Government Structure

Under the Basic Law，the HKSAR enjoys a high degree of autonomy except in defence and foreign affairs. The HKSAR exercises executive，legislative and independent judicial power， including that of final adjudication.

The Chief Executive

The Chief Executive is the head of the HKSAR. He is advised on major decisions by the Executive Council， the members of which are appointed by the Chief Executive.

Representative Government

The HKSAR has a two-tier system of representative government. At the central level is the Legislative Council， which legislates， controls public expenditure and monitors the performance of the Administration. At the district level， 18 District Councils advise on the implementation of policies in their respective districts. All 60 members of the Legislative Council are elected. The council‘s third term election was held on September 12， 2004 and the term of office for the members is four years.

The third District Council Election was held on November 18， 2007 and the District Councils are composed of 405 elected members， 27 ex-officio members and 102 appointed members. The term of office for district councillors is four years starting from January 1，2008.

Administrative Structure

The Government introduced the Accountability System for Principal Officials in 2002. Under it， the Principal Officials， namely the Chief Secretary for Administration，the Financial Secretary， the Secretary for Justice， and the 12 Directors of Bureaux，accept total responsibility for matters relating to their respective portfolios. They are appointed to the Executive Council and are responsible for all aspects of their portfolios： from determining policy goals to policy initiation， formation，implementation and their outcome.

Legal System

The HKSAR‘s legal system is firmly based on the rule of law and the independence of the Judiciary. Under the principle of’one country， two systems‘， the HKSAR’s legal system is different from that of the Mainland， and is based on the common law.

The Judiciary

A key element in the HKSAR‘s success and continuing attraction is its judicial system which operates on the principle， fundamental to the common law system，of independence of the Judiciary from the executive and legislative branches of government. The courts make their own judgments regardless of whether disputes before them involve private citizens， corporate bodies or the Government itself.

The Court of Final Appeal

The Court of Final Appeal is the highest appellate court in the HKSAR. The court is headed by the Chief Justice. There are three permanent judges and a panel of six non-permanent Hong Kong judges and 10 nonpermanent judges from other common law jurisdictions. In hearing and determining appeals， the court may， as required， invite a non-permanent Hong Kong judge or a non-permanent judge from other common law jurisdictions to sit in court. The Chief Justice is the head of the Judiciary. He is assisted by the Judiciary Administrator.

Employment

Manpower is Hong Kong‘s most treasured asset. The Government ensures there is a dynamic， well-motivated，adaptable and continuously upgraded workforce contributing to the HKSAR’s economic competitiveness.

Labour Market

In 2007， Hong Kong‘s labour force was about 3.64 million， of which 53.9 per cent were men and 46.1 per cent were women. The majority of employed persons were engaged in the services sector： 34 per cent in wholesale， retail and import and export trades，restaurants and hotels； 10.5 per cent in transport，storage and communications； 15.4 per cent in finance，insurance， real estate and business services； and 26.8 per cent in community， social and personal services. Only 4.9 per cent worked in the manufacturing sector.

Wages

In 2007，the average monthly wage rate for supervisory, technical，clerical and miscellaneous non-production workers in the wholesale, retail and import/export trades，restaurants and hotels sector was $12，179 (US$1，561). The average daily wage was $332 （US$42.5） for craftsmen and operatives in the manufacturing sector.

Education

Education is one of the biggest public expenditure items. The education budget accounts for about one-fifth of total recurrent public expenditure. The Government gives financial assistance to ensure that no student is deprived of education for lack of means.

12 Years' Free Education

The Government has been providing nine years of free and universal basic education （6 years of primary education and 3 years of junior secondary education）through public sector primary and secondary schools since 1978. Starting from the 2008-09 school year， free education will be extended to include senior secondary education provided by public sector secondary schools. As from the 2008-09 school year， the Government will also fully subsidise full-time courses offered by the Vocational Training Council for Secondary 3 school leavers to further their studies.

IT in Education

IT studies prepare students for the information age and equip them to become lifelong learners. The first five-year strategy on IT in education was successfully completed in 2003. Riding on the achievements of the first five-year strategy， a new student-centred IT in education strategy was launched in July 2004 to strengthen communitywide support for sustainable development of IT in education. The key goals of the second strategy are to empower learners and teachers with IT， to enhance the e-leadership capacity of schools， to develop more digital resources for learning， to improve schools‘IT infrastructure， to provide continuous research and development， and to gain community-wide support for the plan.

Higher Education

Hong Kong has 12 degree-awarding higher education institutions. They include seven universities and a teacher training institution funded by the University Grants Committee. The other four institutions are the Open University of Hong Kong， the Hong Kong Academy for Performing Arts， the Hong Kong Shue Yan University and Chu Hai College of Higher Education.

Health

The aim of the Government‘s health care policy is that no one should be denied adequate medical treatment through lack of means. To this end， it provides a range of services and facilities to complement those in the private sector and to meet the needs of patients who cannot afford medical attention. At the end of 2007， the number of hospital beds was 35 000. The bed-population ratio was 5 beds per thousand population. There were 11 961 registered doctors， or about 1.7 doctors for one thousand people.

Public Services

There are 38 public hospitals in Hong Kong. Fees in public hospitals and clinics are heavily subsidised. The general wards charge $100 a day （for eligible persons）.The fee covers accommodation， food， tests， medicine and surgery.

Private Services

There are 12 private hospitals， whose charges range from about $350 a day for a bed in a general ward to $900 or more for a first class ward. Patients have to pay for items， such as medicine and dressings， in addition to the daily attendance fees for doctors.

Community Health Services

Hong Kong people have continued to enjoy good health， due to extensive preventive measures implemented by the Government through its Family Health Service， the Port Health Service， the Student Health Service， the School Dental Care Service and many other community health services. These services have contributed to Hong Kong‘s remarkably low infant and maternal mortality rates， which are comparable to the best in the world.

Housing

Government spending on housing accounted for 5.9 per cent of total public expenditure in 2007 -08.

Public Rental Housing

It is the Government‘s policy to provide public rental housing to families who cannot afford private rental accommodation. The public rental housing programme is a major social achievement. At the end of 2007， about 2 million people lived in public rental housing estates managed by the Hong Kong Housing Authority（HKHA） and the Hong Kong Housing Society （HKHS）。 The stock at that time was 711 300 flats. Public housing tenants pay，on average， 49 per cent of that charged on the open market.

Subsidised Home Ownership

Since 1978， more than 452 100 subsidised sale flats have been sold to eligible families /persons at discounted prices under the Government‘s various subsidised home ownership schemes. Among these were the Home Ownership Scheme （HOS）， the Private Sector Participation Scheme （PSPS） and the Tenants Purchase Scheme （TPS） under the HKHA. To support the Government’s housing policy， the HKHA ceased the production and sale of HOS flats in 2003， terminated the PSPS， and ceased the sale of public rental housing units under the TPS. To dispose of the remaining surplus HOS flats， the HKHA decided in early 2006 to sell some 16 600 surplus HOS flats in phases starting from 2007. A total of 3 056 surplus flats were offered in the first phase in early January 2007.

Private Housing Market

The Government recognises the importance of the property sector to the economy and the community. Its policy is to allow the private housing market to operate as freely as possible. The Government believes that the scale of private housing production should be a matter for the market to decide. The best way to stabilise property prices is to maintain a market environment virtually free of government intervention.

Transport

Hong Kong is a highly mobile city， where people make about 11 million trips daily on an efficient and multi-modal public transport system that includes railways， trams， buses， public light buses， taxis and ferries. Commuters are offered a good choice of transport modes at reasonable fares. Public transport services are provided by private operators or public corporations without direct subsidy from the Government.

Railways

Railways form an important part of the public transport system. They account for some 35 per cent of the total daily public transport volume. The existing railway network in Hong Kong comprises the Mass Transit Railway （MTR），Airport Express and Light Rail. 

MTR is a heavily patronised railway system consisting of nine lines—Kwun Tong Line， Tsuen Wan Line， Island Line， Tung Chung Line， Tseung Kwan O Line， Disneyland Resort Line， East Rail Line， Ma On Shan Line and West Rail Line. The total route length of the MTR is now about 168 kilometres with 80 stations. The network carries about 3.6 million passenger trips on weekdays.

Airport Express provides services to the Hong Kong International Airport and has a route length of 35.3 kilometres. Light Rail，which is 36 kilometres in length with 68 stops，is a local transportation network serving the northwest New Territories. It carries about 390 000 passengers daily.

Electric trams have been running on Hong Kong Island since 1904. More than 160 trams make up the only all double-decker tram fleet in the world and make about 230 000 people trips daily.

A cable-hauled funicular tramway operates between Central and the Peak. The 1.4-kilometre line began service in 1889， with trams climbing 373 metres on a gradient as steep as one-in-two. The line carries about 12 000 passengers a day， mainly tourists and local sightseers.

Buses

Franchised buses are the largest road-based carriers and account for about 37 per cent of the total daily public transport volume. There are about 570 bus routes operated by five franchised bus companies. The total licensed fleet of about 5 900 buses， mostly air-conditioned double-deckers， carries an average of about 4 million passengers daily. There are a maximum of 4 350 public light buses， which are minibuses with not more than 16 seats. They carry about 1.76 million passengers daily，while there are 18 100 taxis carrying a daily average of 1 million passengers.

Ferries

Ferries provide an essential mode of transport for the outlying islands. In the inner harbour and the new towns， ferries offer a supplementary mode of transport to the buses and railways. About 154 000 passengers use ferries daily.

Road Network

In 2007， Hong Kong had 2 009 kilometres of roads and 1 193 road structures， three immersed-tube crossharbour tunnels， nine road tunnels through hills and three bridges built high above sea level. These facilities provide a comprehensive road network. There were 565 071 licensed vehicles， including 372 203 private cars. Hong Kong‘s traffic density of 281 vehicles per kilometre of road was among the highest in the world. Despite this， traffic usually flows smoothly even in peak hours.

Environmental Protection

The Government has stepped up efforts in the battle against pollution in Hong Kong since the late 1980s. Some achievements have been made to provide safe and environmentally sound systems for handling waste and to reduce street-level air and noise pollution.

Pollution Control

Hong Kong is one of the leading Asian cities in terms of vehicle emission control and fuel quality standards. Diesel vehicles are responsible for most of the roadside pollution in the urban areas， and government strategies include tighter control on vehicle emissions and cleaner fuel vehicles wherever practicable. Almost all taxis and more than half of the public light buses run on liquefied petroleum gas.

The Harbour Area Treatment Scheme （HATS） was adopted by the Government to combat water pollution caused by urban development around Victoria Harbour. A major deep tunnel collector system and treatment works were designed to handle sewage generated from all districts around the harbour. So far， 24 kilometres of large tunnels under the central urban area and a sewage treatment works at Stonecutters Island， providing chemically enhanced primary treatment for an average design flow of 1.7 million cubic metres of sewage per day， have been commissioned. Preparatory work for the first of two phases of the second stage of HATS started in 2005. Expansion and upgrading of the sewerage network and sewage treatment facilities in other parts of Hong Kong continue， in order to handle the needs of existing and future developments.

To tackle regional environmental issues， Hong Kong has been cooperating with its Mainland partners through the Joint Working Group on Sustainable Development and Environmental Protection. The HKSAR and Guangdong governments have drawn up a regional air quality management plan that aims to jointly reduce by 2010，on a best endeavour basis， the regional emission of four major pollutants by 20 per cent to 55 per cent， taking 1997 as the base year. Under the management plan， a regional air quality monitoring network has been set up and started reporting the Regional Air Quality Index for the Pearl River Delta since November 2005.

Law and Order

Hong Kong is a safe city. The overall crime rate is about the same as Singapore‘s and lower than Tokyo’s. It is much lower than those of many other major cities. There are strict firearms controls in Hong Kong， which make it very difficult to own a gun. Illegal possession of a firearm is a serious offence. Hong Kong‘s streets are safe for anyone to walk on， day or night. Police maintain regular foot patrols in the urban and suburban areas.

International surveys consistently rate Hong Kong as one of the’least-corrupt‘places in Asia. The Independent Commission Against Corruption ensures that government and firms operate fairly and honestly. The Customs and Excise Department takes vigorous action against copyright piracy and trademark counterfeiting， and Hong Kong is leading the fight in the region against pirated goods.

Tax System

Hong Kong‘s tax system is one of the most businessfriendly in the world—simple and low. Taxes are levied only on three types of income—from profits，salaries and property. There is no value-added or sales tax or capital gains tax. Only income sourced in Hong Kong is taxable.

Profits Tax

Profits are taxed if they arise in or are derived from Hong Kong as a result of a trade， profession or business. The tax rate is 16.5 per cent for corporations and 15 per cent for non-corporate persons.

Salaries Tax

Everyone with a Hong Kong income arising from any office， employment or pension is liable to salaries tax. The rate of tax after deductions and allowances is applied on a graduated scale， but the total salaries tax charged will not exceed 15 per cent of a person's total assessable income after deductions.

Property Tax

Owners of land and/or buildings in Hong Kong are charged property tax， which is based on the property‘s rental income. The rate is 15 per cent on the annual rent receivable， less a statutory deduction of 20 per cent for repairs and outgoings.

Mandatory Provident Fund

Under the Mandatory Provident Fund System implemented in 2000， all employees aged 18 to 65 （unless specifically exempted）　have to contribute 5 per cent of their relevant income， up to a maximum contribution of $1，000 per month. This is matched by a contribution from the employer.

By end-2007， about 99.7 per cent of employers，98.7 per cent of relevant employees and 75.7 per cent of self-employed people have enrolled in Mandatory Provident Fund schemes.

The Media

The media have been an important factor in Hong Kong‘s success， since a fast， free flow of information and ideas helps to reinforce the free economy. The media play a key role in helping to transform the economy towards one centred on information and services. This role will be pivotal in the years to come， as information becomes an even more important ingredient of economic development.

The Press

Hong Kong‘s print media are among the most vibrant in Asia. As at end-December 2007， there were 44 newspapers including 19 Chinese， 13 English， seven bilingual and five in other languages； and 689 periodicals， of which 472 were in Chinese， 110 in English， 96 bilingual and 11 in other languages. The magazines cover a wide range of subjects from public affairs to technical matters and entertainment.

About 90 international media organisations had offices in Hong Kong，which is also the base for regional publications such as the Far Eastern Economic Review. The Financial Times， The Wall Street Journal Asia， USA Today International， International Herald Tribune and Nihon Keizai Shimbun are also printed in Hong Kong.

Broadcasting

Hong Kong is a regional broadcasting hub. Sixteen satellite broadcasters uplink signals from the SAR. Satellite and cable operators offer a combined service of more than 300 channels including BBC World，CNN International， HBO， Discovery Channel，TCM and National Geographic.

There are two domestic free television programme service licensees， each providing one Cantonese and one English-language channel. On average they broadcast more than 665 hours of programmes weekly， reaching 6.43 million viewers or 2.3 million television households. The two licensees launched digital terrestrial television on December 31， 2007， providing a total of nine new digital television channels.

Hong Kong has 13 radio channels， including seven operated by a publicly funded， editorially independent broadcaster whose mission is to inform， educate and entertain the public through the provision of balanced and objective programmes.

Telecommunications

Hong Kong is a global communications hub and has an excellent communications infrastructure. It is the first major city in the world to have a fully digitised telephone network and to implement operator number portability.

Telephone Services

As at December 2007， Hong Kong had more than 3.8 million exchange lines. The fixed-line household penetration rate was 95 per cent. The number of subscribers to cellular phones was 10.6 million， a penetration rate of about 152 per cent—also one of the highest in the world. Among them， 2 million were 3G service customers. 3G networks are being upgraded with‘highspeed downlink packet access’（HSDPA） technology. Most 3G service customers can experience HSDPA—enabled multimedia services of transmission speed of up to 7.2 Mbps.

Internet

Virtually all households and commercial buildings are covered by the broadband network. As at end-2007，there were more than 1.8 million registered customer accounts for broadband Internet access services， of which the speed ranged from a few Mbps to 1 000 Mbps. The broadband household penetration rate was 76 per cent， one of the highest in the world.