Speeches Index

Speech by
MR STEPHEN LAM
Secretary for Constitutional Affairs, HONG KONG SAR

Hong Kong making firm and steady Progress

Mr (Richard) Woolcott (Founding Director of the Australasia Centre, Asia Society), Your Excellency the Governor, Ladies and Gentlemen,

I am delighted to be here today to meet with friends here in Perth who have been following developments in Hong Kong closely.

Accountability System

I have been serving the Hong Kong Government for 24 years. Until last year, I have been a member of the civil service. On 1 July 2002, I was appointed as one of the Principal Officials, with a limited life span of five years, under the new Accountability System.

The Accountability System was introduced to tie in with the commencement of the term of office of the second term Chief Executive. There are two key changes brought about by this system.

Firstly, we now have a cabinet-style government. All the Secretaries of the Government (Principal Officials) are appointed to the Executive Council. They serve for a maximum of five years co-terminous with the Chief Executive who nominates them for appointment. The public can now identify individual Principal Officials who are responsible for specific policy portfolios and hold them accountable for the success or failure of the respective policies and policy outcomes.

For the first time in Hong Kong’s history, there is a political team at the top layer of the Government to devise the policy agenda and to account as a collective team to the community. This marks an important change in Hong Kong’s governance and there will be no turning back. All future Chief Executives will need to form their own teams of political appointees. The impact of this fundamental change will thus last long after the first cabinet of political appointees leaves the scene in 2007.

Secondly, we have created a layer of Permanent Secretaries to assist the Principal Officials in taking charge of the policy bureaux and executive governments. By so doing, we have strengthened the foundation of the civil service to remain as an apolitical, neutral, professional and uncorrupt civil service. Henceforth, the Permanent Secretaries and their civil service colleagues will always be there to serve the Hong Kong community, regardless of future changes of government following the election of Chief Executives.

This new system brings Hong Kong closer to the rest of the world. It is a common feature of many jurisdictions that the head of government chooses his ministers or secretaries to form the cabinet. The system of having a political leadership underpinned by a professional civil service is adopted by many developed jurisdictions around the world.

There have been suggestions that the new system could not be implemented effectively until after the introduction of universal suffrage. I disagree. Hong Kong is an open and transparent city. The legislature, the media and the public are fully capable of monitoring the performance of the Government and holding individual Principal Officials responsible for their respective policies.

The recent developments concerning the enactment of the national security legislation demonstrate that the Government is prepared to heed public sentiment and adjust its position in the light of public opinion and views expressed by members of the legislature. In the light of doubts and concerns expressed by the community about the provisions of the proposed legislation, the Government have decided to withdraw the National Security (Legislative Provisions) Bill from the legislative programme, so as to allow sufficient time for the matter to be re-considered, studied and dealt with over a longer time-span.

This case illustrates that under the Basic Law, the executive government can only take forward legislative or budgetary proposals with the support and consent of the legislature. Such a system of checks and balances is similar to that applicable in other common law jurisdictions. Even though Hong Kong has not yet attained universal suffrage, in our free and transparent community the legislature can exercise the function of monitoring the Government’s performance effectively.

From the outset, in designing the Accountability System, the Government has been ready to assume a higher degree of accountability to the public. Indeed, as a political team, the Government has endeavoured to be proactive in meeting the needs of the community. To cite as another example, when SARS began to subside, the Government adopted an HK$11.8 billion programme to revive the economy and create about 72,000 employment and retraining opportunities. Under the previous system, such a programme might have taken months, rather than weeks, to be put together.

I must emphasise that the implementation of the Accountability System has by no means been entirely smooth in the last year. The new system will take time to evolve and develop. However, it represents an important step forward in constitutional development in Hong Kong.

CEPA

More recently, the focus of the community has been concentrated more on the economy. We have gone through some tough times with our economic restructuring. And SARS has exacerbated our difficulties. There are strong demands that we need to move ahead, to get the economy going again, and to get the unemployment situation improved. The Government has been responding to these community aspirations pro-actively.

Specifically, the conclusion of the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the Mainland is one notable booster. Under CEPA, specified categories of manufactured goods of Hong Kong origin can enter the Mainland duty-free. Our service industries can also enter the Mainland market ahead of other places. Although ASEAN countries will also enter into a free trade agreement with China, the Chinese Premier, Wen Jia-bao, has undertaken that any favourable terms offered to the ASEAN countries will also be offered to Hong Kong.

In fact, the subsidiaries of foreign companies incorporated in Hong Kong can also be classified as Hong Kong companies and benefit from CEPA, provided that they satisfy the requisite criteria of having an established business track record in Hong Kong. Among our foreign business partners in Hong Kong, Australian companies have been a vibrant and diverse group. There are more than 400 Australian companies in Hong Kong and many of them are increasingly engaged in business with the Mainland. Australia is also strong in exporting its service industry to Hong Kong, particularly in the areas of engineering and construction services, legal and accounting, architecture, etc. All these sectors should stand to benefit from CEPA.

Apart from the obvious economic benefits it will bring to Hong Kong, the conclusion of CEPA is also significant in another sense. The implementation of CEPA is only achievable due to the special status that Hong Kong enjoys under the provisions of the Basic Law.

Under the Basic Law, Hong Kong has retained its membership in the World Trade Organization (WTO) after the reunification. Following China’s entry into the WTO, Hong Kong is able to conclude a free trade agreement in accordance with the rules of the WTO. The conclusion of CEPA with the Mainland which enables Hong Kong to enter the Mainland market ahead of other places highlights Hong Kong’s unique status guaranteed by the Basic Law. It demonstrates that Hong Kong is not “just another Chinese city”, but enjoys a special position after reunification. Hong Kong will be the leading city in our part of the world in terms of being an international financial centre, a logistics hub and the bridgehead for investments into Mainland China.

Constitutional Development

Economic challenges apart, Hong Kong also has to address the challenge of dealing with constitutional development beyond 2007.

The Basic Law has laid down a blueprint for Hong Kong’s constitutional development. It has specifically set out the composition of the first three terms of the Legislative Council. Since the reunification, we have pursued constitutional development in accordance with the Basic Law. The number of directly elected seats in the Legislative Council has increased from 20 in the first term to 24 in the second term. By 2004, 30 seats, which account for half of the seats in the Legislative Council, will have been returned through direct election. Compared with the composition of Legislative Council in 1997, this represents a 50% increase in the number of directly elected seats.

As for the subsequent terms, the Basic Law provides that we should pursue constitutional development, having regard to the actual situation in the HKSAR and in accordance with the principle of gradual and orderly progress, with the ultimate aim of attaining universal suffrage.

We are now conducting internal research on the subject. Our current plan is to commence a wide public consultation exercise to seek the community’s views in 2004 and to deal with local legislation in 2006. We are fully aware of the differing aspirations among different sectors in the community. The review will be proper and thorough. There will be adequate opportunities for the public to take part in the public consultation and to give their views.

The HKSAR Government will endeavour to create new room for constitutional development beyond 2007. This will definitely be in the interest of the community, political parties and politicians in Hong Kong as well as the Government.

According to the Basic Law, effecting changes to electoral arrangements after 2007 will require the support of a two-thirds majority of members of the Legislative Council. This will mean that to make any changes possible, the proposed changes need to have the support of a combination of both the directly elected members and the functional constituency members. This will be a challenge, not just to the Government but also to all members of the Legislative Council. However, I believe that it should be possible to make progress — as no one, including our legislators, would like to see the post-2007 constitutional development resulting in stalemate.

Although the public consultation exercise has yet to be formally launched, I have been meeting with different sectors of the community and listening carefully to their views. My mission will be to work closely with different sectors and political parties, with the objective of “widening the common ground, narrowing differences and building consensus”.

Conclusion

The inception of political appointments for government secretaries marked a watershed in Hong Kong’s governance. The review of electoral matters beyond 2007 represents the next crucial step in constitutional development. The Basic Law provides the key parameters, and it is up to the Hong Kong community to chart its own course into the future.

We succeeded in creating a smooth transition in 1997. I am sure that we can overcome the challenge of 2007 with the same determination and spirit of the Hong Kong community.