Fiscal and Financial Systems

LAW OF THE HONG KONG CONSTITUTION, Sweet & Maxwell, 2011

66 Pages Posted: 22 Oct 2012

See all articles by Richard Cullen

Richard Cullen

The University of Hong Kong - Faculty of Law

Douglas W. Arner

The University of Hong Kong - Faculty of Law

Berry Fong Chung Hsu

Asian Institute of International Financial Law

Xiaonan Yang

University of Hong Kong

Antonietta Wong

Independent

Date Written: October 22, 2012

Abstract

The Basic Law sets out the way in which the Hong Kong Special Administrative Region (HKSAR) is to be administered for 50 years beyond 1997. It promises that the socialist system and policies in the People’s Republic of China (PRC) will not apply to the HKSAR under the doctrine of 'One Country, Two Systems'. Under the Basic Law, matters related to foreign affairs and defence fall within the ambit of the Central People’s Government (CPG) of the PRC but Hong Kong has full management responsibility over many other matters. In particular, the HKSAR shall: maintain its status as an international financial centre; have no foreign exchange controls; formulate policies to support a wide range of trading activities; maintain its status of a free port; pursue a free trade policy; remain a separate [from the Mainland PRC] customs territory (and may, as 'Hong Kong, China' participate in relevant international trade negotiations); issue its own certificates of origin for given products; formulate its own monetary and financial policies; issue Hong Kong currency, backed by a 100 per cent reserve fund; retain its own tax (revenue) regime; use its finances only for its own purposes (and they shall not be handed over to the CPG and the CPG shall levy no taxes in the HKSAR); and strive to achieve a fiscal balance and avoid deficits.

The above provisions are all set out in Part 1 (Public Finance, Monetary Affairs, Trade, Industry and Commerce) of Chapter V (Economy) of the Basic Law. Various of these provisions are discussed in detail in this Chapter under the following headings:The Budget and Appropriation Process in Hong Kong; The Hong Kong Revenue Regime; Financial Law and Regulation in Hong Kong, Hong Kong’s Future as an Internatioanal Financial Centre; and The Justiciability of Articles (apart from Article 105) in Part 1 of Chapter 5 of the Basic Law.

Article 105, which stipulates that the HKSAR shall protect individual and legal-person property rights (and requires just compensation to be paid for lawful deprivation of property) is also included in Part 1 of Chapter V (above). Article 105 is dealt with in other Chapters of this book.

Suggested Citation

Cullen, Richard and Arner, Douglas W. and Hsu, Berry Fong Chung and Yang, Xiaonan and Wong, Antonietta, Fiscal and Financial Systems (October 22, 2012). LAW OF THE HONG KONG CONSTITUTION, Sweet & Maxwell, 2011. Available at SSRN: https://ssrn.com/abstract=2165150

Richard Cullen (Contact Author)

The University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

Douglas W. Arner

The University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

HOME PAGE: http://hub.hku.hk/rp/rp01237

Berry Fong Chung Hsu

Asian Institute of International Financial Law ( email )

Faculty of Law
University of Hong Kong
Hong Kong, 709
China

Xiaonan Yang

University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK
China

Antonietta Wong

Independent ( email )

No Address Available
United States

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