Integration under ??ne Country Two Systems??The case of Mainland China and Hongkong SAR
Wu Bing
Number ID :S06236
Research Paper Suoerviser : Dr. Sekou Conde
Minzhu University of China
2006-2007 Academic Year
Abstract
With the handover of the territory in 1997, Mainland China and Hongkong achieved reunification. However, unification does not mean integration. HongKong, as the Special Administrative Region (hereinafter referred as SAR) has its own unique law, its own economic system and international legal personality except for the conduct of diplomatic relations. The Basic Law guarantees the uniqueness of the Hong Kong SAR until 2047. But close economic ties between Hong Kong and the Mainland will promote closer economic integration. It is unclear how much integration can been deepened, but it can be argued that the current policy of the Hong Kong SAR is too supportive of business, and an
excessive degree of economic integration may threaten the uniqueness of Hong Kong. But if Hong Kong achieves democracy and enjoys complete autonomy, it will be easy for economic integration to co-exist with the ‘one country two systems’ approach, in the interests of the business community and of the citizens of the SAR.
Keywords: Hong Kong SAR, Mainland China, integration,the policy
The ‘one country two systems’ formula of the People’s Republic of China (hereinafter referred to as the PRC) has been advanced as the solution for the reunification of Hong Kong with the PRC without the need for integration??/sup>,just as Deng Xiaoping’s(one of the greatest Chinese leaders) remarks:‘The Chinese Government is firm in its position, principles and policies on Hong Kong. We have stated on many occasions that after China resumes the exercise of its sovereignty over Hong Kong in 1997, Hong Kong's current social and economic systems will remain unchanged, its legal system will remain basically unchanged, its way of life and its status as a free port and an international trade and financial center will remain unchanged and it can continue to maintain or establish economic relations with other countries and regions.’??/span>Under the‘one country two systems’ policy, gradual change, including progress towards
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integration, can continue even after unification??/span>. In this paper, the author
will focus on the following aspects: the meaning of unification and integration and the relationship between them??/span>‘one country two systems’ and integration,the uniquenes??/span>of Hongkong SAR and integration. The author argues that integration between Mainland China and Hong Kong will be increasingly implemented after reunification.
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1??span style="font: 7pt 'Times New Roman'"> Unification and Integration
‘Unification’means that two or more states form a new sovereign state with a single central government, which has domination over diplomacy. ‘Integration’ means integration of the functions of states, and integration of sovereignty except for the conduct of diplomatic relations.
Sovereignty and integration are different concepts. Integration is not a necessary requirement for unification. The relationship between a colony (such as Hong Kong) and its suzerain(such as the United Kingdom before the handover of Hong Kong to the PRC) is a good evidence.In another words, integration is not necessary in cases where there is geographical remoteness, and where large differences occur in the socio-economic composition and economic relations of the territories concerned.
But the need for integration of economic and legal systems can increase if distances are smaller and if economic relations between states or territories are close,just as the relationship between Hongkong SAR and the Mainland China. In the past, there has been little mention of economic integration between the two territories, and on the few occasions when integration has been discussed, commentators have pointed out the large disparity in economic levels between the two territories, and have argued that this disparity prevents economic integration.In fact,with the development of the Mainland China,especially the development of economy,the integration between them is inevitable.Furthermore the integration is likely to be accelerated by the increasing trend for regional integration, and may even be completed before 2047. First, the preferential treatment in Mainland China that Hong Kong companies have enjoyed should be abolished gradually following China’s accession to the World Trade Organization (WTO); Second, the trend of the formation of a Free Trade Agreement (hereafter FTA) has spread into Northeast Asia, one of the last vacuums of FTAs in the world. Once Hong Kong and Mainland China each signs an FTA with third countries, the creation of an FTA between the two territories will become desirable??/span>.
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In late November 2001, it was made known that the Hong Kong Chief Executive Tung Chee Hwa had proposed the formation of an FTA with Mainland China to the PRC central government. The first step of economic integration became the government’s policy??/span>. This paper analyzes the integration that is occurring under the ‘one country two systems’ formula, focusing mainly on the consistency of economic
integration with the Basic Law, the changes to the ‘one country two systems’ formula, and the transparency (the balance between business interests and the citizen) that needs to accompany integration.
2??span style="font: 7pt 'Times New Roman'"> ‘One Country Two Systems’ and Integration
The PRC government proposed ‘one country two systems’ as the solution for achieving unification of the Mainland China with Hongkong,Macau and Taiwan. The central government of the PRC gives ‘one country’priority over ‘two systems’, and insists that the ‘one country two systems’formula adopted for Hong Kong is different from a federal system??/span>.In the following paragraphs,I will attempt to justify this view by examining the current status of Hong Kong, and by considering the consistency of the ‘one country two systems’ with the international status of Hong Kong.
A federal system and the ‘one country two systems’ are different. A
federal system means a system in which sovereignty and jurisdiction are divided among federal (central) and state (local) governments. In federal
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systems, the central government has jurisdiction over foreign affairs ,[??/span>]
but cannot intervene in domestic affairs, over which state governents have jurisdiction. This seems close to the ‘one country two systems’ system. In fact, there is great difference between them.
The Hong Kong SAR was established under the ‘one country two systems’ formula by a “basic law” which was legislated by the National People’s Congress (the central parliament of PRC)??/span>??/span>and which differed from constitutional law (Article 31 of PRC Constitution). The PRC Constitution does not stipulate the functions of the SAR and has not vested any jurisdiction in the SAR. The Basic Law of Hong Kong SAR??/span> makes provision for administration (Article 16) except for diplomacy (Article 13), and defense (Article 14). Moreover, several policies of the Hong Kong SAR are controlled by the PRC central government. Section 3 (Shipping) and Section 4 (Civil Aviation) stipulate that international negotiation on these issues by the Hong Kong SAR government cannot be carried out without the permission of the central government. What is more, Hong Kong SAR has not established its own examining authority on patents, even though it formulates policy with respect to patents
(Article 139). Issuing a patent in Hong Kong can only be done if the
patent has first been issued in the United Kingdom, Europe or the PRC (a correction added just before the handover)??/span>.It is clear that the ‘one country’ principle is the most important.
However,the Basic Law also makes the arrangements needed to maintain Hong Kong’s unique economic system (including customs, currency and the legal system). Moreover Hong Kong SAR is also permitted, as an economic entity independent from Mainland China, to sign treaties and to become a member of international organizations
relating to economic and social issues. The fundamental purpose of the “two systems” part of the formula is to maintain the original economic system of Hong Kong??/span>.Some of articles of the Basic Law of Hong Kong SAR control the direction of the policies that may be taken by the government of the Hong Kong SAR.For example:
Fiscal Policy :keeping the balance of the treasury budget (Article 107), maintaininglow tax rates (article 108)
Finance and monetary policy:
maintaining Hong Kong’s status as international financial center (Article 109)
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maintaining by the bank issuing the currency the reserve fund
system(Article 111)
maintaining a free flow of capital within, into and out of the Region (Article 112)
Custom policy:the SAR is not allowed to impose any tariff unless otherwiseprescribed by law (Article 114)
It is clear that HongKong,as the SAR,is inseparable from the PRC.Under the ‘one country two systems’,the principle of ‘one country’ is prior over something else.Any policys in any fields can not destroy this rule.‘One country’is the first,then ‘two systems’ and this principle is also adapted for the Macau SAR and Taiwan Province.
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The PRC did not integrate the economic and legal systems of Hong Kong with those of Mainland China, and did permit the Hong Kong SAR to join the international community. Indeed the current status of Hong Kong SAR is that of a local government of the PRC, and one that has only ‘incomplete autonomy’, and is controlled by the PRC central government.Why does the lack of autonomy of Hong Kong not have a negative effect on the international personality of Hong Kong? One of the most important reasons is that dependent territories are subject to more limitations than sovereign states. Only a few international organizations on the socio-economic files of the United Nations allow the accession of
dependent territories such as Hong Kong. The WTO is one such organization. But [...]
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