Hong Kong: Country and Foreign Investment
Since July 1, 1997 Hong Kong has been a special administrative region of the People's Republic of China. The constitution is known as the "Basic Law" and is modeled on the constitution of the People's Republic. Under the guiding principle of "one country, 2 systems" which was established before the handover, the Chinese Government agreed that Hong Kong's capitalist system would remain unchanged until the year 2047. Thus whilst defense and foreign affairs are the exclusive domain of China, Hong Kong is autonomous in all other matters even to the extent that the Basic Law authorizes the territory to maintain and develop relations and conclude and implement agreements in various significant fields with foreign states and regions and relevant international organizations using the name of "Hong Kong, China".
The administration of the territory is in the hands of the Hong Kong special administrative government which is headed up by a Chief Executive. The Chief Executive owes his appointment to the decision of a committee of selected nominees of the Chinese Government. The Chief Executive appoints the Executive Council of Government (a body that advises him on all matters of government) and all judges. Moreover all bills passed by the Legislative Council must have his assent before they become law. The 70-member Legislative Council enacts legislation and controls public expenditure. Its members are elected every 4 years under a complex weighted voting arrangement. A total of about 1.83 million registered electors cast their votes in the last Legislative Council Election held on September 9, 2012, representing a provisional cumulative turnout rate of about 53%. The urban and regional councils are the equivalent of western municipal authorities.
The handover agreement of 1997 provided for the territory to maintain its British legal system save in so far as those laws contravene the Basic Law and with the Court of Final Appeal of Hong Kong replacing the Privy Council as the final and highest court of record.
Although there have been one or two cases in which Beijing has seemed to over-rule Hong Kong courts, particularly as regards citizenship issues, by and large the transition from colony to Special Administrative Region has been successful, although the people of Hong Kong have been very dissatisfied with the lack of independence and vigour shown by their leaders in moving towards democracy in the SAR.
In April, 2004, the Standing Committee of the National People's Congress asserted that political reform in Hong Kong is the sole prerogative of the Chinese central government, a move which observers suggested was effectively designed to amend Hong Kong's Basic Law by increments. Despite then Chief Executive Tung Chee-hwa's suggestion that the ruling is unlikely to affect the "one country, two systems" arrangement between the territory and mainland China, a pall was cast over the jurisdiction's political system.
Tung attempted to reassure the populace, explaining that: "There are calls for democracy in the society, but Hong Kong should not place itself in opposition to the central government. The central government is actually very concerned about the development of democracy in Hong Kong." Chief Secretary for Administration at the time, Donald Tsang attempted to back the Chief Executive up, observing that: "It also does not mean that the central authority does not respect the opinions of the Hong Kong people." But the populace has largely lost faith in its leaders. Critics argue that the ruling deprives the jurisdiction of any say over its political future, and that the door has been left open for further reinterpretations of Hong Kong law by the Chinese authorities.
In 2005, Tung Chee-hwa resigned in the face of mounting dissatisfaction both in Hong Kong and Beijing, and Beijing formally rubber-stamped Donald Tsang's selection as Hong Kong's new Chief Executive. Tsang was re-elected on 25 March 2007.
Barred from standing for a third term of office under the Basic Law, Tsang gave way to new Chief Executive Leung Chun-ying (or CY Leung) in March 2012 after the latter received 689 out of 1,132 Election Committee votes.
Speaking at a news conference after the election, Leung pledged to safeguard the core values of Hong Kong, such as the rule of law, human rights, integrity, anti-corruption, freedom of the press, speech and assembly, and promised that rights and freedoms will be maintained during his administration. He also said that he would "pave the way for enhanced democracy and an open and fair election system" in time for the next Chief Executive election in 2017.