Brussels, 24/07/2001 (Agence Europe) - The European Commission is preparing to present to the Council and to the European Parliament a relatively positive assessment of the situation in Macao and Hong Kong, after their respective handovers by Portugal and the United Kingdom to China. In these two special administrative regions (SAR), the principle of "one country, two systems" works well and, at commercial level, there is still an attachment to free market principles. There are, however, certain difficulties with respect to intellectual property rights, say two reports to be published on Wednesday.
EUROPE has reason to believe that the first annual report by the Commission since retrocession of Macao to China in December 1999 will underline the "good start" taken by the SAR government which developed an institutional framework in just one year allowing relatively effective management. The SAR authorities also maintained most of the specific economic features of this small territory which is very much tributary to the situation of its neighbours, hence its status as a free port which gives its exemption from all taxes imposed by Beijing, and its attachment to free market principles. The economy remains largely dominated by gambling and tourism, a sector where recent revitalisation has been one of the key factors for a return to growth (with a slight pick-up of GDP which is said to have progressed 4.6% in 2000 after four consecutive years in decline). Its export performance has also improved, mainly for shoes and textiles. The EU is the second outlet (28.4% of all exports from the region), after the United States but before China and Hong Kong. It is the third supplier for Macao, contributing up to 9.6% of its imports behind China and Hong Kong. The liberalisation of economic sectors is moving forward, and the trade and investment regime of Macao remains "one of the most open in the world", say Europeans. The excellent relations that the territory enjoyed with Europeans before retrocession are now confirmed and enhanced. Intellectual property rights remain, however, a question of vital importance still unresolved, it is said in Brussels.
The Commission is expected to adopt a positive tone touched with caution, in its third annual report on Hong Kong, that the United Kingdom handed back to China in 1997. There have been one or two incidents during the past year (rich in debate and controversy on the peninsula's autonomy following remarks made by Chinese officials, later neutralised by a declaration from President Jian Zeming and strong reactions from the SAR itself). On the whole, however, the "one country, two systems" principle is doing well, it is said in Brussels. The legislative elections last year unfolded smoothly and civil society movements prove the population's attachment to fundamental freedoms and rights. Brussels, however, has promised to keep an eye on the polemic surrounding the presence of the Falun Gong sect in Hong Kong. The Commission is expected, moreover, to welcome Hong Kong's success whose economy has completely recovered from the financial crisis of 1997, and which has a rate of GDP growth essentially fed by exports, reaching 10.5% in 2000. The EU is its 3rd supplier of goods after China and Japan, and its third outlet after China and the United States. Bilateral relations continue to develop generally but comes up against an obstacle over one thing, namely respect of intellectual property rights which remains a source of discontent for Europeans, who nonetheless "applaud" the efforts of the SAR.