Speeches and Articles by U.S. Consul General James B. Cunningham

The Hong Kong S.A.R. at Ten Years - An American Perspective

Remarks by U.S. Consul General James B. Cunningham
to The Better Hong Kong Foundation
June 13, 2007

(As Prepared For Delivery)

U.S. Consul General James Cunningham remarks on the 10th anniversary of the HKSAR at a luncheon co-organized by The Better Hong Kong Foundation and the Hong Kong-America Center.

It is a great pleasure to be here today. I want to thank the Better Hong Kong Foundation for inviting me to share an American perspective on Hong Kong after ten years as a Special Administrative Region of China. I am particularly pleased to be addressing a Better Hong Kong Foundation audience. The Foundation was created in 1995 by a group of Hong Kong's influential business and community leaders for the express purpose of enhancing public confidence in Hong Kong's future. You have done good work, and I am pleased that the United States enjoys a close relationship with you in support of that goal.

As you may know, I am a newcomer to Hong Kong with a fresh perspective. But my first exposure to the remarkable road you have been on came more than 20 years ago. My wife and I were befriended in Europe by a Chinese couple from Hong Kong who were living abroad temporarily. Even then they were greatly concerned about Hong Kong's return to China, and they eventually decided to leave beforehand. Two or three years before 1997, there was a surge of concern in the international press over the territory's future: dire predictions and expressions of worry were the common currency of public discussion. In June of 1995, Fortune magazine ran this cover story: "The Death of Hong Kong." It was in that business- and investment-unfriendly climate that the Foundation was created to help restore confidence in the territory.

In looking at this magazine cover 12 years later, I recall Mark Twain's comment when someone told him that his obituary had been published in New York. He responded, "The reports of my death are greatly exaggerated." Hong Kong too has exceeded expectations, and the Better Hong Kong Foundation has helped build greater international understanding between East and West by promoting understanding of Hong Kong, its relationship with the Chinese Mainland, and the unique "one country, two systems" model. In discussing Hong Kong on the occasion of the ten-year anniversary of the establishment of the Special Administrative Region, I hope to contribute to the mutual understanding the Foundation seeks to develop.

Let me begin by saying that looking back over the last ten years, the United States believes that "one country, two systems" has been a success for Hong Kong and for China. The Basic Law's commitment to preserve a "high degree of autonomy" for Hong Kong and to maintain the integrity of its distinct economic, legal and social systems by and large has been observed.

I would also like to state unequivocally that my government wants Hong Kong and the "one country, two systems" model to succeed. Before and since 1997, the implementation of this historic experiment has been of great interest to the international community. After 10 years, we continue to have great hopes for Hong Kong's future. This is more than a thing of mere words, because the U.S. has a measurable stake in Hong Kong's success. As Asia's world city, Hong Kong plays an important role which benefits China, the U.S. and many others in the globalized, interdependent 21^st century. America itself has no small stake in Hong Kong. It is our 15^th largest export market. 60,000 U.S. citizens reside here, and a million more Americans visit each year. 1,200 U.S. firms have local and regional offices here - which, by the way, employ 10% of Hong Kong's work force. U.S. direct investment in Hong Kong totals 38 billion U.S. dollars.

Just as a prosperous, stable and confident China is in the U.S. national interest, so also is a prosperous, stable and confident Hong Kong.

Looking back over the past 10 years, Hong Kong, like much of the rest of Asia, has faced its share of trials. But Hong Kong has been able to rebound - decidedly so. Economic growth over the last three years has been strong (GDP grew by 6.5% in 2006), and polls show the Hong Kong people are generally optimistic about the future and about their role in China. The United States shares that optimism and congratulates Hong Kong on being on the path to success. We have strong expectations that Hong Kong will continue on that high road.

There is good reason for this positive forecast.

After 10 years of Chinese sovereignty, Hong Kong remains the most open and developed part of China. The Central Government has generally respected its commitment to maintain a high degree of autonomy for Hong Kong, and has acted over the years in concrete ways to support Hong Kong's economic development and prosperity. The Closer Economic Partnership Arrangement, the introduction and expansion of the individual visitor scheme, the growing cooperation within the Pan- Pearl River Delta region and the liberalization of rules on the use of Renminbi in business and finance remain important elements of Hong Kong's past and future economic success. Hong Kong's role as an international financial center has strengthened in the last ten years. Hong Kong's market capitalization is now three and a half times what it was in 1997. The territory is the number one source of capital for China, raising 43 billion dollars U.S. in 2006. Hong Kong remains an important economy which exercises active membership in the World Trade Organization and in the Asia-Pacific Economic Cooperation (APEC) forum.

Once again this year, for the 13^th straight year, the Heritage Foundation recognized the Hong Kong SAR as having the highest level of economic freedom in the world. Just last week, the Japan Centre for Economic Research ranked Hong Kong first out of 50 world economies in 2006 in the areas of competitiveness, internationalization, and finance.

Importantly, though, Hong Kong serves as an example of more than just an economic success story.

Hong Kong remains a model Chinese society that observes the rule of law, follows free and fair market principles, allows unfettered entrepreneurial activity, and respects freedom and human rights, including religious freedom. Its political system is evolving, and public participation in civic affairs is growing.

Hong Kong has survived and thrived over the years by repeatedly adapting to changing economic and political circumstances, and redefining itself. It must continue to do so to remain stable, prosperous and competitive. In a rapidly changing global economy, the status quo is not enough.

In the fast moving globalized economy of the 21^st century, good governance and public engagement are necessary for success, not optional. Difficult decisions need to be made, and executed. Hong Kong is no exception. Our experience is that a vibrant, authentic political process helps strengthen leadership legitimacy and accountability, and thus promotes stability. While the 2007 Chief Executive selection process limited participation by the people of Hong Kong, elements of the process - in which the candidates debated issues during live television broadcasts - showcased an important change in Hong Kong's political development. Just as Hong Kong's economy is a living example of the success brought by freedom, competition, and individual choice, we believe that its political system would also benefit. Indeed, in our view such political legitimacy and accountability is a necessary part of the "whole package" of being a modern, competitive and stable society. Because of this, we have long supported universal suffrage for Hong Kong, the goal established in the Basic Law. We believe that people in Hong Kong are especially well-prepared for such participation, and that the Hong Kong people should decide the scope and pace of movement toward universal suffrage, in accordance with the Basic Law. We understand full well that it is for the people of Hong Kong to work this out among themselves. My government does not presume to prejudge the structure of a future political system for Hong Kong, or to promote one timetable over another. But we genuinely believe it necessary, for both Hong Kong and the mainland, that Hong Kong set out on the path toward governance strengthened by popular elections, and the sooner this happens, the better.

We welcome the Chief Executive's intention to resolve the issue of universal suffrage during his tenure, and wish him every success in his efforts. As the debate evolves, we would hope to see an expansion of genuine dialogue and consensus on Hong Kong's future within China and early political reform that will sustain Hong Kong's prosperity, stability and good governance.

We also remain concerned about occasional events and possible trends that some observers believe may present troubling precedents or undermine the high degree of autonomy promised in Hong Kong's Basic Law and the 1984 Sino-British Joint Declaration. One of these is a widely-held public perception that Hong Kong's press increasingly practices self-censorship in reporting or commenting on issues of high political sensitivity to the PRC central government. Over the years there have been several instances, as you well know, of intervention or interpretation by the Central Government that have raised questions. Such interventions, while infrequent, can undermine public and international confidence in Hong Kong's autonomy and competitiveness.

That said, our evaluation of the progress over the past 10 years is positive, and we are optimistic about the next 10 years - as Americans usually are. Hong Kong is an open, vibrant, and sophisticated society. It has much to contribute to China, and to offer to the rest of the world as an international city. People here continue to anticipate the future, and to plan for change. I have been fortunate to make dozens of Hong Kong friends in my time here; they are proudly Chinese, and see no contradiction between love of their country and the pursuit of Hong Kong's economic and political development. "One country, two systems" is working, despite the earlier doubts and the predictable difficulties. There is no doubt in my mind that it can continue to do so. The United States is a friend with a sincere hope for and strong interest in Hong Kong's success, and, more broadly, China's success.

Let me close by presenting a more positive bookend to my earlier, pessimistic visual aid. Here is a more recent graphic: the March 2007 Time magazine cover touting "A Vision for Hong Kong." The United States' vision for Hong Kong's future is bright indeed. We see a Hong Kong that is part of a prosperous, stable, and confident China, and which contributes to its country and the world by continuing to be a leading light in economic freedoms, civil liberties and respect for human rights. We see a Hong Kong that continues to adapt and respond to changes, a Hong Kong whose government has found the legitimacy that comes from popular elections. We envision a Hong Kong that draws strength from its Chinese heritage as well as its Western heritage, a Hong Kong that has found its own voice, and is a positive, dynamic force in China's development on all fronts.

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