Overseas Business Risk - Hong Kong

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Information on key security and political risks which UK businesses may face when operating in Hong Kong.

Government

The Hong Kong Special Administrative Region of China (SAR) covers an area of 1,098 square kilometres (424 square miles) on the southern coast of China. It comprises Hong Kong Island, Kowloon and the New Territories, and about 235 outlying islands.

Hong Kong falls under the sovereignty of the People’s Republic of China, which is responsible for its foreign affairs and defence. However, Hong Kong enjoys a high degree of autonomy in the other areas of its governance, including economic and trade affairs. The Sino-British Joint Declaration outlines the “One Country, Two Systems” model for the Hong Kong Special Administrative Region. The Basic Law, which encompasses the key features of the Joint Declaration, such as Hong Kong’s special status, autonomy, the continuation of its capitalist system, common law legal system, rights and freedoms is effectively Hong Kong’s constitution. It prescribes, among other things, the relationship between the Chinese Government and the Hong Kong SAR Government, the fundamental rights and duties of the Hong Kong people and the SAR’s political structure.

On 25 March 2012, Mr CY Leung was elected by a 1,200 member Election Committee as Chief Executive of the Hong Kong SAR Government for a five-year term. He took office on 1 July 2012. The Legislative Council (LegCo) is Hong Kong’s parliament. Forty of its seventy seats are directly elected. The remaining thirty seats are filled by representatives of “functional constituencies”, selected mainly by the business sector and the professions. Members of LegCo serve for a term of four years, and the next LegCo elections, to select the 6th Legislative Council of Hong Kong, will be held on 4 September 2016.

On 18 June 2015, the Legislative Council voted down HKSAR Government proposals to implement universal suffrage for Chief Executive elections in 2017. The HKSAR Government has said it will now turn its attention to “economic development and livelihood” issues. At the time of writing, it is not clear when the constitutional reform process will be restarted.

Following the rejection of the reform bill, pro democracy legislators have engaged in a sustained filibuster campaign, which has impacted negatively upon the HKSAR Government’s ability to pass legislation and to secure funding for public infrastructure projects.

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