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HKSARG's response to EC's Report

In response to media enquiries on the European Commission (EC) Report on Hong Kong (covering year 2002), a Government spokesman said today (September 16), "We note that the EC Report has made various observations about constitutional development, Article 23 legislation, and financial and economic issues."

The EC has also made the remark that Hong Kong residents should remain confident about future economic developments and continue to take full advantage of the assets the HKSAR has as an international financial centre.

The report points out that Hong Kong's further economic integration with Mainland China is an asset for both provided that Hong Kong retains its individual personality within the framework of the "One Country, Two Systems" principle.

"We are committed to the full and faithful implementation of the 'One Country, Two Systems' principle and the Basic Law," the spokesman said.

On constitutional development, the spokesman pointed out that the Basic Law had laid down a blueprint for the HKSAR's constitutional development. "In the four years between now and 2006-07, the Government would conduct a review on post-2007 constitutional development according to the Basic Law, and set aside sufficient time for a wide public consultation.

"We are fully aware of the differing aspirations of 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."

On the accountability system, the spokesman said, "The implementation of the system is an important step towards more effective governance of the HKSAR.

"As with other new systems of governance, the development of the accountability system is an evolving and evolutionary process. The Government will learn from experience and strive for improvement and will aim to strengthen communication with the public and the Legislative Council."

The spokesman said that the HKSAR had a constitutional duty to legislate on Article 23 of the Basic Law.

The National Security (Legislative Provisions) Bill previously proposed by the Government provided that all its provisions must be interpreted, applied and enforced in accordance with the international standards on rights and freedoms mandated in Chapter III of the Basic Law.

"The Government recognises the importance of securing public understanding and support before taking forward the legislation," the spokesman said. The Government decided on September 5, 2003 to withdraw the Bill from the legislative programme.

"The Government will review afresh the issues concerning Article 23 of the Basic Law. The proposals to implement Article 23 would only be taken forward after extensive public consultation and with the understanding and support of the community at large."

On the fiscal deficit, the spokesman said, "We are committed to restoring fiscal balance."

The slowdown in economic activities caused by the outbreak of SARS earlier this year has made it unrealistic for the HKSARG to stick to the original target of eliminating the fiscal deficit in 2006-07.

"We will work out a new target through extensive discussions with various sectors of the community in the months ahead. The 2004-05 Budget will address this issue and provide a realistic work plan in restoring fiscal balance."

On the Mainland/Hong Kong Closer Economic Partnership Arrangement (CEPA), the spokesman reiterated that it was fully consistent with the Basic Law, the "One Country, Two Systems" principle and WTO rules governing free trade areas.

End/Tuesday, September 16, 2003