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Viewing cable 09HONGKONG919, HONG KONG SCENESETTER FOR CODEL PELOSI
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
09HONGKONG919 | 2009-05-19 10:31 | 2011-08-23 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Hong Kong |
VZCZCXRO7764
PP RUEHGH
DE RUEHHK #0919/01 1391031
ZNR UUUUU ZZH
P 191031Z MAY 09
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC PRIORITY 7649
INFO RUEHBJ/AMEMBASSY BEIJING 3186
RUEHGH/AMCONSUL SHANGHAI
UNCLAS SECTION 01 OF 02 HONG KONG 000919
SENSITIVE
SIPDIS
DEPT FOR EAP/CM; H PASS TO CODEL PELOSI
E.O. 12958: N/A
TAGS: PREL PGOV ECON ETRD OREP HK
SUBJECT: HONG KONG SCENESETTER FOR CODEL PELOSI
REF: BEIJING 1315
¶1. (U) We warmly welcome your delegation's May 29-30 visit to
Hong Kong. Your meetings with Chief Executive Tsang, the
Legislative Council and democratic politicians will help to
underscore our message that the United States, particularly
the Congress, maintains a key interest in Hong Kong's
autonomy and democratic development under the Basic Law and
"one country, two systems."
-----------------
Political Outlook
-----------------
¶2. (SBU) Under the "one country, two systems" concept
enshrined in Hong Kong's Basic Law, the Hong Kong Special
Administrative Region (HKSAR) enjoys a high degree of
autonomy in all matters except foreign relations and defense.
Since Hong Kong's return to China 12 years ago, the people
of Hong Kong have continued to enjoy a broad range of civil
and social freedoms, strong legal institutions and rule of
law, the free flow of information, and a highly professional
civil service. The Basic Law also provides for "gradual and
orderly progress" toward election of both the Chief Executive
and the entire Legislative Council (LegCo) by universal
suffrage. Public opinion polls suggest Hong Kong people
(particularly the young) increasingly identify themselves as
Chinese citizens and are enthusiastically proud of China's
rise, symbolized by its hosting of and performance in the
Olympics. Further, the increasing economic and personal
linkages between Hong Kong and mainland China mean that Hong
Kongers see their future tied to China's success.
¶3. (SBU) Although Hong Kong's "executive-led" system grants
the administration far greater powers than the legislature,
LegCo has grown in influence as a check on the executive,
with even "pro-Beijing" parties more willing to criticize the
government and push for changes in policy. Chief Executive
(CE) Donald Tsang's Administration has won plaudits for its
macro-level handling of the economic crisis and the recent
H1N1 outbreak (more below), but has faced contentious debates
on social spending and economic stimulus. While the
pan-democrats lost three seats in the September 7, 2008,
LegCo elections, they retain enough votes to deny the
government the necessary two-thirds majority required to
change the Basic Law. The government will thus have to
accommodate pan-democratic views in order to pass democratic
reforms for the 2012 LegCo and Chief Executive elections.
Political consultations on these reforms, originally planned
for early 2009, are now scheduled to begin by the end of this
year.
¶4. (SBU) Hong Kong will once again be the only point on PRC
soil in which the anniversary of the June 4 democracy
movement is publicly commemorated, with activists planning a
march for May 31 and the annual candlelight vigil in Victoria
Park June 4. Local observers believe the significance of the
20th anniversary, as well as Hong Kong people's desire to
protect "one country, two systems" amid allegations the
Mainland is trying to ratchet up control of Hong Kong, will
lead to a larger-than-usual turnout. An additional factor
will be remarks by CE Tsang at LegCo May 14. Claiming to
speak for the Hong Kong people, Tsang said an "objective"
assessment of June 4 should be made in light of the
subsequent 20 years of China's economic development and
social stability. Pan-democratic lawmakers walked out in
protest, and Tsang later apologized for claiming to represent
the views of the people of Hong Kong on this issue.
--------------------
Economic Performance
--------------------
¶5. (U) The global financial and economic meltdown has hit
Hong Kong hard. Hong Kong's benchmark Hang Seng Index fell
48 percent in 2008; while it has recovered some ground in
recent weeks, trading volumes are still down by two-thirds.
Hong Kong banks' hard-earned experience during the Asian
Financial Crisis positioned them well to deal with the
immediate impact of the financial crisis in the United
States: they were not significantly exposed to exotic
financial products and continue to be well capitalized.
However, the collapse of U.S. demand for Chinese manufactured
goods has significantly affected Hong Kong,s trade and
logistics industries, and the financial services sector has
suffered along with them. Hong Kong,s exports and imports
are down 20 percent from the same period last year. Official
unemployment climbed sharply to 5.2 percent in March, and
analysts expect additional layoffs in the finance, trade and
HONG KONG 00000919 002 OF 002
retail sectors later this year. Hong Kong,s economy has
been in recession since mid-2008; in the first quarter of
2009, Hong Kong,s GDP contracted by 7.8 percent. The Hong
Kong government has proposed several new infrastructure
projects in an effort to create jobs, has increased fiscal
spending, and is likely to announce additional fiscal
stimulus later this year, but confidence in Hong Kong,s
short-term economic prospects remains low.
¶6. (SBU) In 2007, Hong Kong was the third-largest container
port in the world (by volume). Hong Kong and the adjacent
PRC port of Shekou (Shenzhen) handled almost the same volume
of cargo in 2008 and together account for over 25% of all
containers shipped to the United States. The economic
crisis, however, has pushed cargo volumes down by over 20
percent in both ports in the first quarter of 2009. Hong
Kong air cargo shipments declined 20 percent in the fourth
quarter of 2008, compared with the same period in 2007,
including a drop of 28 percent in December. Shippers
reported improving figures in April, leading some to suggest
that the region has hit the bottom and is now rebounding, but
trade financiers say the low volumes of trade credit
applications point to a deeper fall to come.
------------------------------------
Export Controls and Nonproliferation
------------------------------------
¶7. (SBU) Hong Kong is a critical partner for USG
counter-proliferation and transportation security programs.
With its special status under the "one country, two systems"
framework, Hong Kong continues to maintain an effective,
autonomous, and transparent export control regime, despite
its reversion to China. Our mission remains vigilant in
efforts to detect possible compromises in Hong Kong,s trade
controls. Hong Kong was among the first in Asia to
participate in the Container Security Initiative (CSI). On
April 30, a successful 18-month Secure Freight Initiative
(SFI) pilot between the U.S. Government, the Hong Kong
Government and Hong Kong,s private sector concluded at the
port of Hong Kong. This pilot utilized integrated radiation
scanning and imaging systems and provided valuable
operational lessons on the technical, logistical and
diplomatic challenges with scanning maritime containers in a
high-volume port such as Hong Kong.
¶8. (SBU) Hong Kong is a cooperative partner in preventing the
transfer of goods through its ports that could be used by
those seeking to develop missile and WMD programs. The Hong
Kong Government possesses the necessary laws and powers to
prosecute and convict persons engaging in illicit activities
involving proliferation or WMD production. Its government is
also empowered to legally enforce UN Security Council
resolutions, once they have been confirmed by Beijing and
written into Hong Kong law.
-----------------------
Pandemic Influenza/H1N1
-----------------------
¶9. (SBU) As a regional business and tourist hub in an area
historically hit hard by pandemic disease, Hong Kong has
invested heavily in a robust and very capable infectious
disease surveillance and treatment capability. Response
planning conceived for H5N1 (Avian Influenza), which focused
on delaying its spread into the general population for as
long as possible, is now employed in Hong Kong,s "emergency"
response to H1N1. All arriving passengers are subject to
passive thermal screening for a raised temperature and fill
out additional health and travel questionnaires upon arrival.
As of May 19, four cases of H1N1 have been confirmed in
recent arrivals from North America and hundreds of travelers
in direct contact with, or proximity to, these passengers
have been placed in mandatory seven-day quarantine, among
them a number of Americans (8 are currently under
quarantine). Given this background and the extraordinary
lengths Hong Kong has gone to keep H1N1 from its territory,
the local press is highly critical of a perceived lack of
U.S. efforts to contain H1N1 and are openly accusing the
United States of "callously exporting the disease around the
world." Hong Kong,s Secretary for Health has publicly and
privately called for U.S. exit controls to prevent ill
passengers from departing the United States.
DONOVAN