draft), which is under the 
section on Public Servants, mentions the nationality 
restriction on principal officials. Whether principal 
officials will be considered civil servants as the 
existing Secretaries are awaits further clarification. 
However, according to Articles 55 and 100 of the Basic 
Law (Draft), principal officials must be Chinese 
nationals and may become Executive Councillors. 
Obviously, they will occupy a decisive position in the 
future government. If they are considered civil 
servants, their political role will be equivalent to 
that of the existing Secretaries. In addition, the 
requirement that these principal officials must be 
Chinese nationals will to a certain extent affect the 
promotion or continued employment of existing senior 
civil servants who are foreign nationals (including 
those who are Chinese but of foreign nationalities). 

6.4 As regards the participation of civil servants in 
politics, neither the Sino-British Joint Declaration nor 
the Basic Law (Draft) has specific provisions. But the 
Basic Law (Draft) provides the following: 

6.4.1 Article 8: "The laws previously in force in Hong Kong, 
that is, the common law, rules of equity, ordinances, 
subordinate legislation and customary law shall be 
maintained, except for those that are inconsistent with 
this Law or have been amended by the legislature of the 
Hong Kong Special Administrative Region." 

6.4.2 Article 102: "... Hong Kong's previous system of 
recruitment, ... for the public service, ... , shall be 
maintained, except for any provisions for privileged 
treatment of foreign nationals." 

6.5 Since at present civil servants are subject to 
restriction in their participation in politics, if these 
laws and systems are to be maintained, civil servants in 
the post-1997 government will also be subject to the 
same restrictions on their freedoms of speech, to stand 
for election and of association. 



Controversial issues and related opinions 



24 3 



7.1 Civil servants and the political machinery 

7.1.1 Issue 

It is indisputable that civil servants should observe 
the principle of political neutrality when performing 
their public duties. As the question of political 
contention does not exist in Hong Kong, even when 
senior civil servants are playing an important 
political role, they have not violated the principle of 
political neutrality. After 1997, there will be more 
or less some political contention in the Hong Kong 
Special Administrative Region. If principal officials 
who are equivalent to the existing Secretaries also 
play an important political role, while the departments 
of the HKSAR Government are headed by civil servants 
rather than elected councillors, will civil servants 
and the civil service as a whole be affected as a 
result of the infiltration of outside forces? Or, in 
what way will the civil service be affected by the 
involvement of civil servants in politics, e.g. 
standing for election? 

7.1.2 Opinions 

7.1.2.1 Civil servants and principal officials 

7.1.2.1.1 Civil servants are familiar with the machinery of the 
government and the policy-making process. If they are 
appointed as principal officials, with their 
administrative expertise, the standard and efficiency 
of administration in Hong Kong will definitely be 
maintained, thus strengthening the confidence of the 
industrial and commercial sectors, which in turn will 
be conducive to a smooth transition. 

7.1.2.1.2 The appointment of civil servants as principal 
officials will reassure civil servants and may 
encourage capable persons to join the civil service and 
serve the government. 

7.1.2.1.3 Principal officials are political appointees. If they 
are civil servants, the principle of political 
neutrality observed by civil servants will be violated, 
and they may be subject to government reshuffle. This 
will undermine the professionalism of civil servants. 

7.1.2.1.4 The appointment of civil servants as principal 
officials implies that the posts of principal 
officials are possible vacancies to be filled through 
promotion within the civil service. And the criteria 
for promotion should be the candidates' administrative 
ability and seniority and not their political stance. 

7.1.2.1.5 The term of office of a Chief Executive is five years. 



244 



Should a Chief Executive be unable to serve a 
consecutive term and the new Chief Executive want to 
replace the principal officials of the previous 
government by removing or demoting them, the career 
prospects of principal officials as civil servants will 
be adversely affected. 

7.1.2.2 Civil servants and the Executive Council 

As the Executive Council of the HKSAR will possibly 
comprise elected members, senior civil servants may 
have to share the policy-making power with these 
members. Since elected members are accountable to the 
electorate while civil servants are accountable to the 
government, it will be rather difficult for these two 
different kinds of accountability to co-exist without 
conf 1 icts . 

7.1.2.3 Civil servants and the Legislative Council 

Unlike the existing Legislative Council, the future 
Legislative Council will be more than a advisory body. 
The public will have more vigorous demands on the 
transparency of the administration of the HKSAR 
Government, thus subjecting the work of civil servants 
to greater supervision. 

7.2 Political rights of civil servants 

7.2.1 Issue 

At the moment, the political rights of civil servants, 
such as that of joining political parties, 
participating in political activities, openly 
criticizing the government, standing for election and 
canvassing support for a candidate, are subject to 
restriction by law. The question of whether the 
restrictions imposed on civil servants' political 
activities should be relaxed has all along been a 
subject heatedly debated by members of the public. The 
controversy lies in that on the one hand, civil 
servants are also citizens whose civil rights should 
not be infringed; and on the other, civil servants are 
administrators of policies who must strictly observe 
the principle of political neutrality so as to 
faithfully discharge their duties. Hence, thorough 
research must be conducted on the question as to 
whether the involvement of civil servants in politics 
will affect the faithful discharge of their duties. If 
the laws relating to civil servants' political 
activities are to be maintained after 1997, the 
question as to whether or not the restrictions on civil 
servants' political activities should be reviewed 
requires immediate study so that more specific 
provisions can be included in the Basic Law. 

245 



7.2.2 Opinions 

7.2.2.1 Implications of civil servants' participation in 
political activities 

7.2.2.1.1 The participation of civil servants in political 
contention, such as elections, under the protection of 
the lifelong employment system is unfair to those 
politicians who do not have this kind of security. 

7.2.2.1.2 Civil servants have a special political obligation of 
implementing policies faithfully under whatever 
circumstances. If civil servants are involved in 
political activities, it will be very difficult for 
them to uphold the principles of impartiality and of 
faithfulness to the government when implementing 
policies . 

7.2.2.2 Restrictions on the civil rights of civil servants 

7.2.2.2.1 As the political machinery will become more and more 
open after 1997, the restrictions on civil servants' 
political activities should also be relaxed. 

7.2.2.2.2 Article 26 of the Basic Law (Draft) provides that 
permanent residents of the Hong Kong Special 
Administrative Region shall have the right to vote and 
the right to stand for elecion in accordance with law. 
And it is stated in Article 27 that Hong Kong residents 
shall have freedom of speech, of association and of 
assembly. These freedoms should apply to civil servants 
because they are also residents of Hong Kong. However, 
the participation of civil servants in political 
activities is at present subject to restriction by law 
and it is provided in Article 8 of the Basic Law 
(Draft) that except for those that are inconsistent 
with the Basic Law, all laws previously in force shall 
be maintained. These restrictive provisions will 
therefore be inconsistent. 

7.2.2.2.3 As private citizens, the civil rights of civil servants 
should not be infringed. But since civil servants are 
playing a special political role, their rights to join 
activities which will in turn affect their faithfulness 
in implementing policies should be subject to 
restriction. As to what these activities exactly are, 
it should be judged in the light of the actual 
c ircumstances . 

7.2.2.2.4 As far as the restriction on political rights is 
concerned, the senior civil service, and the junior and 
middle-level civil service should be dealt with 
separately (the demarcation of ranks awaits further 
deliberation). Since it is believed that senior civil 



246 



servants will occupy important positions in the policy- 
making departments of the HKSAR Government, the 
existing restrictions on their political rights should 
remain unchanged. However, some relaxation of 
restriction is possible and desirable for junior and 
middle-level civil servants. This would encourage them, 
a force for stability in Hong Kong, to work actively 
for the interests of the community. Further, it would 
encourage them to voice constructive criticism of the 
government, that could help to improve it. 

7 2 2 2 5 On the freedom of speech, junior and middle-level civil 
' servants should be permitted more leeway to express 
their opinions about candidates and issues in 
elections. Strict control over the public comments of 
senior civil servants, however, must be maintained to 
ensure civil service neutrality. 

7 2 2 2 6 As regards the freedoms of nomination and standing for 

' election, junior and middle-level civil servants should 

be allowed to stand for election. If they are elected, 

thev will have to resign from the civil service. 

However, they may be permitted to return to the 

government at the same level of seniority if they lose 

the election or when they leave an elected post. These 

decisions should be made on a case by case basis and 

determined by the needs of the service. As for senior 

civil servants, if they stand for election, they should 

resign without the possibility of reappointment. 

Further, they may retain the right to vote but should 

not be prevented from participating in elections, 

including campaigning, canvassing, jtttendxng r&llxes 

and so forth, in order to maintain the neutrality oi 

the civil service. 

7 2 2 2 7 With regard to the freedom of association, junior and 
middle-Lvel civil servants should be allowed to join 
political groups, associations, °r political parties, 
so long as they do not play a leading role in these 
institutions. Additional restrictions should be drafted 
for senior civil servants, however, prohibiting them 
from joining these groups, associations, or parties or 
taking a leading role in them. 

7.3 Nationality restriction on civil servants 

7.3.1 Issue 

According to Article 100 of the Basic Law (Draft ), only 
Chinese nationals may be appointed as Principal 
officials. At present, quite a number of senior- 
officials in the government are foreign nat i°™ ls - *? 
they are to remain in the civil service of the post 
1997 HKSAR Government, their career prospects will 
suffer as a result their nationality. This has dampened 

247 



the morale of these civil servants. In addition, those 
Chinese civil servants who have acquired foreign 
nationalities are not sure where they stand as far as 
their Chinese nationality is concerned. They therefore 
face the same problem. In any case, this issue 
concerning nationality must be studied in the light of 
the application of China's Nationality Law in Hong 
Kong. 

7.3.2 Opinions 

7.3.2.1 In order to stabilize the civil service and to maintain 
Hong Kong's international status, the Basic Law should 
not impose any restriction on the nationality of 
principal officials. 

7.3.2.2 Before its application in Hong Kong, the Nationality 
Law of China should be duly modified to allow the 
Chinese nationals residing in Hong Kong to have dual 
nationality, i.e. they may keep their Chinese 
nationality without giving up their foreign one. 

7.3.2.3 The requirement that principal officials must be 
Chinese nationals is to give expression to sovereignty. 
It will also avoid the problem of dual allegiance which 
will jeopardize the interests of the HKSAR Government. 



Conclusion 

Civil servants have to remain politically neutral in 
order to carry out their duties conscientiously. This 
principle has been widely accepted. Since Hong Kong 
will be under a new political environment after 1997, 
the duties of civil servants and the civil service have 
to adapt to the new political machinery. Their 
political role will also undergo some changes. At 
present, the civil service is of considerable 
importance to the stability of Hong Kong and it will 
continue to be so beyond 1997. The issues concerning 
the civil service constitute one of the major subjects 
in the Basic Law. The finalized provisions in the Basic 
Law will not only set down the policies to be 
implemented after 1997, but will also have tremendous 
bearing on the run-up to 1997. 



248 



Note 1: "Publish" includes making public by interviews 
and speeches, by letters and articles in the 
press, and by talks and discussions on radio or 
television programmes. 

Note 2: - Section 19 of the Electoral Provisions 
Ordinance [1984] 

A person shall be disqualified for being 
elected or being nominated as a candidate or 
holding office as a member if he -- 

(a) holds any public office (other than as a 
member of an auxiliary force) or any 
office of emolument in the gift or 
disposal of the Urban Council, or of the 
Regional Council, or any committee 
thereof or having held such office has 
been dismissed therefrom; 

- In 1989, Mr Desmond Lee filed an appeal 
against the election results of the Hong Kong 
Island (East) electoral college constituency 
in the 1988 Legislative Council elections. 
According to the ruling of the Full Bench of 
High Court, Lay Assessors and Immigration 
Tribunal Adjudicators appointed by notice 
published in the Hong Kong Government Gazette 
are not considered holders of public office. 

Note 3: Please refer to the speech by Mr Harnam 
Grewal , Secretary for the Civil Service, at 
the City Polytechnic on Thursday, 4 May 1989. 



* If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



249 



CONSTITUTIONAL ECONOMICS AND 
THE PROVISIONS ON ECONOMY IN THE BASIC LAW (DRAFT) 



Contents 



1 . Introduction 



2. Constitutional economics: the theories 



3. Constitutional economics and the provisions on economy 
in the Basic Law (Draft) 



4. Views in favour of imposing constitutional restraints on 
the government's fiscal power 



5. Views against prescribing restraints on the government's 
fiscal power in the Basic Law (Draft) 



6 . Conclusion 



1 . Introduction 

1.1 This report is mainly based on the discussion at the 
seminar on "Constitutional Economics" organized by the 
Consultative Committee for the Basic Law, with some 
relevant information added. This report analyzes the 
various issues concerning the economic policy provisions 
in the Basic Law (Draft) from the economic point of view, 
so as to enhance the reader's understanding of these 
provisions . 

1.2 This report first introduces some basic concepts such as 
the origins and substance of "constitutional economics", 
and then present, for reference purposes, the views 
for/against the inclusion of provisions concerning 
constitutional economics in the Basic Law (Draft), and the 
proposals for resolving the related problems. 

2. Constitutional economics: the theories 

2.1 The philosophical basis of constitutional economics 
economic liberty 

The philosophy of constitutional economics may be said to 
have its origins in the concept of economic liberty which 
is not only closely related with constitutional law but 
can be traced back to the middle ages. 

2.1.1 Basis of economic liberty 

A constitution is a system of fundamental laws and 
principles that prescribes the nature, functions, and 
limits of a government. Advocates of economic liberty 
maintain that the most important object in the drafting 
and ratification of any constitution is to secure the 
liberties of individuals against the coercive, depredatory 
powers of government. The full range of liberties 
protected under constitutional government includes civil 
rights, political freedoms and economic liberties. Indeed, 
for most people in society, the opportunity to engage 
freely in a business, trade, occupation, or profession is 
the most important liberty society has to offer. In a 
society based on private property and private enterprise, 
those who engage in economic activities in conformity with 
existing laws, practices, and institutions are entitled to 
security against arbitrary and confiscatory government 
actions. Furthermore, society as a whole suffers greatly 
when government intrudes into the marketplace in a manner 
that harms the efficiency of economic competition. 

2.1.2 Origins of economic liberty 

In England, private property was duly regarded and 
protected as early as in the 12th and 13th centuries 

253 



through writs and the common law. With the publication of 
John Locke's Second Treatise on Civil Government , 
individual economic liberty seriously developed into a 
coherent, powerful intellectual tradition. 

In his publication, Lockes put forward three very 
important notions: individual liberty, private property 
and limited government. The notion of "limited government" 
is especially important in relation to individual economic 
liberty. A "limited government" refers to a government 
that men fashion by yielding the rights they enjoy in the 
state of nature. Such a government cannot act arbitrarily 
over men nor dispossess them of those rights. The unique 
relationship between a limited government and its people 
became an important aspect in the later development of the 
notion of economic liberty. 

In the 17th century, Blackstone, one of the most prominent 
English jurists, emphasized the importance of individual 
economic liberty in relation to Jaw to the effect that the 
state's power of eminent domain and taxation would be 
restrained. About a century later, Adam Smith, in his 
Inquiry into the Nature and Causes of the Wealth of 
Nat i on . went even further to assert that a free and 
prosperous economy must be based on private ownership, 
private enterprise, and free-market competition. 

2.1.3 Definition and substance of economic liberty 

Economic liberty is primarily an issue of the rights of 
individuals, not of groups or collectives. However, 
economic liberty recognizes that when a state performs its 
legitimate tasks such as the maintenance of law and order, 
it has to acquire the necessary resources from its people. 
Hence, to safeguard economic liberty, individual economic 
liberty and the collective acts of the state in 
interfering with the economy should be carefully defined 
and weighed up. 

Individual economic liberty depends on private property, 
freedom of contract. and the rule of law. Individual 
liberty and prosperity of society are enhanced by policies 
that: (1) require the state to maintain low rates and 
levels of taxation; (2) limit government spending through 
bans on budget deficits; (3) minimize costly regulations 
imposed on business or labour; (4) avoid wage and price 
controls; (5) issue and maintain sound money; and (6) 
impose no barriers to free trade in goods, services and 
financial assets. 

2.1.4 After the Second World War, the democratic governments in 
Europe and America constantly increased public spending, 
thus intensifying their intervention in the economy and 
creating budget deficits. In recent decades, people living 
in these countries have not only felt frustrated by their 

254 



inability to control the government's fiscal policies in 
face of an ever-increasing budget deficit, but have also 
lost confidence in the monitoring of government by a 
democratic polity. With the revival of the notions of 
"limited government", "balanced budget" and "low tax 
policy" which are important to "economic liberty", 
constitutional economics began to develop. 

2.2 Practice of economic liberty -- constitutional economics 

2.2.1 Different schools of economists have different solutions 
to existing economic problems such as budget deficit and 
rampant inflation. Economists who advocate economic 
liberty are convinced that the solution to these economic 
problems lies in reforming the constitution, hence the 
emergence of "constitutional economics". The main point of 
constitutional economics is to put those serious economic 
problems experienced in the West, especially in the 
United States, under permanent control by pol it ical-cum- 
economic means. Milton Friedman mentioned in his book -- 
Free to Choose -- that only the constitution could 
restrain a government's fiscal power. Friedrich Von Hayek 
also put forward a similar proposal in his 
Constitution of Lib erty. But the economist who has 
contributed most to constitutional economics is James 
Buchanan . 

2.2.2 Buchanan's study on the relationship between the 
constitution and the economy is mainly based on his 
research on the US economy. He asserts that the main cause 
of the serious deficit in the US is that Keynesian 
economists have defied the fiscal doctrine of balanced 
budgets advocated by classical economists. He also 
maintains that in stressing the government's role in 
running the economy, Keynesian economists have overlooked 
the importance of a balanced budget, thus enabling the 
government to make unchecked demands on state resources 
and the wealth of the people, while politicians are also 
making unlimited demands on the government in order to 
appease the voters. This ultimately results in an 
indefinite rise of public expenditure, a deteriorating 
budget deficit, a continuous waste of resources and 
uncontrollable inflation. 

2.2.3 Buchanan does not rely on the government for any 
improvement on the economy because he is not convinced 
that a popularly elected government is able to stabilize 
economic fluctuations effectively. Furthermore, he is 
against the theory of Keynesian economists that budget 
surpluses or deficits can be used to stabilize or propel 
the development of the entire economy. He maintains that 
government intervention will only become a cause of 
economic fluctuations. He therefore proposes that the 
principle of a balanced budget should be restored and laid 
down specifically in the constitution so as to make it 

255 



legally and morally binding. A balanced budget will not 
only check the demands of politicians, but will also 
prevent the continuous expansion of the public sector and 
reduce the waste of resources. 

2.2.4 The essence of a balanced budget is that a government is 
required to take its revenues and expenditure into account 
comprehensively. When deciding a certain policy, it must 
be careful about the allocation of resources, i.e. it must 
exercise rigorous control over spending. To keep 
expenditure within the limits of revenues is a principle 
which must be observed in preparing government budgets. 
The constitutional economic theories put forward by 
Buchanan are essentially a return to those more 
conservative and cautious theories advocated by classical 
economists. In addition, his sceptical attitude towards 
governments and politics affirms that the government's 
fiscal power should be restrained and bound by the 
constitution, thus reducing the government's intervention 
in personal economic freedoms. 



3. Constitutional economics and the provisions on economy in 
the Basic Law (Draft) 

3.1 The provisions in the Basic Law (Draft) which are most 
akin to the spirit of constitutional economics are 
Articles 106 and 107. 

Article 106: "The Hong Kong Special Administrative Region 
shall follow the principle of keeping expenditure within 
the limits of revenues in drawing up its budget, strive 
for a fiscal balance, avoid deficits and ensure that the 
budget is commensurate with the growth rate of its gross 
domestic product." 

Article 107: "The Hong Kong Special Administrative Region 
shall practice an independent taxation system. 

"The Hong Kong Special Administrative Region shall, taking 
the low tax policy previously pursued in Hong Kong as 
reference, enact laws on its own concerning types of 
taxes, tax rates, tax reductions and exemptions and other 
matters of taxation." 

"Balanced budget", "keeping expenditure within the limits 
of revenues", and "low tax policy" are points being 
stressed in constitutional economics. 

3.2 Other articles, such as Article 117 of the Draft Basic Law 
for Solicitation of Opinions (DBLSO) on the policy of free 
external trade, Article 122 of the DBLSO free and open 
policies, Article 110 of the Basic Law (Draft) on the 
issue and regulation of currency, and Article 113 of the 
Basic Law (Draft) on tariff, also carry certain notions of 

256 



constitutional economics. From the angle of constitutional 
economics and with constitutional economics as the 
theoretical basis, the following section analyzes the pros 
and cons of including these provisions in the Basic Law 
(Draft) . 



Views in favour of imposing constitutional restraints 
the government's fiscal power 



on 



4.1 Changes in the balance between the political framework and 
the socio-economic forces 

The Hong Kong Government has played a very important role 
in helping the Hong Kong economy to become what it is 
today. Its policy of positive non-intervention has 
received much acclaim. It is possible for the Hong Kong 
Government to become a sel f -restrained and limited 
government mainly because of the balance between the 
political framework and the socio-economic forces. 
However, after 1997, this balance will inevitably 
experience some changes. A representative political 
structure alone will not be able to restrain the powers of 
the government. Hence, provisions restricting the 
government's fiscal power have to be laid down in the 
Basic Law in order to avoid the situation where minimum 
improvements will be made only when the conditions have 
deteriorated to an unbearable extent. 

4.2 Changes in the political structure 

4.2.1 According to the experience of Western democratic 
countries, even a democratically elected government is 
unable to prevent politicians or public servants from 
sacrificing public interests for personal gains, or to 
prevent vested interests from demanding "free lunches" 
from the government. Hong Kong's political structure is 
bound to change as 1997 approaches. If a highly democratic 
polity emerges, Hong Kong is likely to follow the 
footsteps of the Western democratic countries: politicians 
will use public moneys to give out "free lunches" in order 
to please voters (the general public), parties seeking 
special interests (businessmen, professionals or trade 
unions) and bureaucrats, thus increasing government 
spending and giving rise to rampant inflation. 

4.2.2 But if the political structure of the HKSAR does not 
develop into a highly democratic one, the vested interests 
within the Legislative Council (businessmen, professionals 
or trade unions) can even more easily disguise their 
special interests as public interests, such as demanding 
the government to aid industry and asking the government 
to safeguard the professional qualifications of certain 
professional bodies. They will protect their own 
interests at the expense of the overall interests of 

257 



society, thus adversely affecting social and economic 
development. Regardless of the development of the 
political structure, constitutional measures must 
therefore be adopted to prevent the government from 
abusing its taxation and spending powers. 

4.3 Views on individual articles of the Basic Law (Draft) 

4.3.1 Article 104 combines segments from Articles 6 and 117 of 
the DBLSO with the following provision deleted: "The Hong 
Kong Special Administrative Region shall continue the 
policy of free external trade and free external economic 
relations." As .justification, the following view in the 
Consultation Report was cited: "Free trade may be feasible 
during economic booms, but it is not an invariable 
practice." This statement is wrong. From an overall 
economic point of view, free trade maximizes an economy's 
capacity to adjust to changing world conditions, both in 
times of prosperity and recession. Restraining free trade 
during periods of recession retards the economy's capacity 
to adjust to begin a new round of higher growth once the 
global economy picks up again. Departing from the practice 
of free trade will harm prosperity and growth in the long- 
run . 

In addition, restraining free trade during any phase of 
the economic cycle violates each individual's economic 
liberty to buy and sell freely on world markets. Economic 
liberty must be preserved during recessions as well as 
during periods of prosperity. It was therefore proposed 
that the articles in the DBLSO should be reinserted. 

4.3.2 Article 106 provides for a balanced budget. Some opinions 
point out that this article is much less binding than the 
article in the previous draft since Article 105 of the 
DBLSO provides for both budgetary balance and a limitation 
on government spending whereas this article fails to limit 
government spending. 

The flaw in Article 106 is due to the possibility of 
maintaining fiscal balance and keeping expenditure within 
the limits of revenues at the same time that both revenues 
and expenditure rise as a share of gross domestic product 
(GDP). To the extent that the government approved a rise 
in taxation as a share of GDP, Article 106 permits the 
government to spend all of that increase. The budget would 
still be balanced, but at higher levels of taxation and 
spending. The problem with the language in the present 
draft lies in the word "commensurate". "Commensurate" can 
be interpreted in a number of ways. It is commonly argued 
by scholars and government officials throughout the 
world that as a country gets richer (that is, as real per 
capita incomes rise), the people can afford to pay a 
higher share of their income in taxes to finance an 
increase in the relative size of the public sector. If the 

258 



courts in Hong Kong interpret "commensurate" in this way, 
Article 106 would permit the Government to increase the 
relative size of the public sector any time it wanted. The 
original language which stated that "the rate of increase 
of the budgetary revenues and the expenditure of the HKSAR 
shall not exceed that of the gross domestic product over a 
number of fiscal years taken as a whole" constituted an 
effective spending limit and should be put back into the 
final draft. It is important to link the "rate of 
increase" in revenues and expenditure to the "rate of 
increase" of the GDP. 

In fact, the statement that no restriction should be 
imposed on the growth rate of the HKSAR ' s budgetary 
revenues and expenditure is utterly wrong because the 
characteristic of Hong Kong's economy is keeping public 
spending at a low level. If public spending and taxation 
were allowed to increase dramatically in Hong Kong, the 
vitality of the HKSAR and the economic liberty of its 
citizens will be seriously affected. 

4.3.3 Article 107 no longer requires the HKSAR to continue to 
practise a low tax policy but only treats the concept of 
low tax policy solely as a "reference", which is less 
binding . 

The use of the word "reference" permits the Government of 
the HKSAR to state that times and circumstances have 
changed and, therefore, that the previous low tax policy 
is no longer suitable to Hong Kong's new conditions. On 
this basis, the HKSAR Government can enact higher taxes, 
which it can spend because the growth in revenues is no 
longer firmly capped by the growth rate in GDP. On the 
contrary, the provision of the previous draft that "the 
HKSAR shall continue to practice a low tax policy" is 
better. Although some people expressed concern that 
keeping the word "continue" in the first draft indicated a 
mistrust of the HKSAR Government, if governments all over 
the world (including the future HKSAR Government) could be 
trusted to maintain systems of low taxation, there would 
never be tax revolts nor any need to use constitutional 
devices to restrict taxes. Hence, the question does not 
lie in trust but that there should be clear statutory 
safeguards to assure everyone. Furthermore, far too many 
powers vested in the present government are subject to 
abuse . 

4.3.4 The provision in Article 108 that the HKSAR Government 
shall maintain the status of Hong Kong as an international 
financial centre is superfluous. So long as the free flow 
of capital and free trade are guaranteed in Hong Kong, 
this objective will in effect be achieved. This provision 
implies that other provisions like "the status of Hong 
Kong as a textile and garment manufacturing centre or 
tourist centre" could well be laid down in the Basic Law. 

259 



4.3.5 Article 109 is on the monetary and financial systems. The 
provision that "the HKSAR shall continue to practise free 
and open monetary and financial policies" in the previous 
draft has been deleted. This will give rise to confusion 
as a free and open financial policy may mean the 
elimination of monopolization in the financial market, 
and that financial services like banking and capital 
management are allowed to compete freely within the 
confines of law such as by meeting the required capital 
ratio. Hence, the future HKSAR Government should adopt 
such a practice. 

4.3.6 Article 110 is on the arrangements for the issue of Hong 
Kong dollar. The issue of Hong Kong dollar, apart from the 
stability of the currency, the currency's convertibility 
should also be maintained. Hence, the provision "shall 
remain freely convertible" in the previous draft should be 
kept. "Convertibility" has three different meanings: (1) 
convertibility into the US dollar at a fixed exchange 
rate. If such a provision is incorporated into the Basic 
Law, it will help to maintain the pegged system currently 
being practised in Hong Kong or even keep it unchanged for 
fifty years; (2) convertibility of the Hong Kong dollar in 
the foreign exchange market; and (3) no foreign exchange 
control. All these meanings must be expressed in 
different parts of the Basic Law. In addition, the 
government must be restrained from issuing banknotes and 
bonds to pay for its expenditure. 

4.3.7 The provision that "the issue of Hong Kong currency shall 
be backed up by a reserve fund of no less than 100 per 
cent freely convertible foreign currency" in the previous 
draft should have been retained. Too many people have 
already forgotten 24 September 1983 when the Hong Kong 
dollar and Hong Kong's financial system almost collapsed 
until the linked system, with 100 per cent backing, was 
announced, which restored confidence in the Hong Kong 
dollar. Experiments in other countries to reduce the 
proportion of external backing for their domestic 
currencies often resulted in inflationary overissue of 
banknotes, which constitutes a tax on individuals holding 
those currencies. Absolute confidence in Hong Kong's 
currency, which would meet the government's requirement to 
preserve the value of the currency issue it monopolizes, 
is met by 100 per cent external backing. The definition of 
external backing could be broadened to include other 
financial assets (US government treasury bills and bonds, 
English gilts, and gold) that are equally suitable as 
backing . 

It has been queried whether a 100 per cent reserve fund is 
necessary. Such comments are harmful. Confidence in the 
currency, both within Hong Kong and abroad, is maintained 
by the knowledge that Hong Kong dollars are literally as 



260 



good as US dollars, Deutschmarks , Yen, etc. Once the 
public no longer believes this to be true, confidence in 
the Hong Kong dollar is weakened. If 100 per cent backing 
is too much, what is there to stop the future HKSAR 
Government from reducing the backing from 100 per cent to 
90 per cent? to 80 per cent? to 70 per cent? or even 
lower? At some point, confidence would wane and the 
government would break its implicit promise to preserve 
the value of its monopoly note issue. Further, there is 
the possibility that a surplus in the reserve fund will 
encourage the government to spend more and invest in areas 
which it should not have done, such as spending on Chinese 
mainland bonds to please Beijing. 

4.3.8 Apart from prescribing the management and control of the 
Exchange Fund, Article 112 should also state clearly that 
the main objective is to maintain the stability and 
convertibility of the Hong Kong dollar, rather than 
regulating the exchange value of the Hong Kong dollar. 

4.3.9 Article 113 provides that the HKSAR shall maintain the 
status of a free port and not impose any tariff unless 
otherwise prescribed by law. The provision "unless 
otherwise prescribed by law" enables the Government of the 
HKSAR to do anything it wants with respect to tariffs. To 
maintain Hong Kong's status as a free port, Article 113 
should be rewritten as follows: 

"The Hong Kong Special Administrative Region shall 
maintain the status of a free port and shall not impose 
any tariff except what may be absolutely necessary for 
executing its inspection laws." 

4.3.10 A condition of individual economic liberty is the right of 
free entry to and exit from all lines of economic activity 
(except certain government-run public works enterprises 
and/or regulated natural monopolies). The deletion of 
Article 122 of the DBLSO which stated that the HKSAR shall 
practice free and open policies regarding industry, 
commerce and other trade, is a serious error because the 
article provided constitutional guarantees of free entry 
to all economic participants, thus preventing domestic 
monopolies. This article should be put back into the Basic 
Law to ensure for each individual the right of free entry 
to compete in any chosen economic pursuit. 

4.3.11 Article 117 of the Basic Law (Draft) is an improvement 
on Article 123 of the DBLSO. By eliminating reference to 
"the development of new industries", Article 117 removes 
the possible scope for government intervention in the 
implementation of "industrial policies". The Basic Law 
should not encourage industrial planning which has 
generally failed in centrally planned or state-directed 
economies. Moreover, industrial planning deprives 
individuals of economic liberty. Industrial and economic 

261 



development should be left to market forces, which 
promotes prosperity and preserves individual liberty. 

4.3.12 Article 118 states: "The Government of the Hong Kong 
Special Administrative Region shall formulate appropriate 
policies to promote and coordinate the development of 
various trades such as manufacturing, commerce, tourism, 
real estate, transport, public utilities, services, 
agriculture and fishery." This article should be deleted 
from the Basic Law. The language of "promote and co- 
ordinate" the development of various trades implies 
government power to regulate and intervene in purely 
private economic activities. Individual businessmen should 
be free to decide on their own which trades to pursue, 
rather than be coordinated by the Government of the 
HKSAR. 

4.3.13 Article 73 only restricts the power of Legislative 
Councillors to introduce bills relating to public 
expenditure. It does not impose any restrictions on the 
introduction of bills relating to taxation. 

4.3.14 Words such as "free" and "open" should be used as 
frequently as possible in Chapter V in order to strengthen 
the provisions on the free market economy of post-1997 
Hong Kong. After amendment, the provisions of the Basic 
Law (Draft) indicate a retrogression or inadequacy in the 
intent to restrain the fiscal power of the future HKSAR 
Government . 

4.4 Additions to the Basic Law 

The Basic Law (Draft) omits several economic liberties 
that ought to be protected in any constitution. Perhaps 
the most important omission is freedom from wage and price 
controls. Another insertion could stipulate that no firm 
or sector shall receive favourable or discriminatory 
treatment over another. Such a measure would ensure that 
all economic entities in Hong Kong would receive equal 
treatment before the law. 

4.4.1 The Basic Law should include an article to protect Hong 
Kong residents from wage and price controls which would 
violate individual economic liberty. An article to this 
effect might be worded as follows: 

"The Government of the Hong Kong Special Administrative 
Region shall adopt no laws abridging the freedom of 
sellers to price their products or services." 

4.4.2 To prevent discriminatory treatment, an article might be 
worded as follows (which extends Article 25 to economic 
pursuits ) : 

"All persons engaged in lawful business activities in Hong 

262 



Kong shall receive equal treatment before the law." 

4.4.3 The right to choose an occupation or profession, normally 
considered an economic right, is expressed in Article 33 
in Chapter III: Fundamental Rights and Duties of the 
Residents. This article should be moved to Chapter V, 
Section 1, as it is exclusively an economic right. 

Alternatively, it is possible to write an article to 
protect Hong Kong residents from the Government's power to 
impose duties, wage and price controls, and occupational 
1 icensure : 

"The Government of the Hong Kong Special Administrative 
Region shall not infringe the right of the people to buy 
and sell legitimate goods and services at mutually 
acceptable terms." 

5. Views against prescribing restraints on the government's 
fiscal power in the Basic Law (Draft) 

Not all economists agree to the inclusion of provisions 
restraining the fiscal power of a government in a 
constitution. Those who object to this idea, besides 
querying the theoretical basis of constitutional 
economics, put forward their arguments concerning the 
difficulties in actual enforcement and the effectiveness 
of such a practice. Furthermore, the inconsistency between 
those Basic Law provisions drafted in the spirit of 
constitutional economics and other provisions has also 
become a subject of debate. 

5.1 Wrong assumptions 

Economists who are against the introduction of 
constitutional economic theories into the Basic Law 
(Draft) maintain that the assumptions of these theories 
are erroneous: 

5.1.1 The assumption is that the making of a constitution is 
the only and best opportunity to control a government's 
fiscal power. In fact, it is not true that there is no way 
to restrain the government's power once the constitution 
has been made. In a democratic society, even after the 
constitution is drawn up, it is still possible to restrain 
the government's fiscal power through certain procedures 
or means. For instance, the "taxpayer revolt" in the US is 
a case in point. The representative government of Hong 
Kong will also provide safeguards in this respect. 

5.1.2 The assumption that every government is a revenue 
maximizing government which would like to spend every 
penny of its tax revenue does not really apply to the 
existing practice of the Hong Kong Government. On the 

263 



contrary, the traditional colonial government of Hon" Kong 
can be used as an example to refute the assumption that 
"every government would like to spend every penny of its 
tax revenue". Furthermore, the assumption that an increase 
in government revenues will be followed by an expansion of 
the public sector cannot be applied to Hong Kong because 
the size of the public sector in Hong Kong does not stand 
comparison with that in Western countries. There is no 
point in restraining the growth of the local public 
sec tor . 

5.1.3 The assumption is that a small government is beautiful. In 
fact, this is not so because the size of a government 
depends on the extent of social development. For instance, 
for a society which is still at the infant stage of 
economic development, a small government may not be 
appropriate. Furthermore, according to the experience of 
the four "little dragons" of Asia, a low tax policy, a 
balanced budget and a small public sector may not 
necessarily be beneficial to economic development. Hence, 
it is not appropriate to incorporate these points into the 
Basic Law. 

5.2 Difficulties in enforcement 

5.2.1 On the question of limiting the growth rate of government 
revenues and expenditure, James Buchanan pointed out in 
his Power of Taxation the difficulties in actual 
enforcement. Variables such as the rate of growth of 
government revenues and expenditure require ( 1 ) relatively 
abstract definitions; and (2) to be professionally 
measured according to specified standards. But these two 
conditions are not readily comprehensible to the general 
public or politicians. 

5.2.2 Another technical problem concerns the definition of terms 
such as "low tax" and "free and open". They are ambiguous 
terms with no standard definitions. These terms will only 
give rise to disputes in the course of enforcement. The 
inclusion of these provisions in the Basic Law makes 
constitutional crises more probable. With these ambiguous 
economic provisions in the Basic Law, people could easily 
accuse the HKSAR Government of violating constitutional 
provisions . 

5.3 On effectiveness 

In the US, the majority of the state and local governments 
are subject to restrictions by state constitutions on a 
balanced budget, budgetary revenues and expenditure and/or 
the issue of bonds. According to a research done in the 
US, the effect of these constitutional restraints are 
minimal. For instance, in his research on 50 US states, 
Bails pointed out that restraints on government revenues 
and expenditure could not effectively control the growth 

264 



of the public sector, and that the ceiling provided for in 
the constitution often became the prescribed minimum in 
actual enforcement. (See "A Critique on the Effectiveness 
of Tax-Expenditure Limitations", Public Choice , 1982, 129- 
138). Furthermore , emergency clauses can easily be 
applied (or abused) by governments (or politicians), thus 
making the restraints ineffective. In another research 
conducted by Abrams and Dougan, regression analysis was 
used to study the effect of different constitutional 
restraints on the spending of 50 state and local 
governments. It was discovered that these restraints were 
not binding. (See "The Effects of Constitutional 
Restraints on Governmental Spending", Public Choice , 1986, 
101-116). Even though these analyses are preliminary and 
require further research, they indicate that the 
usefulness of having similar provisions in the Basic Law 
require further consideration. 

5.4 On a balanced budget 

5.4.1 Although Buchanan advocates balanced budgets, he remarks 
that it is impossible to maintain "the principle of a 
balanced budget in a boom cycle" because the 
unpredictability and irregularity of the boom cycle result 
in greater budget variance. As regards the concept of "a 
balanced budget under full employment", he points out that 
this principle tends to increase public spending and could 
easily be abused by politicians, especially when the 
general public do not know whether government revenues 
and expenditure follow such a principle. Further, this 
principle does not allow any channel of feedback for 
rectifying wrong estimates. 

5.4.2 Buchanan points out that balanced budgets may prevent 
continuous expansion of the public sector. But he 
stresses that balanced budgets do not require that the 
total expenditure of a government should stay at a certain 
level or be in a certain ratio to national income. Under 
the principle of a balanced budget, the main concern is 
that the government should take into account both its 
revenues and expenditure. As to the amount of resources 
the government may consume is generally determined by 
political policies. 

5.5 Inconsistency with the provisions of the Basic Law (Draft) 

5.5.1 Inconsistency with the economic provisions 

The principle of a balanced budget being stressed in 
constitutional economics is not aimed at limiting the 
level or the growth rate of total expenditure. However, 
Article 106 of the Basic Law (Draft) provides that the 
total expenditure should be commensurate with the growth 
rate of the HKSAR's gross domestic product. Furthermore 

265 



constitutional economics only deals with the limits of 
taxation, it does not require that a low tax policy must 
be adopted. 

5.5.2 Inconsistency with the political provisions 

Constitutional economics are theories combining politics 
and economics. Hence, when analyzing the economic 
provisions of the Basic Law (Draft) from the angle of 
constitutional economics, consideration should also be 
given to the provisions on political structure of the 
Basic Law. 

Although constitutional economics affirms that a 
democratic government will give rise to "free lunch" 
politics, with respect to restraining the powers of a 
government, it still requires democratic participation 
and a democratic political system. However, the pace of 
democratization in Hong Kong is far slower than that in 
Western countries. According to the present provisions of 
the Basic Law, it remains uncertain whether the post-1997 
Legislative Council will have more than half of its 
members elected by voters. Hence, it is far too subjective 
to insist that the Basic Law should contain constitutional 
restraints on the fiscal power of the government to 
prevent the post-1997 Legislative Council from being 
dominated by popularly elected members advocating "free 
lunches". Moreover, popularly elected members are not 
necessarily advocates of "free lunches". In fact, such a 
view does not apply to the actual provisions on political 
structure in the Basic Law: if popularly elected members 
constitute less than half of the membership of the 
Legislative Council, how could there be "free lunches"? 

5.6 Amendment proposals on the articles 

5.6.1 For the various reasons mentioned above, some people are 
against prescribing restraints on the fiscal power of the 
future government in the Basic Law. They propose that the 
practice of other countries should be taken as reference: 
treating these policy provisions as policy guidelines 
which are not binding in any way so as to avoid 
constitutional crises emerging as a result of the 
ambiguity of such provisions. 

5.6.2 Some suggested that all related provisions be completely 
revised. It was proposed that the first sentence of 
Paragraph 2 of Article 107 of the Basic Law (Draft) be 
amended to read: "The Hong Kong Special Administrative 
Region shall formulate fiscal policies on its own." , and 
that the first sentence of Paragraph 2 of Article 109 be 
amended to read: "The Hong Kong Special Administrative 
Region shall formulate monetary and financial policies on 
its own . " 



266 



5.6.3 In order to avoid constitutional crises emerging as a 
result of the lack of standard definitions of these 
provisions, it was suggested that the policy provisions on 
economy be placed in an annex. Other alternatives 
proposed include: 

( 1 ) laying down a "paramount clause" in the Basic Law to 
the effect that (subject to matters of foreign affairs 
and defence etc. ) the legislature of the HKSAR shall 
pass laws for the peace, order and good government of 
the HKSAR. (This can be done by amending Article 17 of 
the Basic Law (Draft). ); and 

(2) incorporating into the Basic Law Section 19 of the 
Interpretation and General Clauses Ordinance (Cap. 1): 

"An Ordinance shall be deemed to be remedial and shall 
receive such fair, large and liberal construction and 
interpretation as will best ensure the attainment of 
the object of the Ordinance according to its true 
intent, meaning and spirit." 



6. Conclusion 

Chapter V of the Basic Law (Draft), which is on economy, 
attempts to incorporate all major economic factors 
generally recognized to be conducive to Hong Kong's 
prosperity so that they become part of the constitution of 
the HKSAR. It also provides that the future HKSAR 
Government must abide by these provisions. Such a practice 
has on the one hand been criticized for being difficult to 
enforce and even detrimental to the entire economy of Hong 
Kong. On the other hand, it has been praised as a bill of 
economic liberties comparable to a bill of rights and 
being the only one of its kind in the world. With regard 
to the amended economic provisions in the Basic Law 
(Draft), those who are not in support of constitutional 
economics consider the amendments still inadequate, 
whereas advocates of constitutional economics consider 
that the present provisions have weakened the effective 
restraints in the Basic Law on the monopoly and decision- 
making power of the HKSAR Government in financial and 
monetary matters. After all, the inclusion of provisions 
on the government's fiscal power will have significant 
bearing on the future government as well as the entire 
community. 

Canada-Hong Kong I ce Centre 

1 Spadina Crescent, Rm, 111 • Toronto, Canada • M5S 1A1 

* If there is any discrepancy between the Chinese and the English 
versions, the Chinese version shall prevail. 



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