First Anniversary Issue: From the Editor

This is the first anniversary issue of Policy Bulletin which also coincides with the first anniversary of the establishment of the Hong Kong Special Administrative Region (SAR). To mark the event, we have enlarged this issue to include articles to review the various aspects of the SAR during its first year.

The two articles on the economy by Professor Gregory Chow and Dr. Edgardo Barandiaran are extracts from their plenary speeches at the recent Hong Kong Economic Forum jointly organized by the Hong Kong Policy Research Institute and the Hong Kong Trade Development Council during 29-30 June 1998. Both articles discuss Hong Kong's free market though with a different emphasis. Professor Chow observes that economically both Hong Kong and Mainland China are getting closer to each other, with the Mainland clearly on its way to developing a market economy, yet the two societies are located within different political systems. He cautions about the interface between a free market economy and a democratic government and argues for a careful balance between individual interests and the common good. Dr. Barandiaran examines how Hong Kong has to respond to the challenge posed by the recent Asian currency crisis, in particular the demands for government action to increase domestic aggregate demand, to improve competitiveness and to provide relief to some aggrieved groups. Such response is conditioned by the strengths and weaknesses of government institutions. In Hong Kong's case he argues that the SAR government has inherited institutions which have not achieved a degree of readiness to deal effectively with the Asian crisis.

On the question of government action, Dr. Anthony Cheung's article suggests that the Hong Kong government had become more interventionist than most people assumed even before the change of sovereignty. He identified new institutional, political and external factors which have since pushed the SAR government towards greater policy intervention in the economic and social arenas. An invited article by the Secretary for Justice, Ms. Elsie Leung, reviews various tasks facing the SAR in the development of Hong Kong's system of jurisprudence and the protection of civil and human rights as guaranteed in the Basic Law and the International Covenant on Civil and Political Rights. Other controversial issues such as the legality of the provisional legislature and the adaptation of pre-1997 laws are also discussed.

Dr. Jane Lee examines the relations between the Central People's Government and the SAR and concludes the national leadership is determined not to interfere with the internal affairs of the SAR. As also confirmed by the Confidence Index Report prepared by the Hong Kong Policy Research Institute (the main findings of which are highlighted in this issue), the "China factor" does not now pose as a negative factor for public confidence in the SAR. Instead several domestic issues and crises, including the economic down-turn, have caused increasing doubts about the performance of the SAR government leadership. Such doubts are partly captured by Dr. T. L. Lui in his analysis of the Chek Lap Kok airport fiasco. According to him the chaos in the initial opening of the new airport has resulted not just in embarrassment, shock and anger, but also concerns about whether the "Hong Kong way" is being subject to erosion in the post-1997 setting.

The transfer of sovereignty and administration has been impressively smooth by most accounts and Central-SAR relations have not turned out to be difficult as some had worried prior to the handover. However the economic and other domestic challenges definitely call for priority attention by the SAR government without further delay.

Dr Anthony B L Cheung

Editor-in-Chief