This report covers the importance of the democratization of Hong Kong to U.S. foreign policy as well as to Hong Kong itself. It specifically looks at two recent election changes which indicate the Hong Kong government's willingness to press for democratic reforms and also give more power to current government officials over incumbent officials.

The Hong Kong Special Administrative Region (HKSAR) has recently recovered from an economic downturn and the SARS virus outbreak of 2002-2003 which crippled trade and tourism. There has also been a major change in the top government personnel, with the former Chief Executive, Tung Chee-Hwa, being replaced by Donald Tsang as the new Chief Executive of Hong Kong. The next major the issue to be addressed in Hong Kong is the pace of further democratization and the the extent to which the next elections for the Legislative Counsel will be based on direct elections of all seats or a larger portion thereof.