TNAG-2728-FCO40-3934-Hong-Kong-elections-proposed-functional-constituencies-1993 — Page 5

SECRET

XCX(93)36

Justifications For The Proposals

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Wholesale, Retail, Import and Export. This proposal builds on the Import/Export FC proposed by the Chinese side. The wholesale, retail, import and export trades constitute an important component of Hong Kong's service sectors. In 1991, they contributed 21.1% of our Gross Domestic Product and employed 19.6% of our total workforce. Hong Kong is also among the top ten traders in the world. The electorate of this FC will comprise proprietors/directors of companies in the trades, plus members of the relevant trade (employers') associations.

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Resident Organizations. This proposal builds on the Kai Fong FC proposed by the Chinese side, even though Kai Fong associations are largely a dormant species. The backbone of this new FC is the Mutual Aid Committees (MACs), Owners' Corporations (OCs), and Landlords and Tenants Associations which perform an important role in building management. They also help to foster a sense of belonging among the residents by supporting various community campaigns (e.g. Fight Crime) organized by Government. At present, there are over 8 000 such organizations; this number will increase in the years to come.

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Kai Fong associations are traditional, district-based organizations. There are now about 63 such associations, and are mostly found in the older parts of the urban areas. Of these, only 24 are considered active, and their activities are mainly social and recreational. Although the importance of these associations has been in decline since the early 1970s and as such do not really deserve an FC seat, their inclusion will demonstrate our willingness to accommodate Chinese wishes where practicable.

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There are no MACS, OCs or Kai Fong associations in villages in rural New Territories. Village affairs are handled by the Village Representatives (VRS). At present, there are approximately 690 villages with about 900 VRs.

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The electorate of this FC will therefore comprise executive committee members of MACs, OCs, Landlords and Tenants Associations, and Kai Fong associations, plus all VRs in the New Territories.