A Comparison of the Evolution of Macau and Hong Kong into SARs of China

Renée Vincent

Abstract

Hong Kong and Macau have the exception of being administered under China’s constitutional principle of ‘One Country Two Systems.’ It bestows upon them the designation of being Special Administrative Regions (SARs), setting them apart from the other regions of China. They have their own economic and judicial systems while remaining under the tutelage of the Chinese Government, which is responsible for the diplomatic, military, and other foreign affairs of the two SARs. Despite exercising autonomy unlike that offered to any other regions of China, there exists a discrepancy in how the two regions have adopted and accepted the model. Macau is the crowning glory of China’s “One Country Two Systems” model, while Hong Kong is proving to be its antithesis. The paper delves into China’s adoption of the principle of autonomy in its political system. It attempts to outline the similarities in the autonomous status between the two regions. It will also examine the differences in this status which have contributed to the success of the model in Macau but instead heightened conflict in Hong Kong. 

Keywords: Hong Kong, Macau, Autonomy, Special Administrative Regions, China

Introduction

A point of commonality that is evident between Macau and Hong Kong is their respective colonial pasts. The British colonial legacy in Hong Kong began with the First Opium War in 1839, which was provoked by Britain illegally exporting opium into China. Britain’s victory in the war resulted in the signing of the Treaty of Nanking in 1842 (Wong, 2018). As per its requirements, China had to cede Hong Kong to the British to become one of its colonies. In 1898, Britain was given a lease of 99 years over Hong Kong, effectively ending in 1997. The Sino-British Joint Declaration was then signed in 1984, after which Hong Kong was handed over to China (Wong, 2018). 

Macau alternately was the de facto colony of Portugal. However, when the Ming Dynasty fell, and the Manchu Qing Dynasty took over in 1644, Great Britain's increasing influence in the area, due to its presence in Hong Kong, allowed it to dominate the relationship between Portugal and the Qing Dynasty. This was reflected in the signing of the Sino-Portuguese Treaty of Peking, which gave Portugal conditional rights of “perpetual occupation and government” (Szczepanski, 2019). Eventually, even the Qing Dynasty fell, and in 1966, the Cultural Revolution overtook Macau causing mass protests against Portuguese rule. In the course of time, Portugal and China established diplomatic relations and in 1976, it was mutually acknowledged that Macau was a “Chinese territory under Portuguese administration” (Szczepanski, 2019). On 13 April 1987, the Joint Declaration on the question of Macau was signed in Beijing, paving the way for Macau's restoration to full Chinese sovereignty as a Special Administrative Region on 20 December 1999.

China’s Concept of Autonomy

A derivation of the Greek word ‘auto’ and ‘nomos,’ autonomy, at its basic denotation, is self-rule. In the context of territories, the term can be defined as, “the legally entrenched power of communities to exercise public policy functions of a legislative, executive and/or judicial type independently of other sources of authority in the state, but subject to the overall legal order of the state.”(Weller & Wolff, 2005). A manifestation of this is what uniquely characterizes the Chinese political system. Having historically been a centralized country, unifying the multiplicity of ethnicities residing within it, required providing the minority ethnic regions autonomy. The rights of the ethnic minorities as autonomous areas are enshrined in the Constitution of the land, with Article 4 promulgating, “all areas inhabited by ethnic minorities shall practice regional autonomy, establish autonomous organs, and exercise the power to self-govern. All ethnic autonomous areas are inseparable parts of the People’s Republic of China.” Accordingly, in 1984, the Law on Regional Ethnic Autonomy was adopted, which enshrined the principles that would protect the rights of minorities. 

Through the creation of provisions for regional ethnic autonomy, the country has sought to secure the interests of the citizens as well as the country. The multicultural country's stability is very much dependent on the successful fruition of autonomy. Thus, the system of autonomy can only be inferred to be indispensable to the socio-political constitution of China. This acts as a frame of reference in the context of China’s Special Administrative Regions or SARs. Under the suis generis ‘One-Country Two Systems model’, the Special Administrative Regions is a designation Hong Kong and Macau solely share. Under this policy, they have autonomy over their own economic and legal systems while remaining under the tutelage of the Chinese Government, which is responsible for the diplomatic, military, and other foreign affairs of the two SARs. The rationale provided in a White paper released by the Information Office of the State Council of The People’s Republic of China, for the country choosing such a system, lies in its aspirations for "peaceful reunification of the country." While particularly focusing on Hong Kong, the first of the regions to transform into a SAR, it states that the policy of One Country, Two System is effective in ensuring that China’s sovereignty is safeguarded, its development interest secured, and the long-term stability it is capable of achieving. The adoption of this system has become synonymous with China, which relies on its success to accomplish its broader goal of unifying China.

Similar legal provisions retaining autonomy

Since signing their respective Joint Declarations, Hong Kong and Macau have found themselves under the direct authority of the People’s Republic of China. As Special Administrative Regions of China (SARs), these areas exercise limited authority and enjoy restrained autonomy. On the question of their governance, it is the regional constitutions of the regions or their mini-constitutions that dictate the dynamics of their relationship with mainland China. Legally, the provisions of autonomy are enshrined in the Basic Laws of the Hong Kong Special Administrative Region of the People's Republic of China and the Basic Law of the Macao Special Administrative Region of the People's Republic of China. This constitutional document is also proof of their futures as negotiated by the Chinese government and their former colonial rulers.

From a comparative perspective, the Basic Laws of the SARs are generally similar in their provisions. The document starts with a Preamble, which dictates the establishment of Macau and Hong Kong as ‘Special Administrative Regions’ under Article 31 of the Constitution of the People’s Republic of China. It also establishes the resumption of China’s sovereignty over the region. Their mini-constitutions comprise nine chapters and three Annexes, laying down various provisions regarding how the region is to govern and be governed. Through this document, the similarities in the legal status of the regions are acknowledged: 

• Articles 1 to 11, titled General Principles, identify Macau and Hong Kong as “inalienable parts of the People’s Republic of China,” specifies the broad ideas that underpin the Special Administrative Regions’ position. It also gives them the authority to exercise a high degree of legal, executive, and judicial authority. The power of final adjudication is also granted to them. Article 5 specifically states that for a period of 50 years, the social system and its policies will not be practiced in the SARs, meaning a retention of their capitalist system for the same period.

• Articles 12 to 23, contain provisions for the nature of the association that would exist between the central authority and the SARs. For matters about the Special Administrative Region’s foreign relations, the Central People’s Government shall be in charge. The defense of the regions is also the responsibility of the Central People’s Government. 

• Articles 24 to 42 (For Hong Kong) and Articles 24 to 44 (For Macau), detail the fundamental rights guaranteed to the residents of the regions. They are granted freedom of speech, press, association, demonstration, etc. The citizens and visitors are legally required to abide by laws that are in effect in the Special Administrative Regions.

• Articles 45 to 60 (For Hong Kong) and Articles 45 to 62 (For Macau) establishes the political structure and recognizes the Chief Executive as the head of Macau and Hong Kong respectively. They outline the requirements for becoming a Chief Executive as well as the duties that come with the position. It also establishes an Executive Council. Its purpose is to assist the Chief Executive in dispensing functions of policy making.

• Articles 61 to 65 (For Hong Kong) and Articles 63 to 66 (For Macau) specify who comprises the Executive Authorities of the regions, the power they enjoy, and the functions they are expected to execute. Accordingly, the respective Governments of the Special Administrative Regions are its Executive Authority, with the head of the government being the Chief Executive of the region. 

• Articles 66 to 79 (For Hong Kong) and Articles 67 to 81( For Macau) describe the structure, power, and function of the legislature. The Legislative Council of both regions are their respective legislatures. They fulfill the functions of creating, amending, and repealing laws, approving, and examining the budget, and approving public expenditure among others.

• Articles 80 to 96 (For Hong Kong) and 82 to 96 (For Macau) focus on the judicial part of the government. It legitimizes the authority of the courts of the regions to exercise judicial power. The power of final adjudication is granted to the Court of Final Appeal of the regions. In the case of Hong Kong, it was allowed to retain its previous practice of trial by jury. Whereas for Macau, the existing system for appointing and dismissing judicial staff is to be maintained.

• Articles 105 to 119 (For Hong Kong) and Articles 103 to 115 (For Macau) expound on the economic rights of the regions. It maintains that they are to have independent finances and independent tax systems. They will be free ports, and the exchange control policy does not apply to them. They are to operate as separate customs territories, and no customs duty will be charged.

• Articles 136 to 149 (For Hong Kong) and Articles 121 to 134 (For Macau) are where provisions containing the laws on education, culture, social affairs, and religion are enshrined. It states that the internal workings of religious organizations of the region will be free from any form of government interference. It also safeguards the principle of freedom of religious belief.

• Articles 135 to 142 (For Macau) and Articles 150 to 157 (For Hong Kong) enshrine provisions regarding external affairs. Both regions have the freedom to develop and build ties with foreign nations, regions, and pertinent international organizations, and sign and carry out agreements with them. They are to do so under the name ‘Hong Kong, China’ and ‘Macau, China.’ It also permits them to attend international conferences and participate in international organizations under the same names.

Points of Contention

As documented, the legal provisions for the two SARs are predominantly similar. Their sovereignty is only countered by the fact that China retains the right to interpret the Basic Laws of these lands (Huang & Huang, 2016). Moreover, “any autonomy they have vested in them was granted by the government of China. Although the power of immunity of the two SARs is also broader than other localities in China, Beijing still maintains political leverage to ensure that the decisions of the SAR governments do not conflict with its interests.” (Chou, 2013). Intentional exploitation of any ambiguity present in the Basic Law could directly infringe on the sovereignty of these regions.

There exists a stark difference in how Hong Kong and Macau have accepted Beijing’s overt exercise of authority. Hong Kong’s vitality for protesting Beijing’s policies contrasts with Macau’s quiet acceptance of them. In Hong Kong, where civil society places great emphasis on retaining its way of life, the Basic Law’s are accepted at face value and discussions on local autonomy and judicial independence do not end. Chou, a political scientist at the University of Macau states that the cause of defiance and obedience by Hong Kong and Macau, respectively can be attributed to an amalgamation of factors according.

Transition

During the negotiations for the handover, the British government was less willing to give up Hong Kong, as it feared the economy of the region would collapse. The Chinese counterparts made it abundantly clear that the sovereignty of Hong Kong was not merely a matter of discussion but rather a predetermined decision. Britain also pushed for the democratization of the region. The last governor General of Hong Kong, Chris Patten introduced an electoral reform in 1994, which saw the election of half the Legislative Council by universal suffrage. On account of this, Hong Kong saw for the first time a fully elected legislature. The government of China strongly criticized Patten’s actions and post-handover the legislative council elected under the reform was dissolved. This could be traced to Hong Kong’s first taste of democracy. Edmonds and Yee have equated Hong Kong's transition as being a stimulus for Sino-British rivalry over sovereignty and democracy (Edmonds & Yee, 1999).

Portugal, on the other hand, was more cooperative and willing to comply with China for a smooth transition. The Carnation Revolution of 1974 ended the dictatorship in Portugal and established democracy. Moreover, the 123 incident of 1966 had already established de facto Chinese sovereignty over the island. Lisbon, by then, wanted to relieve itself of its colonies and therefore, submitted to Chinese sovereignty over the region. Unlike the British government in Hong Kong, the Portuguese authority in Macau avoided taking measures toward promoting democracy. Instead, it chose to allow pro-Beijing social groups like trade unions and ‘kaifong’ (neighbourhood associations) to encourage people to cast votes and participate in elections. (Edmonds & Yee, 1999). The asymmetry of power between Portugal and China made it nearly impossible for Lisbon to prevent Beijing from taking a unilateral stance on Macau.

Universal Suffrage

The demand for universal suffrage further differentiates Macau and Hong Kong. Article 45 of the Basic Law of Hong Kong promulgates, “The Chief Executive of the Hong Kong Special Administrative Region shall be selected by election or through consultations held locally and be appointed by the Central People's Government. The method for selecting the Chief Executive shall be specified in light of the actual situation in the Hong Kong Special Administrative Region and in accordance with the principle of gradual and orderly progress. The ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures.”

The definitive decision for the same was to be made by 2007, but the Standing Committee of the National People’s Congress (NPC) deferred it till 2012. The universal suffrage promised under the subsequent 2014 resolution turned out to be attenuated. According to the NPC-SC judgment, only a nominating committee will be able to choose contestants, and it will be modelled after the previous election committee. As a result, those who support Beijing will be primarily responsible for choosing the candidates. No pan-democrat could be nominated if Beijing disapproved of him or her because each candidate would also need the approval of a majority of the nomination committee members. Disapproval of the public against the proposed reform materialized and erupted in the form of the Umbrella Movement of 2014. It was described by democracy activist Benny Tai as Hong Kong’s “new era of resistance”. Though the movement was unsuccessful in achieving true universal suffrage, it did start a wave of pro-democracy protests. It became an indication of the growing dissent among people toward the system, as the Chinese government undermined the judicial system and violated the country's autonomy.

On the other hand, the establishment of universal suffrage is not enshrined in Macau’s Basic Law. The inclination towards autonomy is also relatively minuscule in Macau, where strong pro-China sentiments exist. The influence of pro-Chinese Communist Party groups coupled with the Beijing government's competency in dealing with Macau has enabled space for cordial relations to develop between the two. Since the era of Portuguese rule, pro-Beijing forces have exercised their influence on local politics. Now, the election of Chief Executives and legislators is also dominated by such groups. Beijing, which retains the authority to initiate political reforms in the SARs, has found less resistance in Macau for the same.

Economic Interrelations

The economic relationship between mainland China and its SARs also factors in when analysing their attitude towards Beijing. Owing to the economic autonomy given to them, both regions are extremely important to China. Hong Kong as a prime international financial center is distinguished by its open economy, minimal government interference, and distinct regulatory frameworks to oversee businesses operating in the area. When Beijing imposed the National Security Law in 2020, in Hong Kong it met with vehement opposition, as its impact was also felt on Hong Kong’s economy. Consequently, the U.S. Department of State issued an advisory to American companies in 2021, about potential threats to their operations and activities in Hong Kong. Foreign companies are now more skeptical of investing in Hong Kong, negatively impacting the inflow of foreign investment.

Macau’s economic relations with China is one of reliance as its economy is highly dependent on the gambling and tourism industry. In the quarter ending in March 2023, the region earned MOP USD 10.1 billion (USD 1.25 billion) in gaming tax income. It also holds the special place of being the sole region in China where gambling is legal. This has created a relationship of dependence between the two. Visitors from mainland China constitute the highest percentage of tourists, with some of the highest betters also being Chinese. The Macanese economy has seen a humongous boost ever since it came under China’s sovereignty, overtaking Hong Kong’s GDP per capita by USD 68,991 in 2018. This could be linked to the hesitation shown by the region against resisting China.

Civil Society

Local identity, localism, and social integration have coalesced and created divergent attitudes between the two SARs toward China. Local identity is built by interpersonal social interactions, community harmony, and historical heritage. In Macau, there have not been enough conditions for local identity to develop. Since Portugal's reign, pro-Beijing elements have ingrained themselves in Macau's local society (Chou, 2013). Their influence has permeated the region's media, society, and even the educational system. Since the local identity is weak, the people of Macau are more inclined to identify with the culture and politics of China. According to the Population Statistics Database, population census 2021, 42.72 percent of Macau’s population was born in Mainland China, a small difference from the 49.69 percent born in Macau itself. This could also be attributed to the greater acceptance shown towards Beijing’s policies.

In Hong Kong, the sense of local identity is strong. Localism can be defined as “an umbrella term which refers to the devolution of power and/or functions and/or resources away from central control and towards front-line managers, local democratic structures, local institutions and local communities, within an agreed framework of minimum standards” (Evans et al. 2013). Many Hong Kong residents have devised new strategies to defend the interests of Hong Kong due to growing unhappiness with the established opposition pan-democracy camp's attempts to undermine the current political system. This has given rise to localist movements and stimulated the growth of localism (Kwong, 2016). For localists, attempts at ‘mainlandisation’ of Hong Kong by the intervention of Beijing are a threat to local identity and warrant hostility towards China (Kwong, 2016). Beijing's measures which seek to restrict Hong Kong's freedom are interpreted as a bid to interfere with the identity and autonomy that the region fervently wants to protect. 

Conclusion 

China's State Council Information Office published a white paper in 2021 on the 'One Country, Two Systems' principle. The white paper particularly focuses on Hong Kong, which captures the country's real view regarding the system. According to the white paper, the policy is imperative for stability and prosperity. China sees it as necessary to achieve 'high-quality democracy' consistent with Hong Kong’s realities. What remains to be seen is whether these realities are inclusive of Hong Kong’s true democratic aspirations. China’s goal to thoroughly integrate Hong Kong with itself, leaving little room for any independent inclinations cannot be disputed. The difference in political ambitions, economic performance, social policies, ideology, attitude towards the Beijing government, and aspirations for democracy becomes the reason the ‘One Country- Two Systems’ model has worked in Macau and not Hong Kong. China is slowly but surely consolidating its control over the Special Administrative Regions, as the deadline for 50 years edges closer. Suppressing Hong Kong’s activism is equivalent to snipping at the bud, an issue that could very well threaten its dream of a united China. Beijing is also investing more in propositions that would closely integrate the two SARs with China. The Hengqin Plan and the Qianhai Plan, for the development of the regions, are closely linked to the Greater Bay Area. The Greater Bay Area, which consists of Hong Kong and Macau, is a scheme of the PRC, aimed at interlinking the two SARs and nina other municipalities of China and converting the area into an integrated economic zone. There have been apprehensions arising from Hong Kong as to how this could further dilute the sovereignty of the region, but the plans are already underway. Beijing remains determined to suppress any form of dissent. To fulfil its goal of reunification, it would require gaining complete control of all the regions it governs. Macau, which is hailed as the crowning glory of China’s One Country- Two Systems policy, will continue to acquiesce to Beijing’s policies. It is important for the Macau-Beijing ties to be cordial, as the region is more focused on economic growth than civil liberties. 

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About the Author

Renée Vincent is a Research Affiliate at the Centre for East Asian Studies, Christ University, Bangalore. Her focus area pertains to peace, conflict and human rights. She is currently pursuing her Master's from the Department of International Studies at Stella Maris College, Chennai.

Working Paper, #07, July 2023 | Centre for East Asian Studies