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RECENT DEVELOPMENTS IN HONG KONG

HEARING

BEFORE THE

SUBCOMMITTEE ON ASIA AND THE PACIFIC

OF THE

COMMITTEE ON 

INTERNATIONAL RELATIONS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

JUNE 23, 2004

Serial No. 108–125

Printed for the use of the Committee on International Relations

(

Available via the World Wide Web: http://www.house.gov/international—relations 

(II)

COMMITTEE ON INTERNATIONAL RELATIONS 

HENRY J. HYDE, Illinois, Chairman 

JAMES A. LEACH, Iowa 

DOUG BEREUTER, Nebraska 

CHRISTOPHER H. SMITH, New Jersey, 

Vice Chairman 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

ILEANA ROS-LEHTINEN, Florida 

CASS BALLENGER, North Carolina 

DANA ROHRABACHER, California 

EDWARD R. ROYCE, California 

PETER T. KING, New York 

STEVE CHABOT, Ohio 

AMO HOUGHTON, New York 

JOHN M. MCHUGH, New York 

ROY BLUNT, Missouri 

THOMAS G. TANCREDO, Colorado 

RON PAUL, Texas 

NICK SMITH, Michigan 

JOSEPH R. PITTS, Pennsylvania 

JEFF FLAKE, Arizona 

JO ANN DAVIS, Virginia 

MARK GREEN, Wisconsin 

JERRY WELLER, Illinois 

MIKE PENCE, Indiana 

THADDEUS G. MCCOTTER, Michigan 

KATHERINE HARRIS, Florida 

TOM LANTOS, California 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

ROBERT MENENDEZ, New Jersey 

SHERROD BROWN, Ohio 

BRAD SHERMAN, California 

ROBERT WEXLER, Florida 

ELIOT L. ENGEL, New York 

WILLIAM D. DELAHUNT, Massachusetts 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

JOSEPH CROWLEY, New York 

JOSEPH M. HOEFFEL, Pennsylvania 

EARL BLUMENAUER, Oregon 

SHELLEY BERKLEY, Nevada 

GRACE F. NAPOLITANO, California 

ADAM B. SCHIFF, California 

DIANE E. WATSON, California 

ADAM SMITH, Washington 

BETTY MCCOLLUM, Minnesota 

BEN CHANDLER, Kentucky 

THOMAS E. MOONEY, SR., Staff Director/General Counsel 

ROBERT R. KING, Democratic Staff Director 

SUBCOMMITTEE ON ASIA AND THE PACIFIC

JAMES A. LEACH, Iowa, Chairman 

DAN BURTON, Indiana 

DOUG BEREUTER, Nebraska 

CHRISTOPHER H. SMITH, New Jersey 

DANA ROHRABACHER, California 

EDWARD R. ROYCE, California 

STEVE CHABOT, Ohio 

RON PAUL, Texas 

JEFF FLAKE, Arizona 

JERRY WELLER, Illinois 

THOMAS G. TANCREDO, Colorado 

ENI F. H. FALEOMAVAEGA, American 

Samoa 

SHERROD BROWN, Ohio 

EARL BLUMENAUER, Oregon 

DIANE E. WATSON, California 

ADAM SMITH, Washington 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

ROBERT WEXLER, Florida 

GREGORY W. MEEKS, New York 

JAMES W. MCCORMICK, Subcommittee Staff Director 

LISA M. WILLIAMS, Democratic Professional Staff Member 

DOUGLAS ANDERSON, Professional Staff Member & Counsel 

TIERNEN MILLER, Staff Associate 

(III)

C O N T E N T S 

Page

WITNESSES 

William H. Overholt, Ph.D., Asia Policy Chair, RAND Corporation ................... 6

Peter M. Manikas, Senior Associate and Director of Asia Programs; National 

Democratic Institute for International Affairs .................................................. 24

Veron Hung, JSD, Ph.D., Associate, Carnegie Endowment for International 

Peace ..................................................................................................................... 30

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable James A. Leach, a Representative in Congress from the State 

of Iowa, and Chairman, Subcommittee on Asia and the Pacific: Prepared 

statement .............................................................................................................. 3

William H. Overholt, Ph.D.: Prepared statement ................................................. 9

Peter M. Manikas: Prepared statement ................................................................. 26

Veron Hung, JSD, Ph.D.: Prepared statement ...................................................... 32

APPENDIX 

Letter addressed to the Honorable Eni F.H. Faleomavaega, a Representative 

in Congress from American Samoa, from the Embassy of the People’s Republic of China ..................................................................................................... 43

(1)

RECENT DEVELOPMENTS IN HONG KONG 

WEDNESDAY, JUNE 23, 2004

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ASIA AND THE PACIFIC, 

COMMITTEE ON INTERNATIONAL RELATIONS, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 1 o’clock p.m. in 

Room 2200, Rayburn House Office Building, Hon. James A. Leach 

presiding. 

Mr. LEACH. The Subcommittee will come to order, and on behalf 

of the Subcommittee, I would like to welcome our distinguished 

panel of witnesses. At the outset, I must explain that we are beginning the hearing slightly earlier than noticed, because Secretary 

Powell is scheduled to appear on Capitol Hill later today to discuss 

the situation in Iraq, and we wanted to be sure Members would 

have the opportunity to be present for our expert testimony. 

In this regard, I would like to take this opportunity to express 

my condolences to the family of Kim Sun-il for his heinous murder 

at the hands of the brutal terrorists in Iraq yesterday. Our hearts 

go out to his loved ones and the people of South Korea. And while 

Americans may be divided in our Iraq policy, we are united in a 

deep appreciation for the support we have there from friends and 

allies around the world, and in this case, particularly South Korea. 

As my colleagues are aware, this is the 7th year after Hong 

Kong’s reversion to China. As the Department of State noted in an 

April, 2004 report to Congress as mandated by the U.S.-Hong Kong 

Policy Act, the Hong Kong special administrative region remains 

an international city whose residents continue to enjoy protections 

of the rule of law and broad civil liberties. 

As is also well-understood, the United States maintains substantial economic and political interests in Hong Kong and promotes 

Hong Kong’s high degree of autonomy under Chinese sovereignty. 

Washington works closely with the authorities in Hong Kong on a 

wide range of international issues, not the least of which is cooperation in the global campaign against terrorism. 

Like Beijing, the United States has an enormous vested interest 

in the success of the one country, two systems model in Hong Kong. 

In this context, I believe it would be unwise and counterproductive 

at this time for the United States to review Hong Kong’s treatment 

under the U.S.-Hong Kong Policy Act, as has been suggested in 

some quarters. 

Having said that, however, recent developments have raised serious concerns in the former British colony as well as around the 

2

world, regarding Beijing’s commitment to respect the high degree 

of autonomy it has promised Hong Kong. 

From a congressional perspective, it appears self-evident that advancing democratization and constitutional reform, including universal suffrage, would contribute to the city’s political stability and 

economic prosperity. The authorities in Beijing should realize that 

a vibrant, democratic and prosperous Hong Kong would be a tremendous asset to China. Hong Kong will only become a threat if 

China makes it so. 

Even though the Basic Law may not technically require fuller democracy by 2007–2008, wisdom as well as respect for autonomy dictates the embrace of democracy for Hong Kong. Having just traveled to Indonesia, Malaysia, and the Philippines, which have held 

successful local and national elections, I see no reason why Hong 

Kong, with all its wealth and sophistication, cannot also do so. 

The people of Hong Kong made plain their aspirations for greater 

democratic autonomy—aspirations fully within the framework of 

the ‘‘one country, two systems’’ formula—when they so impressively 

demonstrated on July 1, last year. In the aftermath of those peaceful demonstrations, the Hong Kong government appeared to listen 

to the people and withdrew controversial national security legislation pending additional consultations with the populace of the city. 

The people of Hong Kong again showed their keen interest in 

participatory democracy when they turned out in record numbers 

for District Council elections last November. 

Regrettably, however, recent decisions by Beijing setting limits 

on constitutional development in Hong Kong appear to be inconsistent with the high degree of autonomy promised by the central 

authorities in the 1982 Joint Declaration and the Basic Law. 

Equally dismaying has been a series of incidents in Hong Kong—

from several political talk show hosts complaining of apparent 

threats against them, the appearance of a Chinese flotilla sailing 

through Victoria Harbor, to the recent attack on the office of legislator Emily Lau—that many perceive to be part of a campaign of 

intimidation against pro-democracy advocates in Hong Kong. 

I understand that in recent weeks tentative steps have been 

taken by all parties to restore dialogue, build confidence and seek 

compromise. I earnestly hope these efforts succeed. 

Whether the 21st Century is peaceful and whether it is prosperous will depend on whether the world’s most populous country 

can live with itself and become open to the world in a fair and respectful manner. Hong Kong is central to that possibility. As such, 

it deserves our greatest attention, respect, and good will. 

Hong Kong is important unto itself; it is also a model for others. 

What happens there is watched particularly closely by the Taiwanese. In a globalist world where peoples everywhere are seeking 

a sense of community to serve as a buttress against political and 

economic forces beyond the control of individuals and their families, it is next to impossible to reconcile political systems based on 

unlike institutions and attitudes. Mutual respect for differences is 

the key to peace and prosperity in a world in which history suggests conflict has been a generational norm. 

Mr. Faleomavaega? 

[The prepared statement of Mr. Leach follows:]

3

PREPARED STATEMENT OF THE HONORABLE JAMES A. LEACH, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF IOWA, AND CHAIRMAN, SUBCOMMITTEE ON ASIA AND

THE PACIFIC

On behalf of the Subcommittee, I would like to welcome our distinguished panel 

of witnesses to our hearing this afternoon on recent developments in Hong Kong. 

At the outset, I should explain that we are beginning the hearing slightly earlier 

than originally noticed because Secretary Powell is scheduled to appear on Capitol 

Hill later today to discuss the situation in Iraq and we wanted to be sure Members 

had the opportunity to be present for our expert testimony. 

In this regard, I would like to take this opportunity to express my condolences 

to the family of Kim Sun-il for his heinous murder at the hands of brutal terrorists 

in Iraq yesterday. Our hearts go out to his loved ones and to the people of South 

Korea. While Americans may be divided on our Iraq policy, we are united in our 

deep appreciation for the support we have received there from friends and allies 

around the world, including South Korea. 

As my colleagues are aware, this is the seventh year after Hong Kong’s reversion 

to China. As the Department of State noted in an April 2004 report to Congress 

(as mandated by the U.S.-Hong Kong Policy Act of 1992), the Hong Kong Special 

Administrative Region (SAR) remains an international city whose residents continue 

to enjoy protections of the rule of law and broad civil liberties. 

As is also well-understood, the U.S. maintains substantial economic and political 

interests in Hong Kong and promotes Hong Kong’s high degree of autonomy under 

Chinese sovereignty. Washington works closely with the authorities in Hong Kong 

on a wide range of international issues, not the least of which is cooperation in the 

global campaign against terrorism. 

Like Beijing, the U.S. has an enormous vested interest in the success of the ‘‘one 

country, two systems’’ model in Hong Kong. In this context, I believe it would be 

unwise and counterproductive at this time for the U.S. to review Hong Kong’s treatment under the U.S.-Hong Kong Policy Act, as has been suggested in some quarters. 

Having said that, recent developments have raised serious concerns, in the former 

British colony as well as around the world, regarding Beijing’s commitment to respect the ‘‘high degree of autonomy’’ it has promised Hong Kong. 

From a Congressional perspective, it appears self-evident that advancing democratization and constitutional reform—including universal suffrage—would contribute 

to the city’s political stability and economic prosperity. The authorities in Beijing 

should realize that a vibrant, democratic and prosperous Hong Kong would be a tremendous asset to China. Hong Kong will only become a threat if China makes it 

so. 

Even though the Basic Law may not technically require fuller democracy by 2007–

2008, wisdom as well as respect for autonomy dictates the embrace of democracy 

for Hong Kong. Having just traveled to Indonesia, Malaysia, and the Philippines, 

which have held successful local and national elections, I see no reason why Hong 

Kong—with all its wealth and sophistication—cannot do so also. 

The people of Hong Kong made plain their aspirations for greater democratic autonomy, aspirations fully within the framework of the ‘‘one country, two systems’’ 

formula, when they so impressively demonstrated on July 1 last year. In the aftermath of those peaceful demonstrations, the Hong Kong government appeared to listen to the people and withdrew controversial national security legislation pending 

additional consultations with the populace of the city. The people of Hong Kong 

again showed their keen interest in participatory democracy when they turned out 

in record numbers for District Council elections last November. 

Regrettably, however, recent decisions by Beijing setting limits on constitutional 

development in Hong Kong appear to be inconsistent with the ‘‘high degree of autonomy’’ promised by the central authorities in the 1982 Joint Declaration and the 

Basic Law. 

Equally dismaying has been a series of incidents in Hong Kong—from several political talk show hosts complaining of apparent threats against them, the appearance of a Chinese flotilla sailing through Victoria Harbor, to the recent attack on 

the office of legislator Emily Lau—that many perceive to be part of a campaign of 

intimidation against pro-democracy advocates in Hong Kong. 

I understand that in recent weeks tentative steps have been taken by all parties 

to restore dialogue, build confidence, and seek compromise. I earnestly hope these 

efforts succeed. 

Whether the 21st Century is peaceful and whether it is prosperous will depend 

on whether the world’s most populous country can live with itself and become open 

to the world in a fair and respectful manner. Hong Kong is central to that possibility. As such, it deserves our greatest attention, respect, and good will. 

4

Hong Kong is important unto itself; it is also a model for others. What happens 

there is watched particularly closely by the Taiwanese. In a globalist world where 

peoples everywhere are seeking a sense of community to serve as a buttress against 

political and economic forces beyond the control of individuals and their families, 

it is next to impossible to reconcile political systems based on unlike institutions 

and attitudes. Mutual respect for differences is the key to peace and prosperity in 

a world in which history suggests conflict has been a generational norm.

Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. I certainly would 

like to associate myself with your statement, Mr. Chairman, concerning the unfortunate situation of where one of the Korean nationals was murdered by the terrorists in Iraq, and certainly offer 

my condolences and sympathies to the family as well. 

Mr. Chairman, before—with my opening statement I would like 

to share with you a very interesting experience in the fact that we 

have some very special guests with us in our room, students from 

the Pacific Region. And I would say that the success of this Fellowship Program that has given scholarships and opportunities to students from the Pacific Island countries, I attribute this, a lot of it, 

also to your support, Mr. Chairman, for all these years. 

We have in our presence three students from East Timor doing 

undergraduate studies at the University of Hawaii. One also representing Fiji and one representing Samoa, doing graduate studies. 

And in the process of the last 6 or 7 years, Mr. Chairman, we have 

approximately graduated over 70 students from these island nations. And certainly I want to express my sincere appreciation for 

your support over the years of this program that has been dubbed 

now, by the State Department, as a tremendous success story. And 

I really appreciate your support and help in doing this. 

Mr. LEACH. Will the gentleman yield? 

Mr. FALEOMAVAEGA. I will gladly yield. 

Mr. LEACH. First, let me also welcome our guests. But I would 

also suggest to our guests that if the United States Congress had 

as its average representative capacity the capabilities of its Representative from the Pacific, we would not have any problems of 

comity or general lack of expertise. 

Mr. FALEOMAVAEGA. Well, Mr. Chairman, thank you for that. I 

want to thank you for calling this hearing today, Mr. Chairman, 

and certainly we need to examine the status of Hong Kong and its 

unique relationship with the Peoples’ Republic of China. 

I recall years ago there were serious concerns about whether it 

was a good idea to transfer the administration and sovereignty of 

Hong Kong to the Peoples’ Republic of China, especially given the 

fact that Hong Kong, after all, was a colony of the former British 

Empire. 

Today the State Department says that Hong Kong remains an 

international city, one of the world’s most open and free economies. 

However, 7 years after Hong Kong’s reversion to Chinese sovereignty, events have arisen which suggest that Hong Kong’s high 

level of autonomy is seriously at risk. 

For example, the Peoples’ Republic of China has made a decision 

to prevent direct elections of the Chief Executive in 1907. Controversies in Beijing have also arisen over China’s decision to limit 

the ability of Hong Kong to make electoral changes in the near future. 

5

Two years ago, the Hong Kong government also proposed an 

anti-sedition law under article 23 of the Basic Law. The legislative 

council was expected to pass the proposal, but a massive demonstration of some half a million residents of Hong Kong stifled the 

vote, which led the legislation to temporarily be put aside. This decision was brought about as a result of the demonstration and has 

been widely viewed as a victory for democracy and a major setback 

for Chinese government. 

Since that demonstration, a major movement toward universal 

suffrage in Hong Kong has begun. In February of this year thousands of people gathered in a peaceful protest in favor of holding 

free elections for the Chief Executive Officer in 2007 and for legislative elections in 2008. The public’s sincere wish for greater, more 

rapid political changes in Hong Kong has become the most serious 

controversy under the Basic Law. 

People’s efforts in Hong Kong have been thwarted, however, by 

Beijing’s active intimidation toward pro-democracy advocates, including prominent radio talk show personalities. Suggestions have 

been made that the President should exercise authority under the 

U.S.-Hong Kong Policy Act to change that policy toward Hong 

Kong. This act still remains a current U.S. policy, and allows the 

United States to treat Hong Kong differently from the rest of the 

Peoples’ Republic of China. A wide range of legal, economic and 

trade laws. 

I want to ask unanimous consent, Mr. Chairman, to submit for 

the record a copy of a letter that I am sure our colleagues have received from the Ambassador to the Peoples’ Republic of China, 

challenging some of the allegations, and also one of the proposed 

resolutions that is now pending in the House as well as in the Senate. And I look what our panel of experts have to say about these 

elements, and I want to personally welcome our distinguished 

members of the panel this afternoon, and look forward to hearing 

from their testimony. Thank you, Mr. Chairman. 

Mr. LEACH. Thank you. Let me introduce briefly our three witnesses. 

William H. Overholt is Asia Policy Chair at RAND’s California 

Headquarters. Previously he was a Fellow at Harvard. He is a visiting professor at the Yang Xi University in South Korea, and has 

worked at the Hudson Institute, and, beyond that, is a banker. We 

won’t hold that against you, Dr. Overholt. 

He is the author of five books. I think the contrast and subject 

matter is extraordinarily interesting—from the rise of China to the 

political risk to the future of Brazil, to Asia’s nuclear future. That 

is a wide-ranging set of interests. 

Mr. Peter M. Manikas serves as the National Democratic Institute’s Regional Director for Asia Programs. Before joining NDI, he 

was a consultant to the U.N. Commission for Experts in the form 

Yugoslavia, and has been a Senior Fellow at DePaul University’s 

College of Law, and an expert on International Criminal Law. And 

I must say, Mr. Manikas, I am well aware of the lead role of that 

university in the international criminal legal arena. And personally 

I think the world community owes a lot to DePaul and the leadership of your people there. 

6

Ms. Veron Hung is an expert in Chinese law. She may be the 

only person that has come before the Committee as a barrister in 

England, Wales and Hong Kong, as well as a member of the New 

York and DC Bars. I am not sure which is more prestigious, but 

it is a wonderful combination. She has also taught at the City University in Hong Kong as well as at the Peoples’ University in Beijing. Welcome to the Subcommittee. 

Unless you have a prior arrangement, I will begin in the order 

of introductions. Is that all right with everybody? And let me say 

that all statements will be presented in full in the record, without 

objection, and you may proceed as you see fit. 

Dr. Overholt? 

STATEMENT OF WILLIAM H. OVERHOLT, PH.D., ASIA POLICY 

CHAIR, RAND CORPORATION 

Mr. OVERHOLT. Thank you, Mr. Chairman. I am very honored to 

be invited to testify here today. I hope I can be helpful to you. I 

have submitted a probably excessively long paper for the record. I 

will summarize the issues more briefly. 

When people hear that I lived in Hong Kong for 16 years, they 

invariably ask oh, how did it change after the handover to China? 

And the answer is that, for most things, it didn’t change noticeably 

at all. There is a lively free press. People are free to speak. The 

laws are the same; the judges are the same; they still wear the 

same silly British wigs. 

Mr. LEACH. Excuse me, Ms. Hung, do you want to complain? You 

are okay? All right, very good. 

Mr. OVERHOLT. There are more demonstrations than there used 

to be. Not because there is more to demonstrate about; there was 

lots before 1997, but because it has become a major cultural feature 

of how you express yourself in Hong Kong. 

The bottom line is that 22 years after China demanded Hong 

Kong back, the freedoms are still there and it is somewhat more 

democratic than it used to be. It is definitely not a democracy, but 

when China demanded Hong Kong back, all legislators were appointed. And we have seen gradual, positive change. There are 100 

footnotes to what I just said. And one of the reasons why I wrote 

an excessively long paper is that I wanted to deal with a lot of 

those issues. 

But the bottom line is that Hong Kong is a free society. And that 

is something of a miracle, given where they started, with the British/Chinese divide in 1982. And I think we need to always take 

that into account. 

There are two outstanding issues. Big ones. One is the legal 

structure for the boundaries of one country, two systems. The other 

is democracy. 

One country, two systems basically means you don’t subvert me, 

I don’t subvert you. And in a rule of law system that concept has 

to have some legal expression, and that is what this article 23 controversy is about. Basically it is a good idea to have some rules, 

some very clear rules. It basically helps Hong Kong because if you 

get into a game where Hong Kong is going to try to change the Chinese system, and China is going to try to change the Hong Kong 

system, it is pretty clear who will win. 

7

But the Hong Kong government drafted a very stringent proposal. It had four major features that Hong Kong people objected 

strongly to. It tried to ram this through without the usual white 

paper for discussion. It misrepresented the results of a consultation 

process. The result was a big demonstration. The government then 

made enough concessions so that it could have gotten this through 

if it had started there originally. But there was, by that time, such 

ill feeling that they didn’t get any law at all. The result was to politicize a hitherto very apolitical citizenry. 

Another result, surprisingly, was an era of good feeling. After the 

demonstration everybody handled things well. The Hong Kong government did not interfere, except a little bit at the margin, with 

the demonstration. The democrats were very careful to keep focused on one issue and not broaden this into something that people 

in Beijing could misconstrue as instability. And the Chinese government reacted with very broad consultations, including the democrats, and with a program to revive the economy. 

So last October/November, the situation looked wonderful. But 

that leads me to the second big issue, which is democracy. And 

here I think a little history is enlightening. A lot of people think 

that the British/Chinese Joint Declaration promised democracy. It 

didn’t. What it promised was that Beijing would appoint the Chief 

Executive based on consultations and elections. This provided only 

a very vague, general sense of direction. 

However, when China wrote the Basic Law—it was only Chinese 

who wrote it—it promised the goal of eventual universal suffrage 

for both the Chief Executive and for the legislators. 

Now, why do I mention this history? Because it shows that China 

isn’t ideologically opposed to free universal suffrage elections. The 

problems lie elsewhere. 

This should have been a good time to move forward on democracy. It was a time when there was no separatist movement in 

Hong Kong. The leading democrats have even supported the idea 

that Taiwan is part of China. Respect for the central government 

has been extremely high, particularly last fall. All polls showed 

that Hong Kong people respected the central government leaders 

much more than any of their own leaders. Anti-Chinese groups 

have weakened in Hong Kong substantially since 1997, so China’s 

deepest fears were not being realized. And finally, Hong Kong people clearly want democracy. 

But the actual movement of policy has been the opposite. So 

what has happened? Well, these big demonstrations in Hong Kong 

were very orderly, very brief, very focused, very much in the Hong 

Kong tradition, but in China they created almost a consensus fear 

of instability. You have new leaders in China who don’t know very 

much about Hong Kong. And that goes down a couple of levels. 

You had a war scare over the feeling that Taiwan was moving 

toward independence. President Bush wisely averted what was 

headed toward a major conflict over Taiwan, but in March, particularly, the sense of a war scare was very, very strong in China. 

There is a power struggle going on in Beijing, and the greatest 

vulnerability of any Chinese leader is if somebody accuses him of 

being soft on the unity and stability of China. These new leaders 

are very vulnerable, and that vulnerability is being exploited. 

8

There is an argument that the democracy movement is a product 

of foreign involvement, and if you know Hong Kong people it is a 

pretty silly argument. But the argument is very focused on Martin 

Lee, and his history. So his visit here was taken as a major American intervention in Chinese politics. It was not intended that way 

here, but the visit was a setback for those in China who were arguing for a softer policy on Hong Kong. 

And finally, Chinese leaders, based on their own experience, 

were absolutely convinced that Hong Kong’s discontents must have 

purely economic roots. So they took action to revive the economy 

and they were very shocked when Hong Kong people still had some 

serious political aspirations which they expressed in demonstrations. 

To summarize, I would argue that Chinese policy has been based 

on what I call the three confusions. They have confused the Hong 

Kong situation with the Taiwan situation. They have confused the 

broad democracy movement with a few anti-Chinese democracy 

leaders, and they have confused the meaning of demonstrations in 

Hong Kong with the meaning of demonstrations at home in China. 

The result is a very bad situation. 

They have taken repressive actions which you have already mentioned, so I won’t go through them again. They have created an 

anxious and threatening atmosphere. From January to May of this 

year there has been a collision course between Hong Kong public 

opinion and Chinese policy. 

In June there has been kind of a reversion to what was happening last fall. Democratic leaders have taken a stance of emphasizing their loyalty to China. They want democracy but they are 

loyal to China. Some have accepted a suggestion that they turn 

their big July 1st demonstration into a celebration of civic society. 

Tung Chee Hwa, the Chief Executive, has endorsed statements of 

a group about Hong Kong’s core values: Freedom, human rights, 

rule of law and democracy. The second man in the Hong Kong government, the Chief Secretary, has made a statement saying that 

eventual democracy is inevitable. And Chinese leaders have committed to broad consultations again, a little bit ambiguously. 

I would say this leaves the situation in Beijing’s court, that people in Hong Kong are doing about everything they can to make the 

situation better. It is a major test for the new Chinese leadership. 

Some people, when they find they have dug themselves into a hole, 

stop digging and climb out of the hole. Some people dig faster. I 

don’t want to predict the outcome. 

Let me just say a few brief words about what this means for 

American policy. Of course we support democracy and everything 

you said about democracy stabilizing Hong Kong and being good for 

China I would certainly endorse. I would revert to the theme that 

Hong Kong’s existing freedoms are precious, and we need to take 

that into account in everything we do. 

Second, if Beijing does things that harm Hong Kong, in our frustration to express our feelings about this I don’t think we should 

be tempted to adopt policies that would do damage ourselves to 

Hong Kong. 

As we express our concerns and frustration, unfortunately, we 

have very little positive leverage, and we have enormous negative 

9

leverage. If the enemies of democracy in Hong Kong are able to define this as a United States/Chinese confrontation, they win. It has 

to be a Chinese dialogue with the Hong Kong people. 

If we play our hand well, there is no assurance that the outcome 

will be what we want. If we play it badly, if we overplay our hand, 

we will certainly get the opposite of what we want. The hard, central point is that Hong Kong will only get democracy when China 

is comfortable with it. The good news is that by their own writing 

in the Basic Law they can get comfortable with it. They are afraid 

of the precedent of political gain seized through demonstrations, 

not afraid of democracy. So Hong Kong’s democracy movement is 

repositioning itself to reassure Beijing, to make Beijing comfortable 

with the idea of democracy in Hong Kong. 

I would just conclude by saying that I would hope American policy would be right in line with them, and that we wouldn’t do anything to undermine the thrust of their efforts at this time. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Overholt follows:]

PREPARED STATEMENT OF WILLIAM H. OVERHOLT, PH.D., ASIA POLICY CHAIR, RAND 

CORPORATION

SUMMARY

Hong Kong’s freedoms promised under ‘‘one country two systems’’ are intact: freedom of speech, press, demonstration, and movement, and retention of British law 

and the capitalist economic system. As anywhere, controversies have arisen at the 

margin. Settlement of the freedom issues has been satisfactory, albeit sometimes 

messy. Hong Kong is a free society. 

Two issues have not been resolved. First, ‘‘one country two systems’’ means mutual non-subversion and Basic Law Article 23 requires anti-subversion legislation. 

The Hong Kong government’s proposed stringent legislation provoked overwhelming 

and successful opposition. Disingenuous Hong Kong government handling of this 

issue, following failures to revive the economy, politicized a previously apolitical society. 

Second, democracy. Hong Kong is now more democratic than when China demanded Hong Kong back from Britain, but 30 of 60 legislators are elected through 

narrow functional constituencies and the Chief Executive by a narrow committee 

that allows Beijing to handpick him. The Basic Law sets universal suffrage in electing the Chief Executive and Legislature as an ultimate goal after 2007 but calls for 

gradual and orderly change, does not set a timetable, and makes Beijing the arbiter 

of appropriate conditions. 

A gridlocked Hong Kong government has had difficulty undertaking vital economic reform. To end gridlock, it could theoretically go back to the more dictatorial 

British system or forward to a more democratic system that would develop the political skills, political coalitions and policy mandates to move policy forward. But Hong 

Kong people will resist retrograde change and Beijing will block democratization if 

it feels threatened. 

Arguably Beijing should feel comfortable with democratization because Hong 

Kong has no independence movement and democratic leaders have strongly supported China’s view on Taiwan. Anti-Chinese leaders and movements have weakened since 1997. Demonstrations for democracy have been orderly and lawful. Public 

opinion polls reveal strong respect for the central government and its leaders. 

However, Beijing has reacted defensively and has issued a preemptive law barring 

direct elections of the Chief Executive in 2007 and of the 30 functional-constituency 

legislators in 2008. New central government leaders, largely unfamiliar with Hong 

Kong, have misinterpreted large demonstrations as instability. They have made decisions in the context of a Taiwan crisis that makes them vulnerable to charges of 

failing to protect national unity. They believed that economic recovery and insistence that Hong Kong business leaders support the Chief Executive would calm discontent, and have felt betrayed when their successful engineering of Hong Kong economic growth failed to achieve political quiescence. They erroneously equate the 

broad democracy movement with a few leaders who have a history of mobilizing antagonism to China. Chinese experts with a more sophisticated view of Hong Kong 

10

1See ‘‘Hong Kong: The Perils of Semi-Democracy,’’ Journal of Democracy, October 2001

were silenced when a strong U.S. show of support for Martin Lee gave credence to 

fallacious arguments that the democracy movement is a product of British-U.S. efforts to weaken China. 

In effect, central government leaders have confused Hong Kong with Taiwan, the 

democracy movement with a few provocative pro-democracy leaders, and orderly, 

lawful, brief demonstrations in Hong Kong with anti-regime demonstrations in 

China proper. A series of repressive measures and announcements in January-May 

2004 have created an atmosphere of tension and anxiety in Hong Kong. 

Constructive discussions have revived in June. Democratic leaders have reaffirmed loyalty to China and suggested turning the coming July 1 demonstration 

into a celebration of civic society. Hong Kong government leaders have pledged their 

commitment to core values of freedom, human rights, rule of law and democracy. 

Central government spokesmen have pledged somewhat ambiguously to resume dialogue with all sectors in Hong Kong. While there is absolutely no assurance that 

Beijing will now move from consultations to concrete proposals, an optimist could 

build hope around efforts at constructive dialogue, repeated high level re-commitment to eventual universal suffrage, and the reformist intelligence of many of the 

key personalities in Hong Kong and China proper. 

What principles should U.S. policy follow? We of course support democratic 

progress. Amid concern about today’s problems, we should remember the value of 

the Hong Kong’s existing freedoms. Thus, when we respond to central government 

actions that might damage Hong Kong, we must take care not to do damage ourselves. 

U.S. positive leverage is frustratingly limited. Our negative leverage is large. Regardless of the intensity of our good intentions, the central reality is that Hong 

Kong will only get democracy when Beijing is comfortable with it. Anti-democratic 

forces will triumph if they can define the Hong Kong problem as a Chinese-American confrontation rather than a dialogue with the Hong Kong people. If we play 

our hand properly, we have absolutely no assurance of success. If we overplay our 

hand, we will surely fail. Hong Kong’s democratic forces are organizing to increase 

Beijing’s comfort with democratization; we should not inadvertently undermine 

them. 

If this seems a counsel of impotence, there is some comfort: if Chinese leaders create a major confrontation with Hong Kong, the economic damage to China will be 

greater than any sanctions we can imagine. Reversion to threats and flotillas will 

be self-sanctioning. 

Anyone who offers confident predictions about the immediate future probably 

doesn’t understand the situation. But I will close this summary with two positive 

thoughts. First, China’s reformist leaders have so far displayed considerable acumen 

for calculating their country’s self-interest, and any knowledgeable calculation of 

their self-interest must conclude that a revival of Deng Xiaoping’s past political generosity toward Hong Kong will pay huge dividends. Second, Hong Kong today is considerably more democratic and a smidgen freer than when China demanded it back 

from Britain in 1982. Anyone who is totally pessimistic about the future joins thousands of commentators who said that was impossible. 

HONG KONG AT THE CROSSROADS

Mr. Chairman, I am honored to be invited to testify before this committee. 

As background, I lived in Hong Kong from 1985 to 2001, leading research units 

for investment banks. I am by training and inclination a scholar. While in Hong 

Kong, I wrote a book, The Rise of China, about China and Hong Kong and served 

for six years each on the boards of the American Chamber of Commerce in Hong 

Kong and of a local counterpart, the Business and Professionals Federation of Hong 

Kong. In connection with the latter, I helped lead a study of Hong Kong’s economic 

future and served as spokesman for a delegation that persuaded Premier Li Peng 

to abandon the policy of withholding decisions about the Court of Final Appeal until 

after 1997 handover of sovereignty. My published work has emphasized the value 

of democratization for Hong Kong.1

I am testifying today at the Committee’s invitation and not on behalf of any interest group. 

A Period of Anxiety 

Hong Kong today is in a period of stress and uncertainty. Recent Chinese central 

government policies have raised anxiety in Hong Kong and created a threatening 

atmosphere. The risks to the future are considerable. The problems that have 

11

2 ‘‘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,’’ Joint Declaration of the Government 

of the United Kingdom of Great Britain and Northern Ireland and the Government of the People’s 

Republic of China on the Question of Hong Kong, December 19, 1984, Article 3(3). 

emerged could conceivably escalate and cause great difficulty for Hong Kong, serious 

economic and political setbacks for Beijing, and significant strains in US-China relations. All of this is somewhat surprising because only last fall there was an atmosphere in Hong Kong of remarkable good feeling toward the central government. Amicable resolution remains possible, and there have been preliminary hopeful signs 

in June 2004. 

The Record, 1997–2003

In situations like this, it is useful to step back and understand the broad context 

before drilling down into current events. 

The backdrop of Hong Kong’s current situation is one of the modern era’s great 

triumphs of diplomacy, moderation, mutual understanding, and leadership. When 

Britain and China began in 1982 to negotiate Hong Kong’s return to Chinese sovereignty, the mistrust, fear, and ideological division between China and the West 

were so much greater than today that it is difficult to overstate the obstacles to 

agreement. Only leaders as determined and as confident as Margaret Thatcher and 

Deng Xiaoping could have forged the agreement. Prime Minister Thatcher realized 

that she could preserve the freedoms of the Hong Kong people by cutting a deal that 

relied on Chinese economic interests in a vibrant Hong Kong. Most remarkably for 

the leader of a country that had been profoundly ideological, profoundly isolated, 

and at times profoundly hostile to the West, Deng Xiaoping realized that China had 

much to gain economically from preserving British institutions after the British 

leaders had departed. 

The ‘‘one country two systems’’ formula that they agreed upon promised to preserve Hong Kong’s separate judicial system, capitalist economic system, separate 

currency, and social freedoms. It did not promise full democracy, and indeed the 

British as well as the Chinese negotiators were somewhat skeptical of the appropriateness of full democracy for Hong Kong, but their agreement provided for gradual moves in the general direction of democratization.2

In terms of what was promised, the ‘‘one country two systems’’ agreement has 

through the end of 2003 been about as complete a success as anyone could have 

imagined. The legal system has the same laws, interpreted the same way, by the 

same judges or by judges chosen in the same fashion, as before. The ultimate appeal 

has no longer been to the Privy Council in London but rather to the Standing Committee of the National Peoples Congress, but the SCNPC was extremely cautious 

through last year in exercising its authority. (I will speak below about what has 

happened this year.) No commercial dispute, divorce, or freedom of any kind other 

than immigration into Hong Kong was affected by the handover. Hong Kong has remained a remarkably cosmopolitan international city; English is an official language 

and foreigners are permitted to occupy up to 20% of the seats in the legislature, 

to hold relatively senior government positions, and, after seven years’ residence, to 

vote. 

Likewise the press has been utterly free from any kind of government restraint. 

So-called self-censorship did occur for commercial reasons. For example, one newspaper forced out Hong Kong’s two favorite humorists and its best-known China reporter, in order to pursue its desire to build a major market in China. But all three 

are employed, and are free to skewer China as they like, at other prestigious publications in Hong Kong. The Asian Wall Street Journal, whose editorial page is no 

apologist for China, continues to base itself in Hong Kong, and the Hong Kong Chinese press commentary runs the whole gamut from acknowledged mouthpieces of 

the Chinese Communist Party to vitriolic sarcasm toward it. Skewering Hong 

Kong’s Chief Executive is Hong Kong’s leading media sport. 

Demonstrations have become much more common in post-1997 Hong Kong than 

they were under the British. Although some NGOs still have complaints, the laws 

are looser than before and they often are loosely enforced. Indeed, Hong Kong has 

become a culture of demonstrations. One of the commonplaces in the media prior 

to 1997 was that, after the 1997 handover, there would be no more Hong Kong demonstrations protesting the June 4 slaughter near Tiananmen Square. But in fact the 

1998 vigil was bigger than its predecessors and this year’s was variously estimated 

from 50,000 to 82,000 demonstrators. 

Freedom of religion has been sacrosanct; notwithstanding Tung Chee-hwa’s reference to Falun Gong as an ‘‘evil cult,’’ the sect at one time rented out City Hall 

for a major meeting and practitioners who would be jailed or worse on the other 

12

3The skirmish over immigration was the most severe test. The British had warned the Chinese to give Hong Kong residence rights only to those in China with two Hong Kong parents. 

China, failing to recognize that every macho Hong Kong truck driver had sought out a mistress 

on the other side of the border, chose to grant it to those with only one Hong Kong parent. Subsequently many in Hong Kong came to fear a flood of immigrants. China and the Hong Kong 

government, seeking an ‘‘orderly’’ process, insisted that every potential emigrant to China join 

a slow-moving queue to get an exit permit and the Hong Kong government moved to expel those 

who had sneaked across the border. Immigrants and their Hong Kong friends said, no, they had 

a constitutional right to immediate residence in Hong Kong. The Hong Kong government sought 

to panic the population and the court with exceptionally misleading statistics about the prospective flood. The Court rejected the government’s arguments and in the process staked out breathtakingly wide claims to jurisdiction over interpretations of the Basic Law. Calls arose for the 

Standing Committee of the National Peoples Congress to amend Hong Kong’s Basic Law, but 

the latter refused to do so on the sensible ground that it was bad to set a precedent of amending 

Hong Kong’s constitutional document for convenience. The Hong Kong government then called 

on the Standing Committee of the National People’s Congress to interpret the law; it did so, 

approving the government-favored process with a somewhat hamhanded ruling. It took the opportunity to assert its own role, defined in the Basic Law, as ultimate interpreter of the Basic 

Law. The process was messy, as such boundary skirmishes often are anywhere, but the ultimate 

result both on immigration and on jurisdiction was a legally and morally defensible one. 4Testimony By Martin Lee Chu-ming, Member of Legislative Council in Hong Kong To the 

Senate East Asian and Pacific Affairs Subcommittee of the Foreign Relations Committee (updated version), 4March 2004

side of the border practice freely and openly. They exercise every morning near the 

main government buildings, and collect money in Hong Kong’s most prominent locations such as the entrance to the Star Ferry. 

What Prime Ministers Thatcher and Deng, together with their successors and the 

Hong Kong people, have achieved is remarkable and, notwithstanding concern about 

a succession of issues, we should remember this. 

Just as we have had to spend two centuries defining the legal balances and 

boundaries among the parts of our constitution, Hong Kong and China have had to 

define the balances and boundaries of ‘‘one country two systems.’’ The method for 

defining such boundaries is legal skirmishes, for instance over immigration and over 

the division of labor between the Final Court of Appeal and the Standing Committee 

of the National Peoples Congress.3

What has been most noteworthy about this process of defining boundaries and 

balances and limits has been the absence of significant legal or public policy controversies over freedom of speech, freedom of the press, freedom of demonstrations, 

independent judicial proceedings, and in general the range of ‘‘freedom issues’’ that 

were of greatest concern to skeptics about the viability of freedom in a territory 

seeking to maintain autonomy under the sovereignty of a communist state. While 

the ultimate appeal is now to the Standing Committee of the National Peoples Congress rather than London’s Privy Council, the Standing Committee has used its 

right of interpretation only twice. I will comment later on the problems created by 

the most recent interpretation, but I want to underline that the basic body of law, 

judicial structures, and freedoms has been preserved. 

Mr. Chairman, all segments of Hong Kong society agree that Hong Kong’s basic 

freedoms have been maintained. Martin Lee testified before the Senate counterpart 

of this committee on March 4 that Hong Kong enjoys ‘‘a free press, an independent 

judiciary and a lively civil society.’’ 4

What the skeptics failed to comprehend was that Deng Xiaoping and his immediate successors understood the connection between Hong Kong’s prosperity and its 

freedoms and its rule of law. Those who believed these were tactical concessions 

that the British wrung from reluctant autocrats, and that therefore there must be 

a secret plan for taking back those promises two or three years after 1997, misread 

the situation. Deng’s view was the opposite. Reflecting on the deal well after the 

agreements had been signed, he commented that China had made a mistake. China 

should, he said, have made Hong Kong’s grant of autonomy run for 100 years rather 

than 50. 

Hong Kong is in fact both freer and more democratic than it was before China 

demanded the return of Hong Kong. Repressive British laws were repealed, and 

some repressive practices have disappeared. Hong Kong has evolved from a consultative colonial dictatorship to a semi-democracy. For instance, before Britain acquiesced in Hong Kong’s return to China, all members of the legislature were appointed by a British Governor. Now half are elected through full suffrage and half 

through narrower functional constituencies. 

Hong Kong has also been successful through 2003 in two other respects. Notwithstanding some economic difficulties in a few recent years, it has maintained a high 

standard of living for its own people and made an enormous contribution to China’s 

13

5 Current political stresses have recently led some members of the senior civil service to request transfers or early retirement. 

modernization. Hong Kong still accounts for a major share of China’s trade and is 

the largest ‘‘foreign’’ investor in China. Second, by example and by institutional outreach, it has contributed to:

• spreading the concept of rule of law in China;

• development of specific areas of Chinese law;

• spreading acceptance of the concept of mutually profitable long-term partnership with foreigners, in business and elsewhere;

• the spread of higher accounting standards and transparency in China;

• the broad Chinese public consciousness of the idea of rights;

• the advance of academic freedom in China;

• Chinese acceptance that an inquisitive and moderately aggressive press can 

be valuable to society;

And many others. 

When you travel into China proper from Hong Kong, you find that adjacent areas 

feel, look and function more like Hong Kong than like the old China. The lives of 

tens of millions of people in nearby areas have been uplifted, not just in terms of 

consumer goods but also in terms of attitudes toward foreigners, personal outspokenness, respect for the private sector, attitudes toward law and contracts, and 

consciousness of rights. 

Many of China’s most prominent companies want to do business under Hong 

Kong law. This is part of a spreading appreciation in China for the rule of law. 

Mr. Chairman, when I was in Beijing last week I picked up a copy of the June 

10 Beijing Review, a weekly English-language information/propaganda publication 

of the Chinese government. One of the lead articles was titled ‘‘Calling for an independent judiciary’’ and subtitled ‘‘China needs to untangle government from its judicial system.’’ A key passage was ‘‘Government intervention produces arbitrary judgments, which may not correspond to law. Not only does bureaucratic tampering unnecessarily bring about corruption, [but also] consistent malpractice damages the 

professional integrity of judges, rendering them puppets of others.’’ The article highlights the terrible problems of corruption in the judiciary, partly as a result of government intervention. While there are several causes of China’s radical shift from 

the view that the judiciary should simply be a tool of the Party, and from the view 

that the press should be wholly uncritical, no cause has been more important than 

the example of Hong Kong and the lesson of the enthusiasm of both Chinese and 

foreign companies for Hong Kong’s legal guarantees. 

We can lecture to exhaustion about the advantages of the rule of law and of meddlesome media. To a traditional Chinese Communist Party official, those arguments 

would have seemed to be the implausible excrescences of an alien ideology. What 

makes rapid change in old attitudes palatable and what makes the issues concrete 

is direct experience in a non-threatening situation. That is why Hong Kong’s influence has been transformative-transformative, even though implemention of an independent judiciary has barely begun and acceptance of meddlesome reporters has a 

long ways to go. 

From that base of successes, how have we come to today’s troublesome situation? 

Weakness of the pure business model of Hong Kong 

Prior to the handover of sovereignty on July 1, 1997, there was widespread belief 

(not including this writer) that the handover would imperil Hong Kong’s freedoms 

but that the world’s freest economy would continue to thrive because it would continue to be administered by a highly competent civil service. The principal threat 

to the economy was almost universally assumed to be mass emigration of the civil 

service along with other talented executives.5

What happened, as is so often the case with China, was exactly the opposite. 

Hong Kong’s freedoms were admirably maintained. Not democracy, but freedoms. 

Hong Kong’s civil service, which enjoys pay and perquisites that are almost unimaginable in the United States, stayed put and all the senior officials were kept 

on. The brain drain was always a myth: there was net immigration every year, and 

as the handover neared the number of people moving in rose dramatically while the 

number moving out declined substantially—exactly the opposite of the impression 

conveyed by most of our media. But the economy proved to have substantial problems and the new Hong Kong government proved unable to resolve them. 

14

6 Underlying the myth of a pure economic city is a policy truth, namely that China’s acceptance of Hong Kong’s freedoms and British laws derived from Chinese interest in maintaining 

Hong Kong’s economic vitality. Deng Xiaoping’s realization that Hong Kong’s economic vitality 

depended on its rule of law was the seed from which the current Chinese acceptance of the idea 

of rule of law grew. Actual practice is still more a seedling than a tree, but the seedling shows 

real growth. 7To take one example, the Hong Kong economy got into very serious trouble in September, 

1983, with a currency collapse, a banking crisis, and runs on grocery stores. Under the guidance 

of Prime Minister Thatcher’s principal economic advisor, the government instituted a currency 

peg to the U.S. dollar and thereby resolved the crisis. 

The Asian Crisis began with the collapse of the Thai currency on July 2, 1997, 

the day after the Hong Kong handover. That crisis revealed that most of the Asian 

miracle economies, including Hong Kong, had serious structural problems. In particular, Hong Kong’s property system is prone to bubbles and financial crisis, Hong 

Kong’s education system now lags behind Shanghai’s, Hong Kong’s system of cartels 

threatens to make it less competitive as competing cities reform, the tax system has 

too narrow a base with revenues dependent on government action to maintain extremely high property prices, and the civil service needs major reform. Unlike a 

number of other Asian economies, including both democratic South Korea and authoritarian China, Hong Kong has so far been unable to respond effectively to the 

new era by instituting needed reforms. The one major reform, which was the key 

to the current economic revival, was the closer integration of the Hong Kong economy with neighboring parts of China, a tremendously successful, long overdue effort 

that was masterminded by the Chinese authorities. This problem derives from the 

inadequacies of what might be called the business model of Hong Kong. 

There has long been a Western myth that Hong Kong is a laissez faire economy 

merely administered by an apolitical civil service. The Chinese version of the myth 

is that Hong Kong is an economic city, not a political city. That is why the city’s 

leader is called Chief Executive, not Governor or Mayor.6

The reality, once again, is close to the opposite. Hong Kong’s economy is highly 

regulated, far more so than for instance our own economy. Trade and investment 

are indeed free, but half the population lives in government housing, the currency 

is pegged to the U.S. dollar, and the economy is managed through a set of cartels, 

mostly created directly or indirectly by government regulations, that control housing, airlines, taxis, conventions, interest rates, electricity, gas, ports, moving companies, water, buses, food distribution, gambling, car distribution, gasoline, pharmaceuticals, education, performance theaters, cruise terminals, and the principal services such as lawyers, doctors, nurses, and dentists. 

Moreover, and this is crucial, maintaining Hong Kong’s edge in sophisticated services like capital markets, banking, and accounting requires visionary leadership, not 

just administration. 

Thus the economic reality is that the Hong Kong economy is a highly administered economy, and the political reality is that Hong Kong requires real leadership. 

The traditional myth of an economic city administered by a politically neutral civil 

service required one to ignore the presence of a British Governor with near-dictatorial powers, the visionary leadership exercised by several of those Governors as conditions changed, the rallying of social leaders and public opinion by the Governors 

in times of crisis, the addition of a new layers of advisory bodies after each major 

crisis in order to maintain political order, the use of the British political leadership 

and the British civil service to make the key plans and resolve crises 7, and the pervasive use of British consulting firms to do everything from cleaning up the stock 

exchange to choosing acceptable cement for the new airport. 

Even those like myself who always rejected the myths of the laissez-faire economy 

and the society that was administered rather than led did not understand how the 

structure of the post-handover government hobbled the city’s leadership. Hong Kong 

is supposed to have executive-led government, with a strong Chief Executive (CE) 

modeled on the British Governor overseeing a compliant civil service and a relatively tame legislature. The reality is close to the opposite. The CE has a personal 

staff of only half a dozen. Unlike the old British Governors, the CE has no counterpart of Margaret Thatcher and her economic advisors to back him up. The theory 

of an Economic City and the method of selection by a small group of business executives and conservative notables virtually guarantee that the Chief Executive will be 

an executive without political experience—without for instance experience in going 

on television to rally the public or in convening disparate interest group leaders to 

forge compromises and consensus. 

That leaves Hong Kong’s Chief Executive highly dependent on the legislature and 

the civil service. But the tame legislature and the compliant civil service have not 

materialized. The typical legislator is a highly successful executive with a mind of 

15

his or her own, who gains confidence from an electoral mandate that conveys greater legitimacy than the Chief Executive’s. The legislators resent the Chief Executive’s 

assumption that he is the boss and they are the subordinates and, although his 

major bills get through, find numerous ways to frustrate him. Moreover, since they 

have limited opportunity to push legislative initiatives, and very little likelihood of 

ever being chosen for top government jobs, legislators have few incentives to rise 

above constituency concerns and push a long-term development agenda. 

If there is any view common to most civil services, anywhere in the world including Hong Kong, it is that the way things have been done is just fine so why cause 

trouble by trying to change them. Hong Kong’s civil service leadership has opposed 

education reform, competition policy, housing reform, tax reform, and of course civil 

service reform. Beyond the normal inertia of civil services, much of Hong Kong’s 

civil service leadership at the transition and afterward found a mobilizing principle 

in the idea that it was protecting Hong Kong from China and that the Chief Executive personified China. Until recently, civil servants continued to treat contacts with 

their counterparts across the border as a security risk and senior officials from 

neighboring provinces as country bumpkins. This was both wrong and damaging to 

the economy. As a consequence of such inertia in other areas, Hong Kong’s education system has fallen far behind Shanghai’s and, to take just one example, its 

housing system is far more socialist than Shanghai’s. 

The civil service also reacted with only partly suppressed outrage to the process 

of legislative accountability. Being called by legislative committees to explain and 

defend policies in front of sometimes querulous legislators was a largely unfamiliar 

and hated task. 

These problems add up to a gridlocked government—primarily for structural reasons. Each part of the triangle—Chief Executive, civil service, and legislature—has 

serious difficulties in working with the other two, and there is no mobilized political 

force to push them in a common direction. In principle, the dictatorial powers of the 

old British Governor could push them in common direction, and so could a democratically elected political coalition, but today Hong Kong has neither. 

However, just as we personalize our political problems, so the media and public 

opinion have personalized Hong Kong’s problem by blaming the Chief Executive. 

This is only partly fair. Chief Executive Tung Chee Hwa is an honest and wellmeaning business executive. He was chosen to ‘‘preserve’’ Hong Kong’s system. In 

the run up to the handover, neither British nor Chinese officials could get through 

more than a few sentences without emphasizing that central goal: to ‘‘preserve’’ 

Hong Kong’s system. The emphasis was neither on political reform nor on economic 

reform. It was on preservation. By and large Mr. Tung has done that. Under him, 

Hong Kong has preserved the economic system. It has preserved the legal system. 

It has preserved the fundamental freedoms. It has preserved the political system. 

He presides over a culture of demonstrations and outspoken opinions while reassuring Beijing. That is a significant achievement. Had he wished to do so, Mr. Tung 

could have done considerable damage to the free press, the right of free speech, the 

right to demonstrate, and others. He has instead preserved the system as he was 

hired to do. But it is the fate of political leaders to be faced with challenges different 

from those for which they prepared. 

Mr. Tung was chosen by Beijing to be an apolitical administrator of an apolitical 

economic city. Nothing prepared him for either the tasks of economic reform or the 

task of leading a polity where, inevitably, the disappearance of the colonial power 

elicited a flowering of civil society. His reformist vision was confined to housing and 

education, areas that brought him popularity when he first ran for office, but he 

has been unable to make substantial progress in either area. He has no experience 

at rallying public opinion or forging coalitions. The reality is that any large and sophisticated economy and any substantial population require experienced political 

leadership, not just administration. Hong Kong is not a business to be administered. 

It is a society to be led. 

Although Mr. Tung has borne the brunt of popular and media frustration, ultimately the response of Hong Kong people to a structural problem has been migration toward a structural solution: support for democratic political reform has broadened and deepened. For the most part, this is not based on a sophisticated analysis 

of structural gridlock. It is personalized. Many people say: We let Beijing choose our 

leader. We gave them a fair chance. They blew it. Now they have a responsibility 

to let us try. Today that sentiment is absolutely pervasive in Hong Kong and some 

of Hong Kong’s tycoons now share it. 

16

8 According to a mid-May 2004 survey by the Hong Kong University Public Opinion Program, 

the single most strongly supported political organization in Hong Kong was the Article 45 Concern Group, set up to call for universal suffrage as provided for in Article 45 of Hong Kong’s 

Basic Law. See http://hkupop.hku.hk/. The Democratic Party was ranked third and its pro-Beijing competitor, the DAB, was ranked next to last. 9Popular views of politicians aren’t necessarily that different. In a recent poll, 16.2% felt the 

DP, Hong Kong’s most popular party, was doing a good or somewhat good job on economic 

issues, while 44.8% felt it was not doing a good job. See ‘‘Second Multi-Party Opinion Survey 

on Political Development in Hong Kong’’ at the Hong Kong University Public Opinion Program 

site cited above. 

Polls have always shown majority support for democracy in Hong Kong. Now they 

show quite strong support.8

Obstacles to democracy inside Hong Kong 

Mr. Chairman, democratization has faced significant obstacles within Hong Kong 

as well as in Beijing’s relationship with Hong Kong. Much of the business leadership, which Beijing views as the natural voice of the ‘‘economic city,’’ opposes democratization, and the democratic forces, although broad, have been weak and divided. 

The central government has traditionally communicated with Hong Kong primarily through the business elite. The business elite in turn has traditionally taken 

the view that Hong Kong people are not ready for democracy, that prospective leaders are too immature, and that democracy could damage Hong Kong’s economy. 

The view that the population is not ready for democracy is insupportable. Education levels are high, income levels are higher than Britain, and there is a substantial middle class. Moreover, the population is highly concentrated, with extraordinary communications, so there is more shared consciousness of issues and leaders 

than in most modern democracies. 

Hong Kong society is deeply divided, with both a wealthy elite and a large population that is squeezed into tiny, government-provided apartments. A large portion 

of the lower half of the income distribution just doesn’t buy into the prevailing economic system. Moreover, the majority of people don’t pay significant taxes, so they 

have an incentive to demand services without much regard for cost. The economic 

elite is concerned about what policies these people would support if their votes dominated the political system. They point to bills supported by both major parties that 

pander to damaging populist views.9 Effectively, the message of the elite has been, 

no representation without taxation, no universal suffrage until fully responsible 

leaders emerge. 

There is, however, a neglected option of both taxation and representation. Moreover, the seeming lack of responsible leaders is arguably a product of the current 

political system, which gives politicians of all parties an incentive to advocate populist positions and no potential career benefit from trying to moderate those positions. The results of a system constructed with no career benefits from being responsible probably do not provide a valid indicator of how they would behave if they possessed, or could aspire to, serious responsibilities. ‘‘Support’’ for bills that pander to 

constituents but have no chance of becoming law does not mean that such bills 

would become law if legislators had to live with the consequences. The personal sophistication of Hong Kong’s legislators, the electorate’s exquisite sensitivity to economic performance, an awareness of economic principles substantially superior to 

what we have in the U.S., the immediate feedback that occurs in this tightly-knit 

city, and the range of buffers against fundamental change lead me to confidence 

that elections under universal suffrage would lead to responsible government. 

Having said that, the social divide nonetheless creates a substantial constituency 

for legislation that would be well to the left of contemporary European socialism. 

Hong Kong’s leaders would have been wiser to ameliorate the social divide earlier. 

They are going to pay some price in some of their traditional businesses for having 

held onto the full range of their privileges a bit too long. Hong Kong’s cartel and 

tax system were originally designed to channel wealth into the hands of a British 

expatriate elite and now do so for a post-colonial elite; the resulting social divide 

is inappropriate for the post-colonial period and Hong Kong’s high cartelized prices 

will likely prove unsustainable as other cities become more competitive. But it 

would be a mistake to exaggerate the price they will pay or the speed at which they 

will pay a price. Hong Kong people are instinctively cautious and moderate. Moreover, the dismantling of Hong Kong’s cartels, a likely consequence of democratization, and the emergence of powerful consumer advocates would be good for Hong 

Kong’s economy—as shown by the enormous benefits the city has experienced from 

increasing telecommunications competition. Any price the business elite pays will be 

more than compensated by new opportunities. 

17

10See ‘‘Second Multi-Party Opinion Survey on Political Development in Hong Kong’’ at the 

Hong Kong University Public Opinion Program site cited above. 

Hong Kong’s party system is quite immature. The Democratic Party (DP) has 568 

members, according to its website in mid-June 2004, and its supporters are deeply 

divided between a social elite that is committed to Hong Kong’s current economic 

system and a mass base that includes powerful forces with populist and even socialist views. The party has consistently failed to raise significant funds from the citizenry. In a recent poll, a quarter of the population felt that the DP ‘‘represents its 

interests,’’ with only 5.4% feeling that the DP ‘‘very much represents its interests.’’ 

Half the population (49.7%) had a negative or strongly negative view of whether the 

DP represented its interests.10

The other principal party, the DAB, commonly characterized as pro-Beijing, has 

an organizational structure that was consciously copied from the U.S. Its better-organized relationships between leaders and constituents has on occasion brought it 

close to victory, but it has repeatedly lost ground through scandals and support of 

unpopular positions. For instance, it initially supported the Article 23 legislation, 

and paid the price with voters, although it subsequently changed its mind. It depends financially on local subsidiaries of big Chinese state enterprises to fund many 

activities. 

The Democratic Party has heretofore had difficulty charting a credible path to democracy under Hong Kong’s peculiar circumstances. The Party includes a group of 

leaders from the Hong Kong Alliance in Support of Patriotic Democratic Movements 

of China. While the idea of promoting democracy in China is a noble one, having 

part of the leadership of a major political party promoting political transformation 

on the other side of the border is manifestly inconsistent with the concept of ‘‘One 

Country Two Systems.’’ One prominent leader of the Democratic Party, Martin Lee, 

wisely resigned from the Hong Kong Alliance in Support of Patriotic Democratic 

Movements of China, but he founded his image, particularly overseas, on the intimation that after July 1, 1997 he was likely to be jailed or killed. His favorite line 

in the year before the handover was to close his speeches by saying that he was 

eating less in order to prepare himself for jail. Time after time he gave speeches 

asserting that someone arrested by Chinese soldier in Hong Kong could not get a 

fair trial—but always failed to mention that the Basic Law specifically prohibited 

Chinese soldiers from doing any such thing. Such lines often brought tears to the 

eyes of normally tough-minded American politicians and executives, but they damaged his credibility in Hong Kong and left both himself and the democratic movement a jumbo mortgage of political ill-will to amortize in both Hong Kong and Beijing. He and others are now repositioning themselves more in line with the center 

of gravity of Hong Kong opinion, and this may eventually enhance the chances of 

democratization. 

Aside from the central government’s reaction to the legacy of anti-Chinese postures, these have created a fundamental ambivalence in the Hong Kong electorate 

toward some of the leaders of the democracy movement. Hong Kong people want 

strong voices for democracy and therefore they elect, inter alia, Martin Lee to speak 

out as part of the opposition. On the other hand, they do not wish to be actually 

governed by people who make a career out of sparking gratuitous conflict with the 

central government. That is why, in the runup to the handover, only 11% of people 

polled said they would trust Martin Lee to be Chief Executive while five times and 

six times that number said they would Tung Chee-hwa and Anson Chan respectively. (Anson Chan was highest because she spoke out strongly for Hong Kong’s 

freedoms, demonstrated exceptional administrative talent, and never asserted that 

Beijing would jail her after the handover.) 

Thus the democracy movement has a fairly broad base, but the principal institutions and key leaders advocating democracy have limited public support. 

On balance: 

The Hong Kong elite is increasingly left with Churchill’s dictum: ‘‘. . . democracy 

is the worst form of government except all those other forms that have been tried 

from time to time.’’

The democratic movement remains in search of leaders and institutions that can 

organize the broad support that exists for democracy. 

Beijing finds itself uncomfortably relying on the advice of a limited number of traditional business leaders who are increasingly at odds with popular sentiment. 

Moreover, the business leadership is increasingly divided regarding democracy, and 

repression of democratic sentiment just makes it stronger. 

Hong Kong people are just getting fed up. Polls show a decline in respect for both 

Beijing and provocative democratic leaders. 

18

11The specific wording of Article 23 is: ‘‘The Hong Kong Special Administrative Region shall 

enact laws on its own to prohibit any act of treason, secession, sedition, subversion against the 

Central People’s Government, or theft of state secrets, to prohibit foreign political organizations 

or bodies from conducting political activities in the Region, and to prohibit political organizations or bodies of the Region from establishing ties with foreign political organizations or bodies.’’

As each group wrestles with this dilemma, there have been both very ominous developments and more recently some very hopeful signs. 

Hong Kong’s options 

Structurally, Hong Kong has three basic options. One is to continue trying to 

make the gridlocked business model work. The consequence of that option would be 

like trying to accelerate a powerful car against a concrete wall; there will be a lot 

of overheating and smoke and sparks and possibly even danger. 

Second, in principle Hong Kong could revert to the more authoritarian mode of 

the British era, with Beijing backing up Hong Kong leaders the way London once 

did. That is what has happened with Beijing’s successful measures to rejuvenate the 

Hong Kong economy. The problem with that option is that over any significant period of time the majority of Hong Kong’s people won’t accept it. In the short run 

they will demonstrate, probably in a very disciplined and civilized way; in the long 

run, they’ll leave. That’s exactly the outcome Deng Xiaoping was trying to avoid. 

The third option is greater democratization. Direct election of the chief executive 

and the legislature would choose a leader with political skills, create a class of 

skilled politicians, force the formation of a coalition with certain policy mandates, 

give the Chief Executive a mandate as good as and broader than any legislator’s, 

and stimulate an informed debate about issues like education reform. It would force 

the development of more mature political parties, and it would give at least some 

politicians the incentive to advocate responsible policies in the hope of being elected 

or selected for top government positions. It would force the civil service to abandon 

the rationale that they have a mandate to protect Hong Kong from China by frustrating reform. But the central government will not accept the third option if it feels 

threatened. 

The highs of 2003 and the lows of 2004

In 2003, the Hong Kong government decided to address the last major boundary 

issue. The essence of the ‘‘one country, two systems’’ idea is that China will not subvert Hong Kong’s major institutions and conversely Hong Kong will not subvert China’s major institutions. The deal obviously has to work both ways. If they get into 

the business of subverting each other, it is obvious from looking at the map, or at 

population numbers, that China will win. So this deal primarily benefits Hong 

Kong. 

In a system based on the rule of law, such a deal must have concrete legal expression. Hence Article 23 of Hong Kong’s Basic Law requires the passage of specific 

legislation to prohibit subversion.11 It is important to recognize from the beginning 

that the principle is not a terrible idea, but rather a good and essential one. The 

devil is in the details. 

After Hong Kong returned to China on July 1, 1997, the government deferred passage of controversial anti-subversion legislation. Six years later, in July 2003, the 

Hong Kong government proposed to pass stringent Article 23 legislation with elements that attracted widespread opposition. In particular, the law would have allowed an Assistant Police Commissioner (rather than the courts) to authorize 

searches of private homes, allowed the government to proscribe organizations proscribed on the mainland (Falun Gong and the Roman Catholic Church are proscribed there), allowed the Secretary for Security rather than the courts to set the 

rules for appealing such decisions, and precluded a public interest defense against 

a conviction for publishing state secrets. (On the mainland, almost anything can be 

a state secret.) 

Proponents of the law argued that the proposed legislation was milder than British-era legislation and that one can find similar or even stronger provisions to some 

of these in the laws of certain Western democracies. They argued, and most people 

acknowledged, that the Hong Kong government clearly did not intend to target, for 

instance, the Catholic Church. However, the public saw the laws as unnecessarily 

stringent. They wanted to be able to rely on the law, not on the individuals running 

the government. They did not want the government to be able to circumvent the 

courts. 

Such sentiments led to a demonstration by 500,000 people, one of the largest in 

Hong Kong history, on July 1, 2003; to withdrawal from the Executive Council of 

the leader (James Tien) of the principal big-business party (Liberal Party); to deVerDate Mar 21 2002 15:13 Aug 23, 2004 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6621 F:\WORK\AP\062304\94507.000 HINTREL1 PsN: SHIRL
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12For instance, as noted in Christine Loh’s newsletter of January 29, 2003, the government 

categorized the responses of the some of the organizations most emphatically opposed to the legislation as ‘‘unclear.’’

mands by the pro-Beijing DAB party to delay the legislation; and ultimately to withdrawal of the legislation because it lacked the votes to pass without Liberal Party 

support. 

The demonstration and its aftermath were the lowest hour for the Hong Kong 

government and in some ways the finest hour of the broader Hong Kong political 

process. The government refused strong public demands for a White Paper that 

would allow detailed public scrutiny. It distorted the results of a required public 

consultation and thereby ensured maximum public distrust of its intentions.12

Under pressure it made concessions, including three huge concessions after the July 

1 demonstration, and its flexibility on substance would likely have been adequate 

to ensure passage, but it attempted to stampede passage of the bill in two days and 

in the process created so much distrust that no bill passed. 

Culminating a series of lesser missteps, government mishandling of the Article 23 

issue politicized a hitherto apolitical populace. This has become a fundamental turning point in Hong Kong’s history. 

Demonstrators against the bill, comprising a wide spectrum of Hong Kong society, 

behaved with fortitude and total discipline in the face of terrible heat and very long 

hours of marching. Notwithstanding the huge importance of the bill to Beijing and 

the fear in China of large demonstrations, the government refrained from invoking 

laws that could have been used to prohibit a demonstration far larger than the organizers requested and the government approved. Premier Wen Jiabao, who was in 

Hong Kong and neighboring Shenzhen, conducted himself with total professionalism 

and in particular eschewed threats. Hong Kong’s Democrats kept their focus on the 

Article 23 issue and deferred (until New Year’s Day) attempts to press a larger political agenda in ways that could have given hardliners in Beijing a pretext for some 

kind of repression. Subsequently the central government sent teams to Hong Kong 

for broad consultations, including with the Democrat Party. In short, each participant conducted itself in a way most likely to result in respectful dialogue and to 

minimize the risks of unnecessary confrontation. 

Subsequently the central government followed through on forms of closer economic integration with Hong Kong that triggered a revival of the Hong Kong economy. 

Hong Kong people reacted very positively to this situation. Polls in the autumn 

showed public trust in the central government to be substantially greater than trust 

in any of Hong Kong’s own leaders. The situation appeared to be headed for a clear 

win-win between Hong Kong and China’s central government. 

Unfortunately that era of good feeling proved short-lived. 

At the end of November, pro-democracy candidates won overwhelming in local 

Hong Kong elections. On January 1, 2004, a large demonstration (37,000 people according to the government, 100,000 according to the organizers) demanded direct 

elections of the chief executive and the legislature in 2007, as permitted but not required by the Basic Law. The demonstration was again orderly, peaceful, brief, and 

not antagonistic toward the central government. 

The central government could have confidently expanded its consultation and regarded the demonstration as a disciplined way of requesting something that was, 

after all, an option opened by the central government itself when it wrote the Basic 

Law. Instead, lacking confidence, it responded to the series of demonstrations as a 

threat to stability. 

Beijing turns repressive 

The ominous aspects of the current situation began with a central government 

campaign, one that originated around October 2003 but became vigorous only later, 

to emphasize that the leaders of Hong Kong must be patriots, with the implication 

that supporters of democracy were not patriots. This was an inversion of Deng 

Xiaoping’s insistence at the time of the agreement with Britain that, regardless of 

ideology, anyone who respected China, believed Hong Kong to be part of China, and 

would not damage Hong Kong’s stability or prosperity was a patriot. Deng’s formulation was generous; he welcomed capitalists and feudalists, in other words even 

anti-communists, as long as they met these criteria. The dicta of 2004, on the other 

hand, interpreted the requirement of patriotism in a seemingly narrow and ideological way—the opposite of Deng. 

On April 6, 2004, the Standing Committee of the National Peoples Congress 

issued an ‘‘interpretation’’ of Hong Kong’s Basic Law provisions on elections emphasizing the central government’s right to approve changes. This provoked a pro-deVerDate Mar 21 2002 15:13 Aug 23, 2004 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6621 F:\WORK\AP\062304\94507.000 HINTREL1 PsN: SHIRL
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13From Article 45: ‘‘The method for selecting the Chief 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 is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating 

committee . . .’’ Article 158 begins by giving the Standing Committee a general power of interpretation of the Basic Law. 

mocracy demonstration of about 15,000 people on April 11. On April 26, the Standing Committee specifically banned direct elections of the CE in 2007 and for the 

Legislative Council in 2008. 

The Standing Committee had the legal right to take the action it did. Under the 

Basic Law the Standing Committee has the right to interpret the Basic Law (Article 

158), the right to rule on anything that affects relations between Hong Kong and 

the central government (Article 17 paragraph 3, invoked in the explanation of the 

decision), and the right to interpret the clauses that open the door to direct elections 

after 2007 subject to gradualism and appropriate conditions.13 The important issue 

is not whether its decision was legal but whether it was wise. 

On May 5, a Chinese naval flotilla sailed through Hong Kong harbor in a way 

that seemed clearly designed to intimidate. That period also saw suggestions of further restrictive interpretations of the Basic Law. 

Three pro-democracy radio hosts have complained of seeming intimidation, and 

earlier the head of a campaign to stop reclamation of Hong Kong harbor resigned 

with similar complaints. If such incidents become a pattern, or if evidence emerges 

of central or local government involvement, or if the government does not vigorously 

pursue anyone who made threats, then the threat to Hong Kong’s freedoms would 

be serious indeed. On these, we need more time and information before reaching 

judgments. On the other steps, the record is perfectly clear. 

Why Beijing has reacted this way 

Mr. Chairman, I believe it is important for us to understand why China’s central 

government has taken this turn. To explain, however, is not to explain away, and 

I have absolutely no intention to explain away. The central government’s new policies have created an atmosphere of anxiety and distress in Hong Kong. 

In my view the policies were unwise, even if one considers only the central government’s interests. The fear of instability was entirely misplaced. These orderly, 

brief demonstrations demonstrated extreme discipline and respect for the law. Although large, they were entirely consistent with Hong Kong’s political culture and 

therefore not disruptive of the established system. They did not advocate political 

change in China proper or disorderly change in the Hong Kong government. They 

were not in any general way hostile to the central government. They advocated 

something that the Basic Law, which was written solely by the central government, 

explicitly allows as a possibility. 

Moreover, even as general support for democracy has risen, the post-1997 period 

has seen the gradual fading rather than the rise of those democratic leaders whose 

goal was to organize change across the border in China or whose political strategy 

depended on provoking China. All the pro-democracy leaders have from the beginning supported the view that Hong Kong is part of China, and they have (with one 

notable exception outside the Democratic Party) generally supported the view that 

Taiwan is part of China. Hong Kong polls have shown high levels of admiration for 

central government leaders. In short, China’s central government has had every reason to take satisfaction from the success of its policies in Hong Kong and every justification to act with confident generosity rather than fearful repression. 

Why, then, the fearful, negative policies from Beijing? 

Chinese leaders believed, and may continue to believe, that Hong Kong’s discontents were economic and that amelioration of the deflation, high unemployment, 

and sluggish growth that plagued Hong Kong for several years would resolve tensions over things like Article 23 and the pace of democratization. Hence their primary policy response was to stimulate, quite successfully, economic recovery in 

Hong Kong. While it is certainly true that economic problems greatly exacerbated 

political discontents, the belief that political sentiments only reflected economic conditions was always as fallacious as the economic city theory. In China proper, privation was long so severe that drastic economic improvement could for several decades 

overwhelm the political agenda, but Hong Kong long ago left that era behind. Because central government leaders misread the discontents as purely economic, they 

were shocked and perceived bad faith when, following their successful economic 

measures, they got a big pro-democracy demonstration. 

Chinese leaders also believe deeply in the power of good leadership and in their 

own ability to choose good leaders. They have considerable basis for that belief. 

21

14The link between Taiwan and Hong Kong developments is quite direct. The ‘‘one country 

two systems’’ concept was originally offered to Taiwan in September 1981 and only later applied 

to Hong Kong. Since then, Beijing has repeatedly said that the successful implementation of the 

concept in Hong Kong will eventually give credibility to the concept in Taiwan. In response, 

under Presidents Lee and Chen, Taipei has made an enormous effort to discredit the concept. 

Moreover, when the issue of national unity becomes sensitive in one place, it immediately becomes sensitive elsewhere. 

Macau’s economy took off as soon as China replaced the lackluster Portuguese leadership, suppressed crime, encouraged investment in infrastructure, enhanced competition, and instilled a long-term economic vision. Edmund Ho has simply been outstanding. In China’s principal cities, leaders like Zhu Rongji, installed from outside 

by the central government, have repeatedly created economic miracles and quelled 

much political dissatisfaction. But the political structures of these other cities bear 

more resemblance to the structural conditions of old British colonial Hong Kong 

than to Hong Kong’s prosperous, pluralistic, gridlocked situation. Greater complexity, greater prosperity, and a Westernized political culture made Hong Kong different, and disillusionment with the current local leadership magnified these differences. Not understanding this, China’s leaders have reacted with dismay and fear 

to demands for more sophisticated politics in Hong Kong. 

When Tung Chee-hwa was chosen for his first term, polls showed that he inspired 

considerable popular trust. Anson Chan, then head of the civil service, scored highest, just under 70%, Tung Chee-hwa second, in the mid-50s, and Martin Lee was 

trusted as a potential leader by 11% of Hong Kong people. Hence the choice of Tung 

reflected a balance of acceptability to Hong Kong people and acceptability to the 

central government. When the Chief Executive’s first term was ending, a substantial 

proportion of the city’s leading conservative business leaders warned the central 

government that reappointment could bring serious trouble. Beijing’s response was 

to admonish business leaders to rally the city around Mr. Tung, repeatedly citing 

an analogy to the way Americans rallied around George W. Bush despite his narrow 

election. The idea that they could do so reflected the economic city fallacy, by now 

an increasingly dangerous misreading of Hong Kong. The central government was 

surprised and shaken by its inability to get Hong Kong to accept the chosen leader. 

Repeated demonstrations in Hong Kong raised consensus fears in Beijing of disorder and chaos in Hong Kong. While Deng Xiaoping might have been able to analyze the demonstrations in their Hong Kong context and understand that they were 

not threatening in the way similar demonstrations in China might be, the circumstances of the new leadership in Beijing made such a possibility far less likely. 

Perhaps most importantly, the Hong Kong demonstrations occurred in the context 

of the efforts of Taiwan’s President Chen to move toward independence.14 As the 

Taiwan elections approached, Chen’s constantly reiterated statements that Taiwan 

was already sovereign and independent, his plan to revise the constitution, and his 

wedge-issue referendum had led to a widespread conviction in China, even among 

apolitical businesspeople and many liberal intellectuals, that war might be inevitable. President Bush’s wise amelioration of that situation helped avoid conflict, but 

the tension and anxiety that accompany a war scare inevitably narrow leaders’ perspectives on other issues. 

In this context, China had new leaders whose hold on power would take years to 

consolidate. The greatest vulnerability of any Chinese leader is the potential accusation that he is permitting threats to the unity or stability of the nation, and new, 

untested leaders are exceptionally vulnerable to such charges from hardliners. The 

fate of predecessors like Zhao Ziyang ensures that no leader ever underestimates 

that vulnerability. 

The new leaders had little direct knowledge of Hong Kong. They are not known 

in China as hardliners or advocates of greater repression. Quite the opposite. They 

have surrounded themselves with bright, young, reformists, many of whom are advocates of modestly democratizing reforms in China itself and avid, admiring students of democratization in other successful Asian countries. They have taken both 

symbolic and substantive steps to identify with the needs of common people and to, 

for instance, improve the lot of rural migrants. But their experience is in places like 

Gansu, not in Hong Kong, and this creates at least transitional risks. 

At the risk of offending almost everybody in this room, I might recall that President Carter from Georgia initially thought that he might improve the lot of Koreans 

by withdrawing our troops from that threatened country, President Clinton from Arkansas initially thought it a good idea to curtail our most important trade ties with 

China, and the aides of President George W. Bush from Texas initially thought it 

useful to allow aides to characterize China publicly as a strategic competitor upon 

which we should re-focus much of our global military planning. In this context, one 

22

might empathize somewhat with new Chinese leaders when they apparently 

thought of demonstrations in Hong Kong the way they might think about demonstrations at home. However, our system has repeatedly demonstrated the ability 

to bring leaders up to speed very rapidly, because of the institutionalized weight of 

expertise in our system. It remains to be seen whether China’s system works equally well. Moreover, even if central government leaders get properly briefed, they have 

handcuffed their own wrists through the Standing Committee’s ban on direct elections in 2007, which is now a law. 

One reason often cited by observers for Beijing’s conservative stance is concern 

that democratization in Hong Kong might prove infectious on the mainland. Perhaps this is a concern, but I have not heard any emphasis on that point. If that 

is the primary concern, it is strange that Premier Wen re-committed at the end of 

April to eventual universal Hong Kong suffrage. 

There are two central confusions in current Chinese policy toward Hong Kong. 

The first is a confusion of Hong Kong with Taiwan. In Taiwan there is a large independence movement. In Hong Kong there is no such movement. 

The second is a confusion of the democracy movement with a few prominent democracy advocates. The sentiment for democracy is wide and deep, encompassing a 

majority of Hong Kong people, many of whom identify to some substantial degree 

with China. The distrust of leaders who gratuitously provoke Beijing is equally 

strong. The current heads of the Democratic Party are not particularly anti-Beijing. 

In short, Hong Kong is not Taiwan, and the democracy movement is not anti-Chinese. If China’s central government were to act with confidence rather than fear, 

with detailed knowledge rather than vague analogies, and with generosity rather 

than threats, there would be no risk whatsoever of a separatist winning and negligible risk that victory would go to a China-baiter. Having lived in Hong Kong, my 

instinct is strongly that a central government decision to allow early universal suffrage would cement Hong Kong public loyalties to a degree that no other decision 

could match. 

On the other hand, if the central government allows itself to be drawn into a vicious cycle of Beijing threats, Hong Kong demonstrations, bigger Beijing threats, 

bigger Hong Kong demonstrations, it just might create a separatist movement 

where none existed and it just might empower anti-Chinese leaders in Hong Kong. 

Beijing risks creating its own headache. 

There is a further source of support for Beijing’s threatening, repressive attitude 

and that is the allegation that the democracy movement is a creature of foreigners. 

On one level this is simply tiresome. All government leaders anywhere who get into 

difficulty are tempted to shift blame to foreigners. Anyone who experienced the ordinary housewives and students pouring into the streets to oppose the Article 23 legislation and later to support democracy would realize that no foreigner could stimulate such a thing. Anyone who knows Hong Kong people knows that they are highly 

educated and canny and can’t be stampeded by some conspiracy. 

Nonetheless, some important officials believe that foreigners are organizing the 

Hong Kong democracy movement. ‘‘Foreigners’’ or course means primarily ourselves. 

The evidence cited in China for this fallacious belief relates to our enthusiasm for 

Martin Lee, who although no longer the leader of the Democrat Party continues to 

be a frequent spokesman with foreigners because his English fluency is so much 

greater than his colleagues’. The fact that Martin Lee’s global campaign was managed for such a long period by the American prote ́ge ́ of a prominent American political figure, the vitriolic campaign mounted in this country against the Hong Kong 

law prohibiting political contributions by foreign political parties, and the extraordinary reception during his recent visit, gave maximum leverage to hardline Chinese opponents of Hong Kong democracy. I was in Beijing at the time of Mr. Lee’s 

visit here, and experts who were expressing concerns about the negative thrust of 

Chinese policy toward Hong Kong reacted with anguish and despair to what was 

seen as a major U.S. intervention in favor of an anti-China figure. They had no 

choice other than to go quiet for a while. 

A principal argument being mounted by opponents of democratization inside Hong 

Kong also concerns ourselves. The Basic Law gives the central government a veto 

over any proposed Chief Executive and over the top level of Hong Kong officials. 

Democratic Party leaders say they will accept the veto if given the right of direct 

election. However, key opponents of direct elections are arguing that, if a candidate 

were directly elected and then vetoed, the U.S. would confront China over it. That, 

they argue, would be a great crisis that China cannot afford and therefore China 

should not run the risk of allowing direct elections. However, if the central government is generous toward Hong Kong’s political aspirations, there would be little 

chance of Hong Kong electing a provocative figure. On our side, if we really care 

about democratization of Hong Kong, then acceptance of the veto, which the DemoVerDate Mar 21 2002 15:13 Aug 23, 2004 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6621 F:\WORK\AP\062304\94507.000 HINTREL1 PsN: SHIRL
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15 Cited in Zheng Yongnian and Tok Sow Keat, ‘‘Hong Kong Democratisation: A Crisis Brewing for Beijing?’’ Background Brief, East Asian Institute, National University of Singapore, May 

7, 2004, pp. 3, 13

cratic Party accepts and which has been there all along without our protest, would 

seem to be a minor price. 

June 2004 turn toward rapprochement 

Last summer all parties to the Hong Kong situation seemed moderate and constructive. This spring all parties seemed destructively confrontational—except the 

Hong Kong public. In June, there has been a pullback from confrontation. Democratic Party leaders, democratic activists like Lau Chin-shek, and civic leaders like 

Christine Loh led this shift, emphasizing loyal and orderly intentions. Chief Executive Tung Chee Hwa proclaimed his support of a group emphasizing Hong Kong’s 

‘‘core values’’ of human rights, freedom, rule of law and democracy, and the Secretary for Constitutional Affairs wrote an op-ed article underlining that point. The 

central government indicated its intention to resume consultations with all parties. 

Hong Kong’s Chief Secretary Donald Tsang, the government’s most important official after the Chief Executive, said that eventual democracy was ‘‘inevitable.’’ Public 

opinion polls show disillusionment with confrontational attitudes on both sides. 

These are auspicious developments. To retrieve the situation, however, much 

more will be needed. The demonstration on July 1 will have to be orderly. Democratic activists are talking about turning the demonstration into a ‘‘celebration’’ in 

order to show the central government their sincerity. 

That puts the ball in Beijing’s court. The keys will be Beijing’s reactions to the 

upcoming July 1 demonstration/celebration and to what now seems likely to be a 

near-sweep by pro-democracy candidates of the September legislative Council elections. If Beijing reacts with threats and further restrictions on future democracy, 

the situation will polarize quickly. Even to stabilize the situation, Beijing will have 

to move from consultations to concrete compromises. 

If Beijing wants real consultation and compromise, there is plenty of room. The 

committee that chooses the Chief Executive could be greatly broadened. The 30 

functional constituencies could be greatly broadened. Beijing could proclaim a schedule for additional direct elections to replace some of the functional constituencies. 

A simple statement by a top leader that affirms appreciation for Hong Kong’s contributions to China and promises progress toward universal suffrage would markedly alter the tone of discussions. 

Some principles for U.S. policy 

When we react to actions by the Chinese central government that potentially 

damage Hong Kong, it is not in our interest to take measures that do additional 

damage. 

Nothing will serve the enemies of Hong Kong democracy better than a situation 

where they can credibly paint the controversy as a Chinese-American confrontation 

rather than a negotiation with the citizens of Hong Kong. 

Speaking out clearly and constructively may do some good. Chinese leaders need 

to focus on this before the central government paints itself a corner. 

This is one of those frustrating situations where our positive leverage is limited 

and the risk of unintended collateral damage is high. I can offer you no assurances 

that if we play our hand well the outcome will be good. I can offer you considerable 

assurances that if we overplay our hand the outcome will be poor. 

Perhaps the most frustrating thing for those here who would like to support democracy in Hong Kong is this: Democracy will come to Hong Kong only when the 

central government is comfortable with it. Fortunately such comfort is not a farfetched scenario. Contrary to a widely held view in the West, Chinese leaders are 

not ideologically opposed to democracy in Hong Kong. The Basic Law, which explicitly sets the eventual goal of full suffrage, was written exclusively by the Chinese 

government. It was not a negotiated compromise with foreigners. President Jiang 

Zemin promised democracy at the 1997 handover. Premier Wen stated on April 28, 

2004, three days after the disappointing Standing Committee ruling, that the goal 

is still universal suffrage for Hong Kong.15 Chinese leaders are nervous about 

change, and they scare easily when they see demonstrations, but they are not ideologically opposed to free elections in Hong Kong. They will go for whatever works, 

but they want to be shown step by step that it works. 

What I have written about our options is no counsel of impotence or despair. On 

the one hand, if the central government messes up its relationship with Hong Kong, 

then, without any actions whatsoever on our part, the economic and political costs 

to China will be so great as to dwarf any imaginable sanctions by us. A return to 

24

dealing with Hong Kong through threats and flotillas would be the ultimate selfsanctioning policy. 

On the other hand, an optimist can hope for progress because both Hong Kong 

and China have enormously intelligent people who want to avoid making a mess. 

At the moment, each party is again taking constructive steps and averting confrontation. Again, Mr. Chairman, I can offer no assurances that Beijing will proceed 

from proffered consultations to wise compromises, but so far June has been a good 

month and we would be wise to smile upon the constructive steps of all parties. 

As Hong Kong confronts these controversies, it is worth remembering that the 

freedoms that have so far been preserved are precious. This small part of China remains a place of freedom of speech, freedom of the press, freedom of religion, freedom of movement, freedom of demonstration, British law, capitalism, and one of the 

world’s largest trading powers. It is not a democracy, but it is a free society with 

gradually increasing elements of democracy that never existed until China demanded Hong Kong back. Who could have imagined in October of 1982 that this 

would be the outcome of China’s demand for return of Hong Kong?

Mr. LEACH. I want to thank you for that very thoughtful testimony. 

Mr. Manikas. 

STATEMENT OF PETER M. MANIKAS, SENIOR ASSOCIATE AND 

DIRECTOR OF ASIA PROGRAMS; NATIONAL DEMOCRATIC INSTITUTE FOR INTERNATIONAL AFFAIRS 

Mr. MANIKAS. Thank you very much, Mr. Chairman. Because Dr. 

Overholt provided such a good backdrop, I think, to the current political situation——

Mr. LEACH. Can you hold on for 1 second? Why don’t you bring 

the microphone a little bit closer? I apologize, we just apparently 

have one today. 

Mr. MANIKAS. That is quite all right. Can you hear me? 

Mr. LEACH. Yes. 

Mr. MANIKAS. Because Dr. Overholt provided such a good backdrop to the current political situation in Hong Kong I will not only 

summarize my written testimony, but I will also summarize my 

oral testimony. There is so much of what Dr. Overholt said with 

which I agree, but I would like to highlight a few other points. 

Well, there doesn’t really seem to be a dispute over whether or 

not eventually universal suffrage could occur; there is certainly a 

dispute over the pace of democratic development in Hong Kong. 

And it is becoming an increasingly tense and acute dispute. 

A lot of people are expressing discontent over the pace of democratization, and a recent poll in Hong Kong showed that 52 percent 

of the people of Hong Kong were dissatisfied with the pace of democratization. Again, although there is no time line, there is certainly an expectation—there was an expectation, until the recent 

decision of the Standing Committee—that the Chief Executive 

could be elected by 2007 and the legislature by 2008. Clearly those 

expectations no longer exist after the Standing Committee’s decision. But nevertheless, I think people still want to move forward 

and do what they can to expedite the democratization process. 

In addition to that debate over the pace of democratization, recent events surrounding the election, I think, require a certain degree of attention. The area of concern is not just democratization 

but it is also the nature of what is going on specific to the upcoming legislative elections. 

One area of particular concern is freedom of expression. In recent 

weeks, we have seen the intimidation of public figures who have 

25

expressed their political opinions in Hong Kong’s news media. And 

in at least three cases, radio talk show hosts have resigned because 

of political harassment. There have also been reports of pro-democracy legislators being intimidated. 

This is important, I think, because never before in Hong Kong 

has the integrity of the electoral process ever been questioned. But 

election-related misconduct is becoming an issue in the current context. There have even been reports of voter intimidation and false 

voter registration. The Hong Kong Human Rights Monitor has 

called for international monitors to observe the September elections. 

Hong Kong officials, I think, have actually responded pretty well 

to this, and they have called for an end to any conduct that threatens democratic practices. But it is nevertheless important for the 

international community to follow this situation pretty carefully. 

In regard to the future of democratic development in Hong Kong, 

there is one ongoing process now. The Hong Kong governmentsponsored public consultation process that I think holds some 

promise. These consultations are a series of public forums that are 

being conducted now, and they are going to continue until August 

31st. Their purpose is to solicit public comment under various reform issues such as the composition of the legislative council and 

the 800-member election committee that selects the Chief Executive. 

The consultation process is now providing an opportunity for 

public participation and representation in government. Whether 

these consultations will be effective is still an open question. 

One of the criticisms has been that the public appearing at public forums has been permitted to speak only very briefly, and sometimes only for 3 minutes. But nevertheless, it is a step in the right 

direction, and it holds some promise. 

Some pro-democracy advocates, particularly the party leaders, 

have chosen to participate in that consultation process, but others 

have not. The reality is that in Hong Kong the pro-democracy 

forces, are not really unified in their approach to political change. 

Many of them now—and it has certainly become apparent over recent weeks—are reaching out to mainland Chinese officials. And in 

response, Chief Executive Tung Chee Hwa is starting a series of 

meetings with pro-democracy advocates which is supposed to commence on June 17th and last over a number of weeks. A lot of 

these pro-democracy advocates, certainly the people that we have 

been working with closely, are somewhat optimistic, I think, about 

this, and they want it to lead to direct dialogue with the central 

government. 

Reconciliation, I think, is really very important to the people that 

we have been working with. They all understand that this is only 

going to evolve in a positive way if there can be some accommodation made to the concerns of the central government in Beijing. 

They want that reconciliation to take place, and that is their real 

challenge. They have to find a way to have that reconciliation while 

still accelerating the pace of democratization and keeping to a time 

table that—while it may not be 2007 and 2008—will at least not 

be 30 years away. 

26

Thank you very much, Mr. Chairman, and I am glad to answer 

any questions when the panel is completed. Thank you. 

[The prepared statement of Mr. Manikas follows:]

PREPARED STATEMENT OF PETER M. MANIKAS, SENIOR ASSOCIATE AND DIRECTOR OF

ASIA PROGRAMS; NATIONAL DEMOCRATIC INSTITUTE FOR INTERNATIONAL AFFAIRS

INTRODUCTION

I would like to thank the House International Relations Committee, Subcommittee on Asia and the Pacific for inviting me to testify today. NDI has been 

operating in Hong Kong since 1997. We have issued periodic reports on political developments and we have worked with all of Hong Kong’s political parties in helping 

them develop the capacity to operate in a competitive electoral environment. 

This hearing is timely, as we approach the one-year anniversary of Hong Kong’s 

massive July 1, 2003 rally which generated considerable enthusiasm for democratization. 

Polls indicate that Hong Kong people are increasingly dissatisfied with the pace 

of democratic development. The percentage of dissatisfied people has steadily grown 

over the last eight months. In October of last year, Hong Kong University’s (‘‘HKU’’) 

Public Opinion Programme (‘‘POP’’) conducted a poll which showed 42.2% of respondents were dissatisfied while 22.4% were satisfied with the pace of democratic 

development in Hong Kong. A follow-up poll in January of this year showed 46.7% 

dissatisfaction versus 20.1% satisfaction. And the dissatisfaction figures continue to 

rise while the percentage of satisfied people remains relatively stable. Results from 

HKU POP’s recent poll in April show that 51.8% of respondents are dissatisfied 

with the pace of democratic development in Hong Kong while only 21.7% are satisfied. 

The Basic Law, Hong Kong’s ‘‘mini-constitution,’’ does not provide a time frame 

for universal suffrage. What it states is that universal suffrage is the ‘‘ultimate aim’’ 

of the Basic Law. Article 45 of the Basic Law states, ‘‘The ultimate aim is the selection of the Chief Executive by universal suffrage.’’ Article 68 contains similar language for electing members of the Legislative Council (‘‘LegCo’’). Many pro-democracy advocates hoped that following the ten-year transition period laid out in the 

Basic Law, universal suffrage would apply to the 2007 Chief Executive election and 

to the 2008 LegCo election for all LegCo seats. 

This hope faded when, on April 26, 2004, after months of unofficial statements, 

the Standing Committee of the National People’s Congress (‘‘SCNPC’’) issued an interpretation on the Basic Law, making three points. First, the SCNPC interpretation ruled out the application of universal suffrage for the 2007 Chief Executive 

election. Second, the SCNPC also ruled out universal suffrage for electing all members of the LegCo in the 2008 election. Third, the interpretation declares that the 

LegCo’s one-to-one ratio of functional constituency representatives (who are not 

elected through direct general elections) to directly elected legislators must remain 

intact. The SCNPC’s statement reiterates that the ‘‘final goal’’ of the current process 

is selecting the Chief Executive (after nomination by a nominating committee) and 

LegCo members through general elections. As in the Basic Law, no timeline is attached to this goal. The prospects for when Hong Kong will enjoy universal suffrage 

are therefore uncertain. 

‘‘POST-REVERSION’’ ELECTION FRAMEWORK

Currently, candidates for Hong Kong’s Chief Executive position are selected and 

voted on by an 800-member Election Committee composed of prominent citizens 

from four sectors which represent industry and business; professional groups; social 

services and labor; and government. Each sector has 200 Committee members. Corporations in their respective sectors elect members to the Election Committee. This 

system for electing the Chief Executive is laid out in Annex I of the Basic Law, and 

will continue to be in effect for the 2007 Chief Executive election, as the SCNPC 

decreed in its April 26 interpretation. Therefore, the region’s political and economic 

elites will retain control of the process for electing Hong Kong’s top post ten years 

after the reversion to Chinese sovereignty. 

Annex II of the Basic Law establishes the electoral framework for the upcoming 

September 2004 LegCo election. In accordance with the Basic Law, 30 of 60 legislators will be directly elected in this year’s LegCo election (an increase from 24 in the 

last election), while the other 30 seats are reserved for representatives of functional 

constituencies. Functional constituencies are composed of individuals and corporate 

bodies representing various business and professional groups, such as financial servVerDate Mar 21 2002 15:13 Aug 23, 2004 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6621 F:\WORK\AP\062304\94507.000 HINTREL1 PsN: SHIRL
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ices, agriculture and fisheries, labor, health services, information technology, textiles and the garment industry. They represent powerful business and industrial 

sectors in Hong Kong. By setting aside half of the LegCo seats for these groups, representation of their interests is guaranteed in the Hong Kong government. As a result, these various business and industry sectors are particularly influential in the 

territory’s governance. While the September LegCo election is the last to be covered 

by the Basic Law in its current form, the SCNPC has officially rejected the possibility of universal suffrage for all LegCo positions in the 2008 election, requiring 

functional constituency representatives to maintain half the seats in the LegCo for 

the term starting in 2008. 

INTERPRETING THE BASIC LAW

The interpretation of the Basic Law by the SCNPC has raised concerns regarding 

process and jurisdictional scope. On April 15, Chief Executive Tung Chee-hwa reported his assessment of Hong Kong’s constitutional reform needs to the SCNPC, 

particularly whether to amend the Basic Law on methods for selecting the Chief Executive in 2007 and the LegCo in 2008. Tung outlined nine conditions for electoral 

reform. However, this report was not expected until later in April, leaving many 

people surprised by its premature release. With the announcement of his report, 

Tung bypassed the Hong Kong government’s own Taskforce on constitutional reform. The SCNPC then issued its interpretation in response to Tung’s report 

In addition, Article 2 of the Basic Law states, ‘‘The National People’s Congress 

authorizes the Hong Kong Special Administrative Region to exercise a high degree 

of autonomy and enjoy executive, legislative and independent judicial power, including that of final adjudication, in accordance with the provisions of this Law.’’ The 

Article 45 Concern Group, a group of prominent Hong Kong lawyers, issued a report 

on April 21 asserting that the SCNPC’s decisions regarding the procedures for the 

2007 Chief Executive election and the 2008 LegCo election were beyond its scope 

of power as afforded by the Basic Law. They contend that the SCNPC’s power is 

to determine whether there is a need to amend the election methods, not to determine the actual methodology and timing. Article 17 of the Basic Law states that 

the SCNPC ‘‘may return the law in question but shall not amend it.’’ In their report, 

the Article 45 Concern Group argues, ‘‘[W]hat the Standing Committee is required 

to determine is simply whether there is a need to amend the method for selecting 

the Chief Executive or for forming the Legislative Council, not anything else and 

in particular not what amendments to make or not to make.’’

Articles 45 and 68, in describing the methods of selecting the Chief Executive and 

forming the LegCo respectively, both say the methods ‘‘shall be specified in light of 

the actual situation in the Hong Kong Special Administrative Region and in accordance with the principle of gradual and orderly progress,’’ with the ultimate aim to 

be universal suffrage in both cases. It is this provision in both articles of the Basic 

Law that the SCNPC highlights in its April 26 interpretation as the guiding rationale for its decision to not allow universal suffrage in the 2007 and 2008 elections. 

The SCNPC proclaims in its interpretation, ‘‘[V]arious social circles in Hong Kong 

currently still have considerable differences about methods for selecting the Chief 

Executive and for forming the Legislative Council after 2007, and no broad consensus has been reached yet. Under such circumstances, conditions do not satisfy 

the general election of the Chief Executive . . . and the general election of all Legislative Council members.’’

However, the Article 45 Concern Group maintains that Annexes I and II of the 

Basic Law, which outline the election methods for the Chief Executive and LegCo 

during the ten-year transition period, do not give the SCNPC power to specifically 

decide the election methods subsequent to the year 2007. Both annexes state that 

subsequent to 2007, amendments to the methods for electing the Chief Executive 

and forming the LegCo must be made within the Hong Kong Special Administrative 

Region, with the endorsement of a two-thirds majority of all the LegCo members 

and the consent of the Chief Executive, and then reported to the SCNPC. In the 

case of changing the election method for the Chief Executive, the SCNPC’s power 

is limited to approving the amendment. In the case of changing the formation method of the LegCo, the amendment is to be reported to the SCNPC for the record. 

PRE-ELECTION ENVIRONMENT

Public concerns are not limited to election-related matters, but also extend to 

other areas of democratic development as the LegCo election approaches. There is 

growing evidence, for example, that the space in which pro-democracy advocates can 

operate is shrinking. 

28

One area of particular concern is freedom of expression. Most recently, Anson 

Chan, Hong Kong’s highly respected former Chief Secretary, was criticized for an 

article she wrote for the June 14, 2004 issue of TIME Asia magazine, in which she 

expresses concerns about the state of affairs in Hong Kong. Other examples that 

draw attention to questions of freedom of expression, and may also involve press 

freedom issues, were the sudden departures in quick succession of three popular 

radio talk-show hosts in May. Outspoken pro-democracy radio talk show hosts Albert Cheng and Raymond Wong resigned from their respective shows after being 

victims of repeated harassment. Albert Cheng’s replacement, Allen Lee, also resigned. Lee is the former chairman of the Liberal Party who, in subsequent years 

to resigning as chair, became an outspoken democracy supporter as a Hong Kong 

Deputy to the NPC. 

There have also been reports of pro-democracy legislators being threatened, detailing increased incidents of harassment, vandalism, and personal physical attacks. 

Reports of harassment and violence towards public figures such as media personalities and legislators call into question security for not only these individuals, but 

also raises concerns for voters during the LegCo election in September. Election 

tampering has never been a significant concern in previous years, but it is becoming 

an issue as the elections approach. Rumors of voter intimidation began in mid-May 

and are continuing. Furthermore, reports have surfaced of false voter registration 

submissions, with some people already arrested for falsely registering voters. In 

light of these reports, the Hong Kong Human Rights Monitor has called upon international monitors to observe the September LegCo election. However, Hong Kong’s 

Electoral Affairs Commission (‘‘EAC’’) asserts that, as an independent and apolitical 

body, it is capable of organizing, supervising, and monitoring Hong Kong’s elections. 

Another sign that the space for Hong Kong’s liberal voices is constricting is that, 

in recent months, some businesses have withdrawn advertisements from one of 

Hong Kong’s most liberal newspapers, the Apple Daily. Though various government 

representatives, including Chief Executive Tung Chee-hwa, have called for an end 

to practices that threaten democratic practices, it will be important for the international community to follow the evolving situation. It is especially pertinent since 

signs have emerged recently that the controversial Article 23 security legislation 

may be put back on the table in the near future. 

LOOKING FORWARD

What is the future for democratic development in Hong Kong? One hopeful mechanism is the current Hong Kong government-sponsored public consultation on constitutional reform, which is now open and will remain so until August 31. ‘‘Constitutional reform’’ refers to the process of examining the Basic Law and determining 

what structural changes to governance might be made both within the constraints 

of the ‘‘mini-constitution’’ and outside of it. The consultation will address the make 

up of the 800 member Election Committee, such as a potential membership increase, and changes to the election sub-sectors and electoral base. It will also address the LegCo’s composition, such as an increase in the total number of seats, 

changing the electoral base of Functional Constituency seats, as well as rules for 

foreign nationals running for election. The possibility for these changes in the compositions and sizes of the Election Committee and the LegCo provides one area for 

potentially greater public participation and representation in government. 

Some pro-democracy advocates and party leaders have chosen to join the consultation process, while others will not take part. The reality is that Hong Kong’s prodemocracy forces are not unified in their approach to political change. For example, 

a group of 294 prominent pro-democracy academics and professionals started a campaign called the ‘‘Hong Kong Core Values Declaration’’ that they took to Chief Executive Tung Chee-hwa, which he endorsed. Dr. Alex Chan, Secretary of SynergyNet, 

a Hong Kong-based public policy think-tank, and a prominent academic who is also 

one of the 294 signatories of the Declaration, explains the campaign ‘‘as an attempt 

to bring a new and broader angle of thinking about the challenge that Hong Kong 

people are facing at this critical point of time, what constituted Hong Kong’s success 

in the past, and what we need to defend today so that Hong Kong can continue to 

thrive in future.’’

Other groups are reaching out to Mainland Chinese officials with conciliatory 

overtures. Pro-democracy advocates have offered to improve relations with the central government by toning down their rhetoric. In response, Chief Executive Tung 

Chee-hwa started a series of meetings with democrats on June 17, to last over a 

number of weeks. In a June 17 meeting with a veteran pro-democracy lawmaker, 

Tung promised to push for talks between Beijing and Hong Kong’s pro-democracy 

advocates, and to urge Beijing to allow pro-democracy advocates to travel to the 

29

mainland. Currently, many of Hong Kong’s pro-democracy advocates are not able to 

receive official permission to travel to the mainland. Some advocates hope that these 

talks will lead to direct dialogue between the democrats and Beijing leaders. Political observers are cautiously optimistic about these developments, as it will take 

some time to ascertain the actual effects of these efforts and see whether a future 

reconciliation can be realized. 

Regarding the future of universal suffrage in Hong Kong, polls indicate that the 

majority of people still support general direct elections for the 2007 Chief Executive 

and 2008 LegCo elections. An HKU–POP mid-May poll showed 66% support for a 

general election of all LegCo members in 2008, down from 82.8% support last July. 

The same poll also showed 54.7% support universal suffrage for the 2007 Chief Executive election, down from 81.6% last July. While Hong Kong people no longer expect to have universal suffrage in 2007 and 2008, they are willing to work on the 

constitutional reforms still available to them while hoping to preserve the rule of 

law and civil liberties. Furthermore, there are prominent people in Hong Kong who 

are focusing on universal suffrage in 2012 and governance reforms that would address some of the underlying issues of poor performance by the administration, including the Chief Executive’s cabinet system and various public consultation mechanisms. 

The September elections will be important to Hong Kong’s political development, 

as the number of directly elected legislators will increase from 24 to 30. The polls 

have the potential to send a clear message about the public’s support for advancing 

democracy or embracing the status quo. 

The July 1 rally turnout and the September LegCo election results will be interesting indicators for popular thinking on Hong Kong’s state of affairs beyond the 

political and economic elite whose actions the press constantly report. The international community should maintain an interest in Hong Kong’s political development, as the region’s future for democracy remains in question while the ‘‘one country, two systems’’ paradigm evolves. 

NDI Programs in Hong Kong 

Since 1997, NDI has been conducting a series of study missions to Hong Kong to 

consider the development of the Hong Kong SAR’s ‘‘post-reversion’’ election framework, the status of autonomy, rule of law and civil liberties under Chinese sovereignty, and the prospects for democratization beyond the 10-year transition period 

set forth in the Basic Law. As part of this program, NDI has met extensively with 

Hong Kong government officials, political party leaders, election administrators, 

community and human rights activists, legal and academic experts and representatives of the business community. 

NDI has published an ongoing series, entitled ‘‘The Promise of Democratization 

in Hong Kong,’’ that assesses the prospects for the development of a democratic electoral framework and identifies the obstacles that impede full democratization in 

Hong Kong. In October 2002, NDI collaborated with a Hong Kong-based think tank 

to produce a comprehensive joint publication on the Accountability System and its 

implications for democratization in Hong Kong. The report assessed what the Accountability System means for executive-led government in Hong Kong, concluding 

with recommendations for a best practice ministerial model in the HKSAR. 

NDI works with political parties and civil society organizations to encourage public discussion and debate on political reform. The Institute shares information with 

and provides technical assistance to Hong Kong political parties and civil society organizations seeking to increase their ability to increase citizen participation in the 

SAR’s political life. 

In 2002 NDI began helping Hong Kong’s political parties, which have little experience in electoral politics, by conducting two multi-party workshops that, for the first 

time, brought together all of the Hong Kong SAR’s major parties to discuss the political environment and the internal structure of the parties. 

NDI expanded its efforts in February 2003. The Institute provided direct technical 

assistance through individual consultations with party leadership and training 

workshops for party members and staff. The programs included half-day consultations on party strategy and full-day skills training workshops that ranged from public speaking to message development to fundraising based on the expressed needs 

of the particular group. NDI has held several follow-up rounds of political party consultations and workshops to help the parties prepare for District Council election 

that took place in 2003 and the upcoming Legislative Council election this September. 

In June 2003, NDI began to support the work of SynergyNet, a Hong Kong-based 

public policy think tank, to conduct a Hong Kong governance review project. The 

project combined extensive research and a forum to both determine and publicize 

30

the views of Hong Kong residents and legislators towards several aspects of governance in the HKSAR. Also, NDI initiated work with Hong Kong University’s Political 

Opinion Programme (POP) in early 2004 to assist Hong Kong’s political parties in 

determining public perceptions about them. 

ADDENDUM I

Legislative Council: Changes in Composition 

Term 

Beginning Total Members 

Members Elected 

by Election 

Committee 

Members Elected 

by Functional 

Constituencies 

Members Elected 

by Direct General 

Elections 

1998 60 10 30 20

2000 60 6 30 24

2004 60 – 30 30

2008 60 – 30 30

Mr. LEACH. Thank you Mr. Manikas. If you could pass that down 

to Ms. Hung. And let me say that the microphone is principally for 

the recorder, so if I can ask you to speak up, it would be helpful. 

Ms. Hung. 

STATEMENT OF VERON HUNG, JSD, PH.D., ASSOCIATE, 

CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE 

Ms. HUNG. Thank you. 

Today I will focus on two issues, first the prospects of democratization in Hong Kong beyond the 10-year transition period set 

forth in the Basic Law. Second, whether the United States should 

change its policies toward Hong Kong. For my discussion of recent 

developments in Hong Kong and their impact, please refer to my 

written testimony. 

The first is, prospects of democratization in Hong Kong. After 

Beijing made the decision on April 26th to rule out universal suffrage in 2007 and 2008, it is clear that the earliest possible time 

to have universal suffrage in Hong Kong is 2012. But, according to 

the April 26th decision, methods for electing the Chief Executive in 

2007 and legislators in 2008 could be more democratic than the 

current mechanism. The prospects of having universal suffrage in 

Hong Kong in the near future and the degree of democracy the city 

can enjoy in years 2007 and 2008 will hinge on whether Chinese 

leaders can dispel the fear of democratic development in Hong 

Kong. 

The Chinese Communist Party fears that democratization in 

Hong Kong will affect the Party’s control over Hong Kong and 

would have spill-over effects in China. Beijing’s fear is so enormous 

that it blurs Chinese leaders’ vision, causing them to take measures that are disproportionate to the actual situation in Hong 

Kong. 

Take the April 26th decision as an example. Before it was made, 

polls already showed that the public support for universal suffrage 

in the year 2007 and 2008 had already dropped from over 80 percent last July to about 50 percent. More and more Hong Kong people have faced the political reality that Beijing would not approve 

full democracy in the near future. 

31

Beijing should be pleased to see this change in Hong Kong and 

could very well have decided to leave the entire matter to the city, 

because given such changing attitudes in society, it would be extremely unlikely that any ‘‘universal suffrage by 2007’’ proposal 

could win the votes of 2⁄3 of Hong Kong legislators. Even if this 

might happen, the proposal could not be ultimately adopted without meeting two other legal requirements; that is, approval by 

Chief Executive Tung Chee Hwa, Beijing’s man, and by Beijing 

itself. 

To dispel Chinese leaders’ fear of democratic development in 

Hong Kong, pro-democracy advocates in the city must establish a 

dialogue with Beijing to work out their differences as soon as possible. Developments over the past 10 days have been very encouraging. Both Beijing and democrats have softened their tone and expressed interest in meeting with each other. 

Last Friday, a successful meeting between democrats and Mr. 

Tung Chee Hwa as well as Mr. Tung’s unconditional pledge to help 

some democrats regain access to the mainland marked significant 

progress. In fact, a few hours ago, the Hong Kong legislature just 

passed a motion tabled by Mr. Martin Lee, former Chairman of the 

Democratic Party in Hong Kong, which urged Hong Kong people to 

work with the central government to ensure the successful of ‘‘one 

country, two systems’’ in Hong Kong. 

This shows that these steps might pave the way for constructive 

dialogue between the pro-democracy camp and Beijing. Such dialogue would help them develop mutual trust, which is crucial for 

democratization of Hong Kong and successful implementation of 

the ‘‘one country, two systems’’ principle. 

The next issue I want to address is United States policy toward 

Hong Kong. Recent developments in Hong Kong have led some critics to suggest that the President should exercise his power under 

the U.S.-Hong Kong Policy Act to change the United States policy 

toward Hong Kong. According to the act, if the President, after consulting with the Congress, finds that Hong Kong is not sufficiently 

autonomous to justify the special treatment it enjoys under the act, 

the President may issue an Executive Order to suspend any of 

these treatments. In my opinion, even as a person from Hong 

Kong, I urge and I would suggest that the United States should not 

take this step, for four reasons. 

First, it is premature to find that Hong Kong is not sufficiently 

autonomous. Although recent developments such as the interpretation of the Basic Law and the April 26th ruling have raised grave 

concerns about the implementation of ‘‘one country, two systems,’’ 

there is no solid evidence to show that they have negated the high 

degree of autonomy exemplified in many other aspects of government in Hong Kong. 

In the recent U.S.-Hong Kong Policy Act Report, the State Department assesses developments in Hong Kong from last April to 

the time before the Basic Law was interpreted. The State Department rates highly the implementation of ‘‘one country, two systems’’ in Hong Kong. 

Moreover, the interpretation of the Basic Law and April 26th ruling were mainly made as a result of Beijing’s misjudgment of the 

actual situation in Hong Kong. They do not necessarily show BeiVerDate Mar 21 2002 15:13 Aug 23, 2004 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6601 F:\WORK\AP\062304\94507.000 HINTREL1 PsN: SHIRL
32

jing’s intent to breach its promise of implementing ‘‘one country, 

two systems’’ in Hong Kong. Had Beijing had such intent, it could 

have done so earlier. Instead, the first 61⁄2 post-reversion years saw 

Hong Kong maintain a high degree of autonomy. And this achievement was widely recognized by the international community, including the United States. 

Beijing’s judgment of the actual situation in Hong Kong would 

improve after its meeting with democrats in Hong Kong. The 

United States should welcome this progress and must not change 

its stance prematurely. 

My second reason, any changes would undermine Hong Kong 

confidence and prosperity. Some supporters of Hong Kong suggest 

that changes in the United States policy will have no punitive impact on Hong Kong but will merely serve as a clear message to 

China that the United States has given up hope of ‘‘one country, 

two systems.’’ This argument is flawed. 

Such a message will go beyond Chinese leaders to reach foreign 

investors. The message itself will severely damage Hong Kong’s 

confidence and prosperity, which the United States pledges in the 

Hong Kong Policy Act to play an active role in maintaining. Hong 

Kong people need encouragement, but not punishment. 

The third reason, any changes could hinder United States efforts 

in promoting political and legal reform in China. The United States 

Government and NGOs have actively supported political and legal 

reforms in programs in China. Any changes to United States policy 

toward Hong Kong could escalate U.S.-China tensions. This would 

make a resumption of the U.S.-China human rights dialogue more 

unlikely and would also provoke China to terminate other technical 

assistance projects jointly organized by Americans and Chinese. 

The final reason, any changes could damage the economic interests of the United States in Hong Kong and the country’s security 

interests in Asia. Changes in the U.S.-Hong Kong policy could affect American businesses operating in and with Hong Kong. Hong 

Kong is ranked second among the top 10 countries or cities with 

which the United States has a trade surplus. More than 1,100 

American firms operate in Hong Kong with more than $38 billion 

invested. 

Any changes to United States policy toward Hong Kong could 

also undermine the security interests of the United States in Asia. 

These changes might breed anti-American sentiment in Hong Kong 

and mainland China. This could weaken Beijing’s interest in employing more political and economic leverage to persuade North 

Korea to dismantle its nuclear weapons and ballistic missile programs. 

For these four reasons, I urge Congress not to consider any 

changes to the United States policy toward Hong Kong as authorized under the U.S.-Hong Kong Policy Act. Thank you very much. 

[The prepared statement of Ms. Hung follows:]

PREPARED STATEMENT OF VERON HUNG, JSD, PH.D., ASSOCIATE, CARNEGIE

ENDOWMENT FOR INTERNATIONAL PEACE

SUMMARY

In the seventh year after Hong Kong’s reversion to China, the former British colony experienced several challenges that have generated widespread concerns regardVerDate Mar 21 2002 15:13 Aug 23, 2004 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 F:\WORK\AP\062304\94507.000 HINTREL1 PsN: SHIRL
33

ing the implementation of ‘‘one country, two systems’’. Yet, recent steps taken by 

Beijing and pro-democracy advocates in Hong Kong show their strong interest in developing constructive dialogue to mend their differences. Such dialogue would help 

develop mutual trust, which is crucial for democratic development in Hong Kong 

and the successful implementation of the ‘‘one country, two systems’’ principle. 

The United States should welcome this progress. Any changes to the U.S. policy 

towards Hong Kong as stated under the U.S.-Hong Kong Policy Act are, therefore, 

premature. In addition, they could undermine Hong Kong’s confidence and prosperity that the United States has committed to play an active role in maintaining, 

hinder the U.S. efforts in promoting political and legal reforms in China, and damage the economic interests of the United States in Hong Kong and the country’s security interests in Asia. 

INTRODUCTION

During the first few months of the seventh year after Hong Kong’s reversion, Beijing, to the great relief of Hong Kong’s population and to the satisfaction of the 

international community, did not respond negatively to last July’s 500,000-strong 

protest. Polls taken after the protest demonstrate that over 80 percent of respondents called for universal suffrage of Hong Kong’s chief executive in 2007 and all legislators in 2008, the earliest allowed under the Basic Law, Hong Kong’s mini-constitution. Believing that such strong demand for universal suffrage was fueled primarily by public dissatisfaction with Hong Kong’s economic difficulties, Beijing facilitated economic growth by allowing more mainland Chinese to visit the city and 

granting Hong Kong businesses special trade benefits. Hong Kong’s economy quickly 

revived. The population’s confidence in the central government grew. 

This rosy picture turned bleak in the remaining months. The landslide victory of 

pro-democracy candidates in district level elections held in November 2003 and an 

unexpectedly large demonstration of almost 100,000 on New Year’s Day made Beijing realize that economic recovery did not dampen the public’s desire for universal 

suffrage. The central government shifted to take a heavy-handed approach to handle 

the situation. The following months saw Hong Kong evolve through a series of challenges that has aroused widespread concerns about the implementation of ‘‘one 

country, two systems’’. 

This testimony highlights these challenges and their impact on the implementation of the ‘‘one country, two systems’’ principle in Hong Kong, analyzes the prospects of democratization beyond the 10-year transition period set forth in the Basic 

Law, and discusses whether the United States should change its policies towards 

Hong Kong. 

I. Challenges and Their Impact 

Hong Kong experienced three major challenges during the last few months of the 

seventh post-handover year. 

A. The Interpretation of the Basic Law 

In early April 2004, the Standing Committee of China’s National People’s Congress (‘‘NPC’’) interpreted two provisions of the Basic Law’s annexes. One provision—paragraph 7 of Annex I—concerns the electoral method of Hong Kong’s chief 

executive. It states that ‘‘if there is a need’’ to amend the electoral method of the 

chief executives for the terms ‘‘subsequent to the year 2007’’, any amendment must 

be made with the endorsement of a two-thirds majority of Hong Kong’s legislature 

and consent of the chief executive. The amendment must also be reported to the 

Standing Committee of the NPC ‘‘for approval.’’ The other provision—part III of 

Annex II—concerns the electoral method of Hong Kong’s legislators and uses similar 

expressions except that any amendment to the electoral method must be reported 

to the NPC Standing Committee ‘‘for the record.’’

Before the interpretation was issued, the phrases ‘‘subsequent to the year 2007’’, 

‘‘for the record’’, and ‘‘if there is a need’’ had generated heated debates. Pro-democracy advocates, the Hong Kong government and two mainland drafters of the Basic 

Law opined that ‘‘subsequent to the year 2007’’ includes year 2007, but some mainland experts and pro-Beijing figures in Hong Kong disagreed. The NPC Standing 

Committee decided that the phrase includes year 2007. This interpretation is welcome. 

As regards the phrase ‘‘for the record’’, there was an opinion that the Basic Law 

itself provides a clear answer. Article 17(2) states that all laws—which, pro-democracy advocates argued, include electoral laws—enacted by Hong Kong’s legislature 

must be reported to the NPC Standing Committee ‘‘for the record’’ and that ‘‘the 

reporting for record shall not affect the entry into force of such laws.’’ However, according to Article 17(3), the Standing Committee can reject any law passed by Hong 

34

Kong if it violates those provisions of the Basic Law concerning affairs within the 

responsibility of the central government or the relationship between the central government and Hong Kong. Any rejected laws shall immediately become invalid but 

the invalidation shall not have retroactive effect, unless stated otherwise in Hong 

Kong’s laws. 

This opinion was wrong, according to Qiao Xiaoyang, Deputy Secretary-General 

of the NPC Standing Committee, who was responsible for answering questions concerning the interpretation of the Basic Law. Mr. Qiao stated that Article 17 addresses the issue of reporting Hong Kong’s local laws as a matter of record but part III 

of Annex II concerns ‘‘legislation on the constitutional level’’ and, therefore, ‘‘reporting as a matter of record here is different from reporting as a matter of record in 

Article 17.’’ In other words, Mr. Qiao continued,

‘‘the entire amendment process [provided under part III of Annex II] will take 

effect only after it has been reported to the NPC Standing Committee as a matter of record in accordance with the law. This interpretation fully shows that 

the central authorities have the power to decide on the development of Hong 

Kong’s political structure from beginning to end. This conforms to the Basic 

Law.’’

The absence of a subject in the phrase ‘‘if there is a need’’ sparked some controversies about who has the power to decide whether a need exists. The pro-democracy force in Hong Kong suggested that the absence of a subject in the phrase 

meant that an amendment to the method for electing the chief executive or legislators could be initiated in Hong Kong and should, if endorsed by two-thirds of all 

the members of the local legislature and approved by the chief executive, be passed 

on to Beijing ‘‘for approval’’ or ‘‘for the record.’’ Perceiving such interpretation as denying the central government’s power to decide on the development of Hong Kong’s 

political structure, the NPC Standing Committee interpreted the phrase ‘‘if there is 

a need’’ to mean that Hong Kong’s chief executive must submit a report to the 

Standing Committee if an amendment is needed, and the Standing Committee shall 

decide whether or not there is indeed such a need. Mr. Qiao explained that as the 

chief executive represents the entire city, his report ‘‘should represent the views of 

various circles, sectors, and strata in Hong Kong.’’

Responses to Beijing’s interpretation of the Basic Law were mixed. Some legal experts found it ‘‘a mild interpretation’’ and necessary for clarifying the above ambiguities. Others, while acknowledging Beijing’s power to interpret the Basic Law, argued that Beijing should use this power sparingly and cautiously and the interpretation was unnecessary and put ‘‘one country, two systems’’ and Hong Kong’s high 

degree of autonomy at risk. Public confidence in the central government and Hong 

Kong government plummeted. Only 50 percent of 1,022 respondents in a poll taken 

after the incident said that they had confidence in the ‘‘one country, two systems’’ 

concept, compared to 57 percent recorded in an earlier poll. The percentages of respondents who said they had trust in the central government and in the Hong Kong 

government were 38 percent and 28 percent respectively, comparing to 43 percent 

and 34 percent in a previous poll. 

B. The April 26 Decision 

Following the interpretation of the Basic Law, Chief Executive Tung Chee-hwa 

submitted a report to the NPC Standing Committee. He recommended changes to 

the method for electing the chief executive and legislators in and after 2007, but 

also listed stringent conditions for such a change. 

On April 26, 2004, the NPC Standing Committee adopted a decision to rule out 

universal suffrage of Hong Kong’s leader in 2007 and all legislators in 2008. It also 

ruled that the ratio of legislators directly elected by geographical constituencies to 

those elected by professional and business groups called functional constituencies 

shall remain to be one to one. Yet, the Standing Committee decided that other 

changes to existing electoral methods are possible so long as they are consistent 

with the principle of proceeding in a ‘‘gradual and orderly’’ manner, as laid down 

in the Basic Law. Current Chief Executive Tung Chee-hwa was chosen by an 800-

member committee. In September 2004, half of 60 legislators will be directly elected, 

while the other half will be returned by functional constituencies. 

Beijing said that the April 26 decision marked a ‘‘new starting point’’, not the end, 

of democratic development in Hong Kong. Critics were furious and some called it 

‘‘a naked use of power with no legal basis.’’ The media lamented April 26, 2004 as 

‘‘a sad day for China.’’

35

C. The Resignation of Three Talk-Show Hosts 

In May, three outspoken radio talk-show hosts resigned, alleging explicitly or implicitly that Beijing pressured or threatened them to quit. Although the evidence is 

elusive, six out of 10 people surveyed believed that political pressure had induced 

these broadcasters’ resignations. 

Overall, these three incidents have presented challenges to the autonomy, rule of 

law, and civil liberties in Hong Kong. Worries about erosion of these values have 

mounted. Public confidence in the implementation of ‘‘one country, two systems’’ has 

dropped. In a poll, two-thirds of the respondents said that the political atmosphere 

was worsening. Over half opined that the central government was overly involved 

in Hong Kong. More than 200 professionals and scholars signed a statement, declaring that they were ‘‘greatly disturbed’’ by the increasing erosion of Hong Kong’s core 

values, which, according to their definition, include, inter alia, human rights, the 

rule of law, and the upholding of professionalism. 

II. Prospects of Democratization beyond the Ten-Year Transitional Period 

The April 26 decision makes it clear that the earliest possible time to have universal suffrage of Hong Kong’s Chief Executive and all legislators is 2012. Nevertheless, methods for electing the Chief Executive in 2007 and legislators in 2008 could 

be more democratic than the current mechanism. The prospects of having universal 

suffrage in Hong Kong in the near future and the degree of democracy the city can 

enjoy in 2007 and 2008 will hinge on whether Chinese leaders can dispel their fear 

of democratic development in Hong Kong. 

The Chinese Communist Party fears that democratization in Hong Kong would affect the party’s control over Hong Kong and would have spillover effects in China, 

which would, in turn, undermine the party’s governance in the country. Such fear 

also explains Beijing’s resistance to testing universal suffrage in Hong Kong even 

though the city satisfies the condition of adequate education level as mentioned by 

Premier Wen Jiabao during his interview with the Western media in late 2003. Mr. 

Wen explained that, due to the population’s inadequate education level, China can 

only have direct elections in villages, introduce suffrage for the election of people’s 

deputies at the level of townships and counties, and practice indirect elections for 

the leadership of provinces, autonomous regions, municipalities, and central authorities. 

Beijing’s fear of democratic development in Hong Kong is enormous. This is reflected in the high price that Beijing was willing to pay when it interpreted the 

Basic Law and issued the April 26 ruling. Chinese leaders knew very well that their 

actions would cause a major blow to public confidence in Hong Kong, draw condemnations from the international community, and tarnish the image of ‘‘one country, two systems’’ so severely that Taiwanese would find peaceful reunification 

under this formula untenable. In fact, even though the majority of Hong Kong people oppose independence for Taiwan, they have lost so much faith in the ‘‘one country, two systems’’ model that approximately 37.6 percent of 1,027 respondents in a 

poll said the model would not be suitable for Taiwan. 

Such enormous fear also blurs Chinese leaders’ vision, causing them to take measures that are disproportional to the actual situation in Hong Kong. Take the April 

26 decision as an example. Before it was made, polls showed that public support 

for universal suffrage in 2007 and 2008 had dropped from over 80 percent last July 

to about 50 percent. A growing number of Hong Kong people had faced the political 

reality that Beijing would not approve full democracy in the near future. The drop 

in support for universal suffrage in those two years was most obvious after Beijing 

interpreted the Basic Law. Pragmatic politicians and scholars had also begun proposing alternative reform plans. Some suggested, for example, that the size of a 

committee that is responsible for electing Hong Kong’s chief executive should be expanded from 800 members to at least two thousands. 

Beijing should be pleased to see these changing attitudes in Hong Kong society 

and could, therefore, have decided to leave the entire electoral reform matter to the 

city. Beijing could have felt assured that given these changing attitudes, it would 

be extremely unlikely that any ‘‘universal suffrage by 2007’’ proposal would win the 

votes of two-thirds of Hong Kong legislators. Even if this might happen, the proposal could not be ultimately adopted without approval from Chief Executive Tung 

Chee-hwa, Beijing’s man, and Beijing itself. 

Beijing’s failure to assess the actual situation in Hong Kong also shows that Mr. 

Tung as well as pro-Beijing advisers and Chinese officials in Hong Kong have not 

fulfilled their role in keeping Beijing fully informed. Their inability to understand 

the public also explained their failure to predict a series of events happened in Hong 

Kong. They underestimated the size of the demonstrations held on July 1, 2003 and 

January 1, 2004. They did not expect the landslide victory of pro-democracy canVerDate Mar 21 2002 15:13 Aug 23, 2004 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6621 F:\WORK\AP\062304\94507.000 HINTREL1 PsN: SHIRL
36

didates in district level elections held in November 2003. They mistakenly believed 

that economic benefits would dampen the public’s desire for full democracy. 

To dispel Chinese leaders’ enormous fear of democratic development in Hong 

Kong, pro-democracy advocates in the city must establish a dialogue with these 

leaders to work out their differences with no further delay. Developments over the 

past ten days have been encouraging. Apparently driven by poll results that showed 

the public’s strong request for a more moderate approach in dealing with Beijing, 

democrats softened their tone on political issues and expressed interest in meeting 

with Chinese leaders. Beijing has given positive responses. 

Last Friday’s successful meeting between democrats and Mr. Tung as well as Mr. 

Tung’s unconditional pledge to help some democrats regain access to the mainland 

marked a significant progress. This may pave way for constructive dialogue between 

the pro-democracy camp and Beijing. The dialogue would help them develop mutual 

trust, which is crucial for democratization in Hong Kong and the successful implementation of the ‘‘one country, two systems’’ principle. 

III. U.S. Policies towards Hong Kong 

The series of challenges that Hong Kong has faced over the past several months 

has raised doubts in the international community including the United States about 

the autonomous status of the territory. There have been suggestions that the President should exercise his power under the U.S.-Hong Kong Policy Act to change the 

U.S. policy towards Hong Kong. 

Under this act, the United States offers Hong Kong treatment different from that 

accorded to mainland China. This treatment covers a wide range of areas including 

export controls, customs, air services, as well as cultural and educational exchanges. 

Should the President, after consulting with Congress, find that Hong Kong is ‘‘not 

sufficiently autonomous’’ to justify this special treatment, he may issue an Executive 

order to suspend any of these policies. 

The United States should not make any changes to the U.S. policy towards Hong 

Kong as stated under the U.S.-Hong Kong Policy Act for four reasons:

• It is premature to decide that Hong Kong is ‘‘not sufficiently autonomous’’. 

Although the three incidents described above have raised grave concerns 

about the implementation of ‘‘one country, two systems’’ in the city, there is 

no solid evidence to show that they have negated the high degree of autonomy exemplified in many other aspects of governance in Hong Kong. In its 

recent U.S.-Hong Kong Policy Act Report, which assesses developments in 

Hong Kong spanning from last April to the time before the issuance of the 

interpretation of the Basic Law, the U.S. State Department rates highly the 

implementation of ‘‘one country, two systems’’ in the city. 

Moreover, the interpretation of the Basic Law and the April 26 ruling were 

mainly made as a result of Beijing’s misjudgment of the actual situation in 

Hong Kong. They do not necessarily show Beijing’s intent to breach its promise of implementing the ‘‘one country, two systems’’ principle. Had Beijing 

had such intent to breach the promise, it could have done so earlier. Instead, 

the first six and a half post-reversion years saw Hong Kong maintain a high 

degree of autonomy and this achievement was widely recognized by the international community including the United States. 

Beijing’s judgment of the actual situation in Hong Kong would improve 

after it meets with Hong Kong’s pro-democracy advocates. Their dialogue 

would also facilitate democratization in Hong Kong and the successful implementation of the ‘‘one country, two systems’’ principle. The United States 

should welcome this progress and must not change its stance prematurely.

• Any changes could undermine Hong Kong’s confidence and prosperity that the 

United States has committed to play an active role in maintaining. 

Under the U.S.-Hong Kong Policy Act 1992, the United States pledges to 

‘‘play an active role, before, on, and after July 1, 1997, in maintaining Hong 

Kong’s confidence and prosperity’’ and ‘‘Hong Kong’s role as an international 

financial center.’’ Some supporters of Hong Kong suggest that changes in the 

U.S. policy towards Hong Kong will have no punitive impact on Hong Kong, 

but will merely serve as a clear message to China that the United States has 

given up hope of ‘‘one country, two systems’’. This is not accurate. Such message will go beyond Chinese leaders to reach foreign investors. The message 

itself will severely damage Hong Kong’s confidence and prosperity that the 

United States has pledged to maintain. Hong Kong people need encouragement but not punishment.

• Any changes could hinder the U.S. efforts in promoting political and legal reforms in China. 

37

The governmental and non-governmental sectors in the United States have 

played an effective role in supporting political and legal reform programs in 

China. Any changes to U.S. policies towards Hong Kong would escalate U.S.-

China tensions. This would make the resumption of U.S.-China human rights 

dialogue more unlikely and might provoke China to terminate other technical 

assistance projects jointly organized by Americans and Chinese.

• Any changes could damage the economic interests of the United States in 

Hong Kong and the country’s security interests in Asia. 

Any changes to U.S. policies towards Hong Kong could also affect U.S. businesses operating in and with the city. Hong Kong is ranked second among 

the top ten countries/cities with which the United States has a trade surplus. 

As of April 2004, the year surplus was about US$2.3 billion. More than 1,100 

American firms operate in the city with more than US$ 38.5 billion invested. 

Any changes to U.S. policies towards Hong Kong could undermine the security interests of the United States. These changes might breed anti-American 

sentiments in Hong Kong, one of the most Westernized cities in Asia, as well 

as in mainland China. This could weaken Beijing’s interest in employing 

more political and economic leverage to persuade North Korea to dismantle 

its nuclear weapons and ballistic missile programs, upon which both U.S.-

China relations and security in Asia depend.

For these four reasons, I urge Congress not to consider any changes to the U.S. 

policy towards Hong Kong as authorized under the U.S.-Hong Kong Policy Act.

Mr. LEACH. Thank you all very much for your testimony. 

Let me begin by asking a question. Given that the basic framework that Beijing has accepted is eventual democracy, is it your belief that Beijing’s decisions relate exclusively to concerns about 

what is happening in Hong Kong? Do they relate more to what is 

happening potentially in Taipei, or do they relate more to fear of 

spill-over effects in other parts of China itself? Is there an interrelationship between the three, and if there is, which is the dominant? 

Dr. Overholt? 

Mr. OVERHOLT. I think, Mr. Chairman, that when they think 

about Hong Kong their focus is on Hong Kong but I think it is tremendously affected by the atmosphere and security concerns, the 

national unity concerns that are created by what is happening in 

Taiwan. That is just a pervasive influence on Chinese foreign policy. 

I don’t think that fear of a Hong Kong democracy as a precedent 

for mainland democracy is a major issue. A number of people, very 

senior in the Chinese government, privately express admiration for 

Taiwan’s democracy. There is absolutely no opposition in Beijing to 

democracy in Taiwan. It is not seen as a threat. The sovereignty 

issue is. These are different, even though some people try to 

conflate them. So even though alleged Beijing fear of the precedent 

has been kind of cliche in the west I don’t think that is a major 

concern. I think if it had been they wouldn’t have written eventually universal suffrage into the Basic Law. Nobody made them do 

that. 

Mr. MANIKAS. I think there is a tendency on the part of the Chinese officials to conflate the desire for accelerating democratic 

change with a challenge to the very authority of the central government. I think that is a mistaken view, but I think it is one that 

is sometimes apparent. 

Also, I think in our discussions with officials in Beijing, they repeatedly—and not in connection to Hong Kong, but more generally—are very concerned about the experience of the Soviet 

38

Union. They see any sort of uncontrolled change as potentially 

leading to an unraveling of the state. And so they are always looking for ways, I think, that they can proceed with reforms without 

it getting out of control. That is sort of a mental framework in 

which Hong Kong is viewed as well. 

Mr. LEACH. Ms. Hung? 

Ms. HUNG. There were some suggestions in Hong Kong that the 

reason why Beijing interpreted the Basic Law right after the Taiwan elections is that Beijing was very worried about whether a 

similar case would happen in Hong Kong. But I don’t believe that 

this is the reason. The real reason is as stated in my oral testimony 

and also written testimony, the fear on the part of Beijing leaders. 

They fear two things. Losing control of Hong Kong and spill-over 

effects in mainland China. 

The logic is like this: Actually if they are very serious about 

peaceful reunification with Taiwan, they should treat Hong Kong 

nicer, to set a very good example. However, they haven’t done that, 

even though they understand that that would actually scare the 

Taiwanese. The reason why they didn’t do that in Hong Kong is because they do not foresee peaceful reunification with Taiwan will 

happen immediately, whereas the threat of demonstration in Hong 

Kong to mainland China is, in Beijing’s opinion, more imminent. 

Mr. LEACH. One final question. Given the circumstances, certainly from the tenor of Dr. Overholt’s comments, what is your advice to Congress on how best to influence in a positive way events 

in Hong Kong. Are we wise to raise our voices loud and boisterously? Are we wise to take a lower key approach? Are we wise 

to look for a review of the Hong Kong circumstance in aggressive 

ways, or are we wiser to lay things forth in a more calm manner? 

Do you have any advice in this regard? 

Mr. OVERHOLT. I think the louder and more boisterous we are 

the more the enemies of democracy will be able to characterize this 

as an American/Chinese confrontation, and not as a——

Mr. LEACH. Would you call that the fourth confusion? 

Mr. OVERHOLT. That is definitely a fourth confusion. We need to 

support the democracy movement in Hong Kong which is very 

much trying to lower the tone, lower the decibel level, get Beijing 

comfortable with democracy. That is a very feasible goal. Even on 

April 29th, Premier Wen Jaibao recommitted to the idea of full universal suffrage eventually. What they want to see progress is step 

by step, the way they do their economics, the way they do their political reforms at home, so that these fears of things getting out of 

control don’t get invoked. 

We need to support what the democracy movement is doing and 

any loud, boisterous, threatening actions will undermine that. Action to change the status of Hong Kong in our laws is just going 

to add damage to whatever damage Beijing may be at risk of doing. 

So there are times for very strong action and very loud noise. If 

there is a threatened invasion of Taiwan, loud noise and strong actions may have the desired result. In this case, quiet, rational 

thinking is needed. That doesn’t mean that it is not a good idea to 

hold hearings to express views, to communicate very firmly in more 

quiet conversations to them what a big mistake we think they have 

39

made in some of these decisions. But we mustn’t add to the boisterousness of the situation. 

Mr. MANIKAS. It seems to me that there are three things that the 

United States Government can do. While I certainly agree that 

stridency is not wise, it seems to me very important, nevertheless, 

to insure the people of Hong Kong that the attention of the international community is on Hong Kong, particularly during the period of the upcoming elections. That people actually do, in fact, continue to care about the pace of democratization. 

The second matter is providing support to the democratic activists in Hong Kong, as has been done over the past several years. 

And thirdly, facilitating a direct dialogue between the democratic 

activists and the Chinese central authorities. One of the most striking features of Hong Kong policies is the lack of direct communication, wherein democratic activists are even denied access to the 

mainland. They can’t travel there to see their relatives. And there 

is really virtually no dialogue at all. 

So anything that can be done, I think, quietly to facilitate that 

kind of dialogue would be very helpful. 

Ms. HUNG. I think assistance from the United States can be divided into two different levels for consideration. One is the government and the other is the non-government sector. 

For the government, I assume it is better for the United States 

Government to adopt a low profile, while expressing concerns 

through diplomacy, private conversations. Right now the main concern among Chinese leaders is that they suspect pro-democracy advocates in Hong Kong are in some way associated or influenced by 

American government. So the more vocal American government 

tries to be, the more damage it could actually do to the pro-democracy advocates’ efforts. 

Regarding the non-governmental organizations, I believe that 

they can play a good role considering the prospect of having dialogue between pro-democracy camps in Hong Kong and Beijing. 

These pro-democracy advocates are not really familiar with how to 

deal with the Chinese government and how to establish negotiations with it. So I think that these non-governmental organizations 

can provide good advice and share useful experiences to advise 

them as to how to develop the dialogue and how to coordinate 

among themselves to conduct a very fruitful negotiation with 

China. 

Mr. LEACH. Thank you. 

Mr. Faleomavaega? 

Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. As follow up to 

the Chairman’s line of questioning, and listening also to Dr. 

Overholt’s earlier statement about being careful on our part, in our 

nation, where we don’t overreact. And I just want to share with the 

members of the panel, I think, two events of the past that have 

given classic examples of overreaction where it really caused some 

very serious repercussions, and the problems that have been, I 

think, totally impacting, not only the thinking of the leaders of Beijing, but even in our own country. 

I cite the Tiananmen Square as an overreaction, at least in our 

opinion, of the Chinese government to quell the demonstrations 

where obviously what happened, what it produced. And the overVerDate Mar 21 2002 15:13 Aug 23, 2004 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6601 F:\WORK\AP\062304\94507.000 HINTREL1 PsN: SHIRL
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reaction also where President Clinton has had to sent two battle 

groups to the Taiwan Straits because of what had happened. And 

I think what I am trying to share with the members of the panel 

here—you have got pro-democracy or pro-sovereignty advocates. 

And I think the situation in Taiwan does have very serious implications in what is happening in Hong Kong as well. 

The question here is how we are going to be addressing these elements within Hong Kong as to the developments happening out of 

Taiwan. As you know, recently, the President of Taiwan strongly 

advocated the idea to seek sovereignty and complete independence 

from Beijing and I think President Bush was very, very strong in 

his reaction that not only is it going to seriously affect the current 

relationship between our country and China, but the crisis that 

happened in the Taiwan Straits, as I remember—and I am sure the 

Chairman does—that was really a critical moment where it could 

have been—a press of a button at the wrong time in the wrong 

place—it is almost like here are the people of Taiwan and those are 

advocating sovereignty and causing a nation like China and our 

country to go to war. I think we are being a lot more serious in 

looking at the idea that there are those elements, whether it be in 

Taiwan or in Hong Kong, stirring up the pot, so to speak, and getting us involved in a very negative way rather than being constructive. 

And I want to ask the members of the panel if the movement in 

Hong Kong among its residents—is it really as strongly demonstrated by those people than by the people in Taiwan about getting more independence or eventual sovereignty and total independence from Beijing contradicting the entire policy that we have 

been living up with, with China for the past several years. Am I 

making myself clear on this? 

Mr. OVERHOLT. Yes. I think you are clear about the issue. In 

Hong Kong there simply is no substantial independence movement. 

There is exactly one legislator who has, on occasion, said things 

which might or might not be interpreted as supporting Taiwan 

independence, but not Hong Kong. 

The democracy movement in a sense has been absolutely in line 

with the rest of Hong Kong society in not questioning that Hong 

Kong is part of China. And that is one of the things that should 

make Beijing more comfortable with the idea that they can deal 

with these people. 

There have been some leaders of the democracy movement who 

made a career out of creating antagonism toward China and in 

many cases, gratuitous antagonism. For instance, coming here and 

telling people that they were likely to be assassinated or jailed 

right after July 1, 1997. That just created a lot of unnecessary ill 

will. But even that has toned down enormously since 1997. So Beijing should be very encouraged by the trend. 

And this month everybody is lining up to underline basic loyalty 

to the concept that Hong Kong is part of China. So it is just not 

an issue there. 

Mr. MANIKAS. I fully agree with that. In fact, the trends in Hong 

Kong and Taiwan are in the opposite direction. And what you have 

seen in Taiwan, I think, over the last several decades is gradual 

development of a very distinct Taiwanese identity. 

41

In Hong Kong many more people now identify with China than 

they did when it was a British colony. So in a sense, I think that 

should be somewhat edifying to the authorities in Beijing. They 

should feel much more comfortable with how things are developing 

politically. 

Ms. HUNG. I agree with the other two speakers. I just want to 

provide two pieces of information. While Hong Kong people, most 

of them, do not want to be independent. They did not want independence even at the time when the Sino-British Joint Declaration 

of 1884 was negotiated at the time when the future of Hong Kong 

was decided. 

At that time, some academics proposed that maybe Hong Kong 

could use or claim that it has the right to self-determination under 

international law to claim independence. But this remained an academic debate. That is all. No one was serious about this, because 

it is not practical. No one thought that was a practical solution, because Hong Kong people’s water and food supply is heavily dependent on mainland China. So it never, never occurred to Hong Kong 

people that we should be independent. 

Especially now, think about the economic situation in Hong 

Kong. Again, the Hong Kong economy is heavily dependent on the 

mainland. So, for that reason, it is totally groundless to say that 

Hong Kong people want to be independent. 

Another piece of information I want to provide is a recent poll 

in Hong Kong. Even though the majority of Hong Kong people oppose independence for Taiwan, they have lost so much faith in the 

‘‘one country, two systems’’ model that approximately 38 percent of 

1,027 respondents in the poll said the model would not be suitable 

for Taiwan. That is quite interesting. And you can also see how 

much damage has been done because of the recent developments. 

Mr. FALEOMAVAEGA. One of the arguments, Mr. Chairman, and 

I am sure you are aware of this, in fact. You mentioned that we 

have a $38 billion trade investment with Hong Kong and I am curious of the panel—how much investments go from Hong Kong into 

China? I am aware that despite all his rhetoric and the relations 

between Taiwan and Beijing and yet Taiwan, I think, has about 

$100 billion unofficial trade relationship with Beijing. 

So there are some contradictions here, and it is somewhat difficult for us sometimes to ascertain. But the bottom line is the resolution is being floated around that is, I think, somewhat critical of 

China toward the situation in Hong Kong—I want to ask the members of the panel, as my last question, if you think that resolution 

is in order, or should this be the way the Congress should be acting 

properly in terms of what is happening in Hong Kong? 

I get the impression that all of you would prefer that we ought 

to maintain the current situation without being full of what they 

say in the Hawaiian language is a lot of WaHa, which is hot air. 

Excuse the expression, Mr. Chairman. But at any rate, I just wanted to get the—am I correct that the overall view of the panel is 

that things are going pretty well, although it is not 100 percent 

perfect? But it is a lot better than it was before, and I just want 

to get a sense from the panelists if this resolution that we are 

going to be addressing—probably very soon—compliments what you 

42

are saying, or are we going to go in a different direction in that 

respect? 

Mr. MANIKAS. I am not sure that I can answer this directly, but 

I think that the vision we have that the government should take 

is somewhat nuanced. I mean, I think it would be a mistake to say 

that everything is fine and developing as we all would like. I think 

it is important to focus attention on Hong Kong and to acknowledge that this is a situation which the international community 

cares about, and we are watching the situation develop. 

If a resolution does that without being strident or threatening, 

such a resolution might be worthwhile. I think we all agree that 

stridency is something that we all want to avoid; we don’t want to 

make the situation worse. On the other hand, it seems to me that 

we do want to let people know that we care and we are not going 

to ignore how things develop. 

Mr. OVERHOLT. I think we have a clear consensus on the panel, 

and the way I would express it is some bad things have happened, 

and in facing those bad things we should do things that make the 

situation better for Hong Kong people, not worse. Changing the 

status of Hong Kong is just going to make things worse for Hong 

Kong people. 

Ms. HUNG. I always believe that we can take some positive measures. Think about, for example, that there has been some suggestion that some new political parties may be organized in Hong 

Kong by some professionals who support democracy but do not support radical approach. So these professionals are exploring means 

to establish their voice. But they do not have any experience in organizing political parties. 

So for that reason, I think non-governmental organizations from 

the United States or the international community may play a role 

by meeting with them, giving them some useful advice. And I think 

that actually would be more useful than seeking any confrontations 

with the Chinese government directly by Congress. 

Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. 

Mr. LEACH. Thank you. 

Well, let me thank you all for your fine testimony and thank you 

for making an effort to come today. We appreciate it. This is as reasoned a set of comments as I have heard on any subject in a long 

time. Thank you all. 

The Subcommittee is adjourned. 

[Whereupon, at 2:10 p.m., the Subcommittee was adjourned.] 

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