How 'One Country, Two Systems' Shapes Hong Kong and Macao's International Role

How ‘One Country, Two Systems’ Shapes Hong Kong and Macao’s International Role

As the year 2024 approaches, it marks 42 years since the concept of “One Country, Two Systems” was first introduced by Deng Xiaoping on January 11, 1982. This innovative principle was initially proposed as a peaceful solution for reunification with the Taiwan region. It was later enshrined in Article 31 of the Constitution of the People’s Republic of China, allowing for the creation of Special Administrative Regions (SARs) that maintain distinct legal, social, and economic systems while being part of one country.

Hong Kong and Macao are prime examples of this arrangement. Since their establishment as SARs in 1997 and 1999 respectively, they have played unique roles as non-sovereign actors in international affairs. Under their Basic Laws, both regions are authorized to maintain and develop relations with foreign states and international organizations, enabling them to actively participate in the global arena.

One significant aspect of their international engagement is continued membership in the World Trade Organization (WTO) under the names “Hong Kong, China” and “Macao, China.” The WTO allows not only sovereign states but also “separate customs territories” to be members, which has ensured that both Hong Kong and Macao remain open to international trade and have access to overseas markets.

Hong Kong, in particular, has been proactive in defending its trade interests through the WTO’s dispute settlement mechanism. In December 2022, Hong Kong prevailed in a trade dispute against the United States. The issue arose when the U.S. required products originating from Hong Kong to be labeled differently, a move the WTO panel found inconsistent with the General Agreement on Tariffs and Trade. This victory underscores Hong Kong’s commitment to upholding fair trade practices on the international stage.

Macao, on the other hand, has maintained its status as a free port, refraining from imposing tariffs on imported goods. This policy not only makes goods more accessible to local residents and visitors but also contributes to its reputation as a “role model among WTO members,” having not been involved in any trade disputes.

The “One Country, Two Systems” principle has thus allowed Hong Kong and Macao to retain their unique economic and legal systems, fostering active participation in global affairs. Their experiences demonstrate how this approach enables regions to contribute meaningfully to international organizations and uphold global trade norms while being part of a larger sovereign state.

As we reflect on over four decades of this principle, the examples of Hong Kong and Macao highlight its ongoing relevance and effectiveness in facilitating regional participation in international affairs.

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