One Country, Two Systems, and Three Memberships: Legal and Economic Integration between China and its Two SARs

Abstract

This paper examines legal and economic integration between China and its two Special Administrative Regions, namely, Hong Kong and Macau. Two dimensions are dealt with in this paper: the constitutional/national framework and the WTO/CEPA framework. In the constitutional/national framework, this paper examines the interaction between People’s Supreme Court and the Court of Final Appeal in Hong Kong and Macau. It analyzes the horizontal and vertical interaction between courts in China and in the Special Administrative Regions, focusing mainly on three issues: the Standing Committee/CFA, exclusive/residual competence, and the competition of jurisdiction. In the WTO/CEPA framework, this paper presents the legal bases and accession histories of these three memberships in the WTO, and examines their trade policies and practices both in the GATT and the WTO. Emphasis is placed on how and why Hong Kong, China and Macau, China enjoy full memberships in the WTO as China does. This paper finally explores the dispute settlement mechanism provided in the Closer Economic Partnership Arrangements between China and its two SARs, and examines the possibility for these three members to avail themselves of the WTO dispute settlement mechanism. This paper finds that the legal and economic integration between China and its two SARs offers much both to comparative lawyers and international trade lawyers: the vast diversity of legal culture in these three areas yields an unprecedented conflict and combination, while the interaction between China and its two separate customs territories, Hong Kong, China and Macau, China, in the international trading regime, presents a new landscape in the WTO.