[Congressional Record Volume 141, Number 61 (Monday, April 3, 1995)]
[Senate]
[Pages S5077-S5078]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                               HONG KONG

 Mr. THOMAS. Mr. President, the week before last I had the 
pleasure of cohosting a breakfast with Congressman Gilman for Lu Ping. 
Mr. Lu is the head of the People's Republic of China's Office of Hong 
Kong and Macau Affairs, as well as a body known as the Preliminary 
Working Committee. In other words, he is the Chinese official in charge 
of overseeing the transition of Hong Kong from a dependent territory of 
the United Kingdom to a special administrative region under the 
jurisdiction of the People's Republic of China in the summer of 1997.
  Mr. Lu and his group were, in effect, on a public relations tour of 
the United States to convince policymakers here--as well as an audience 
back home--that Hong Kong will continue to thrive as a bastion of 
capitalism after 1997. Mr. Lu did his job well. He spoke eloquently and 
reassuringly, painting a rosy picture for the colony's future without 
sounding phony or unrealistic. While I greatly appreciated the 
opportunity to meet with Mr. Lu and hear his views, I have a concern 
with his pronouncements which I would like to share with my colleagues.
  Despite his polished presentation it seemed to me that his views 
diverged little, if at all, from the official party line. Certainly, 
this was not entirely unexpected. Members of the PRC bureaucracy are 
not often given to flights of independence of thought or opinion. While 
he certainly seemed genuine and straight-forward, I could not shake the 
feeling that his statements were simply a glossy version of what we 
have been hearing from Beijing on this topic for some time. He spoke at 
length about how Hong Kong's present status would be protected, but 
said nothing substantive about the mechanics of that protection. As a 
writer for the Nanhua Zaobao, South China Morning Post, so accurately 
put it:

       [D]espite having an excellent ambassador in the eloquent 
     English-speaking Mr. Lu, and in spite of the articulate back-
     up of sharp minds like those of Rita Fan and Simon Lee, the 
     fact remained that they had--to American earns at least--very 
     little to say. The style was good, but the U.S. needs a lot 
     more meat in its sandwiches.

  Moreover, while painting a picture of a bright fairy-tale scene full 
of sunshine and singing birds, Mr. Lu neglected to peer at the troll 
under the bridge: The increasing threats made to the rule of law in 
Hong Kong. In 1984, the People's Republic of China and Great Britain 
finalized a document known as the Joint Declaration. The declaration 
set forth PRC guarantees for Hong Kong's continued autonomy after 1997, 
an elected local legislature, and the continuation of its common-law 
legal system. Unfortunately, since that time Beijing has acted in such 
a way so as to call its commitment to these basic principles into 
question. In 1990, the National People's Congress enacted what is known 
as the Basic Law, the statutes that will govern Hong Kong after 1997. 
In contravention of the Joint Declaration, it--inter alia--subordinates 
the colony's legislative council to an executive appointed by Beijing, 
and assigns a power of judicial interpretation not to the local courts 
but to the Standing Committee of the People's Congress. In 1993, a 
senior official of the PRC's judicial branch intimated that the 
People's Republic of China will replace Hong Kong's common-law system 
with one more closely resembling China's where the civil law is merely 
an extension of the party.
  Finally, and most ominously in my opinion, the People's Republic of 
China has called into doubt its commitment to
 establish a Court of Final Appeal in Hong Kong. Presently, final 
judicial decisions are appealable to the Privy Council in London. Of 
course, that cannot continue to be the case after reversion, and one of 
the principle concerns of the residents of the colony is that, after 
1997, local legal decisions continue to be appealable to a court with 
interests not inimicable to the common law and judicial independence 
from extralegal influences. Without a local final appeals court, they 
worry--rightly in my opinion--that the final arbiter of the law in Hong 
Kong will be a party cadre in Beijing. So, the Joint Declaration 
provided for the establishment of a Court of Final Appeal [CFR]. Since 
that time, however, there has 
 [[Page S5078]] been increased wrangling between Beijing and London, 
and Hong Kong, over the form of the court; and, for a variety of 
reasons I will not expound upon here, the future of the CFR is much in 
question. While it is probably not fair to lay 100 percent of the blame 
for the imbroglio over the CFA on China, that country, I believe, bears 
a lion's share.
  Mr. President, the continuation of the rule of law in Hong Kong after 
1997 is synonymous with its ability to remain a thriving center of 
finance and democracy at the doorstep of the Communist behemoth to the 
north. The rule of law ensures that business can be conducted in a fair 
and secure way, that contracts are binding, and that there is a 
predictable and impartial means of settling disputes and appeals. Just 
what kind of problems the absence of the rule of law creates in China 
is easily illustrated. McDonald's had a contract with the Peoples 
Republic of China for a restaurant on Tiananmen Square. It operated 
there for several years, until the Chinese Government decided that it 
wanted to give the choice location to someone else. Consequently, 
despite contractual provisions to the contrary, the Chinese kicked 
McDonald's out of their location. Another company, Revpower, Ltd., 
entered into a contract with the Government-owned Shanghai Far-East 
Aero-Technology Import and Export Corp. After a dispute between the two 
was settled by arbitration, an arbitral award in the amount of $6.6 
million was made against the Shanghai firm. Despite its contractual 
promise, however, the Chinese firm refused to abide by the results of 
the arbitration. Revpower subsequently sought the assistance of the 
Shanghai Intermediate People's Court in enforcing the award, but the 
court has failed to act or even acknowledge the existence of the suit. 
One can see why the absence of the rule of law would make businesses 
skittish.
  Mr. President, I come to the floor today as the chairman of the 
Senate Subcommittee on East Asian and Pacific Affairs to let the people 
of Hong Kong--as well as the government in Beijing--know that the 
United States take great interest in the future of Hong Kong. We will 
be keenly watching to be sure that the parties live up to the letter 
and spirit of the Joint Declaration, especially any developments 
regarding the CFR and the rule of law. The People Republic of China 
should know that we will use how it treats Hong Kong as a strong 
indicator on how it will be expected to act in other areas such as the 
WTO or similar body, for example. If the PRC fails in the former, then 
I will be hard-pressed to support its accession to the latter. The 
world is watching, Mr. President; let us hope that we will like what we 
see.


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