The Basic Law (BL) is the constitutional document of the Hong Kong Special Administrative Region (HKSAR). It enshrines within a legal document the important concept of “One Country, Two Systems.” Under this principle, socialist policies of mainland China are not practiced in the HKSAR.
The Basic Law provides the guarantees to maintain Hong Kong’s existing way of life, including socioeconomic development, the rights and duties of Hong Kong people, the rule of law and other areas.
The Basic Law was put into effect July 1, 1997.
Q1: Has the HKSAR Government maintained complete control over fiscal and economic policies and safeguarded the free movement of goods, assets and capital?
A1: The HKSAR Government formulates its own economic policies; manages its finances independently; prepares its own budgets; issues its own freely convertible currency; practices an independent taxation system; keeps its low and simple tax regime; formulates on its own monetary and financial policies; safeguards the free flow of capital; maintains the status of a free port; pursues a policy of free trade and protects the free movement of goods, intangible assets and capital. (BL Articles 62; 106-119)
Q2: Is Hong Kong still a free port and a separate customs territory?
A2: Ships of all nations regularly call into Hong Kong, which is virtually a duty-free port. The HKSAR, using the name “Hong Kong, China,” is a member in its own right of the World Trade Organization and the World Customs Organization. Hong Kong remains a separate customs territory, and the boundary between mainland China and the HKSAR is clearly delineated and properly managed. Export quotas, tariff preferences and other similar arrangements, which are obtained or made by the HKSAR or which were obtained or made and remain valid, shall be enjoyed exclusively by Hong Kong. (BL Articles 114; 116; 126)