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Speech by Secretary for Constitutional Affairsat at Seminar on Legal Landscape of China after Accession to WTO

Following is the speech by the Secretary for Constitutional Affairs, Mr Stephen Lam, at the Seminar on Legal Landscape of China after Accession to WTO today (September 7):

Mr Hoo, Mr. Gao, Distinguished Guests, Ladies and Gentlemen,

It is my honour and pleasure to be invited to give the concluding remarks of this seminar. "Honoured" because this seminar has attracted such a distinguished gathering of eminent lawyers and academics from the Mainland and Hong Kong "Pleasure" because as a non-practising barrister the law has always been very close to my heart. Also, in dealing with my current portfolio day to day, literally I need to have the Basic Law at my finger tips.

During the course of the seminar, you have dwelt very much on the WTO. Today, I would like to share with you a slightly different set of thoughts. I wish to make three important points about the Basic Law.

Historical Problem Resolved

Firstly, the Basic Law embodies a unique formula for resolving a problem left over from history. The formula of "One Country, Two Systems" has cut the Gordian knot of the problem which was featured as "the future of Hong Kong" back in the 1980s. There are many international situations which originate from history which remain unresolved to this very day. For example, everyday we see on CNN scenes of on-going conflicts in the Middle East. However, in Hong Kong, the principle of "One Country, Two Systems" has become an everyday reality. The problem left over from history has been resolved, with all the systems of Hong Kong kept intact and enshrined in the Basic Law.

Central to the successful implementation of "One Country, Two Systems" is the rule of law. Hong Kong has preserved its common law tradition. We have an independent judiciary. The fact that an increasing number of senior judges from leading common law jurisdictions, including Britain, Australia and New Zealand, continues to sit on our Court of Final Appeal as Non-permanent Judges signifies the confidence of the international judicial community in Hong Kong's legal system. Hong Kong is unique in enjoying the power of final adjudication as a non-sovereign entity.

Unique Set of Autonomies

This brings me to the second point. The autonomies which have been given to Hong Kong under the Basic Law are unique in the world. Our autonomies surpass those which are available to provinces and states under many federal systems. Of course, Hong Kong's position as a Special Administrative Region under the Basic Law is not that of a state or province under a federal system. However, it is clear that Canadian provinces or Australian states, unlike Hong Kong, cannot be members of the WTO or APEC. Neither can they enter into multilateral or bilateral treaties with foreign governments in spheres such as air services, surrender of fugitive offenders, investment protection, mutual legal assistance and visa abolition.

I believe we probably have the best of both worlds. We can extend Hong Kong external links in the economic and other spheres, without having to shoulder the burdens of international diplomacy. Under the Basic Law, and with authorization given to the HKSAR by the Central People's Government, we are permitted to handle a wide range of external affairs covering the economic, trade, financial and monetary, shipping, communications, tourism, cultural and sports fields.

Closer Economic Partnership & "One Country, Two Systems"

The third point I wish to emphasise is that closer economic partnership between the Mainland and the HKSAR is fully consistent with the concept of "One Country, Two Systems", and would indeed be complementary.

With the advent of globalisation and WTO accession by China, we in Hong Kong face both challenges and opportunities. Financial services, transport and logistics, tourism and professional services are the four key economic drivers in Hong Kong. Together these four sectors account for about 50 per cent of our GDP, while services as a whole account for about 86 per cent. At the moment, only about 35 per cent of China's GDP is attributed to services. As the Mainland's economy grows and matures, there will be a large demand for skilled professionals and services staff in China.

Our hope is that the service industry and professions in Hong Kong, including the legal profession, will be able to gain wider access to the Mainland market. Legal services is one of the many areas that perfectly fit Hong Kong's niche.

We in the HKSAR Government have every confidence that legal practitioners in Hong Kong are well equipped to meet the challenges and to capitalise on the opportunities arising from China's accession to the WTO.

The Secretary for Justice has taken a personal interest in exploring opportunities for the Hong Kong legal profession to gain access to the Mainland market. In particular, she has been promoting the development of Hong Kong as a centre for resolving disputes arising from international commercial contracts in the Mainland.

On the wider front, we are pursuing earnestly discussions with the Central Government to establish a "Mainland/Hong Kong Closer Economic Partnership Arrangement" - for short, read CEPA.

What we hope to achieve under the CEPA is essentially wider market access to the Mainland on the basis of mutual benefit. Let me give you this assurance: while Hong Kong seeks the support of the Central Government under CEPA, we will not ask the Central Government to give Hong Kong special treatment at the expense of WTO rules. Any arrangement agreed will be WTO-consistent and WTO-plus. The foundation for any agreement will be on the basis that the Mainland and Hong Kong are two separate customs territories under the WTO. Both sides have agreed on the progressive approach of addressing the relatively easier issues first, before tackling the more difficult aspects.

I have every confidence that, eventually when CEPA is concluded, it would be welcomed by those doing business in the Mainland and Hong Kong, as they can be assured that investment opportunities will be backed by professional and world-class services. The arrangements should also benefit the development of the Mainland's legal services. Just as Hong Kong's legal profession has benefited over the years from the presence of many expert foreign lawyers, I believe that closer economic partnership between the Mainland and Hong Kong will benefit the development of the legal professionals in both jurisdictions.

Ladies and gentlemen, "One Country, Two Systems" is here to stay. The Basic Law and common law system will always be there to serve Hong Kong. They will underpin not just the Hong Kong economy, but also the rights and freedoms which Hong Kong residents enjoy. They will protect the foreign investors, academics, professionals and tourists who come here day-in day-out to enjoy Hong Kong together with us. This city will continue to thrive as Asia's world city under the Basic Law. Our position as the leading financial centre, backed by world-class legal professional services, will continue to grow.

Ladies and Gentlemen, let me close by going back to the theme of your seminar : China and the WTO. The characteristics and strengths of Hong Kong's systems provide us with the best conditions and the comparative advantage to forge a closer economic partnership with the Mainland as the two distinct members of WTO. The principle of "One Country, Two Systems" is entirely compatible with, and complementary to, closer economic partnership between the Mainland and Hong Kong.

That is also why the Basic Law Institute, and all of you, have taken an important step in undertaking this seminar and in promoting the exchange of ideas between the two jurisdictions on this occasion. You have started to build for the future. Thank you very much.

End/Saturday, September 7, 2002