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ANATORY STATEMENT
INTRODUCTION
The European Parliament's (EP) previous report on Hong Kong/European Community (EC) relations (Seelar report 1985) painted a rosy picture of the future of Hong Kong and by the sama token the future of Hong Kong/EC relations. This optimism was based on the general acclaim and approbation expressed about the Joint Declaration on the future of Hong Kong drawn up between the respective governments of the United Kingdom (UK) and the Peoples Republic of China (PRC), The Seeler report used the current description of that Joint Declaration, calling it "a masterpiece of diplomacy". It was a widely held view that the guarantees of the survival of Hong Kong's capitalist system until the year 2047 was adequate to keep business confidence.
The Seeler report emphasised the need for the EP to monitor the transition process and the External Economic Affairs Committee (REX) felt that the time was opportune to review the EC's relations with Hong Kong in the light of actual developments in Hong Kong since 1985. Hence this report.
POLITICAL SITUATION
Hong Kong's fate is part of the fate of China and therefore any consideration of Hong Kong's role must begin and end with its relationship with China.
It is possible to talk of distinct phases in Hong Kong's recent development. The first phase is that from the signing of the Joint Declaration to the Tiananmen Square Massacre. Whatever the criticism of the Joint Declaration, the most trenchant being that it is a treaty drawn up by the UK and the PRC over the heads of the residents of Hong Kong, the actual signing provided the stability on which all parties could plan. It is true to say that once Hong Kong knew its future to be irrevocable and unambiguous, namely that it would return to China in 1997, there was a platform for that pragmatic economic activity which has characterised Hong Kong's development.
In general, Hong Kong was confident of securing its distinct character, as guaranteed by the Joint Declaration until 2047. Moreover, there was a buoyant feeling in Hong Kong from 1984 onwards that Hong Kong could take advantage of China's "Open Door" policy and become the power house for the economy of the whole of South China. In short, Hong Kong was more likely to take over China, as China was to take over Hong Kong in the eyes of the confident Hong Kong community.
This feeling, certainly verging on complacency, was rudely shocked by the events in Tiananmen Square in June 1989. There had been considerable interest in the development of the "democracy movement" in Hong Kong, and there had been considerable support. There had been spontaneous solidarity in the form of donations of money and tants eta for the protesters in the square itself. But even the supporters of the pro-democracy movesant were surprised at the size of the spontaneous demonstrations in Hong Kong protesting against the bloody suppression of peaceful movement.
While these protests were clearly primarily an expression of anger and sympathy, there was also a degree of self-interest. Many people in Hong Kong were worried that the Chinese authorities could act in a similarly tyrannical manner to crush
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PE 156.153/rév.