```

[Joint House and Senate Hearing, 111 Congress]
[From the U.S. Government Publishing Office]

 
                 PROSPECTS FOR DEMOCRACY IN HONG KONG:
              ASSESSING CHINA'S INTERNATIONAL COMMITMENTS
=======================================================================

                               ROUNDTABLE

                               before the

              CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION
                               __________

                             JULY 14, 2010
                               __________

 Printed for the use of the Congressional-Executive Commission on China

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

         Available via the World Wide Web: http://www.cecc.gov

                              __________

                        U.S. GOVERNMENT PRINTING OFFICE
57-903 PDF                      WASHINGTON: 2010
________________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing 
Office, http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 
202-512-1800, or 866-512-1800 (toll-free). E-mail, [email protected].  

                            C O N T E N T S

                              ----------                              
                                                                   Page
Opening statement of Douglas Grob, Cochairman's Senior Staff 
  Member, Congressional-Executive Commission on China............     1
Mann, Sharon, Senior Counsel, Congressional-Executive Commission 
  on China.......................................................     2
Martin, Michael F., Specialist in Asian Affairs, Congressional 
  Research Service...............................................     3
Keatley, Robert, Founder and Editor, the Hong Kong Journal, 
  Former Editor, the Wall Street Journal Asia, Wall Street 
  Journal Europe, and South China Morning Post...................     6
DeGolyer, Michael, Hong Kong Baptist University, Professor of 
  Government and International Studies and Director, the Hong 
  Kong Transition Project........................................     9
Bork, Ellen, Director, Democracy and Human Rights, Foreign Policy 
  Initiative.....................................................    12

                                APPENDIX
                          Prepared Statements

Keatley, Robert..................................................    26
DeGolyer, Michael................................................    27
Bork, Ellen......................................................    30

 PROSPECTS FOR DEMOCRACY IN HONG KONG: ASSESSING CHINA'S INTERNATIONAL 
                              COMMITMENTS

                              ----------                              

                        WEDNESDAY, JULY 14, 2010

                            Congressional-Executive
                                       Commission on China,
                                                    Washington, DC.
    The roundtable was convened, pursuant to notice, at 3:06 
p.m., in room 138, Dirksen Senate Office Building, Douglas Grob 
(Cochairman's Senior Staff Member) presiding.
    Also present: Sharon Mann, Senior Counsel.

 OPENING STATEMENT OF DOUGLAS GROB, COCHAIRMAN'S SENIOR STAFF 
      MEMBER, CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

    Mr. Grob. Welcome, ladies and gentlemen. Thank you very 
much for joining us here today.
    My name is Doug Grob, and I am Cochairman Sander Levin's 
Senior Staff Member on the staff of the Congressional-Executive 
Commission on China [CECC]. I would like to recognize, in the 
audience, Charlotte Oldham-Moore, Staff Director of the 
Commission. On behalf of Chairman Byron Dorgan and Cochairman 
Levin, we would like to welcome you to this Congressional-
Executive Commission on China roundtable on ``Prospects for 
Democracy in Hong Kong: Assessing China's International 
Commitments.''
    I apologize for the slight delay in getting started. We are 
awaiting our last speaker, but we will proceed now, 
nonetheless.
    Today we are going to be looking at prospects for democracy 
in Hong Kong. Hong Kong's basic freedoms, for the most part, 
have been maintained under the ``one country, two systems'' 
framework. In June of this year, Hong Kong took its first steps 
toward constitutional reform since the British handed the 
territory back to China in 1997.
    In this roundtable today we are going to examine these 
recent constitutional reforms, mainland China's engagement in 
Hong Kong, and how Hong Kong may contribute to the development 
of democracy and civil society in China. Perfect timing, Mr. 
Keatley. Thank you very much. We have only just gotten started. 
Thank you.
    And I would like to introduce my colleague, Sharon Mann, 
Senior Counsel on the Commission staff, for some introductory 
remarks.
    Sharon?

    STATEMENT OF SHARON MANN, SENIOR COUNSEL, CONGRESSIONAL-
                 EXECUTIVE COMMISSION ON CHINA

    Ms. Mann. First, I would like to welcome you to this 
roundtable on Hong Kong. Hong Kong is a place that is near and 
dear to many of us. I think there are a number of people here 
who spent a good deal of time there. It is also a very 
important platform for people who are interested in development 
of democracy, human rights, and rule of law in China.
    The only place in China to really enjoy freedom of the 
press, free speech, and freedom to organize and question your 
own government is Hong Kong. An example of this was when, in 
2003, half a million people in Hong Kong turned out when the 
government proposed legislation on national security, and the 
government pulled back the legislation. Also, every year on 
June 4, Hong Kong is the one place in China where there are 
commemorations. There is a peaceful demonstration commemorating 
the Tiananmen protest.
    So Hong Kong is a very important place, but the 
relationship between Hong Kong and China is a two-way street. I 
think it's very useful to keep an eye on development of 
democracy in Hong Kong and what that means for democratic 
development in China, and then what type of democracy in Hong 
Kong China will allow. I believe this is important not only for 
people who are interested in Hong Kong, but for anyone 
interested in China.
    Before I turn this over to our panelists, I wanted to give 
a special welcome to John Kamm, who is in the audience. He is 
the founder and head of a human rights organization called Dui 
Hua, which works on behalf of human rights defenders who have 
been imprisoned in China. John has very deep ties to Hong Kong. 
I'm hoping he'll be here for the Q&A and ask some very good 
questions and have excellent comments.
    Anyway, I'd like to turn it over to Michael Martin.
    Mr. Grob. Actually, I've got to do some introductions.
    Ms. Mann. Okay. Sorry.
    Mr. Grob. I have the privilege of introducing our speakers 
today. We have, to my left and in the order in which they will 
speak, Michael Martin, Specialist in Asian Affairs for the 
Congressional Research Service; to my immediate left, Robert 
Keatley, Founder and Editor of the Hong Kong Journal, and 
formerly an editor with the Wall Street Journal Asia, Wall 
Street Journal Europe, and South China Morning Post; to my 
right, Professor Michael DeGolyer of Hong Kong Baptist 
University, where he is Professor of Government and 
International Studies, and Director of the very important Hong 
Kong Transition Project; and finally, to my far right, Ellen 
Bork, Director of Democracy and Human Rights for the Foreign 
Policy Initiative.
    I'd like to ask our speakers to please limit your remarks 
to 7 to 10 minutes, if possible--and even if not possible--so 
that we can ensure that we have enough time for a vibrant and 
free-flowing question and answer session following our 
speakers' presentations. So at this time I'd like to turn the 
floor over to Michael Martin.

 STATEMENT OF MICHAEL F. MARTIN, SPECIALIST IN ASIAN AFFAIRS, 
                 CONGRESSIONAL RESEARCH SERVICE

    Mr. Martin. Okay. Well, thank you, Douglas and Sharon, for 
this invitation to speak today. I need to start with a couple 
of disclaimers. Although I am here as a staffer of the 
Congressional Research Service, my comments are not necessarily 
reflective of the official views of the Congressional Research 
Service, but they are my own.
    The second disclaimer is a slightly different one, which is 
to say I have a long--longer than I want to think about--
history back in Hong Kong, including working at Baptist 
University--back then Baptist College--where I met Michael 
DeGolyer.
    I worked for the Hong Kong Trade Development Council for 
four and a half years, spanning the Handover period. In 
addition, I married a woman from Hong Kong, and most of her 
immediate family still lives, resides, and works or studies in 
Hong Kong. So, Hong Kong is part of my life.
    So let me proceed, trying to be clear, concise, and quick, 
because I have a fair number of things that they asked me to 
cover in 7 to 10 minutes.
    Since I am here on behalf of the Congressional Research 
Service [CRS], or as part of CRS, I'm going to focus my 
comments particularly on congressional interests or concerns, 
so I'm not speaking on behalf of the Executive Branch, 
President Obama, the State Department, or any other aspect of 
the U.S. Government; they may speak for themselves when they 
choose to.
    I guess I'll start out with what is going to be not the 
best of jokes, but I'll say it anyway. Several of my friends 
from the Hong Kong Economic and Trade Office are here. Also, 
when I go to Hong Kong and speak to Hong Kong Government 
officials, I often tell them, be careful what you ask for from 
Congress. They often say, we don't get enough interest from 
Congress. I sometimes point out, getting more interest from 
Congress isn't necessarily to your advantage.
    But that having been said, I think the 1992 Hong Kong 
Policy Act still, to a great extent, reflects congressional 
concerns, interests and preferences about the situation in Hong 
Kong. In particular, let me point out certain aspects of that 
law, which are still U.S. law, and certain aspects that aren't 
in that law.
    In particular, it starts out with a recognition of what for 
shorthand I'll call the Joint Declaration--I'll explain that in 
a minute--which guarantees a high degree of autonomy, with the 
exceptions of defense and foreign affairs, for Hong Kong. 
Second, it recognizes ``one country, two systems'' which you've 
heard about earlier and the notion of the preservation of the 
Hong Kong lifestyle for 50 years, or up until 2047.
    There's an explicit statement of supporting democratization 
in Hong Kong--and it's called ``democratization''--recognition 
of the desire to safeguard human rights in Hong Kong and for 
the residents of Hong Kong; a desire to maintain strong 
economic, cultural, and other ties with Hong Kong, including 
the continuation of any existing international agreements, and 
the ability to forge new bilateral or multilateral agreements 
in the future.
    Then the last thing is a requirement for an annual report 
to Congress about the situation in Hong Kong, a separate 
report. That only went through the year 2000. It was continued 
year by year in appropriations bills. It lapsed a couple of 
times, mostly because it just didn't get noticed that the 
continuation of the report wasn't included in the language.
    But I point that out just to indicate that there has been a 
desire for Congress to keep a specific eye on what's going on 
in Hong Kong every single year and a separate accounting of 
what the situation is like.
    Let me get back to that Joint Declaration that was 
recognized in the Hong Kong Policy Act of 1992. Its official 
name and why it is called the Joint Declaration is--and I'll 
have to put my glasses on--``The 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.'' Thus, you can see why we call 
it the Joint Declaration.
    What's interesting about that statement--and I was there at 
the time that this was being negotiated--the Hong Kong people 
were not direct parties in the negotiation of their future 
fate. It was strictly between the British Government and the 
Chinese Government on what was going to happen to Hong Kong.
    It was concluded and signed on December 19, 1984. For 
today's presentation, the key points are threefold. First, it 
calls on China to create something called the Basic Law for the 
Hong Kong Special Administrative Region [SAR]. Second, it 
explicitly states that there's going to be preservation of the 
political and economic rights that currently exist in Hong 
Kong. Third, it creates something called the Chief Executive to 
replace the governor, and continues the legislature of Hong 
Kong, and explicitly states--this is the Joint Declaration--
that the former, that is the Chief Executive, is to be 
``appointed by the Central People's Government after 
consultation or elections in Hong Kong, whereas, the 
legislature shall be constituted by elections.'' That's the 
full extent of what it says.
    I want to point out that neither of those provisions say 
anything about democracy or universal suffrage, so there's 
nothing in the Joint Declaration that advocated democracy or 
universal suffrage in Hong Kong. That only came about when the 
Basic Law was passed on December 4, 1990, by the National 
People's Congress, a legislature of China.
    We call it the Basic Law. Here's a copy right here. 
Everybody carries one, right? The ``Basic Law of the Hong Kong 
Special Administrative Region of the People's Republic of 
China.'' It is sometimes referred to as Hong Kong's mini-
constitution. Maybe in some of the presentations today they 
will refer to these issues as constitutional issues, although 
some lawyers that I've spoken to said technically this isn't a 
constitution, so that term shouldn't be used. But I'm not a 
lawyer, I'm an economist.
    Looking at the Basic Law, the key points that I want to 
highlight are, first, it creates effectively an executive-led 
government. If you will, in some ways it inverts the political 
system we have here in the United States. The Chief Executive 
has much of the power, including the power to introduce 
legislation before the Legislative Council. The Legislative 
Council's ability to introduce legislation is quite limited. 
For example, it can introduce legislation that involves 
budgetary matters on its own.
    Once introduced, the Legco--that's shorthand for 
Legislative Council--can either approve or disapprove. If they 
disapprove, they can go back to the Chief Executive for 
modification and come back. If it's disapproved a second time, 
then it initiates a governmental crisis that could lead to the 
removal of the Chief Executive. But basically, put in 
shorthand, the Legco vetoes proposed legislation coming from 
the executive, not the other way around. Now, that's an over-
characterization, but I don't have a lot of time.
    In the Basic Law, there's something called Annex I, and it 
specifies the means of selecting the Chief Executive. It 
creates the election committee, a committee of 800 people that 
are appointed by the Chinese Government. It is composed of four 
equal groups representing important sectors of Hong Kong 
society. In rough terms: 200 members from the business 
community; 200 members from what they call the professionals; 
200 from labor, social services, religious groups, and other 
groups considered that sort; and then 200 members that, for the 
most part, are Hong Kong or Chinese Government officials.
    This committee, according to the Basic Law, makes 
recommendations on who should be the Chief Executive, but the 
official 
appointment of the Chief Executive of Hong Kong is done by the 
Chinese Government.
    Annex II specifies the means of selecting the Legco 
members. It basically stipulates a gradual change to a 50/50 
split between what are called geographical and functional 
constituencies. Geographical, as the name implies, says that 
members of Legco will be elected according to districts, 
geographical districts. Functional constituencies, the other 
half of the members, currently 60 members, or 30 people, 
represent what are considered key social sectors of economic 
sectors in the economy.
    So you have labor union representatives, you have 
representatives from religious groups, you have representatives 
from different groups, and they are selected by that 
subcommunity in ways that I don't have time to get into. This 
is in many ways an adaptation of the system for the Legco that 
existed under British rule.
    The first references to the concept of universal suffrage 
appears in the Basic Law, Article 45, which covers the Chief 
Executive. It says, ``The ultimate aim is the selection of the 
Chief Executive by universal suffrage upon nomination by a 
broadly representative nominating committee in accordance with 
democratic procedures.'' By the way, that's the first time you 
see the word ``democratic'' anywhere.
    Article 68, which covers Legco, says, ``The ultimate aim is 
the election of all members of the Legislative Council by 
universal suffrage.'' However, both of those articles contain 
provisions that indicate that this change in procedure is to be 
made ``in accordance with principles of gradual and orderly 
progress,'' which has been in many ways underlying the 
political dynamic in Hong Kong, in my estimation. Also, the 
Basic Law stipulates that the first possible date for the 
selection of either by universal suffrage was after the year 
2007.
    Now, in the roughly negative 30 seconds that I have left, 
let me talk briefly about the attempts at political reforms 
that have taken place in Hong Kong over the last few years. In 
2005, Chief Executive Donald Tsang Yam-kuen introduced a 
proposal to Legco. It was voted down.
    Its two main components were expanding the selection 
committee beyond the current 800 members to 1,600, as well as 
adding new seats to the legislative counsel with an equal split 
between geographical and functional constituencies. This was 
considered unacceptable by enough members of the Legislative 
Council that it failed.
    After that, there was discussion about possible further 
reform in time for the 2008 elections, but in December 2007 the 
Standing Committee of the Chinese Government issued a 
declaration indicating that that was not to be allowed, that 
the soonest date would be 2012, ending the debate and the 
discussion in Hong Kong about possible election reforms for 
2008.
    One last thing. So where do we stand in 2010? In 2010, 
after a long discussion, there were new proposals that were put 
forward. In many ways they looked very similar to the proposals 
in 2005, and according to some estimates were headed to the 
same fate: failure.
    However, there was a last-minute compromise between the 
Democratic Party and the Chinese Government directly that made 
it possible for those reforms to be approved, the two motions 
which are very sparse. I'll talk about that more later if we 
have an opportunity.
    So we did get changes. We'll talk about that a bit more. 
However, an outcome of that was an alliance among different 
political parties that were supportive of democracy appears to 
be split in different camps. One of the major political 
parties, the Democratic Party, appears to be also split 
internally with infighting. Two names, Szeto Wah and Martin 
Lee, who are fairly well-known outside of Hong Kong and are 
members of the Democratic Party, although still friendly to 
each other, profoundly disagreed on this issue, and there's 
some discussion that Martin Lee may actually leave the 
Democratic Party because of their decision.
    With that, I'm out of time. I appreciate this opportunity.
    [The prepared statement of Mr. Martin appears in the 
appendix.]
    Mr. Grob. Thank you. Thank you, Mr. Martin.
    Now, Robert Keatley.

STATEMENT OF ROBERT KEATLEY, FOUNDER AND EDITOR, THE HONG KONG 
  JOURNAL, FORMER EDITOR, THE WALL STREET JOURNAL ASIA, WALL 
      STREET JOURNAL EUROPE, AND SOUTH CHINA MORNING POST

    Mr. Keatley. Thank you. I apologize for being late. Despite 
what it says plainly on my invitation, I had 3:30 fixed in my 
mind for no good reason.
    I'd like to try to give a brief overview of Hong Kong 
politics and why it matters to China, and why it should matter 
to us.
    As Michael has explained, Hong Kong has the ``one country, 
two systems'' policy, which means that Hong Kong is recognized 
as an integral part of China, but with generally separate 
civil, political, legal, and economic standards. Hong Kong 
people running Hong Kong with a degree of autonomy is the 
golden rule, with Beijing cited for foreign affairs and 
security.
    The ultimate goal is that local elections eventually will 
be by universal suffrage, but there is no official timeline 
yet. The lack of one is a major issue inside Hong Kong and has 
been for a couple of decades. Progress toward that goal has 
been limited, but there has been some. Beijing has said 
universal suffrage could be, but not necessarily will be, 
applied to the 2017 election of a new chief executive and to 
the 2020 election--10 years from now--of the legislature.
    The reality of this high degree of autonomy doesn't always 
match the theory, but in some ways this broad political outline 
could be considered fairly generous, considering that it comes 
from a Leninist state that has no tolerance for political 
disagreement and dissent.
    So why did Beijing do this? Given its enormous suspicions 
of, and frustration with, the Democrats and others in Hong 
Kong, why has it allowed this separate system to continue? Let 
me suggest a few reasons. In the beginning, Beijing almost 
certainly wanted to enhance its international reputation and 
prestige.
    By negotiating terms with London, organizing a lavish 
handover ceremony, and absorbing Hong Kong with no more than a 
token presence of the military--and the People's Liberation 
Army [PLA] has been largely kept out of sight ever since--China 
could call itself a nation willing and able to seek its 
objectives by normal diplomatic means. In reality, of course, 
it was an incredibly tough negotiator, with its officials 
seeing non-existent British conspiracies everywhere. They 
accused the British of trying to loot the Hong Kong treasury, 
plant political agents, and otherwise deny China its just 
desserts, just as in the 19th century.
    The handover ceremony was also a great domestic political 
event for China and for the Communist Party. It could, and did, 
take credit for retaining lost territory, which its 
predecessors could not do. The final ceremony, with a beaming 
Jiang Zemin taking charge as Prince Charles and the last 
British governor sailed away into a stormy night, was a 
brilliant propaganda event for the ruling party, partly because 
it was a bit humiliating for the British. Ever since, Beijing 
has taken credit for living up to the terms of the agreement 
and it is important that it be seen to be doing so, even if 
many people would argue about just how they've done it in many 
important details.
    There are three other reasons that Beijing often cites, 
too. The first, is economic. Hong Kong is no longer as crucial 
to the Chinese economy as it was a few decades ago when I first 
lived there. Deep into the 1970s, it was by far the main source 
of foreign exchange for China, which then had nothing like the 
$2.5 trillion in the bank that it has today.
    But Hong Kong can still teach much about management, 
logistics, finance, and so forth. For example, China is using 
the Hong Kong Stock Exchange to float initial public offerings 
[IPOs] in the international market, IPOs of Chinese companies. 
It is gradually letting the renminbi be used for international 
trade and settlements through Hong Kong-based financial 
institutions. That edges it slightly toward convertibility and 
gives some practical experience, but there's a long way to go.
    A Chinese Ambassador once told me that Hong Kong was safe 
as long as it could keep ahead of the mainland economics and 
set a positive example. Its exact role is changing over the 
years, but it remains important and Hong Kong is being tied 
ever closer to the mainland economy.
    Second is Taiwan. The ``one country, two systems'' policy 
was devised originally by Deng Xiaoping for Taiwan, not for 
Hong Kong. But Taiwan, for the most part, isn't really very 
interested and it doesn't want to join the mainland in any kind 
of variation on the Hong Kong system.
    But Beijing still hopes that success in Hong Kong will set 
a positive example that will influence Taiwan to some degree 
and speed reunification. What happens across the Strait 
directly between Beijing and Taipei is much more important, of 
course. But China hopes Hong Kong will have a positive 
influence and, perhaps more importantly, it knows that if 
things go seriously wrong in Hong Kong the negative impact on 
Taiwan would be enormous.
    Thus, over the past year there have been many direct links, 
new ones, between the Taiwan and Hong Kong Governments. There 
are several quasi-official agreements on trade, finance, 
travel, and so forth. Their officials travel back and forth, 
and I think Chief Executive Donald Tsang will probably call on 
Taipei by the end of the year. This all supports the mainland 
policy.
    Finally, there is politics. For the record, mainland 
spokesmen have said full democracy is good for Hong Kong. 
Further, they say Hong Kong needs a free society if it's to 
develop its economic potential to the limit. ``Democracy can 
best free human beings, and humans are the most important 
element of productivity.'' That's from Wang Jemin, vice dean of 
the Tsinghua University Law School who, more importantly, is a 
member of the Hong Kong Basic Law Committee under the Standing 
Committee of the National People's Congress, and is known as a 
chief theorist behind the mainland's policy toward Hong Kong. 
He also says Hong Kong will influence events, political events, 
inside China itself, but I wouldn't take that one too far.
    My main point is that Beijing has several good reasons for 
wanting to avoid any kind of social or political crisis in Hong 
Kong, and will work hard to prevent one. The 500,000-people 
demonstration of 2003 has already been mentioned and, as also 
mentioned, last month there was a political concession that 
allowed the latest election reform bill to pass the 
legislature. Most important is that it followed, for the first 
time, direct negotiations between mainland officials and Hong 
Kong democrats, the people China usually denounces as 
unpatriotic, working for foreigners, and so forth. How long and 
how deep the split in the democratic camp is, and how long it 
will last, I think, are open questions.
    As for U.S. interests, we also have an economic motive. 
Hong Kong's an important financial and commercial center and a 
base for corporate operations in China and across east Asia.
    There are about 1,400 American companies with offices in 
Hong Kong, and 900 or so have regional responsibilities. More 
than 60,000 American citizens live in Hong Kong. U.S. exports 
to Hong Kong last year were $22 billion. Our investments there 
are about $40 billion. It's a free port, low-tax city with a 
reliable legal system based, like ours, on British common law.
    Beyond that, the U.S. Government has direct cooperation 
with the Hong Kong Government on issues like money laundering, 
counterterrorism, and port security. So the large economic and 
financial interests of all these will not go away.
    Finally, as a nation, we believe that more democracy is 
better than less democracy, so we have an interest, as 
explained already, in encouraging the development of a free 
political system in Hong Kong for its own sake. There's also 
the hope that Hong Kong will set a positive example for China 
regarding its own political system, free flow of information, 
legal standards, fighting corruption, and so forth.
    Needless to say, the current record on that, the current 
trends inside China, is not particularly encouraging. But time 
passes and things do change. The United States has an interest 
in change, so there's every reason to maintain a serious 
interest in Hong Kong's internal development, while avoiding 
the kind of heavy-handed meddling that could backfire.
    Thank you.
    [The prepared statement of Mr. Keatley appears in the 
appendix.]
    Mr. Grob. Thank you very much, Mr. Keatley.
    And now, Mr. DeGolyer.

 STATEMENT OF MICHAEL DeGOLYER, HONG KONG BAPTIST UNIVERSITY, 
PROFESSOR OF GOVERNMENT AND INTERNATIONAL STUDIES AND DIRECTOR, 
                THE HONG KONG TRANSITION PROJECT

    Mr. DeGolyer. In assessing the significance of these 
reforms just passed, I have three questions for you to 
consider: How often does China implement policies promoting 
democracy; how often do Chinese officials change policy after 
officials, including the vice president in charge of the 
portfolio, announce rejection of any changes; how often does 
the Chinese Government change policy after negotiations with 
those it deems hostile forces and subversive elements?
    The answers are: seldom, almost never, and never, before 
now. Never before has the central government negotiated with 
the Democratic Party of Hong Kong. That party is led by Albert 
Ho, a member of the group that organizes the annual 
commemorations of the Tiananmen massacre, and which demands an 
accounting of the same from the Communist Party of China.
    He, and other party members like Emily Lau, have long been 
banned from even traveling in mainland China, but now Beijing 
officials have met with him as equals across the negotiating 
table. We can conclude--on the basis something has happened 
that is totally unprecedented--that with the recent 
constitutional reforms in Hong Kong, something significant is 
up in China.
    The question is, what is up? How will it affect the Hong 
Kong-China relationship and how significant is it to China and 
to the rest of the world? First, in establishing the 
significance and meaning of these reforms, the central 
government has promised that direct elections for the chief 
executive may take place in 2017. They may take place for all 
legislative counsel seats in 2020.
    The reforms just passed make the fulfillment of at least 
the timeframe for these direct elections more likely. Of 
course, the details of precisely how nominations for chief 
executive will be done remain unclear. We also do not know how 
all members of Legco will be directly elected.
    But the fact is, China's richest city will take democratic 
steps forward in 2012 and will likely continue onward. Second 
in significance and meaning, these steps move beyond those 
stipulated in the Basic Law. As Michael Martin was saying, the 
Basic Law was the national implementation of an international 
agreement, the Sino-British Declaration of 1984.
    So this reform vote represents the first step beyond the 
bounds agreed in an international process. It is a purely local 
and national step forward in permitting greater democracy. It 
was not driven by international pressures or configured 
according to international binding agreements. It shows China 
today is willing to take unprecedented political steps and is 
willing to compromise with some social and political forces 
outside Communist political control.
    Third, the reforms for 2012 in Hong Kong also build on a 
district representation framework which was adopted by mainland 
cities starting in 2008; there was some precedent--elections--
in 2000 in Beijing. A number of the leading urban centers in 
China began to organize and hold district elections in that 
year, 2008, though in terms of contested open elections, these 
have far to go.
    These district elections and the powers given district 
counselors bear some similarity to Hong Kong's district council 
system, just as the Hong Kong village elections in the New 
Territories begun in 1926 and reformed in the 1950s seem to 
have influenced China's rural village elections, begun in 1982 
and reformed in 1998.
    The reforms of 2012 in Hong Kong, in turn, appear to have 
been influenced by mainland concepts of mixing indirect and 
direct election systems with controlled forms of nomination 
followed by direct election processes.
    We do not yet know how fully open the nomination processes 
for the added Hong Kong district council seats to Legco will 
be, and there will be 6 seats now out of a total of 70 seats in 
Legco from district councils, so that's a significant 
proportion.
    But in any case, the reforms represent a significant 
compromise at the highly constrained electorates of the 
existing functional constituency system, and they perhaps 
represent a way forward in 
either dramatically widening the electorates for all these 
seats or toward the replacement--of the current tiny 
franchises--with other forms of election. The possibility of a 
fully, directly elected legislature by 2020 cannot be simply 
dismissed out of hand anymore.
    Fourth, and most important for the significance of these 
reforms, district seats are directly elected with open 
nomination. Having a system of nomination by such directly 
elected members is a more open nomination system for candidates 
than presently exist in mainland China. Such a system of open 
nomination and direct election, followed by nomination by such 
electees for candidates to higher bodies, which are then voted 
on by all voters, would be a serious move forward in political 
reform of the Chinese system.
    As an SAR, Hong Kong technically comes above the provinces 
in the Chinese structure of government. These reforms may not 
have direct implications for provincial congresses. 
Nevertheless, odds are high that Hong Kong's election of a 
chief executive involving direct vote of residents after some 
more limited form of nomination 
committee is a model that at least some factions of the central 
government are willing to try at higher levels. This model 
potentially removes the barrier to greater democracy on the 
mainland posed by the present cadre's only nomination system.
    The reforms for 2012 and the promise of direct elections in 
2017 for chief executive, plus the district elections in urban 
areas of China in 2008 altogether indicate that the long-
stifled demand for political reform is being given substance 
and a timeframe for investment in at least one part of China. 
It is hard to imagine this step being an isolated and one-off 
move. It is more likely an indicator that resistance to 
political reform has weakened.
    Second, turning to the effects of the reform on the Hong 
Kong-mainland relations, in terms of the effects, it's quite 
clear that the lack of progress in changing Hong Kong's 
increasingly inadequately representative and accountable 
governance system was having a strong negative effect.
    In November 2009, according to Hong Kong Transition 
Project's survey, about two-thirds expressed satisfaction with 
the PRC Government's general handling of Hong Kong affairs. By 
May, satisfaction had dropped to 57 percent, but by mid-June, 
two weeks before the vote on the reform, it had fallen to 
barely a third satisfied, which is the lowest level that we had 
recorded since 1997.
    When asked directly, ``Are you currently satisfied or 
dissatisfied with the performance of the Chinese Government in 
handling Hong Kong's constitutional reform'' 49 percent 
expressed dissatisfaction; only 43 percent were satisfied. 
Among students, 3 out of 4 were dissatisfied on this issue. 
This represented, I think, a significant danger.
    In June, 74 percent of respondents agreed with the 
statement: ``Beijing must amend the reform proposal to make it 
more democratic,'' while just 11 percent disagreed. The focus 
had clearly shifted from the local to Beijing by June 2010.
    Only two amendments could create a majority supporting 
reform. One of those amendments was abolishing corporate voting 
in the functional constituencies, and the other was Beijing 
issuing a promise to abolish the functional constituencies 
altogether.
    Beijing officials also were assigned the highest degree of 
blame if the reform package failed. Nearly 3 in 10 assigned 
Beijing officials a great deal of blame, and majorities blamed 
Beijing officials and the Chief Executive for failure. No other 
party came even close in terms of blame.
    Beijing and the local government faced, just days before 
the vote, a crisis of governance, with 15 percent of the 
population, an even higher percentage of students, and 5 
percent of all men strongly supporting actions and protests, 
such as blockading government offices and hunger strikes. We 
expect those tensions to have cooled since the reform was 
agreed to, but we were also at the time indicating that if 
reforms were not agreed we could expect an outbreak of violence 
in Hong Kong for the first time in a very long time.
    The success of these reforms in Hong Kong will surely 
encourage reformers on the mainland. It should reinforce belief 
among central government officials that one effective way to 
handle restive urban populations is to begin a process of 
political reforms.
    Now, it may also stimulate conservatives to new levels of 
resistance, but clearly this vote in Hong Kong was a win for 
the reformers. It may also have some impact on the national 
party elections in 2012. Reformers favoring political change 
could gain after long conservative dominance. Conservatives 
certainly lost in Hong Kong.
    In terms of global significance, as with economic reforms, 
China insists it will choose its own timing and forge its own 
path of political reform. The economic collapses of the United 
States and other Anglo-American and European-influenced 
economic models in 2008-2009 have considerably raised 
confidence among Chinese cadres in their own economic model. 
They are also gaining confidence in their process of 
incremental experimental reform characterized as ``crossing the 
river by feeling the stones'' beneath one's feet. It's hard to 
argue that the Chinese process of economic reform has been a 
failure.
    Certainly there's room for improvement in democratic models 
and processes of democratization. The perceived sclerosis of 
the European model, stagnation of the Japanese model, 
incompetence of the Indian model, and the violence and 
increasing polarization of American democracy since 1963, as 
well as collapses of many post-colonial forms of democracy have 
convinced the Chinese that not only can they forge their way 
forward, they must.
    Now, Hong Kong is in a unique opportunity for the Chinese 
to build step-by-step on economic successes and on quasi-
Western, but indigenously influenced and developed political 
reforms toward their own practice of democracy. I think 
outsiders should approve and support Chinese leaders ``feeling 
the stones'' toward political reform and their own form of 
democracy rather than flinging stones at them because they are 
going, in their opinion, either too slowly or in a direction 
toward a model outsiders disapprove of or misunderstand.
    For those who got the forecast of China's economic 
development badly incorrect or who forecast the collapse or 
breakup of China back in the 1990s, or who said economic 
development would never, and could never, result in political 
change, the best policy after these reforms were approved might 
be to simply watch this space. Our current economic woes in the 
West give us ample grounds--and I find myself remarkably 
agreeing with George W. Bush here--to be a bit more humble in 
our foreign advice giving.
    Thank you.
    [The prepared statement of Mr. DeGolyer appears in the 
appendix.]
    Mr. Grob. Thank you very much, Mr. DeGolyer.
    And finally, I'd like to give the floor to Ellen Bork.

STATEMENT OF ELLEN BORK, DIRECTOR, DEMOCRACY AND HUMAN RIGHTS, 
                   FOREIGN POLICY INITIATIVE

    Ms. Bork. Thanks very much. It's nice to be here. It's 
great that the Commission is giving some attention to Hong Kong 
and that the community of people who care about Hong Kong is 
reconstituted here for a short time. I'm going to make a few 
points, without reading through everything, so that we can move 
into discussion.
    It won't surprise you necessarily to know that I take a 
more negative assessment of the reforms. I think they were so 
minuscule as to have had a really negligible effect, if any, on 
Hong Kong people's ability to govern themselves.
    I'm not going to go through the fine points, which Michael 
did so well, of the way the system works, but I'd just point 
out that the way the Legco functions with ``split voting'' and 
the disadvantage to pro-democracy legislation remains intact. I 
think it's laughable that the expansion of the committee to 
choose a chief executive from 800 to 1,200 is regarded as any 
kind of real step forward in an electorate the size of Hong 
Kong.
    It was interesting throughout the process that Hong Kong 
people grew less positive about the reform package, especially 
after the televised debate between Chief Executive Donald Tsang 
and Civic Party Legislator Audrey Eu. I think they grew to be 
more concerned about the vagueness and the lack of commitment, 
and that they were being asked to commit to something very 
modest without any expectation of future movement.
    I can see how someone might argue that any movement 
forward, especially given Beijing's intransigence on this, is 
positive. But I think the Hong Kong people's voice needs to be 
better heard. I think it was heard in the Bye elections, which 
unfortunately were portrayed as a failure for the democratic 
camp, whereas, in fact, against very harsh odds, they attempted 
to do something creative and to build a mandate, which in a 
sense they got.
    If there hadn't been a boycott by the Hong Kong Government, 
I think they would have gotten even more of one. But 500,000 
people came out voting for pro-democracy candidates. 
Considering what the system is now, I think that really 
shouldn't be discounted.
    But aside from the fine points of the legislation, I'd like 
to focus on two other negative effects that have come out of 
this that are not, strictly speaking, about the package itself. 
One, is this portrayal of the democratic camp as hardliners, 
extremists, and radicals. It used to be that it was very clear 
who was saying ``no,'' and that was Beijing and still is. It's 
a reflection of the position that democrats have been put in, 
that they are now being portrayed in this manner. That's 
extremely unfortunate. Frankly, a lot of people who are doing 
that should know better.
    Another bad outcome is the erosion of the ``one country, 
two systems'' principle, and the normalizing of Beijing's role, 
direct role, in determining the course of events there. 
Margaret Ng, the legislative councilor spoke very powerfully 
about this on the floor of the Legco. She said that `` `One 
country, two systems' is no longer a sustainable illusion'' 
after the meetings between Beijing representatives and members 
of the Democratic Party that Michael DeGolyer described.
    Again, this is a different interpretation of the import of 
those meetings. I would take a different view. One can ask, is 
it a good thing that those meetings between the Beijing side 
and the Democrats happened in the way they did, or does it 
reflect something else, or at least a change, a change in this 
notion of ``one country, two systems'' and who ought to be 
driving the process of Hong Kong's political development?
    Actually Beijing historically never took ``one country, two 
systems'' terribly seriously, and there's a lot of evidence to 
that effect in the historical record. But the United States and 
the United Kingdom did take this seriously and made this the 
cornerstone of our policy. We've clung to that, for good reason 
and for a very long time. If there's any one good thing that 
comes out of this episode with it is that the curtain has 
really been drawn further on Beijing's role and the failure of 
``one country, two systems.''
    We should now be looking at Hong Kong's democracy movement 
in a different way not through the lens of the Joint 
Declaration and the Basic Law, which served Beijing's purpose 
to limit democracy in Hong Kong. I think the analysis that 
Michael Martin gave was excellent, but the existence of those 
documents and the absence of a really clear democratic way 
forward in those documents in no way should deprive the Hong 
Kong people of their right to democracy.
    Thank you.
    [The prepared statement of Ms. Bork appears in the 
appendix.]
    Mr. Grob. Thank you very much, Ms. Bork.
    I'd like to thank all of our panelists for outstanding 
remarks and for staying within the requested time limit, 
because that enables us now to open the floor to questions and 
answers.
    I would just like to preface this part of the program by 
mentioning that we do have a transcriber present. We will be 
producing a published transcript, both of the panelists' 
presentations and the question and answer period. It will be 
available on our Web site, as is the case for all our 
roundtables and hearings.
    I would ask, if you do have a question, that you raise your 
hand, wait to be recognized, and please avail yourself of the 
microphone here to your left in the front. If you wish to 
identify yourself, please do so and your name will appear in 
the transcript. If you wish not to identify yourself, feel free 
not to identify yourself and your question will appear simply 
with the notation ``audience participant'' in the official 
transcript.
    I'd like now to turn the floor over to Sharon Mann for the 
first question.
    Ms. Mann. The first question is, what, if anything, should 
the U.S. Government or other governments be doing to encourage 
further democratization in Hong Kong? There's a certain risk 
that in any engagement in Hong Kong, or encouragement, is seen 
as interfering in Hong Kong's affairs or in China's affairs. 
With that in mind, there is some concern as to whether 
encouragement could backfire. But any thoughts as to how we can 
support movement in Hong Kong? That is for anybody on the 
panel.
    Mr. DeGolyer. I think one of the best ways is not 
necessarily a one-on-one kind of talks, like between Sino-U.S. 
discussions, but to try to encourage what you might say are 
workshops on various types of democracy--presidential systems, 
parliamentary type systems, the various experiences and 
problems that countries have had in reforming and improving 
their democratic systems.
    So a kind of roundtable process in which you got other 
countries involved, with different systems, in which the 
Chinese are also invited to participate and to interact might 
be a useful way forward because that way you don't have the 
sense of wagging your finger and preaching at them, but 
actually saying, this is the way we do it, and this is the way 
they do it, and there are different approaches that you can 
take, and here are some of the different ways that it has been 
done historically. I think that would be useful.
    Ms. Mann. Sort of soft diplomacy.
    Mr. DeGolyer. A soft diplomacy approach, yes.
    Ms. Bork. I would like to put in a plug for sort of more 
traditional diplomacy. I think interference is largely in the 
eye of the beholder, and that Hong Kong people wouldn't regard 
clear statements from the United States about what real 
democracy and democracy development entails as interference. 
That integrity is something that the United States is 
continuing to forfeit when it comes to Hong Kong, by not 
recognizing the difference between real and phony democracy.
    Mr. Keatley. Following up on Michael, I think a few years 
ago Christian Chung, who was then with the National Democratic 
Institute, ran workshops in Hong Kong for political parties, 
organizations, structure, all that, for all parties, open to 
everyone. I think she got denounced as being a CIA agent by 
some of the pro-Beijing parties, but eventually some of them 
came around and there was broader participation at the end than 
there was at the beginning.
    I think more of that would be good. Various kinds of 
exchanges would be good. Public statements from the United 
States would also be encouraging. It is not that the Hong Kong 
people find the United States meddling. Of course, it's the 
hyper-sensitive Beijing officials who get very upset, or 
pretend to be, whenever something is said about democracy in 
Hong Kong. But it doesn't mean we shouldn't, with caution, 
continue to be encouraging in every way we can. Thank you.
    Mr. Grob. Questions from the audience? [No response].
    Well, I will take this opportunity to ask a question. 
Professor DeGolyer, you mentioned conservative factions and 
other domestic political factions on the mainland and their 
attitudes toward political reform, generally speaking, and 
toward political reform in Hong Kong specifically. Do you have 
a sense of the alignment of positions on political reform in 
Hong Kong with positions on other issues? In other words, if 
you speak of conservative factions on the mainland, with what 
other positions on other types of political issues do they tend 
to be associated? That is, do those who hold a particular 
position vis-a-vis political reform in Hong Kong tend also to 
hold particular positions on other issues? Is there any 
clustering of political positions across issues?
    Mr. DeGolyer. I think the most interesting thing to point 
out is that the Government of China is a factionalized 
government. 
Before 2003, Hong Kong had been given over to the conservative 
element, the conservative faction. There was just a very minor 
contingent of folks from what we might characterize as the 
reformist faction, the more business-oriented modernization 
group, pushing modernization.
    The conservatives blew it because they were not expecting 
at all the massive turnout that showed up on July 1, 2003, when 
you have got over a half a million people marching in the 
streets. The government at that time, the conservative folks, 
were predicting 30,000 people would turn out. Christine Loh, 
who is a former legislator, now head of Civic Exchange--a very 
good think tank in Hong Kong--and I were discussing what we 
thought the turnout would be.
    We had agreed that it was going to be around, or perhaps 
more, than 300,000. In that case I got very angry because I 
missed it by a factor of two, whereas the guy who made the 
30,000 turnout forecast, well, I think I would have shot myself 
if I was supposed to be predicting things. What happened after 
that, was that there was a huge influx of the various groups 
and research arms and elements of the Chinese Government 
sending in people, and many of them are still there. They are 
not interfering in Hong Kong affairs.
    I mean, this is one way people see this, that there is a 
lot of these mainland officials going around asking questions, 
and they see that as interference. Actually, I think if you 
talk with these folks and pay attention to what they're asking, 
is they're interfering with each other. They're sending reports 
back to their various research groups, who in turn feed in to 
these different interest groups and factional groupings in the 
central government itself.
    So they no longer trust each other on Hong Kong and what's 
going on Hong Kong, or the best way to handle Hong Kong. In 
fact, I think the reform vote we just saw showed clearly that 
the conservatives had decided, well, we're not going to change 
anything.
    Then the story is, right up to the very top, that Hu Jintao 
himself intervened to force this compromise to accept the 
Democratic Party's proposal. If so, this would be entirely 
unprecedented that he would come off the fence. Hu Jintao has 
largely been on the fence in terms of the reform versus the 
conservatives. But coming down now on the side of the reformist 
is a very interesting development and something we definitely 
must watch in terms of what goes on in China in 2012, who 
becomes president, and how the factions line up in 2012.
    So I'm not saying that we can tell anything for sure now, 
but we know that something for sure is happening. Whether or 
not the conservatives will be able to recover from this or 
whether we actually do see something breaking out of the logjam 
that has been holding up reform for a very long time, well, 
that's the interesting thing to watch.
    Ms. Bork. Doug, if I could just join in with Michael's 
analysis and again ask whether the only interpretation of Hu 
Jintao's intervention in favor of what is really a minuscule 
change in the way Hong Kong is ruled means that this is a step 
forward or instead a management tactic, perhaps in connection 
with this issue of unrest or something else? Is this meaningful 
as a change of heart on Beijing's side or is it something else?
    Mr. DeGolyer. Very interesting questions. I think our 
survey, our data--and if you want to get a copy of this 
yourself, this is a report we put out on the 18th of June which 
was entitled, ``To The Brink: Rising Danger of Disruption in 
Hong Kong.'' This was based on a survey that we did in early 
June and released just five days before the vote. It's at 
HKTP.org. You can download it there from the report section.
    It showed very clearly that there was a rising possibility, 
particularly of students and unemployed young people, who--just 
like in the United States--have a much higher level of 
unemployment particularly than is normal, than we've seen in a 
very long time. They were particularly angry at the government 
and it looked as though we were heading for disruption, but the 
indicators were, from some of the conservative folks, that they 
believed that if there was trouble, they could crack down on it 
and actually turn public opinion in their favor. So they were, 
in a way, welcoming a confrontation. They were, in a sense, 
provoking a confrontation.
    So it seems the reformist folks did not want to have that 
kind of confrontation, perhaps for fear of the damage that 
would have, not just to their economic interests, but perhaps 
also to some of their political interests on the mainland.
    It seems as though people who have usually kept their head 
down stuck their head up and pushed this compromise, which, as 
I pointed out, is utterly unprecedented. It has never happened 
before. Now, in terms of whether or not this is a significant 
reform, the key thing is, the NPC--National People's Congress--
said you can't change the ratio between functional constituency 
and geographic constituency, directly elected and tiny 
franchise elected, from 50 percent to 50 percent. You can't 
change it.
    That was the grounds on which they refused to accept the 
Democrats' proposal, because the Democrats had proposed that 
what is now the five new seats, that while they want pretty 
open nominations, anybody who's got a substantial connection 
with the district councils can be nominated to run, and then 
everybody who does not currently have a functional constituency 
vote now gets to vote for these five candidates, or one of 
these five candidates, which means that technically the 
directly elected element is going to get closer to 40 versus 
30, rather than 35 versus 35.
    While that looks incremental, that also means that in 
future, in 2016 and 2017 when they go to the next level of 
reforms, the odds are much higher that, with the requirement 
for 60 percent, you have to have a 60-percent vote in favor of 
reform to pass Legco, and that's what failed in 2005. They just 
got it for the first time just a few weeks ago. But with more 
directly elected people, the odds are better that the next 
level of reforms will pass. It tilts. It kind of puts the 
finger on the scale.
    Now, whether you consider that minor or not, it depends on 
how many times, I guess, you weigh the finger on the scale. 
Every time they vote now there's going to be a finger on the 
scale. For the next four years, there are fingers on the scale. 
So that finger tilts things--toward greater democracy. It 
doesn't determine--it does not mean that they have achieved 
democracy, but it tilts it that direction. It tilts it off of 
dead center, and that's where the significance comes in, also 
in how they did it, I think.
    Mr. Martin. If I may add a couple of comments. One, I would 
suggest some caution, or at least clarification when you start 
using such terms as ``conservative'' and ``reformist,'' both in 
the mainland Chinese political context and also in the Hong 
Kong context. Now, let me explain. There may be an, I think, 
inaccurate assumption that some may be making, or inference 
that people will be making. That is, in the mainland, there's a 
reformist pro-democracy group and a conservative anti-democracy 
group.
    I don't see Chinese mainland politics that way. I think it 
was reflected in the quote that we got earlier about how they 
view democracy in general. There is very little notion that I 
see--it's beginning in some places--at least in the Party in 
China, regardless of their ideological faction that they're a 
part of, of democracy as a value independent of other factors.
    Now, the quote points out that democracy is part of a 
process of greater economic development. It is a tool or an 
instrument to get a larger, other, important goal. It isn't a 
goal in and of itself, for the most part, in mainland China. 
That's a view we may have in the West, but isn't particularly 
common in China.
    To a certain extent--and this may be a little contentious--
it may not be extant in Hong Kong either. Part of this, I 
think--and I was talking about this the other day in another 
context--we tend, in the West, to separate human rights or 
political rights from economic rights and treat them as 
categorically separate. I think in China they lump them 
together. You can't talk about human rights without talking 
about economic rights. So, they see them as encompassing both.
    The other aspect underlying all of this is the notion for a 
desire, and the big word in mainland China these days, for 
harmony. So if you implement any type of political reform or 
human rights reform and create some sort of social disharmony 
or economic disharmony, regardless of ideological faction in 
China, I think you will find opposition to the notion. So it's 
not a compartmentalized thing that we can talk about democracy, 
good or bad. It has to be in a larger context. To a certain 
extent, I think that may be true in the Hong Kong population, 
at least in their political development at this time. That's 
the first thing.
    The second thing, going inside the Hong Kong politics, bear 
in mind that, for example, what's called the Democratic Party 
in Hong Kong, if you were to transport them into the United 
States would probably be primarily Republicans, just in general 
terms. The strongest supporters of the Beijing government in 
Hong Kong tend to be business leaders, and they're the most 
conservative segments of Hong Kong society, from our political 
framework.
    The opposition, the pan-democratic groups, tend to be more 
to the left, including my favorite party just simply because of 
their name, the League of Social Democrats, or LSD. It's not 
accidental that they're called LSD. I've spoken to some of the 
founders of the party and they have their own political notion 
of how they want to do politics, which is a little bit 
different. They're fun to talk to.
    But basically if you put it this way, the avowedly 
socialist People's Republic of China has their strongest 
supporters in Hong Kong among the most pro-capitalist business 
leaders. So using conservative/liberal notions or conservative/
reform notions can give you a kind of skewed image of what's 
going on in Hong Kong.
    Now, if I can take one more second, I think one of the 
things that I would like to point out was that when this 
compromise, this last-minute deal was bartered, that the Chief 
Executive seemed to be effectively a non-player in the process. 
This is disconcerting to some in many ways.
    In the past when there have been other similar crises about 
policy in Hong Kong, if you'll remember about the residency 
issue, the right to abode issue, there again, you had the Chief 
Executive effectively not being able to implement policy, not 
being able to move things forward and being sort of side-
stepped in the process.
    So in that respect I would echo a little bit of the concern 
that Ellen is reflecting, which is, to what extent are you 
seeing a little bit of crumbling of the edges of the ``one 
country, two systems,'' in that the resolution requires the 
direct intervention of Beijing?
    Ms. Mann. John Kamm?
    Mr. Kamm. Yes. My name is John Kamm and I'm interested in 
hearing the views of the panel on whether or not Article 23 
legislation might in fact be introduced in Hong Kong, and if 
so, when and what form it would take? It's my understanding 
that Macao has, in fact, passed Article 23-type legislation. 
There has been some impact on freedom of movement, including 
by, I think, Hong Kong legislators and journalists into Macao. 
I don't recall seeing much coverage of the Macao Article 23 
legislation, and I'm just wondering, what is the status of 
Article 23 legislation in Hong Kong? Is anyone proposing that 
this legislation be reintroduced? I throw that open to the 
panel.
    Mr. Martin. Since I have it right here [holds up 
document]--see? It's always good to carry the Basic Law with 
you. Article 23 is one of the articles of the Basic Law. It 
reads, and I will paraphrase, 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, basically the Chinese Government, 
or theft of state secrets, and it goes on for other things. It 
was basically a requirement that they have a law of this sort. 
It was proposed. Chief Executive Donald Tsang proposed such 
legislation and was in fact the precursor to this massive rally 
that occurred in Hong Kong, and also, just for the record----
    Mr. Kamm. Wasn't that C.H. Tong?
    Mr. Martin. C.H. Tong. I'm sorry. C.H. Tong introduced 
Article 23 legislation. It created massive protests, and it 
also ended up creating this group that eventually became one of 
the political parties in Hong Kong, the Civic Party.
    Mr. Kamm. My question is, is there any consideration being 
given to re-introducing Article 23?
    Mr. DeGolyer. No. Peter Wong, who's an NPC delegate, 
brought this up and was roundly slapped down. No change at all 
while Donald Tsang is Chief Executive. After that, maybe, but 
more than likely it's going to be in incremental pieces.
    According to HKU scholars at the HKU Law School, there are 
several sections of the current law, some of the elements that 
were in Tung Chi Hwa's bill, would actually clarify and be 
improvements of human rights because they would really specify 
terms that now, under the common law and under the language of 
the present existing law, are unclear. There are other 
elements, of course, which were pernicious in their effect, 
which is one reason why we had such a massive turnout.
    But in Hong Kong politics, if there is a third rail--just 
like in U.S. politics it's Social Security, touch Social 
Security and die--in Hong Kong politics it's, touch personal 
and media freedoms and die. Seriously. Every time we see even 
an incident occur, like for example just a few weeks ago 
students were carrying statues of the goddess of democracy and 
the police stopped them and declared it was an illegal assembly 
and confiscated their statues.
    We saw immediately a tripling of ``great concern'' for 
freedoms in Hong Kong. I mean, just almost instant response. We 
see that every time. All it takes is an arrest, a story, an 
incident, and people are extremely sensitive to that and they 
respond instantly. The government is acutely aware of this, so 
I think they're going to tread extremely cautiously in going 
forward on Article 23.
    Mr. Keatley. I could agree entirely. Every time I go to 
Hong Kong I ask that question of political leaders, including 
Regina Ip, who is associated with the last go-round, and the 
Democratic Alliance for the Betterment and Progress of Hong 
Kong [DAB] and others. I get the feeling that, no, this is not 
coming forward. It was--at least the DAB feels--one of the 
items on the agenda that Beijing wanted Donald Tsang to deal 
with and get out of the way before he leaves office, but I have 
a feeling he won't and it will pass on to the next group.
    Mr. Grob. Other questions from the audience?
    Ms. Campbell. Hi. I'm Kaitlin Campbell. I'm with the U.S.-
China Economic and Security Review Commission. Sort of 
branching off from what you're talking about, tactical 
management, Ms. Bork, when we were talking about the future 
chief executive election and the Legco election in, I think, 
2017, 2016, 2020, to what extent [inaudible] Beijing promises 
that it may allow universal partial suffrage. To what extent 
can we really--what are we really expecting out of that? Is 
this just management of perception for now? We'll say we're 
going to give it to you in a couple of years, but what can we 
really expect out of that? Open to everyone.
    Ms. Bork. You mean, what can we expect from Beijing about 
that?
    Ms. Campbell. To what extent can we trust that more 
progress will be made in future elections?
    Ms. Bork. I don't know what can be relied upon at this 
point, given the vagueness of the way forward. I think that was 
one of the things that caused such concern to many of the 
Democrats in Hong Kong and the people of Hong Kong, that that's 
not clear and that definitions remain wide open about what full 
democracy is.
    I have to say, I like, in some way, the idea that Michael 
put forward of continuing to discuss forms of democracy and so 
forth, but on the other hand it seems to me that Beijing and 
Hong Kong's people, the Government of China and Hong Kong's 
people, are expert at this point and don't really need to 
consider all the options.
    They need to be given the ability to sit down and have a 
convention or some other process where they determine their 
form of government freely. So at this point I don't think 
anything that Beijing has done up to this point, including the 
most recent developments, suggest that we should have any 
confidence in something much closer to full democracy coming 
about at the next opportunity.
    Ms. Mann. I'd like to turn it over to Michael Martin, and 
then Michael DeGolyer.
    Mr. Martin. Well, let me clarify a little bit about the 
procedures here, and to a certain extent explain a little bit 
of what happened most recently. There was, in the decision that 
came from Beijing, an enumeration of a process by which further 
political reforms can move forward.
    Basically, the current Chief Executive's term is limited, 
so it will be the next Chief Executive who will have the task 
of going to Beijing and saying circumstances in Hong Kong have 
changed significantly so that we can consider further political 
reform. At that point, according to the procedures, it'll be a 
domestic issue. There will be a consultation process, a 
development of proposals, and at that point it would be a good 
opportunity to intervene in the discussion of why we'd be 
moving forward.
    It will be the next Legco and the next Chief Executive who 
eventually will have to vote on whatever motions are 
introduced. If that gets passed, then you have the possibility 
of further development. It was the statement of the current 
Chief Executive that he did not have the full mandate or 
authority to look down the road on what the next incremental 
step was, so he intentionally stayed with, ``This is what I can 
do this time. I can't tell you how we're eventually going to 
get there. That's the next Chief Executive and the next 
Legco.''
    That is why, as Professor DeGolyer, Michael, pointed out, 
the membership in the next elected Legco can be quite pivotal 
in how far the reform process may be able to move forward. Now, 
the question of whether they'll get to the timeline of 2017 and 
2020 is a whole other matter altogether.
    But if I understand your question correctly, Beijing's 
official ability to intervene is if the Chief Executive goes up 
and they say circumstances have changed in Hong Kong, we can 
move forward, and Beijing says, no, they haven't, and they 
could cut off the process that way. But if indeed they would 
abide by that request from the Chief Executive, then the 
procedure moves forward.
    Mr. Keatley. I hope this responds, in part. I'll just say 
that I knew many people in Hong Kong, democratic politicians 
and others--when you talk about 2017--who do expect the Chief 
Executive to be elected by popular vote in that year, and there 
will be two or more candidates running.
    The question, of course, is who gets to run. That would 
have to be nominated by this appointed nominating committee, 
which is pretty reliably pro-Beijing, and whether or not any 
outsiders, a more democratic-inclined person, could get the 
minimum number of nominations within that committee to get on 
the ballot is an open question.
    But you're more likely to have two or three people that 
Beijing deems suitable running for the office, and the one with 
the most votes will get the job. But this goes back a little 
bit to, a lot can depend on the nature of the person in that 
office. I would think Donald Tsang has not exercised what 
powers or abilities he might have to the maximum during his 
time in office, any more than his predecessor did.
    It would be possible for someone to show a little more 
initiative, a little more populism, whatever, and make 
important changes in public policy, what gets done, and not 
just wait for orders or be timid about taking initiatives. If 
you ask a bureaucracy for a decision you'll get one, and if you 
avoid asking in the first place you could probably do a lot 
more. I think that's the Hong Kong situation.
    Ms. Bork. So you're referring to Beijing as the 
bureaucracy?
    Mr. DeGolyer. We asked that question of Hong Kong people 
and there's quite a fair portion who are skeptical about the 
timetable as being a firm promise. Only about 10 percent or so 
believe that it's a firm promise with a fixed timetable. About 
15 percent or so just think it's totally empty rhetoric, has no 
meaning at all. A lot of people under age 30 feel that way, an 
even higher proportion of them, which was one of the things we 
pointed out to the government was a very dangerous thing and 
one reason why they needed to make compromises to ensure that 
we get reform this time.
    In terms of whether or not it's going to happen, well, 
there was a lot of questioning going on about this prior to the 
vote on reform. The Secretary for Constitutional and Mainland 
Affairs and the Chief Executive both said that even if Legco 
voted this down, the 2017 date was a fixed date and there would 
be direct elections for Chief Executive. Since they're not 
going to be around at that time, most people totally discounted 
that.
    On the other hand, the central government indicated that if 
the legislature passed reform this time, that they could deal 
going forward. The Democratic Party has indicated that they 
expect, and the mainland government has confirmed, ongoing 
discussions even though the Democratic Party has said it's not 
going to join the government, it's not going to join the 
executive council, et cetera. But they have agreed to continue 
talking.
    So again, when you look at the balance, we're running a 
survey right now in which we're re-asking that question. I 
expect to see some movement toward a firming of people 
beginning to gain a little bit more confidence that perhaps we 
will get some sort of movement by 2016, 2017.
    As Robert pointed out, we now have the balance tilted in 
the favor of direct elections. Again, it does matter who gets 
elected Chief Executive next. The way things are shaping up, 
there's some very interesting candidates who are coming 
forward. Depending on who gets in, since they can technically 
be reelected for a five-year term, if it's a person who is more 
open to elections then the odds go up; if it's a person who's 
not, the odds probably go down. So I think there's a lot to 
watch going forward between now and 2012, and then following 
2012 to the next round of reforms, some very interesting stuff 
going on in Hong Kong.
    Ms. Bork. If I could, I'd like to throw out there that you 
give Hong Kong civil servants, as estimable as they are, a 
great deal too much confidence. For everybody who's operating 
under, effectively, a Communist system, and that for all of the 
attempts to provide a structure through which Hong Kong would 
enjoy this autonomy, Beijing's hand is very clear, not only in 
setting it up, but in their willingness at crucial moments to 
interfere. And I can certainly understand your interpretation 
of this last engagement. I don't agree with it, but I certainly 
can understand that.
    But purely the fact of that intervention or engagement 
begins to show how little control the system that Hong Kong 
people put their faith in really determines their future. I 
just can't believe that a Hong Kong chief executive is going to 
be able to function as a politician in a free system could, to 
drive through, to build support for, to make arrangements and 
deals that would lead to something that Beijing doesn't want.
    I think that by focusing so much on the system that's been 
put in place, we, ourselves, and the democratic community and 
the world, run the risk of not recognizing that this is now 
effectively an issue to raise with Beijing and to make it a 
priority in our China policy.
    Mr. DeGolyer. I think we should be cautious about 
underestimating what Donald Tsang did. The inside story is 
that, after he was firmly turned down by the Vice President, 
Tsang went outside the accustomed norms, the technical bounds 
of who he was supposed to talk to, and he went directly to Hu 
Jintao with this issue and got him to intervene.
    Now, if that's the case, effectively what he did was he 
pulled rank on the Vice President of China. That's one reason 
why I commented that we might see conservatives react to this, 
because this was an extremely powerful challenge to the 
bureaucratic structure, the administrative structure of the 
Chinese system. He really stuck his neck out, so I don't think 
we should discount that. If the Chief Executive of Hong Kong--
you say if he has to go to the President that's bad.
    Ms. Bork. Right.
    Mr. DeGolyer. I'm saying that he went around the Vice 
President. He went directly to the President and he got a 
direct intervention. Maybe that indicates that he's more 
influential than we might think. I think one of the good things 
is, the veil is off. Beijing now realizes it can't hide behind 
a chief executive. That's what they did with Tung Chi Hwa. They 
hid behind him.
    Ms. Bork. Yes, I agree.
    Mr. DeGolyer. And really, everybody talked about, the first 
thing he did was, instead of turning over and saying good 
morning to his wife, he would turn, pick up the phone and call 
Beijing to find out what he was supposed to do. That was the 
joke on Tung Chi Hwa, the first Chief Executive. This kind of 
changes that. Also, I think a lot of people have begun to focus 
on Beijing and they realize they can't hide behind the local 
government anymore.
    Now, you could have a negative view like Margaret Ng takes 
of this, and I highly respect Margaret. On the other hand, you 
could say that basically this really puts the cards on the 
table. This is also why I think that this gives us some 
indicator that something else is going on on the larger table 
of China as a whole, because Hong Kong is no longer isolated. 
Hong Kong is no longer the exception to every rule. Hong Kong 
is no longer the odd man out of the Chinese system. Hong Kong 
is in the system and it's having an effect on the system. Just 
as the system is affecting it, it is affecting the system. This 
is exactly what happened in terms of economic reform. We're now 
seeing this in political reform. Everybody thought that Hong 
Kong would become like China. Instead, China has become much 
more like Hong Kong in terms of economics. I think the same 
thing is going on politically.
    Ms. Bork. It's a two-way street.
    Mr. DeGolyer. It's a two-way street.
    Mr. Grob. Thank you very much.
    As much as I'm sure we'd all like to continue this very 
vigorous discussion, I'd like to refer you to our Web site, 
which will include the full transcript of this proceeding. With 
that, thank you all very much for coming. Thank you for your 
interest in this issue and your interest in the work of the 
Congressional-Executive Commission on China.
    With that, we will adjourn.
    [Whereupon, at 4:31 p.m., the roundtable was adjourned.]

                            A P P E N D I X

=======================================================================

                          Prepared Statements

                              ----------                              

                  Prepared Statement of Robert Keatley

                             july 14, 2010
    I thought I would try to give an overview of the Hong Kong 
political situation, why it matters to China and why it should matter 
to us here in the United States.
    As you know, Hong Kong is governed by a ``one country, two 
systems'' policy. Broadly speaking, this means Hong Kong is recognized 
as an integral part of China but with generally separate civil, 
political, legal and economic standards. ``Hong Kong people running 
Hong Kong with a high degree of autonomy'' is the golden rule--with 
Beijing responsible for foreign affairs and security issues.
    The stated ``ultimate'' goal is that local elections eventually 
will be by universal suffrage, though no official timeline has been 
set--and that lack of a definite schedule remains a basic issue inside 
Hong Kong to this day. Progress toward that goal has been limited. But 
there has been some, and Beijing has said universal suffrage could be 
(not necessarily will be) applied to the 2017 election of a new chief 
executive and to the 2020 election of all legislators.
    The reality of this ``high degree of autonomy'' does not always 
match the theory. But the broad political outline could be considered 
rather generous, considering that it comes from a Leninist state with 
no tolerance for political disagreement or dissent--even if 
implementation has been much slower and much more grudging than hoped 
for 10 or 20 years ago.
    Why did Beijing do this, and--given its enormous suspicions of and 
frustrations with pro-democrats in Hong Kong--why has Beijing allowed 
this separate political system to continue? Let me suggest a few 
reasons.
    In the beginning, Beijing almost certainly wanted to enhance its 
international reputation and prestige. By negotiating terms with 
London, organizing a lavish handover ceremony and absorbing Hong Kong 
with no more than a token presence of the military (and the PLA has 
essentially been kept out of sight ever since), China could portray 
itself as a nation willing and able to seek its objectives by normal 
diplomatic means. In reality, China was of course an incredibly 
difficult negotiator, with its officials seeing nonexistent British 
conspiracies everywhere. They 
accused the British of trying to loot the Hong Kong treasury, plant 
political agents and otherwise deny China its just rewards--as in the 
19th century.
    The handover ceremony was also a great domestic political event for 
the Communist Party. It could and did take credit for regaining lost 
territory, something its predecessors could not do. The final ceremony, 
with a beaming President Jiang Zemin taking charge as Prince Charles 
and the last British governor sailed away into a stormy night, was a 
brilliant propaganda event for the ruling party--partly because it was 
a bit humiliating for the British.
    And ever since, Beijing has taken credit for living up to terms of 
that agreement, and it is important for Beijing's international 
reputation to be seen as doing so--even if many people would argue 
about important aspects of how it has done so.
    Beyond that, there are three other reasons often cited by those who 
speak for China.
    The first is economic. Hong Kong is no longer as crucial to the 
Chinese economy as it was a few decades ago; well into the 1970s it was 
by far the main source of foreign exchange for China, which then had 
nothing like its current $2.5 trillion of reserves in the bank. But 
Hong Kong still has much to teach about management, logistics, finance, 
law and so forth. For example, China is using the Hong Kong stock 
exchange to float mainland IPOs on the international market, and it is 
gradually letting the renminbi be used in international trade and 
settlements through Hong Kong-based financial institutions. That edges 
the renminbi toward convertibility and gives some practical experience, 
though there is a long way to go. A Chinese ambassador once told me 
that Hong Kong is safe as long as it keeps ahead of the mainland 
economically and sets a positive example. Its exact role is changing 
but Hong Kong remains important and it is being tied ever closer to the 
mainland economy.
    Second, there is Taiwan. The one country, two systems policy was 
devised originally by Deng Xiaoping for Taiwan, not Hong Kong. And 
Taiwan, for the most part, has not been particularly impressed by the 
offer, and doesn't want to join the mainland in some variation of the 
Hong Kong system. But Beijing still hopes that success in Hong Kong 
will set a positive example that will influence Taiwan to some degree 
and speed reunification. What happens across the strait directly 
between Beijing and Taipei will always be more important. But China 
hopes Hong Kong will have a positive influence, and knows that if 
things go seriously wrong in Hong Kong the negative impact would be 
enormous.
    Thus during the past year direct links between the Taiwan and Hong 
Kong governments have increased dramatically. There are now several 
quasi-official agreements on trade, finance, travel, and so forth. 
Senior officials from both sides have made visits for the first time, 
and Hong Kong Chief Executive Donald Tsang will probably call on Taipei 
by the end of the year. From the mainland side, all this supports the 
broader effort to improve relations across the strait.
    Finally, there is politics. For the record, mainland spokesman have 
said ``full democracy is good for Hong Kong.'' Further, they say Hong 
Kong needs a free society if it is to develop further its economic 
potential. ``Democracy can best free human beings, and humans are the 
most important element of productivity,'' according to Wang Zenmin, 
vice dean of the Tsinghua University Law School, and a member of the 
Hong Kong Basic Law Committee under the Standing Committee of the NPC--
and who, I understand, is in line for a promotion within the Communist 
Party. Professor Wang also says the development of a democratic system 
in Hong Kong can help the mainland improve its own political system--
even if the two develop at quite different speeds and in different 
ways--though it remains to be seen if the Communist Party will ever 
adopt any of Hong Kong's freer political ways.
    You can take all this with however many grains of salt you choose. 
But my main point is that Beijing has several good reasons for wanting 
to avoid any kind of social or political crisis in Hong Kong, and will 
work hard to prevent one. For example, when 500,000 people demonstrated 
against legislation that threatened to undermine civic freedoms back in 
2003, it had the Hong Kong government withdraw the bill and in effect 
fired an unpopular chief executive. And last month, it offered the Hong 
Kong democratic camp a political concession to ensure that an election 
reform bill would pass in the legislature. More important may be the 
fact that the concession resulted from the first-ever direct 
negotiations between mainland officials and Hong Kong democrats, people 
China often has denounced as un-patriotic, working for foreigners and 
so forth.
    This suggests that Beijing, for the sake of political peace in Hong 
Kong (and to avoid more radical politics there) will bend from time to 
time. There are limits, but China has several good reasons for wanting 
to avoid trouble.
    As for the US interest in all this:
    First, like China, we also have an economic motive. Hong Kong is an 
important financial and commercial center, and a base for corporate 
operations in China and East Asia.
    For example, about 1,400 American companies have offices in Hong 
Kong, of which more than 900 have regional responsibilities. More than 
60,000 American citizens live there. US exports to Hong Kong last year 
exceeded $22 billion, and US investments in Hong Kong equal about $40 
billion. It is a free port, low tax city with a reliable legal system 
based, like ours, on British common law. Beyond that, the United States 
government has direct cooperation with the Hong Kong government on a 
variety of issues, such as money-laundering, counterterrorism and port 
security. In brief, the United States has large economic and financial 
interests in Hong Kong and this won't change.
    Second, as a nation we believe that more democracy is better than 
less democracy. So we have an interest in encouraging the development 
of a free political system in Hong Kong for its own sake. There is also 
the hope that Hong Kong will set a positive example for China regarding 
its own political system, the free flow of information, legal 
standards, fighting corruption and other matters. Needless to say, the 
current Chinese record on that isn't particularly encouraging. But time 
passes and things do change, and the United States has an interest in 
seeing change. So there is every reason to maintain a serious interest 
in Hong Kong's internal developments while avoiding the kind of heavy-
handed interference that could backfire.
                                 ______
                                 

               Prepared Statement of Michael E. DeGolyer

                             july 14, 2010
                  1. the significance of these reforms
    Three questions can help us assess the importance of these Hong 
Kong constitutional reforms:
    How often does China implement policies promoting democracy?
    How often do Chinese officials change policy after officials 
including the vice president in charge of the portfolio announce 
rejection of any changes?
    How often does the Chinese government change policy after 
negotiations with those it deems ``hostile forces'' and ``subversive 
elements? ''
    The answers are:
    Seldom
    Almost never
    Never, before now
    Never before has the central government negotiated with the 
Democratic Party of Hong Kong. That party is led by Albert Ho, a member 
of the group that organizes the annual commemorations of the Tiananmen 
Massacre and which demands an accounting of the same from the Communist 
Party of China. He and other party members like Emily Lau have long 
been banned from even traveling in mainland China. But now, Beijing 
officials have met with them as equals across the negotiating table.
    We can conclude, on the basis something has happened that is 
totally unprecedented, that with the recent constitutional reforms in 
Hong Kong something significant is up in China. The question is what is 
up, how will it affect the Hong Kong-China relationship, and how 
significant is it to China and to the rest of the world?
    First in establishing the significance and meaning of these 
reforms, the Central government has promised that direct elections for 
the Chief Executive may take place in 2017. They may take place for all 
Legislative Council seats in 2020. The reforms just passed make the 
fulfillment of at least the timeframe for these direct elections more 
likely. Of course, the details of precisely how nominations for Chief 
Executive will be done remain unclear. We also do not know how all 
members of Legco will be directly elected, but the fact is that China's 
richest city will take democratic steps forward in 2012 and will likely 
continue onward.
    Second in significance and meaning, these steps move beyond those 
stipulated in the Basic Law. The Basic Law was the national 
implementation of an international agreement, the Sino-British 
Declaration of 1984. So this reform vote represents the first step 
beyond the bounds agreed in an international process. It is a purely 
local and national step forward in permitting greater democracy. It was 
not driven by international pressures or configured according to 
international binding agreements. It shows China today is willing to 
take unprecedented political steps and willing to compromise with some 
social and political forces outside communist political control.
    Third, the reforms for 2012 in Hong Kong also build on a district 
representation framework which was adopted by Mainland cities starting 
in 2008. A number of the leading urban centers in China began to 
organize and hold district elections in that year, though in terms of 
contested, open elections these have far to go. These district 
elections and the powers given district councilors bear some similarity 
to Hong Kong's District Council system, just as Hong Kong's village 
elections in the New Territories, begun in 1926 and reformed in the 
1950s, seem to have influenced China's rural village elections, begun 
in 1982 and reformed in 1998. The reforms of 2012 in Hong Kong in turn 
appear to have been influenced by Mainland concepts of mixing indirect 
and direct election systems, with controlled forms of nomination 
followed by direct election contests. We do not yet know how fully open 
the nomination processes for the added Hong Kong District Council seats 
to Legco will be, but in any case, the reforms represent a significant 
compromise of the highly constrained electorates of the existing 
Functional Constituency system and perhaps represent a way forward in 
either dramatically widening the electorates for all these seats or 
toward their replacement with other forms of election. The possibility 
of a fully directly elected legislature by 2020 cannot be simply 
dismissed out of hand anymore.
    Fourth and most important for the significance of these reforms, 
district seats are directly elected with open nomination. Having a 
system of nomination by such 
directly elected members is a more open nomination system for 
candidates than presently exists in mainland China. Such a system of 
open nomination and direct election, followed by nomination by such 
electees for candidates to higher bodies, which are then voted on by 
all voters, would be a serious move forward in political reform of the 
Chinese system. As a Special Administrative Region Hong Kong 
technically comes above the provinces in the Chinese structure of 
government; these reforms may not have direct implications for 
provincial congresses. Nevertheless, odds are high Hong Kong's election 
of a Chief Executive involving direct vote of residents after some more 
limited form of nomination committee is a model that at least some 
factions of the Central Government are willing to try at higher levels. 
This model potentially removes the barrier to greater democracy on the 
mainland posed by the present cadres-only nomination system. The 
reforms for 2012 and the promise of direct elections in 2017 for Chief 
Executive plus the district elections in urban areas of China in 2008 
indicate that the long stifled demand for political reform is being 
given substance and a timeframe for advancement in at least one part of 
China. It is hard to imagine this step being an isolated and one-off 
move. It is more likely an indicator that resistance to political 
reform has weakened.
        2. effects of the reform on hong kong-mainland relations
    In terms of the effect of the reform compromise on Hong Kong 
attitudes toward the Central Government, it is quite clear that the 
lack of progress in changing Hong Kong's increasingly inadequately 
representative and accountable governance system was having a strong 
negative effect. In November 2009, according to Hong Kong Transition 
Project surveys, about two-thirds expressed satisfaction with the PRC 
government's general handling of Hong Kong affairs. By May 2010 
satisfaction had dropped to 57 percent. By mid June two weeks before 
the vote on reform, it had fallen to barely a third satisfied. (See the 
report titled ``To the Brink: rising danger of disruption in Hong Kong? 
'' released 18 June and available at http://www.hktp.org.) Forty-nine 
percent expressed dissatisfaction when asked directly: Are you 
currently satisfied or dissatisfied with the performance of the Chinese 
government in handling Hong Kong's constitutional reform? '' Only 43 
percent were satisfied. Among students, three in four were dissatisfied 
on this issue with barely one in ten satisfied. This represented a 
significant danger because students had become increasingly restive 
since January 2010. This was also an extremely dramatic shift in 
attitude toward the central government from the Olympic summer of 2008 
by all, especially students.
    In June, 74 percent of respondents agreed with the statement: 
``Beijing must amend the reform proposal to make it more democratic'' 
while just 11 percent disagreed. The focus had clearly shifted from the 
local government to Beijing by June. Only two amendments to the reform 
package would create clear majority support for a reform package that 
every survey but the government's indicated fell short of majority 
support. These two amendments involved abolishing corporate voting in 
the FCs (something Beijing had indicated it opposed) and Beijing's 
promise to abolish the FCs altogether.
    Beijing officials also were assigned the highest degree of blame if 
the reform package failed. Nearly three in ten assigned Beijing 
officials a ``great deal'' of blame. Majorities blamed Beijing 
officials and the Beijing approved Chief Executive for the failure. No 
other party or group came close to a majority assigning it blame for 
failure, ranging from some blame to a great deal of blame--not even the 
League of Social Democrats or the Civic Party, the two groups leading 
the most vociferous opposition to the proposed reforms. Beijing and the 
local government faced a crisis of governance, with 15 percent of the 
population and even higher percentages of students and those under age 
30 supporting strong actions in protest, such as blockading government 
offices and hunger strikes. Subsequent cooling of tensions and 
pressures on the local and national governments should reinforce belief 
among central government officials that one effective way to handle 
restive urban populations is to begin a process of political reforms. 
The success of reforms in Hong Kong will surely encourage reformers on 
the mainland. It may also stimulate conservatives to new levels of 
resistance, but clearly this vote in Hong Kong was a win for the 
reformers. It may also have some impact on the national party elections 
in 2012. Reformers favoring political change could gain after long 
conservative dominance. Conservatives certainly lost in Hong Kong.
                 3. global significance of the reforms
    In terms of global significance, as with economic reforms, China 
insists it will choose its own timing and forge its own path of 
political reform. The economic collapses of the US and other Anglo-
American and European influenced economic model-states in 2008-09 have 
considerably raised confidence among Chinese cadres in their own 
economic model. They have also gained confidence in their process of 
incremental, experimental reform characterized as ``crossing the river 
by feeling the stones'' beneath one's feet. It is hard to argue that 
the Chinese process of economic reform has been a failure. It is also 
hard to argue that Russia's attempt to put political reform prior to 
economic reform is better than China's practice of reforming economics 
first, though we have yet to see the complete results of China's 
approach in terms of political development. Certainly there is room for 
improvement in democratic models and processes of democratization. The 
perceived sclerosis of the European models, stagnation of the Japanese 
model, incompetence of the Indian model, and the violence and 
increasing polarization of American democracy since 1963 as well as 
collapses of many post-colonial forms of democracy have convinced the 
Chinese that not only can they forge their own way forward--they must.
    Hong Kong is a unique opportunity for the Chinese to build step by 
step on economic success and on quasi-western, but indigenously 
influenced and developed political forms toward their own practice of 
democracy. Outsiders should approve and support Chinese leaders 
``feeling the stones'' toward political reform and their own form of 
democracy rather than flinging stones at them because they are going, 
in their opinion, either too slowly or in a direction toward a model 
outsiders disapprove of or misunderstand.
    For those who got forecasts of China's economic development badly 
incorrect, or who forecast the collapse or breakup of China back in the 
1990s, or who said economic development would never and could never 
result in political change, the best policy might be to simply watch 
this space. Our current economic woes in the West give us ample grounds 
to be a bit more humble in our foreign advice-giving. While we can and 
should share our experiences with democratic forms of governance with 
Chinese officials and public, we must admit that no democracy has 
perfectly and permanently solved all its problems of representation and 
accountability, nor have we solved the issues of regulation or control 
of corruption and influence by the powerful. Liberal democracy--rule 
of, by and for the majority of the people with effective safeguards for 
the rights of minorities--appears to be a permanent goal, not a 
permanent accomplishment. China and Hong Kong should of course be 
encouraged to reform and improve their systems. It would do us well to 
admit that we face the same challenge. Such an atmosphere of mutual 
exchange of perspectives and experience with developing and reforming 
governance models and methods would likely be more effective than many 
of the means employed hitherto to encourage China to move forward with 
democratic reforms in Hong Kong and on the mainland.
                                 ______
                                 

                    Prepared Statement of Ellen Bork

                             july 14, 2010
    Hong Kong's recent changes to its system of constituting the 
legislature and picking the chief executive are a net negative. While 
the Hong Kong governments, and others, have attempted to claim a 
victory for ``progress'' with the passage of the legislation, in fact, 
the minor tweaks to the system reinforce the undemocratic 
characteristics of the system without a commitment to full democracy or 
even agreement on what that really means.
    The changes are being presented as a modest expansion of the 
democratic basis for the government. However, the change in the 
people's control over their governance is practically zero. There will 
be ten new seats, including five democratically elected ones. ``Split 
voting'' persists--a clever procedure instituted by Beijing which 
raises the bar for pro-democracy proposals in the legislature by 
forcing the chamber to vote in two halves, one of which is dominated by 
pro-Beijing ``functional constituencies'' representing mainly business 
and professional associations. (In other words, undemocratically 
selected representatives.) The so-called expansion of the franchise for 
choosing the chief executive is laughable. Now there will be 1200 
electors up from 800, even though Hong Kong has over 3 million 
registered voters. The compromise over the seats that enabled 
legislators of the Democratic Party to sign on does not indicate a 
change of heart by the central government. Instead, it represents a 
further erosion of the barrier to Beijing's involvement in the 
territory's affairs.\1\
---------------------------------------------------------------------------
    \1\ A more positive interpretation of one aspect of the package is 
that the small change in the way the functional constituencies are 
constituted could lead to the seating of more pro-democracy 
representatives in the Legco, that is, in the half of the chamber that 
usually obstructs democracy legislation. While that is theoretically 
possible, it is not likely. It is simply impossible to imagine that 
this maneuver--billed as a compromise on the part of Beijing--
represents a sincere effort to expand democracy in Hong Kong.
---------------------------------------------------------------------------
    A poll showed that opposition to the package among the Hong Kong 
people grew after the televised debate between Chief Executive Donald 
Tsang and Civic Party legislator Audrey Eu. The public was not 
reassured by Mr. Tsang's performance in which he called opponents of 
the package irrational and was vague about how full democracy would be 
reached. He addressed criticisms of the legislation by saying ``there 
are things to be ironed out but we can do so after we pass the 
package.'' In fact, virtually every indicator of the public's opinion 
indicates a strong majority would like to move to full democracy 
immediately.
    The pro-democracy members of the Legco who accepted this argument 
fell into a trap. In future, it won't matter what tiny changes were 
made to the functional constituencies or the selection process for the 
chief executive. Democrats will have voted for the continuation of 
functional constituencies and for a system of a chief executive 
appointed by Beijing and rubber stamped by 1200 people. It will be 
exceedingly difficult from here on to move to full democracy. Beijing's 
role is confirmed, the democratic camp is split and the undemocratic 
features of the system are being entrenched.
    While the effects of the legislation for expanded democracy are 
virtually nil, there are other important, and negative, effects. One is 
that now those who to move to real democracy and to have a firm 
commitment for doing so are being depicted as ``hardliners'' and 
``extremists.'' This is the brilliant achievement of Beijing. The 
system, which is Beijing's creation, is engineered to deny the 
possibility of real, institutional changes. The democracy camp was 
criticized for the ``referendum movement'' in which five pro-democracy 
members of the legislature resigned their seats and ran again, in by-
elections, in order to get a mandate for democracy. In fact, they got 
the mandate. True, the turn-out was low in percentage terms, but 
500,000 voters chose the pro-democracy position by returning the pro-
democracy candidates in those elections. If the government had not 
boycotted the elections, the turn-out would have been more and the 
tally for the pro-democracy candidates, and their position, would have 
been even higher.
    The second bad outcome is that the maneuvering over the legislative 
package and in particular confidential dealings between the Democratic 
Party and Beijing representatives has normalized Beijing's role in 
controlling Hong Kong's democratic development. Margaret Ng, a 
Legislative Councilor, said it very well in her speech to the 
legislature on June 23.

        ``[T]he final deal is closed behind closed doors, and 
        ostensibly between the Democratic Party and the representatives 
        of the Central Authorities. No one who is not already in the 
        know is allowed time to digest these developments. By his lack 
        of action, the Chief Executive [Donald Tsang] has made clear 
        that he no longer represents [the] people of Hong Kong, and 
        `one country, two systems' is no longer a sustainable 
        illusion.''

    There was always a high degree of fiction involved in the ``one 
country, two systems'' arrangement. We know that the Chinese communist 
government, for its part, never took it seriously. As Steve Tsang wrote

        ``the idea of Hong Kong people administering Hong Kong within 
        the framework of `one country, two systems' may imply that 
        after 1997 Hong Kong will be free to run its own domestic 
        affairs with no interference from Beijing as long as PRC 
        sovereignty is acknowledged. Such an interpretation is totally 
        unacceptable to Beijing.''

    And on the matter of elections within Hong Kong, it was clear that 
Beijing never contemplated real democracy. Before the handover, Deng 
Xiaoping asked rhetorically, ``those who can be entrusted to administer 
Hong Kong must be local residents who love mother China and Hong Kong. 
Can popular elections ensure the selection of such people? '' For him, 
and other communist leaders, the answer was no, and Beijing set about 
to control the levers of power in Hong Kong.
    However, Hong Kong's people took this promise seriously, and the 
United Kingdom and the United States purported to do so as well. 
Washington made autonomy and the ability of Hong Kong people to develop 
full democracy there the cornerstone of U.S. policy.
    The ``one country, two systems'' fiction gave the United States and 
other democracies something to hide behind. The curtain has now been 
drawn, and reality can be dealt with. That is the only good thing to 
come from this episode. It would have been better, which is to say, 
principled, for the United States, to show that it knows the difference 
between real and phony democratic reform and to tell the truth about 
the defects in the reform package. By approving of last month's 
developments in the Legco, as Ambassador Jon Huntsman did, Washington 
acquiesced to Beijing's direct involvement in Hong Kong affairs and its 
ultimate control, which is to say, obstruction, of democracy there. It 
will only become harder to change course, but it is possible and 
essential not only for U.S. policy toward Hong Kong, but also the 
People's Republic of China.

                                 

```