V. Fully and Accurately Understanding and Implementing the Policy of "One Country, Two Systems"

As a groundbreaking initiative, "one country, two systems" is a major issue of governance to the central leadership, and marks a major historical turning point for Hong Kong and Hong Kong people as well. While comprehensive progress has been made on all fronts in the HKSAR, the practice of "one country, two systems" has come to face new circumstances and new problems. Some people in Hong Kong have yet felt comfortable with the changes. Still some are even confused or lopsided in their understanding of "one country, two systems" and the Basic Law. Many wrong views that are currently rife in Hong Kong concerning its economy, society and development of its political structure are attributable to this. The continued practice of "one country, two systems" in Hong Kong requires that we proceed from the fundamental objectives of maintaining China's sovereignty, security and development interests and maintaining the long-term stability and prosperity of Hong Kong to fully and accurately understand and implement the policy of "one country, two systems," and holistically combine upholding the principle of "one country" with respecting the difference of "two systems," maintaining the power of the central government with ensuring the high degree of autonomy of the HKSAR, and letting the mainland play its role as a strong supporter of the HKSAR with improving the competitive edge of Hong Kong. In no circumstance should we do one thing and neglect the other.

1. Fully and Accurately Understanding the Meaning of "One Country, Two Systems"

"One country, two systems" is a holistic concept. The "one country" means that within the PRC, HKSAR is an inseparable part and a local administrative region directly under China's Central People's Government. As a unitary state, China's central government has comprehensive jurisdiction over all local administrative regions, including the HKSAR. The high degree of autonomy of HKSAR is not an inherent power, but one that comes solely from the authorization by the central leadership. The high degree of autonomy of the HKSAR is not full autonomy, nor a decentralized power. It is the power to run local affairs as authorized by the central leadership. The high degree of autonomy of HKSAR is subject to the level of the central leadership's authorization. There is no such thing called "residual power." With China's Constitution stipulating in clear-cut terms that the country follows a fundamental system of socialism, the basic system, core leadership and guiding thought of the "one country" have been explicitly provided for. The most important thing to do in upholding the "one country" principle is to maintain China's sovereignty, security and development interests, and respect the country's fundamental system and other systems and principles.

The "two systems" means that, within the "one country" the main body of the country practices socialism, while Hong Kong and some other regions practice capitalism. The "one country" is the premise and basis of the "two systems," and the "two systems" is subordinate to and derived from "one country." But the "two systems" under the "one country" are not on a par with each other. The fact that the mainland, the main body of the country, embraces socialism will not change. With that as the premise, and taking into account the history of Hong Kong and some other regions, capitalism is allowed to stay on a long-term basis. Therefore, a socialist system by the mainland is the prerequisite and guarantee for Hong Kong's practicing capitalism and maintaining its stability and prosperity. For Hong Kong to retain its capitalist system and enjoy a high degree of autonomy with "Hong Kong people governing Hong Kong" according to the Basic Law, it must fully respect the socialist system practiced on the mainland in keeping with the "one country" principle and, in particular, the political system and other systems and principles in practice. The mainland should respect and tolerate the capitalism embraced by Hong Kong while upholding its socialist system, and draw on the successful experience of Hong Kong in economic development and social management. Only by respecting and learning from each other can the "two systems" in the "one country" coexist harmoniously and achieve common development.

2. Resolutely Safeguarding the Authority of the Constitution of the PRC and the Basic Law of Hong Kong

The Constitution of the PRC and the Basic Law together constitute the constitutional basis of the HKSAR. As the fundamental law of the country, the Constitution, with supreme legal status and the highest legal authority, is applicable throughout the territory of the People's Republic of China, including the HKSAR. The Basic Law, which was formulated in accordance with the Constitution, provides for the system of the HKSAR and enjoys the legal status as its constitutional law. The systems and policies of the HKSAR are all based on the provisions of the Basic Law; no law enacted by the legislature of the HKSAR shall contravene the Basic Law. All the executive, legislative and judicial practices in the HKSAR must conform to the Basic Law. And all individuals, groups and organizations of the HKSAR shall obey the Basic Law. As a national law, the Basic Law is applicable throughout the country.