An Evaluation on 2007 Obstetric Service Policy in Hong Kong_a Solution to the Service Seeking Behavior of Mainland Pregnant Women

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TitleAn evaluation on 2007 obstetric service policy in HongKong : a solution to the service-seeking behaviour ofMainland pregnant women?

Author(s) Shiu, Wan-yee, Ruby;邵韻儀

Citation

Issue Date 2007

URL http://hdl.handle.net/10722/52547

Rights unrestricted



i

An Evaluation on 2007 Obstetric Service Policy

in Hong Kong –

a Solution to the Service-seeking Behaviour of

Mainland Pregnant Women?

By

SHIU Wan-yee, Ruby

June 2007

Degree of Master of Public Administration

The Department of Politics and Public Administration

Faculty of Social Science

University of Hong Kong



ii

I, Shiu Wan Yee, attest that this thesis,‘An Evaluation on 2007 Obstetric Service Policy in

Hong Kong – a Solution to the Service-seeking

Behaviour of Mainland Pregnant Women?’,

submitted for fulfillment of the Master of Public

Administration is fully my own work unless

otherwise quoted and cited.



iii

Table of Content

Content Page

Chapter One Introduction

Introduction 1

Undesirable Phenomena 2

Diagnosis to the Phenomena 5

Economic Environment 5

Legal Ambiguity 6

Failure of Charging Policy 7Government Action 9

Framework of Study 11

Research Questions 12

Methodology 12

Dissertation Plan 13

Chapter Two Hong Kong’s Immigration Policy on Mainlanders

Introduction 14Immigration Policy on Mainlander in Colonial Era 14

Entry to Hong Kong for Settlement 17

Entry to Hong Kong for Visit 18

Immigration Policy on Mainlanders after 1997 20

Contradiction between Basic Law and Immigration

Ordinance

25

Immigration Ordinance 25

Basic Law 26

CHONG Fung-yung v. the Director of Immigration 28

Chapter Three Diagnosis of the Problem from an Economic Approach

Introduction 31

Common Pool Resources 31

Problem of Collective Actions 32

Externalities 34



iv

Public Obstetric Service in Hong Kong 38

Cost of Giving Birth in Hong Kong 40

I) Short-term costs 41

II) Long-term costs 41Benefits of Giving Birth in Hong Kong 43

I) Fleeting from one-child policy penalty 45

II) Advanced medical care 45

III) Hong Kong Residency 45

Externalities 46

Policy Before September 2005 48

Policy After September 2005 48

Chapter Four New Policy in February 2007

Introduction 51

The New Policy 51

Increase in Charge 52

Defaulted Payment Prevention Mechanism 53

Centralized Registration System 54

Tightened Immigration Control 55

Chapter Five Evaluation of the New Policy

Introduction 56

What is Evaluation 58

Classification of Policy 60

Regulatory Instrument 60

Economic Instrument 61

Information 62

Evaluation of 2007 Policy 63

Policy Instrument 63

Choice of Instrument 64Design of Policy 68

Conclusion 69



v

Chapter Six The Way Forward

Introduction 71

Long-term Implication 71Social Disintegration 72

Restructuring of Obstetric Service Policy 73

Reorienting Policy Target 73

Extending Quota Coverage 74

Increasing Charge for Couples who are both

non-Hong Kong residents

74

Supportive Measures 75

I) Immigration control 75

II) Defaulted Payment Prevention System 78

Civil Education 78

Vision in Education, Housing, Medical Service and other

Welfare Policies

79

Education 79

Social Welfare Assistance 81

Conclusion 82



1

CHAPTER ONE

INTRODUCTION

Introduction

In the past five years, the number of Mainland women coming to Hong Kong for

obstetric services has risen from 7810 cases in 2001 to 20,577 cases in the first ten

months of 20061. The percentage to the number of local pregnant women rose from

16% in 2001 to 39% in 2006. Before 2001, majority of Mainland women came to

Hong Kong for obstetric services were wives of Hong Kong males. While in recent

years, there was an upsurge in the number of Mainland women, whose husbands were

also Mainlanders, came to Hong Kong for giving birth. Among the 20,577 Mainland

women giving birth in Hong Kong, 61% of them were married to non-Hong Kong

residents. Detailed figure on the number of birth by Mainland mothers in Hong

Kong appear in Annex A.

With only eight public hospitals providing obstetric services in Hong Kong, handling

around 42,000 deliveries per year2, the large influx of Mainland women poses

significant pressures on the scarce health care resources in Hong Kong. Some public

1 Discussion Paper on ‘Impact of the use of Obstetric Services by Mainland Women on Public HospitalResources’ by Legislative Council Panel on Health Services. (8 January 2007), LC Paper No. CB (2)

761/06-07(03).2 ‘Hospital booking rule for Mainland mothers’, Global News Wire - Asia Africa Intelligence Wire,2007-01-17.



2

hospitals have already announced that no further registration for obstetric services

would be accepted in the first half year of 2007 due to the excessive workload they

encountered due to the influx of Mainland women.3

Undesirable Phenomena

There were intermittent reports on the plight of local pregnant women. Some did not

receive the same amount of prenatal checks as they used to have. Extra beds made

of canvas were placed inside public wards to cater for the excessive numbers of

expectant mothers who were waiting for giving birth. Some were even left in the

corridor. There were reports that that more than one woman gave birth in one

delivery room at the same time. The privacy of these mothers-to-be was not

respected. Worse still, some pregnant women deliberately chose to deliver their

babies by surgery instead of natural labour just to secure a stay in the hospital.4 It

was because they knew that those gave birth by surgery (elective caesarean section)

were allowed to stay for maximum three nights while those had their babies naturally

born (spontaneous vaginal delivery) could only stay one night in the hospital.

3 ‘醫管局擬五招防病人走數’, Apple daily. (2006-12-8)4 “港婦：被迫開刀分娩確保有牀位”, Apple Daily (2006-12-07)



3

Local pregnant women showed concern about deteriorating standards of care and

were resentful of outsiders coming in, jumping queues, and getting services they had

not wholly paid for. A group of 30 angry Hong Kong mothers marched to Central

Government Office to air their resentment in order to push the Government into

taking action on November 19, 2006, which was believed to be the major factor that

triggered the implementation of new measures in February 2007.

Hong Kong public medical care is funded mainly by the HKSAR government.

Approximately HK$300 million revenue of Hospital Authority in 2006, 90% was

government subvention. Hong Kong taxpayers generally have the feeling that

money they spent went to subsidize Mainland women instead of provide quality

medical service to Hong Kong people5 as the obstetric services were provided to

everyone at a highly subsidized rate regardless of the service seekers’ nationality.

Before the imposition of the HK$20,000 obstetric package in September 2005, the

charge for obstetric services was calculated based solely on the number of days of

hospitalization, prior to this, the charge was standardized across all public hospitals at

a highly subsidized rate at HK$100 per day for Hong Kong residents and HK$3,300

5 Public money spent on medical service amounting to $32.2 billion in 2006 which was around 13% of the overall government expenditure. Sources : Census and Statistics Department. HKSAR Government.



4

per day for non-Hong Kong residents while the average cost of delivery for a pregnant

woman was $12,000 to $14,000.6 The influx of Mainland women seeking obstetric

services imposed significant financial burden to our health care system. What is

more, some of these Mainland women did not settle the bill before they left the

hospitals. Together with the inefficient default payment collecting mechanism, the

bad debts of Hospital Authority amounted to $2,800 million in 2005/06.7

What made the situation even worse was that many of these Mainland pregnant

women did not receive any antenatal examination before they came to Hong Kong for

giving birth.8 It posed considerable risks to both the mothers-to-be, hospital staff,

other patients, and the babies because illness, defects and other possible problems

could not be detected before delivery. Besides, as the service seekers’ medical

history and the health condition of their babies are all unknown to the hospitals, this

also brought risk to the hospital staffs and other pregnant women staying in the same

hospital, especially when the pregnant woman has Viral Hepatitis Type B or Acquired

Immune Deficiency Syndrome.

6 Legislative Council Meeting on November 10, 2004.(http://www.legco.gov.hk/yr04-05/english/counmtg/hansard/cm1110ti-translate-e.pdf)7 Discussion Paper on ‘Impact of the use of Obstetric Services by Mainland Women on Public HospitalResources’ by Legislative Council Panel on Health Services. (8 January 2007), LC Paper No. CB (2)761/06-07(03).8

In 2006, there were almost 20,000 Mainland women gave birth in Prince of Wales Hospital. Morethan 70% of them did not receive antenatal examination. Source : ‘內地婦來港產子要做產前檢查’,

Mingpao. (2006-12-07) & ‘內地婦港產嬰 5 年升 16 倍’, Singtao Daily. (2006-12-07).



5

Diagnosis to the Phenomena

Economic environment

Mainland women giving birth in Hong Kong is a complex issue and cannot be easily

explained by one single reason. It is the result of political, economic, and social

changes after the handover of sovereignty in 1997. Before 1997, when Hong Kong

was still a British colony, its economic development, job opportunities, political

stability attracted immigrants from Mainland China. Hong Kong government

enacted Immigration Ordinance and imposed strict control over Mainland migrants

and visitors. The purpose was to control the number of influx of Mainland China to

avoid unbearable pressure on the resources of Hong Kong.

After 1997, Hong Kong experienced an economic downturn due to Asian Financial

Crisis. To revive the economy, Hong Kong government agreed to increase the

Two-way Permit quota three folds to encourage Mainland visitors traveling Hong

Kong. The number of Mainland visitors increased from 2.27 million in 1997 to 4.86

million in 2001.9 When Hong Kong economy rebounded in 2003, the Severe Acute

Respiratory Syndrome (SARS) outbreak seriously hit Hong Kong retail, tourism, and

catering industries. The restrictions on Mainland visitors were further relaxed by the

9 Immigration Department Annual Reports 96-97, 03-04.



6

introduction of Individual Visit Scheme in 2003 that allowed Mainlanders to visit

Hong Kong in their own capacity (i.e., without being part of a tour group) for a

maximum of seven days. The relaxation of immigration control has paved way for

the large influx of Mainland pregnant women coming to Hong Kong for the purpose

of giving birth.

Legal Ambiguity

Before 1997, when the people moving in and out from Hong Kong were governed by

Immigration Ordinance Chapter 115 (Cap. 115), Hong Kong residents were defined as

Chinese citizen born in Hong Kong if one of his/her parents had settled or had the

right of abode in Hong Kong at the time of his/her birth or at any later time. With

the introduction of Basic Law in 1997, the definition of Hong Kong citizens under

Immigration Ordinance was challenged as it was found to be contradictory with

Article 24(2)(1) of the Basic Law which provides that Chinese citizens born in Hong

Kong Special Administrative Region have the right of abode in Hong Kong.

Ambiguity over the definition of Hong Kong residency was cleared on 20 July 2001

when the Court of Final Appeal ruled in the Chong Fung-yuen case that Chinese

citizens born in Hong Kong have the right of abode in Hong Kong regardless of the

status of their parents.



7

The decision of Court of Final Appeal gave all babies born to Mainland women in

Hong Kong, residency in Hong Kong, which is also the main reason for Mainland

women coming to Hong Kong for giving birth. They know that their babies, as

Hong Kong citizens, will have free education, healthcare, housing benefit and social

welfare. Many Mainland parents have expressed that they will have their children in

care of relatives in Hong Kong and to be educated in Hong Kong.10 Some said that

these newborn babies would be a solution to our ageing problem while some argued

that they might be the heaviest financial burden to Hong Kong society. Although

either hypothesis is anticipation, the number of babies born to Mainland women is

large enough to have implication on Hong Kong’s planning and policy on population,

welfare, and education.

Failure of Charging Policy

Another reason for the large influx of Mainland mothers-to-be was the low charge for

obstetric services in Hong Kong. Health care services in Hong Kong are distributive

in nature. Requests from any person, regardless of their citizenship and financial

condition, would be contemplated. Fees and charges for different medical services

are standardized across all public hospitals at a highly subsidized rate. The same fee

10 ‘Authority cashes in on pregnancy policy’. South China Morning Post. (2007-02-02).



8

structures applied to Hong Kong and non-Hong Kong residents alike. Before

September 2005, obstetric service for Mainland women only costed HK$3,300 for

one-day hospitalization in a public general ward. This charge has already included

the baby delivery service. The charge was so low that it could not even cover the

cost of delivery. The low charge level attracted Mainland women since they could

enjoy enormous benefits including better medical care and Hong Kong residency for

their children born in Hong Kong.

Despite the low medical charge, many Mainland women did not settle the bill before

leaving the hospitals. In addition, there is no policy or system in place to ensure full

payment is made before they left. The ineffective default payment mechanism

further encouraged such free-riding behaviour. For Mainland women, seeking

obstetric services in Hong Kong have everything to gain, nothing to lose.

What is more, by giving birth in Hong Kong, Mainland parents could avoid the

penalty for having more than one child under One-child policy. This policy was

adopted by Mainland China since late-1970s as a measure to control its population.

It stipulates that each couple is only entitled to have one child. Every extra child will

cost the couple around RMB80,000 as penalty. Since children born in Hong Kong



9

are Hong Kong citizens and will not have Mainland Hukou, citizenship, their parents

would not be fined.

Government Actions

The ever-increasing number of Mainland mothers giving birth in Hong Kong made

the government realize the problem. It is recognized that the obstetric service charge

for non-Hong Kong residents was set too low, causing market disequilibrium. To

bring the market to optimum, the Hospital Authority introduced a new charging

system as a rational basis for the allocation of resource in September 2005. Each

non-Hong Kong pregnant woman giving birth in Hong Kong will be provided with a

minimum obstetric package, which included delivery and three days 2 nights of

hospitalization in a public general ward. The whole package charges each service

seeker HK$20,000. Private consultation fees were also revised from fixed standard

charges to pre-sent ranges to reflect variations in the complexity of the patients’

clinical conditions and in the expertise that might be required for treatment. As

services were provided based on medical need regardless of the patients’ or service

seekers’ citizenship, requests from local and Mainland pregnant women were handled

in the same manner.



10

The alarming figure of bad debt11 also pushed the authority to introduce measures to

avoid defaulted payment. The minimum obstetric service package required all

non-Hong Kong residents to pay a deposit of $19,800 upon admission at a public

hospital. However, as many Mainland pregnant women know that they would not be

denied medical service due to lack of means, they avoided paying deposit by seeking

service from accident and emergency (A&E) ward when they approached to deliver.

After delivery, the Mainland mothers left with their babies prematurely to evade

payment. These acts pose significant risks to both the mothers and babies. There

were intermittent reports that babies died due to inadequate postnatal care as the

babies’ mothers left hospitals for avoiding payment.12

Noise from the public and the pressure groups formed up by pregnant women had

pushed the government in facing the problem in a more active way. After several

meetings among the Secretary for Health, Welfare, and Food Bureau Dr. York Chow,

Secretary for Security Mr. Ambrose Lee, and Mainland China Authorities on the issue,

the Bureau came up with some measures to tackle with the problem. Aims of the

measures are to ensure that local pregnant women would be provided with proper and

11 In 2004/2005 financial year, the defaulted payment arisen from obstetric services by Mainland

women amounted to HK$1,200 million. Source : ‘Hospital Authority : management of outstandingmedical fees’, Audit Commission. HKSAR Government. http://www.aud.gov.hk/pdf_e/e47ch05.pdf 12 ‘4 日男嬰離奇猝死’, Wenweipo. (2006-12-27).



11

priority obstetric services through restricting the number of non-local pregnant

women giving birth in Hong Kong to a level that can be supported by Hong Kong’s

healthcare system.13

Framework of Study

This paper will employ market theories to explain the problem of insufficient public

obstetric service in Hong Kong. The following are the major presumptions in the

framework 14 –

i) Public obstetric service is common-pool resources that are

non-excludable and subtractive. Its nature inevitably results in the

problem of ‘free-riders’.

ii) As human beings are rational and self-interested, they only see the cost

imposed on them and neglect the cost imposed on the society as a

whole. The problem of externalities resulted in market inequilibrium

and inefficiency.

iii) The problem of externalities can be solved by internalizing the social

cost to individual through Pigouvian tax so that the consumer can see

13 ‘New measures on obstetric services and immigration control’ on January 16, 2007, Press Release,www.info.gov.hk.14 The presumptions are the summary of reference drawn from OSTROM, E., (1990), Governing theCommons, Cambridge : NewYork, Cambridge University Press, COWen, T., (eds), The Theory of

Market Failure : A critical Examination, Fairfax, Va. : George Mason University Press and DUNN, W.,KELLY, R.M., (eds), Advanced in Policy Studies since 1950, New Brunswick and London :Transaction Publishers (1992).



12

the real cost of their consumption.

iv) One of the greatest challenges to Pigouvian tax is that the government

is not able to have perfect information to set the optimal tax level.

Research Questions

In this dissertation, I will ask the following questions: What makes the public

obstetric services become so scarce? Why could the policy adopted in 2005 not

solve the problem? Can the new policy implemented in 2007 solve the problem of

insufficient public obstetric services? Finally, can the policy mark an end to Hong

Kong people’s anxiety over Mainland women’s utilization of obstetric services?

Methodology

This paper employs the theoretical frameworks of ‘common pool resource’,

‘externalities’ and ‘Pigouvian tax’ to illustrate the problem of insufficient public

obstetric service in Hong Kong in recent years. Extensive research on academic

literature will be conducted on these theories. Additionally, useful information will

be collected from newspaper, magazines, and websites, journals and reports and

meeting records of Legislative Council.



13

Interviews will be conducted with representatives of interest groups, representatives

of enforcement agencies and professionals such as doctors and nurses to seek their

views on the feasibility and effectiveness of the new policy.

Dissertation Plan

The whole dissertation comprises six chapters. In Chapter 2, the evolution of Hong

Kong’s immigration policy on Mainlanders before and after 1997 will be discussed.

The discrepancies between Immigration Ordinance and Basic Law after 1997 will be

emphasized to illustrate the reason for the influx of Mainland pregnant women after

2001. Chapter 3 will explain the Mainland women’s service-seeking behaviour from

economic point of view. This chapter will apply the Pigouvian theorem in

answering the failure of 2005 policy. Chapter 4 is the detailed description of the

new policy implemented in February 2007. This policy will be evaluated in Chapter

five by applying Policy Instrument theory. Instead of evaluating the policy outcome,

this chapter will analyze the policy effectiveness and legitimacy by referring to the

choice of policy tools and the design of policy. The last chapter will round up the

whole dissertation by proposing suggestions on the way forward.



14

CHAPTER TWO

HONG KONG’S IMMIGRATION POLICY ON MAINLANDERS

Introduction

Hong Kong has long been an immigration city. Since the British occupation of the

territory in 1842, Hong Kong has been a favorite sanctuary for those looking for a

better life.15 People from Mainland China come to Hong Kong for different reasons.

Some treasure political stability while some cherish rapid economic development.

At present, more than half of Hong Kong population is immigrants from Mainland

China.16 From 1842 when Hong Kong became a British colony, to now, Hong

Kong’s immigration policies for Mainlanders have aimed at controlling the number of

migrants from Mainland China to avoid unbearable pressure on the resources of Hong

Kong. Evolution of Hong Kong immigration policy on Mainlanders since 1842 is

outlined in Annexure B.

Immigration Policy on Mainlanders in Colonial Era

Hong Kong had no immigration control measures on Mainlanders until 1938 when the

15 CHAN, J. ‘The Evolution of Immigration Law and Policies : 1842-2003 and Beyond’ in CHAN J.,

Rwezaura, B. (eds) Immigration Law in Hong Kong : An Interdisciplinary Study, Hong Kong : Sweet& Maxwell Asia (2004). Pp. 1.16 Ibid.



15

population grew from 878,947 in 1931 to over 1,500,000.17 At the time, the Hong

Kong Government realized that the society could not cope with the influx of people

from Mainland China in terms of physical, social, and economic infrastructure. The

Immigration Control Ordinance of 1949 was enacted which provided that any person

not in possession of relevant travel documents, visas or entry permit, frontier passes or

certificates of residence issued under the Ordinance were illegal immigrants and

would not be permitted to land, enter or remain in Hong Kong18.

Notwithstanding the introduction of the Immigration Control Ordinance, the

immigration authority adopted an ‘open door’ policy. How an illegal immigrant was

to be dealt with was decided by the prevailing executive policies and not by the law.

Immigration officers could exercise their discretions in granting permits, with or

without conditions, to allow an illegal immigrant to stay in Hong Kong. Instead of

being repatriated to Mainland, every illegal immigrant could obtain entry permit by

reporting to the immigration authorities so that their stay could be regulated. One of

the reasons was that Hong Kong economy suffered badly in the fifties after the

outbreak of the Korean War in June 1950. The United Nation and the United States

17 Growth of Population in Hong Kong 1841-2006. Details at Annexure C. Source : CHAN, J. ‘TheEvolution of Immigration Law and Policies : 1842-2003 and Beyond’ in CHAN J., Rwezaura, B. (eds)

Immigration Law in Hong Kong : An Interdisciplinary Study, Hong Kong : Sweet & Maxwell Asia(2004). Pp. 1.18 Natives of Guangdong Province were exempted from this Ordinance.



16

imposed embargoes on Mainland China and Hong Kong. Trading of Hong Kong

almost came to a standstill. At the same time, political uncertainties pushed refugees

from Mainland China who brought to Hong Kong capital and industrial expertise as

well as a pool of skilled, intelligent, and industrious labour. These refugees were the

major force of economic growth at that time which explained why the government

adopted such a lenient policy toward illegal immigrants from Mainland China in the

fifties and sixties.19

Under this ‘open door’ policy, about 60,000 Chinese persons entered Hong Kong

illegally between 1962 and 1972 and were subsequently permitted to stay. However,

in 1973 alone, 56,000 illegal immigrants arrived from the Mainland. 20 When

comparing with the total population of 4,203,700 in 197321, the figure was quite

alarming. It pushed the Hong Kong Government to impose a ‘reached-base’ policy

in 1974. Under this policy, illegal immigrants who were arrested in the border

region or in Hong Kong territorial waters during their attempt to enter Hong Kong

would be repatriated, but all others who evaded immediate capture, entered the urban

areas and subsequently gained a home with relatives or otherwise found proper

19 CHAN, J. ‘The Evolution of Immigration Law and Policies : 1842-2003 and Beyond’ in CHAN J.,Rwezaura, B. (eds) Immigration Law in Hong Kong : An Interdisciplinary Study, Hong Kong : Sweet& Maxwell Asia (2004). Pp. 6-9.20

Ibid.21 Hong Kong Population Projection 1971-1991. Census and Statistics Department. HKSARGovernment.



17

accommodation would be given permission to stay in Hong Kong.22 In 1979, five

years after the implementation of ‘reach-base’ policy, the number of Mainlander

arrested on arrival and repatriated was 89,900 while those evaded capture and

remained in Hong Kong was 107,700. Some condemned that this policy positively

encouraged illegal immigrants from Mainland and led to an influx of illegal

immigrants who arrived and reached base.23 This ‘reached-base’ policy was thus

abolished in 1980. All illegal immigrants from Mainland China were to be

removed.24

Entry to Hong Kong for Settlement

Since the abolishment of the ‘reach-base’ policy in 1980, the only legal way for

people from Mainland China to come to Hong Kong for settlement was entry under

One-way Permit (OWP) scheme. OWP scheme is a quota system introduced in 1950

with maintaining a rough balance between the inflow and outflow of people as its

major objective. However, the introduction of quota was opposed by the Mainland

authority as ‘unreasonable and unfriendly act towards the PRC and its people’. It

was also a sensitive political matter to have an agreement on the quota, as this might

22 CHAN, J. ‘The Evolution of Immigration Law and Policies : 1842-2003 and Beyond’ in CHAN J.,Rwezaura, B. (eds) Immigration Law in Hong Kong : An Interdisciplinary Study, Hong Kong : Sweet& Maxwell Asia (2004). Pp. 12-13.23 Illegal immigrants from Mainland who successfully evaded capture and remained in Hong Kong

increased from 6,600 (1977) to 28,100 (1978) to 107,700 (1979). Ibid Pp. 12.24 The number of legal immigrants from Mainland China dropped from 107,700 in 1979 to 69,500 in1980, the first year of the abolishment of ‘reach-based’ policy.



18

constitute a tacit recognition on the part of the Chinese government that Hong Kong

was not part of China. Therefore, the quota was not strictly enforced. A

compromise would be that the Director of Immigration always gave permission to

land to whoever was issued an OWP. Indeed, the number of legal migrants who

came to Hong Kong by way of an OWP varied from time to time. It reached a peak

of 310 per day in 1978. It resulted in 67,495 legal immigrants from Mainland China

in one single year, which was almost 250% of the figure in 1977. Although the

British and Chinese governments reached an agreement on the daily limit of the

number of legal immigrant to 150 per day in 1980, the Mainland authority, which is

the issuing authority of OWP’s, still changed the daily limit over time. The authority

reduced the limit to 75 per day in 1983 while it increased to 105 in 1993 to facilitate

the admission of a large number of long-separated spouses and children born to Hong

Kong citizens. In 1995, the quota increased to 150 per day. Since then the daily

limit remained unchanged.25

Entry to Hong Kong for Visit

The restrictions over Mainland visitors were strict in colonial era. Mainlanders who

wish to make private visit to Hong Kong had to apply for a Two-way permit (TWP)

25

CHAN, J. ‘The Evolution of Immigration Law and Policies : 1842-2003 and Beyond’ in CHAN J.,Rwezaura, B. (eds) Immigration Law in Hong Kong : An Interdisciplinary Study, Hong Kong : Sweet& Maxwell Asia (2004). Pp. 15-16.



19

from Mainland Public Security Bureau offices before entry. TWP scheme was

implemented in 1950. Before 1997, there were only two types of endorsements,

‘Tanqing’ (Relative visit) and ‘Tuandui Luyou’ (Group visit). Each had strict

requirements upon application. Relative Visit endorsement was issued for those who

went to Hong Kong for managing properties or business or visiting close relatives

who were Hong Kong permanent residents. The applicant must produce proof of

business and properties in Hong Kong or proof of close relatives26 living in Hong

Kong, including copies of Hong Kong Identity Card, certificate of marriage, or more.

upon application. For Group Visit, visitors had to join tours organized by one of the

three recognized and approved Mainland tour operators. They must arrive and

depart together as a group. There was also daily quota imposed on the Group visit

endorsement. It was hard to believe that the average daily quota for Group visit was

8.3 persons for the whole of Mainland China. The daily limit increased to 1,142 in

1998, though this was still inadequate to cope with the demand.27 Mainland people

coming to Hong Kong for visits before 1997 were not as free as Hong Kong people

going to Mainland China for visits were.

26 Before 1997, the definition of ‘close relative’ confined to parents, spouse, spouse’s parents and

siblings. Endorsement would only be issued to those who had relatives residing in Hong Kong.27 SHAO, Shanbo (2002), 內地人士非移民簽證來港的政策檢討及建議, 一國兩制研究中心, Pp

6-9.



20

Immigration Policy on Mainlanders after 1997

Immediately after the change of sovereign, there was no significant influx of

Mainlanders, either for settlement or for visit. The 150 daily quotas for OWP still

applied and the issue of TWP was not released. Number of Mainland visitors to

Hong Kong decreased from 2.29 million in 1996 to 2.26 million in 1997. The major

reason was that the China Government did not want chaos at the time of handover and

sought stability.28

It was ironic that, after the changeover of sovereignty in July 1997, political stability

faded away as the issue of concern as the economy became the major focus. What

many Hong Kong people and international observers feared about intervention by

Chinese authorities did not happen. The ‘One Country, Two Systems’ arrangement

went off to an auspicious start. Quite unexpectedly, the outbreak of the Asian

financial crisis began with the depreciation of the Thai baht in July 1997. Until the

end of January 1998, a number of Asian currencies had depreciated substantially with

respect to the US dollar. Since Hong Kong dollar was linked to the US dollar, it

remained steady at 7.75. As a result, all these Asian currencies depreciated with

respect to the Hong Kong dollar. Traveling to other Asian countries became much

28 SHAO, Shanbo (2002), 內地人士非移民簽證來港的政策檢討及建議, 一國兩制研究中心, Pp

20.



21

cheaper than to Hong Kong after their currency depreciation. In the first half of

1998, the number of visitor arrivals declined sharply by 21% as compared to the first

half of 1997.29 Domestic consumption shrank and the economy contracted. Hong

Kong’s unemployment rate hit record levels exceeding 7% by the end of 2002.30

When compared with Hong Kong, Mainland China was less affected by the Financial

Crisis. RMB's non-convertibility protected its value from currency speculators.

Unlike other Asian countries, most of the China’s investment took the form of

factories on the ground rather than securities, which insulated the country from rapid

out flowing of assets and money and sharp drop in the exchange rate after the

financial crisis.31 The Chinese economy was hardly affected by the financial crisis as

it continued to grow at 8.8% in 1997 and 7.8% in 1998.32

To revive the economy, Hong Kong government agreed to have the restrictions on the

issue of TWP relaxed. In 1998, China Government introduced ‘Shangwu’ (Business

visit) endorsement, which allowed visitors on business trip, who previously were

required to obtain a visa upon arrival at Hong Kong. The requirements for Relative

29 LIU, Pak-wai (1998), The Asian Financial Crisis and After Problems and Challenges for the HongKong Economy, Hong Kong Institute of Asia-Pacific Studies, Pp. 1830 SIU, Alan & WONG, Richard, Economic Impact of SARS : The case of Hong Kong, Asian

Economic Papers 3:1 (Winter 2004), pp. 62-83.31 With all of its foreign investment took the form of factories on the ground instead of securities,China insulated itself from rapid capital flight. RMB’s non-convertibility protected its value from

currency speculators. China was less affected by the financial crisis.32 Wong, J., Chan, S., Liang, R. ‘The Impact of SARS on Greater China Economies’ in Wong, J (eds).SARS Epidemic, Singapore : World Scientific Publishing Company, (2004) Pp. 13.



22

Visit endorsement were released in 2000, which allowed Mainlanders to visit their

relatives who lived, worked, and studied in Hong Kong. The daily quota for Group

visit endorsement increased from 1,142 in 1997 to 1,500 in 2000. The number of

tour operators in Mainland China, which undertook the application of Group visit

endorsement, also increased from 3 before 1997 to 63 in 2002.33 At present, there are

in total 99 tour operators in Mainland China that can apply Group Visit TWP. All

tour operators were monitored by the China Tourism Association. The relaxation in

TWP permit requirements greatly attracted tourists from Mainland China. The

number of Mainland visitors to Hong Kong increased from 2.67 million in 1998 to

6.82 million in 2002.34 Revenue from tourism-related activities increased from 142

millions in 1998 to 287 million in 2002.35

When economy started to recover again 36 , Hong Kong experienced another

crisis –Severe Acute Respiratory Syndrome (SARS). A professor from Guangdong

came to Hong Kong for a relative’s wedding. He stayed in a hotel in Kowloon for

one night in February. He sought medical treatment in Hong Kong and was admitted

to Kwong Wah Hospital on February 13, 2003. Not soon after, his brother-in-law

33 SHAO, Shanbo (2002), 內地人士非移民簽證來港的政策檢討及建議, 一國兩制研究中心, Pp.

8.34 Tourism Development Board. HKSAR Government.35 Ibid.36

Real GDP in Hong Kong grew at 3.4% in the third quarter of 2002 and at 5.1% in the fourth quarterof 2002. Sources : SIU, Alan & WONG, Richard, Economic Impact of SARS : The case of Hong Kong,

Asian Economic Papers 3:1 (Winter 2004), pp. 62-83.



23

and 16 other people, who stayed in the same hotel with the professor, were admitted.

On February 22, 2003, the Guangdong professor was certified death and was later

confirmed to have died of SARS. Another patient, who visited an acquaintance

staying on the same floor of the hotel during the critical day in February, admitted to

Ward 8A of Prince of Wales Hospital (PWH) and brought the index case for Hong

Kong’s first outbreak in PWH. Eleven healthcare staff of PWH working in Ward 8A

left on sick leave on March 10, 2003. The number of medical staff who had infected

with SARS through contact with this patient increased to 139. The SARS epidemic

reached its peak on March 30, 2003 when the government issued an order to isolate

Block E of Amoy Garden after 213 residents of Amoy Garden were admitted to

hospital for suspected and confirmed SARS with half of the cases were from block E.

On April 2, 2003, the World Health organization (WHO) issued an advisory against

non-essential travel to Hong Kong and Guangdong Province.37 Visitor numbers fell

throughout the Asia-Pacific region, with Hong Kong’s April arrivals dropping by

almost 65% compared with 2002, and those of May by almost 68%.38 By the end of

the epidemic, total 1755 people were infected with SARS. 1451 were discharged

while 304 died of the disease.39 Fearing the disease might spread to the community at

large; Hong Kong people refrained from many consumption activities outside their

37 SARS Expert Committee Report : From Experience to Action. Department of Health. HKSAR

Government. http://www.sars-expertcom.gov.hk/english/reports/reports/reports_fullrpt.html.38 Hong Kong Tourism Board Annual Report 2003-2004.39 SARS. Department of Health. HK Government http://www.info.gov.hk/info/sars/e_sars2003.htm.



24

homes. The drop in demand put further pressure on the price level and worsened the

unemployment problem.

40

To bring the Hong Kong economy back to life, the Chinese Government further

released the issue of TWP and implemented the Individual Visit Scheme.

Mainlanders might go to Hong Kong as individual visitors. Individual visitors from

the Mainland were permitted to remain in Hong Kong for a period of not more than 7

days upon each entry. When this scheme was introduced in July 2003, it was opened

only to residents of Dongguan, Zhongshan, Jiangmen, and Foshan in Guangdong

Province. In the past three and a half years, the scheme extended progressively, and

now covers Guangdong province and 28 other cities (Refer to Map at Annexure D).

The Individual Visit Scheme has brought a significant increase in the number of

Mainland visitors to Hong Kong from 8.5 million in 2003 to 12.2 million in 2004

which brought an increase in inbound tourism revenue from 70,234 million in 2003 to

91,849 million in 2004.41

The Individual Visit Scheme was successful in reviving

Hong Kong economy while it also paved way for Mainland pregnant women to come

to Hong Kong for giving birth. The number of visitors from Mainland China from

1997 to 2006 is shown in Annexure E.

40

Unemployment rate increased from 7.5% in March 2003 to the highest point of 8.7% in July 2003.Source : Census and Statistics Department. Hong Kong SAR Government.41 Tourism Board Highlights 2004. HKSAR Government.



25

Contradiction between Basic Law and Immigration Ordinance

The Sino-British Joint Declaration on the Question of Hong Kong (The Joint

Declaration) was signed between the Chinese and British Governments on 19

December 1984. The Joint Declaration sets out the basic policies of the People's

Republic of China (PRC) regarding Hong Kong. Under the principle of "One

Country, Two Systems", the socialist system and policies shall not be practiced in the

Hong Kong Special Administrative Region (HKSAR) and Hong Kong's previous

capitalist system and life-style shall remain unchanged for 50 years. The Joint

Declaration provides that these basic policies shall be stipulated in a Basic Law of the

HKSAR. The Basic Law of the Hong Kong Special Administrative Region (The

Basic Law) was adopted on 4 April 1990 by the Seventh National People's Congress

(NPC) of the PRC. It came into effect on 1 July 1997.42

Immigration Ordinance

The definition of ‘Hong Kong citizen’ was stipulated in Immigration Ordinance Cap.

115. Before 1997, the implementation of the British Nationality Act 198143, a child

born in Hong Kong acquired the status of a British Dependent Territories (Hong Kong)

42 The Basic Law of The Hong Kong Special Administrative Region of The People’s Republic of China.43 The British Nationality Act 1981 was an Act of Parliament passed by the British Parliamentconcerning British nationality. The Act reclassified Citizenship of the United Kingdom and Colonies intothree categories relating to the right of abode in United Kingdom : British citizens who had the right of

abode in the UK, British Dependent Territories Citizens who enjoyed a right of abode in the DependentTerritories and British Overseas Citizens who enjoy right of abode nowhere in the whole. Most of theHong Kong people fell largely into the category of British Dependent Territories Citizens.



26

citizen if one of his or her parents had the same status or was settled in the city at the

time of their birth. This provision was stated clearly in Schedule 1 of Immigration

Ordinance Cap. 115. It was the common understanding of the Chinese and British

experts under the Sino-British Joint Liaison Group that similar arrangement would

apply after 1997 and no formal agreement was made before the reunification. For

the purpose of reunification, Schedule 1 of Immigration Ordinance Cap. 115 was

slightly amended upon the change of sovereign in 1997. While its meaning

remained the same which required that for a Chinese citizen born in Hong Kong to be

a permanent resident, one of his parents must have been settled44 or had the right of

abode45 in Hong Kong at the time of his birth or at any later time.

Basic Law

However, this qualifying requirement sated in paragraph 2(a) of Schedule 1 of

Immigration Ordinance does not exist in Article 24 of Basic Law. Article 24 of

Basic Law states that the following categories of people shall have the right of abode

in Hong Kong and shall be qualified to obtain, in accordance with the laws of the

Region, permanent identity cards which state their right of abode –

44 The term ‘settled’ is defined by Para. 1(5) of Schedule 1 of Immigration Ordinance Cap. 115 as ‘Aperson is settled in Hong Kong if he is ordinarily resident in Hong Kong; and he is not subject to any limitof stay in Hong Kong.45 According to s. 2A of Immigration Ordinance Cap. 115, a Hong Kong permanent resident enjoys the

right of abode in Hong Kong which are the right to (a) land in Hong Kong; (b) not to have imposed uponhim any condition of stay in Hong Kong, and any condition of stay that is imposed shall have no effect; (c)not to have a deportation order made against him and (d) not to have a removal order made against him.



27

i) Chinese citizens born in Hong Kong before or after the

establishment of the Hong Kong Special Administrative Region;

ii) Chinese citizens who have ordinarily resided in Hong Kong for a

continuous period of not less than seven years before or after the

establishment of the Hong Kong Special Administrative Region;

iii) Persons of Chinese nationality born outside Hong Kong of those

residents listed in categories (1) and (2);

iv) Persons not of Chinese nationality who have entered Hong Kong

with valid travel documents, have ordinarily resided in Hong Kong

for a continuous period of not less than seven years and have taken

Hong Kong as their place of permanent residence before or after

the establishment of the Hong Kong Special Administrative

Region;

v) Persons under 21 years of age born in Hong Kong of those

residents listed in category (4) before or after the establishment of

the Hong Kong Special Administrative Region; and

vi) Persons other than those residents listed in categories (1) to (5),

who, before the establishment of the Hong Kong Special

Administrative Region, had the right of abode in Hong Kong only.



28

More importantly, Article 11 of Basic Law provides that no law enacted by the

legislature of the Hong Kong Special Administrative Region shall contravene the

Basic Law. The authority of Immigration Ordinance was seriously challenged.

CHONG Fung-yuen v. the Director of Immigration

The Contradictions between Basic Law and the qualifying requirements provided in

the Immigration Ordinance brought a numbers of judicial reviews where decisions

and authority of the Director of Immigration Department were challenged. CHONG

Fung-yuen case was a classic case arguing the legal provision on the residency of

Hong Kong born child to Mainland parents. CHONG Fung-yuen’s parents were

Mainlanders who came to Hong Kong with two-way permits on a visit in early

September 1997. They were not residents of Hong Kong, permanent or otherwise.

Shortly after the parents arrived in Hong Kong, the mother gave birth to CHONG

Fung-yuen on 29 September 1997. They were arrested and repatriated while

CHONG Fung-yuen stayed in Hong Kong with his grandfather who was a Hong

Kong citizen. Chong’s grandfather lodged a claim about Chong's status with the

Director of Immigration. That was in November 1997. The Director did not accept

CHONG Fung-yuen as permanent resident of Hong Kong, and did not accept that he



29

has the right of abode in Hong Kong by referring to the provision stated in Para 2(a)

of Schedule 1 of Immigration Ordinance. Chong’s grandfather applied for a judicial

review against the Director’s decision in 1999.

The Court of First Instance ruled that the wordings in Article 24(2) (1) of the Basic

Law are clear and self-explanatory enough to confer the status of permanent residents

on Chinese citizens who have been born in Hong Kong. The judged state that –

the words in paragraph 2(a) of Schedule 1 to the Immigration (Amendment)

Ordinance enacted on 1 July 1997 : ‘if his father and mother was settled or

had the right of abode in Hong Kong at the time of the birth of the person or

at any later time’ were in my judgment incompatible with, and contravene

art.24(2)(1) of the Basic Law. They have therefore no effect to limit the

right of abode of those Chinese citizens born within Hong Kong.46

46 CHONG FUNG-YUEN v. the Director of Immigration. HACL 69/1999



30

Besides, the judges of the case had reviewed the numbers of children born in Hong

Kong between July 1, 1997 to January 31, 2001, whose parents neither had the right

of abode nor lived in Hong Kong at the time of birth.47 Based on the survey of 43

months, they concluded that such judgment posed no ‘significant risk’ to the city and

decided that anyone born in Hong Kong is Hong Kong resident regardless of his or

her parents’ residency48. Director of Immigration lodged an appeal to the Court of

Appeal and Court of Final Appeal and were both dismissed.

The decision of Court of Final Appeal has tremendous implication on Hong Kong

population policy. Once the floodgate was open, Hong Kong medical and health

care and social welfare services became the big pull for Mainland mothers.

Following the Court’s judgment, the number of such births in Hong Kong has risen

from 709 in 2000 to 9273 in 2005, a 13-fold increase. The lack of foresight of our

judges brought about today’s plight.

47 Between July 1, 1997 and January 31, 2001, there were totally 1991 Chinese citizens born in Hong

Kong whose parents neither had the right of abode in Hong Kong nor Hong Kong residents. (CHONGFung-yuen v. the Director of Immigration. CACV No. 62 of 2000.)48 ‘The Hordes at our gate’ by Regina Ip. South China Morning Post. (2006-12-04)



31

CHAPTER THREE

DIAGNOSIS OF THE PROBLEM FROM AN ECNONOMIC APPROACH

Introduction

In this chapter, the insufficient public obstetric service for local women will be

diagnosed from an economic perspective. By referring to the public obstetric service

as a common-pool resource, problems of collective action and problem of

externalities can be used to explain the service-seeking behaviour of Mainland

pregnant women. The content and effectiveness of government reactions in 2005

will be analyzed through Pigou’s theorem of government intervention as a solution to

the problem of externality.

Common Pool Resources

When categorizing a good or service, we basically ask two questions : firstly, is it

possible to restrict someone’s access to that good or service and the second, once

access is gained and consumption or use occurs, does the good or service remain

available for subsequent consumption or use by someone else. For goods which is

very difficult, if not impossible, to restrict someone’s access to the resources and

becomes unavailable for subsequent consumption once it is open for access, we can



32

categorize it as common-pool resource. The most typical examples of common-pool

resources are forests, pastures, and fishery grounds49. These resources are so large

that it is impossible or too costly to restrict someone’s access. Furthermore, these

resources are exhaustible, there will be one day when the resources be used up if open

for consumption without proper management or control.

Problem of Collective Actions

Standard analysis in modern resource economics concludes that when common-pool

resources are open to people for consumption, the problem of collective action is

common. In Garrett Hardin’s ‘Tragedy of the Commons’, he used behaviour of

rational herders to illustrate the phenomena. As human beings are rational and

self-interested, people do things to advance their own goals and objectives 50. If

every herder can gain access to the same piece of land, they tend to add more and

more animals as they receive the direct benefit of their own animals and bear only a

share of the costs resulting from overgrazing. The individual is likely to neglect the

impact of overgrazing as everyone thinks chiefly of his own, hardly at all of common

interest.51

49 Ostrom, E, (1990), Governing the Commons : The evolution of institutions for collective action,Cambridge: Cambridge University Press. Pp 30.50 Brickers, K.N., (2001), Public policy analysis : a political economy approach, Boston ; New York :

Houghton Mifflin, pp. 551 Ostrom, E, (1990), Governing the Commons : the evolution of institutions for collective action,Cambridge: Cambridge University Press. Pp 2.



33

Another scholar Robert Axelrod suggested that the ‘Tragedy of Commons’ could be

avoided by repeated interactions and cooperation among individuals. The rationale

behind this is that individual will cooperate if they believe that gains from cooperation

over time outweigh the loss in short-term benefits of not doing so. However, due to

individuals’ inability to trust one another, they fail to cooperate and end up competing

with each other. This theory is called prisoner’s dilemma, which is a common

representation of the failure of self-interested individuals to cooperate due to lack of

trust.

Mancur Olson in The Logic of Collective Action also suggested those human beings

are rational and self-interested. Unless the number of individuals is small, or unless

there is coercion or some other special device to make individuals act towards their

common interest, rational, self-interested individuals will not act to achieve their

common or group interest.52

Instead, they will behave in a way that brings them the

best interest.

52

Ostrom, E, ‘Policy Analysis of collective Action and Self-Governance’ in Dunn W.N. & Kelly, R.M(eds) Advances in Policy Studies Since 1950, New Brunswick (USA) and London (UK) : TransactionPublics (1992), Pp 89-90.



34

The above three theories are closely related. At the heart of each of these models is

the free rider problem. Whenever one person cannot be excluded from the benefits

that others provide, each person is motivated not to contribute to the joint effort and to

obtain benefit without paying. Since individuals are rational and self-interested, they

tend to allow others to pay for the goods so that they may ‘free ride’. If all

participants choose to free ride, the collective benefit is not produced. On the other

hand, some may provide while others free ride, leading to a less than optimal level of

provision of collective benefit. The temptation to free ride, however, may dominate

the decision process and thus all end up where no one wanted to be. These models

are extremely useful for explaining how perfectly rational individuals can produced,

under some circumstances, outcomes that are not ‘rational’ when viewed form the

perspective of all of those involved.53

Externalities

The irrational outcome usually appears in the form of inefficiency due to negative

externalities. Figure 154 shows the effects of a negative externality. The marginal

benefit curve showing the maximum value that one is willing to pay for successive

53 Ostrom, E, ‘Policy Analysis of collective Action and Self-Governance’ in Dunn W.N. & Kelly, R.M(eds) Advances in Policy Studies Since 1950, New Brunswick (USA) and London (UK) : Transaction

Publics (1992), Pp 90.54 Dahlman. C.J., ‘The Problem of Externality’ in Cowen T. (eds) The Theory of Market Failure,Virginia : George Mason University Press (1988). Pp 209-234.



35

units of goods while the marginal social cost curve representing the maximum values

that one is willing to forgo for the production of successive unit of goods. In a

perfectly competitive market, the efficient equilibrium is at the point of intersection of

the supply and demand curves, where marginal social cost equals to marginal social

benefit. The latter reflects the idea that the marginal social benefits should equal the

marginal social cost, that is the production or consumption should be increased only

when the marginal social benefit exceeds the marginal social cost.

However, there are situations where individual decisions are not based upon full

account of true costs and true benefits. If the consumers or producers only take into

account their own private cost, they will end up at price Pp and quantity QP, instead of

the more efficient price Ps and Qs. The result is that a free market is inefficient since

at the quantity Qp, the social benefit is less than the social cost, so society as a whole

would be better off if the goods between Qp and Qs had not been produced or

consumed. The problem is that people are buying and consuming excessively. The

most typical example of externality is the problem of pollution. Producers only see

their private costs of production such as input of materials, labour cost, rent of factory,

while fail to appreciate the real cost or the social cost to others such as pollutions

arisen from their production and the impact of others’ health. As the producers



36

neglect these externalities, they tend to produce more than market optimum and

induce loss to the society as a whole. Modern resource economics analysis also

concludes that where number of users have access to a common-pool resource, total

resource units withdrawn from the resource will be greater than the optimal economic

level of withdrawal.55

55

Ostrom, E, ‘Policy Analysis of collective Action and Self-Governance’ in Dunn W.N. & Kelly, R.M(eds) Advances in Policy Studies Since 1950, New Brunswick (USA) and London (UK) : TransactionPublics (1992), Pp. 86



37

One of the most frequently cited solutions to externality is government intervention

by way of user charges or tax, which was suggested by Pigou in Economics of Welfare

in 1921. He stated that it is desirable to make the producers or consumers take

responsibility for the externalities. By imposing charges or tax for every unit of

goods or services consumed or produced, the real cost is internalized to the producers

or consumers so as to resume the market optimum. (Figure 2 refers56)

56 Dahlman. C.J., ‘The Problem of Externality’ in Cowen T. (eds) The Theory of Market Failure,Virginia : George Mason University Press (1988). Pp 209-234.



38

Pigouvian theorem ‘The Pigouvian Tax’ was criticized by Ronald Coase to be

inefficient in solving public problem. He criticized that government is not capable

of gathering perfect information to set an optimal level of charge or tax to bring

marginal private cost equal to marginal social cost. Additionally, the transaction

costs for formulating regulation, imposition of tax and monitoring are too high. He

further suggested that when there are no costs of transacting, all externalities would be

eliminated, as costless transaction opportunities will allow suitable modification of

translations behaviour so that all undesirable side effects are properly internalized.57

Public Obstetric Service in Hong Kong

In Hong Kong, medical services that are provided by public hospitals can be

categorized as common-pool resources that are non-excludable and subtractive.

Non-excludable means that it is impossible to prevent relevant people from using the

resources and subtractive means that consumption by a person will impose cost on

others. Some may argue that user charge excludes those who cannot afford the

payment from accessing the medical services, which makes medical service a private

good. However, it is in reality impossible to restrict one’s access to medical care.

In Hong Kong, it is the Hospital Authority’s principle not to deny medical care due to

57 Dahlman. C.J., ‘The Problem of Externality’ in Cowen T. (eds) The Theory of Market Failure,Virginia : George Mason University Press (1988). Pp 209-234.



39

lack of means. Unlike Mainland China58, medical services will be provided to any

person in Hong Kong who is in need regardless of their ability to pay, as human lives

are paramount. The ethical concern makes public medical service non-excludable in

nature. Public medical resource is common-pool resource because it is also

subtractive. Additionally Mainland mother are patients requiring addition drugs, bed,

ward, medical attention from doctors and nurse, thereby imposing costs on other

patients, who now received less attention from nurse and doctors and less space in the

same ward. Pregnant women, who do not manage to reserve a place in public

hospital or who want to have better medical care, are forced to pay more and give

birth in private hospitals when the limit in public hospitals is reached.

Hong Kong public medical services are funded mainly by the government59 through

revenue from taxes and sale of land.60 Patients seeking medical service only have to

pay at a rate, which is highly subsidized by government. Obstetric service before

September 2005 calculated on the number of day of hospitalization. Hong Kong

residents only had to pay HK$100 per day for admission to public hospital for giving

birth. Non-Hong Kong residents paid HK$3,300 per day. The government

58 A pregnant woman about to give birth was turned away from three hospitals and a clinic in Kunmingbecause she only had 900 yuan. ‘Hospitals slam door on pregnant woman’, South China Morning Post,2007-04-03.59

In 2005/2006 financial year, among the HK$300 million revenue of Hospital Authority, 90% i.e.HK$263 million was from government subvention.60 In 2005/2006 financial year, over 70% of the total government revenue was from tax.



40

subsidized 97% and 75% respectively as the cost of delivery for each pregnant woman

is estimated to be HK$12,000 to HK$14,000.61

Alternative to public medical service is private medical service provided by seven

private hospitals in Hong Kong. The charge for obstetric services in private

hospitals is much higher. It ranges from HK$15,000 to over HK$100,000 (Service

charges of seven private hospitals at Annexure F). Those who can afford the higher

service charges will choose private hospitals that provide better medical treatment, a

more comfortable stay, and better postnatal care.

Cost of giving birth in Hong Kong

When deciding whether to give birth in Hong Kong or in Mainland, in private or in

public hospital, Mainland women evaluate the costs and benefits based on their

knowledge. As utility maximizers, Mainland mothers choose the option that benefits

them most. They focus on their private costs and benefits while neglecting the costs

for the Hong Kong society by consumption of medical care.

61 Legislative Council Meeting on November 10, 2004.(http://www.legco.gov.hk/yr04-05/english/counmtg/hansard/cm1110ti-translate-e.pdf)



41

I) Short-term costs

Giving birth in Hong Kong involves short-term costs and long-term costs to

Mainlanders. Short-term costs include obstetric service charges, which were only

HK$3,300 before September 2005. For those who have no relative in Hong Kong,

they have to pay lodging. The cost of lodging ranges from hundreds to thousands.

It depends on the type of accommodation chosen by the Mainlanders. Majority of

Mainland pregnant women come from Guongdong province.62 They come to Hong

Kong mainly by train. The transportation cost is rather limited. Many of these

Mainland mothers-to-be come to Hong Kong with two-way permit under Individual

Visit Scheme. The application fee for a TWP together with a single entry

endorsement costs RMB120.63 However, travel during pregnancy involves risk to the

mothers and babies that should also be counted as costs.

II) Long-term costs

Giving birth in Hong Kong is not without long-term cost. The most important one

would be forgoing ‘hukou’, i.e. citizenship, in Mainland China. Hukou system was

implemented by Mainland China government in 1955 as a measure to guard big cities

62 ‘特首：需要新醫院便建新醫院與公安部研究孕婦來港產子問題’, Mingpao. (2006-12-29)63

Application fee fro a two-way permit cost RMB120 for a single entry while cost RMB140 fordouble entries. Source : Website of Division of Exit and Entry Administration Department of PublicSecurity of Guangdong Province. http://www.gdcrj.com/wlgat/gdgry/index.htm



42

against influx of rural population.64 Under Hukou system, every Mainland China

citizen is required to register to a Public Security Bureau. Hukou registration

provides the principal basis for establishing identity, citizenship, and proof of official

status. Without registration, one cannot establish eligibility for food, clothing, or

shelter, obtain employment, go to school, marry, or enlist in the army.

Unlike Hong Kong, eligibility for the above benefits in Mainland is not standardized

across the country. The state reserves its resources disproportionately for those

classified as urban population. Benefits allocated to urban areas are privileged over

their counterparts in countryside. Within both urban and rural spheres, there are still

differentiations, for example in the allocation of social services by job status.

Children of state official and military officers attend elite schools with small classes

while those of workers in urban area go to neighborhood schools and the parents pay

5% of their income for tuition plus a range of miscellaneous fees.65

64 Rapid economic development in Mainland China brought significant rural-urban migration. China’surban population increased from 10.6% of the total population in 1949 to 14.6% in 1956, with a net

gain of 34.6 million. Tiejun Cheng and Mark Selden, (1994) The Origins and Social Consequences of China’s Hukou System, The China Quarterly.65 Deborah Davis (1989) Chinese Social Welfare : Policies and Outcomes. The China Quarterly.



43

Benefits of giving birth in Hong Kong

I) Fleeing from One-child Policy Penalty

However, majority of these Mainland pregnant women regard hukou as a push instead

of a pull of coming to Hong Kong for giving birth because they can flee from paying

one-child policy penalty by having baby in Hong Kong.

In 1954 when the first census survey in China revealed that China’s population was

over 600 million and was growing by 2 percent yearly, Central Government officials

started doubting their traditional beliefs that having large family was a good thing.

As a result, the Health Ministry issued instruction to all government organizations to

provide guidance to people on the concept of birth control. With the implementation

of economic reform in late 1970s, the Chinese leader at that time, Deng Xiaoping,

pointed out that strict adherence to population control policies was the only way out

of poverty, and to realize the four modernizations66. In 1978, the Fifth National

Peoples’ Congress ratified the new constitution, which explicitly stipulated that the

state advocated family planning. It was also the first time that family planning was

confirmed legally and became one of the fundamental duties of all citizens.67

66 ‘Four modernizations’ was fundamental part of Deng Xiaoping’s economic reform in China in late1970s. Four modernization included modernization of agriculture, industry, national defence and

science and technology.67 WANG, Gabe T., (1999), China’s Populations : Problems, Thoughts and Policies, Aldershot ;Brookfield, Vt. : Ashgate. Pp. 87-94.



44

The population Control Policy in late-1970s included four parts. One is to reduce

the number of children-- which advocates that each couple has only one child; it must

strictly control the second birth, and resolutely prevent the third child.68 Under the

one-child policy, every Mainland couple is only entitled to have one child. There

will be a fine for having an extra child. The penalty varies from city to city, from

household to household. Generally speaking, a family in Guangdong who has their

second child will be fined for around RMB80,000. The Family Planning Office

claims that the rationales behind is first, to make people think clearly before having

children and second, as a financial support for the government to provide education

and other welfares for their children. However, entitlement to social services

depends largely on the type of Hukou and social status. Having a Hukou in

Mainland and paying the penalty will not guarantee social services especially for

those live in rural area and /or without state employment.

By paying just HK$3,300 to give birth in Hong Kong, Mainlanders can evade from

making the penalty of RMB80,000 to the government. It explains why so many

Mainlanders come to Hong Kong for giving birth.

68 WANG, Gabe T., (1999), China’s Populations : Problems, Thoughts and Policies, Aldershot ;Brookfield, Vt. : Ashgate. Pp. 95.



45

II) Advanced Medical Care

Further, medical care and technology in Hong Kong is much more advanced than that

in Mainland China. Furthermore, in Mainland, medical services are provided only

when full payment is made upon admission. They follow strictly to this rule.

Reports on denying medical treatment due to lack of means is common in Mainland

China. While in Hong Kong, the service seeker can easily avoid paying deposit or

can make off without payment by approaching A&E ward and seeking service in the

last minute. This is also the method used by many Mainland women to flee from

making payment in Hong Kong public hospitals. The whole system attracts

Mainlanders, as they know that they can obtain better medical service without paying

a penny in Hong Kong.

III) Hong Kong Residency

However, the major drive for Mainlanders giving birth in Hong Kong is the

permanent residency for their children born in Hong Kong. Especially after the

landmark Chong Fung-yuen case in 2001, it became clear that everyone born in Hong

Kong would be Hong Kong citizen. Many Mainland mothers cherish the better

living environment and welfare for their children and thus try every mean to give birth

in Hong Kong. They are attracted by the nine-year free education, public housing



46

benefits, public medical care, different sorts of allowances such as Comprehensive

Social Assistance Allowance and more recently the Pre-primary Education Voucher

Scheme. With only limited cost, their children can enjoy disproportionately greater

benefits provided by the Hong Kong government. That makes Hong Kong quite

attractive to Mainlanders.

Externalities

What these Mainland mothers cannot see are costs imposed on the society upon their

consumption of medical care in Hong Kong. The negative externalities associated

are not incorporated in the cost function of these Mainland mothers, but appears as

costs to others in the society. The cost of delivery ranges from HK$12,000 to

HK$14,000. The difference between the charge level and the cost are borne by

Hong Kong taxpayers. Besides, the large influx of Mainlanders has placed

significant pressure on the Hong Kong medical resources. As mentioned before,

medical resources are subtractive in nature; consumption by one would impose cost to

another. The service-seeking behaviour of Mainlanders has reduced the frequency

and quality of prenatal and postnatal checks entitled to all local mothers-to-be.

Saturation of public hospitals forced local expecting mothers to give birth in private

hospitals. Those managing to get a place in public hospitals are forced to stay in a



47

crowded ward and give birth with another woman in the same delivery room at the

same time.

Furthermore, providing education, medical care, and welfare to these Hong Kong

born children to Mainland parents are not without cost. The costs are, nevertheless,

shouldered by Hong Kong taxpayers. Especially after 2005, there was an upsurge in

Mainland pregnant women, whose husbands are also Mainlanders, coming to Hong

Kong for the purpose of giving birth. Hong Kong people show anxiety over this

situation as they feel that their contributions to the society are subsidizing children

whose parents have done nothing to contribute to the economic prosperity of Hong

Kong. They feel that these children free ride on the effort of Hong Kong taxpayers.

Not all of these costs were recognized by the Mainlanders. This discrepancy

between the marginal private costs and marginal social costs of seeking obstetric

services by Mainland mothers induces a loss in the overall benefit of such

consumption for the whole society. Individual rational decision becomes collective

irrational behaviour. In order to resume market equilibrium, government has taken

measure to internalize the costs to the Mainlanders and tackle the problem of

externality.



48

Policy before September 2005

After Hong Kong Court of Final Appeal confirmed the status of Hong Kong born

child to Mainland parents in 2001, there was an upsurge in the Mainland mothers

coming to Hong Kong for giving birth. The number of Mainland women giving

birth in Hong Kong in 2005 increased almost 3-fold over that in 2001. At that time,

the charge for obstetric service in Hong Kong for non-Hong Kong residents was just

HK$3, 300 for one-day hospitalization in public ward, with delivery service included.

The private cost for Mainlander was far below the social cost of giving birth in Hong

Kong. Together with the long-term benefits to their children and the relaxation of

Two Way Permit (TWP) requirements, thousands and thousands of Mainlanders came

to Hong Kong for giving birth. The sudden increase in the number of Mainland

pregnant women induced congestions in public ward, delivery room, pressure on

medical staff and affected the quality of service provided to local pregnant women.

Some local mothers-to-be were forced to pay extra to get a place in private hospitals,

as the public hospitals had no vacancy left.

Policy after September 2005

Hong Kong government noted the problem and tried to regulate the situation by

imposing a negative incentive, extra charge, for non-Hong Kong resident seeking



49

obstetric service in public hospital. A HK$20,000 obstetric package was introduced

in September 2005. The package included delivery and care fees in a public ward

for the first three days in the hospital. It also came along with a deposit system that

required all Mainland pregnant women to pay HK$19,800 deposit upon admission to

hospital in order to avoid defaulted payment. The rational behind was that by

increasing the price level, the cost of giving birth in Hong Kong was internalized to

Mainlanders seeking the service. Another purpose was to bring the charge level of

public obstetric service closer to that of private hospital, so that Mainlanders who

could afford the charge might rationally decide to give birth in private hospitals in

order to get better medical treatment and service in return. For those could not

afford HK$20,000, they might simply remain in China.

This Pigouvian tax adopted by the government proved to be ineffective in solving the

problem. In 2006, one year after the implementation of increased charge for the

obstetric package, the number of Mainland women gave birth in Hong Kong increased

30% from 19538 in 2005 to 20577 in the first ten months of 2006. The major reason

was that the charge was not effectively set to bring the market back to optimum. It is

quite ironic to set the charge at HK$20,000 when one can save HK$80,000 by fleeing

from one-child policy penalty. Besides, the marginal private cost after the



50

implementation of new charge was still far below the marginal social cost. It

coincides with the criticism over Pigouvian’s theorem that the government is

incapable of setting an optimal level of charge or tax to attain market equilibrium.

Another reason why the package could not reduce the number of Mainland pregnant

women coming to Hong Kong was that the cost could not successfully be internalized

to the consumers. Although the Authority required every non-Hong Kong resident to

make deposit upon admission for giving birth, there existed a loophole that allowed

Mainland women to obtain obstetric service without making deposit. They knew

that Hong Kong hospitals would not deny service due to lack of means, they then

sought last-minute hospital admission before delivery through the A&E ward.

Furthermore, the obstetric package did not come along with new initiatives in

preventing and collecting defaulted payments as many of the defaulted payments

ended up as bad-debt.69 As Mainlanders can easily escape from making payment, the

cost of delivery could not be internalized to them and could not bring the market to

optimum.

69

The bad debts of Hospital Authority amounted to HK$2,800 million in 2005/06 financial year.Source : ‘Hospital Authority : management of outstanding medical fees’, Audit Commission. HKSARGovernment. http://www.aud.gov.hk/pdf_e/e47ch05.pdf



51

CHAPTER FOUR

NEW POLICY IN FEBRUARY 2007

Introduction

The ever-increasing number of Mainland mothers coming to Hong Kong for giving

birth has reached an unsustainable level. Public hospitals are overcrowded; existing

medical staff manpower can no long cater for the increasing workload; quality of

service delivery has declined significantly; duration of stay after delivery and number

of postnatal checks entitled by every baby and mother have been reduced. A group

of 30 local mothers-to-be marched to Central Government Office to air their

grievances over the situation in November 2006. They urged the government for

solution to ensure sufficient public obstetric service is reserved for local pregnant

women.

The action by these groups of pregnant women had tremendous effect. Different

pressure groups, Legislative Council members and the public have urged the

government to face the problem. Speculations on the possible solutions and

development over the issue can be seen on the headline of the newspaper almost

everyday. Some suggested having the Basic Law amended or reinterpreted while



52

some suggested withholding the baby’s birth certificate until the parents have settled

their hospital charge. All were rejected by the government.

After months of meetings with Mainland authorities, Health, Welfare, and Food

Bureau finally came up with a package of new measures to tackle the problem. The

official objective of the new measures is to ensure sufficient public obstetric service is

available to local pregnant women. The measures include increasing the charge, a

centralized booking system, and strengthening of immigration control. The policy

was tailor-made solely for Mainland women. Pregnant women of other nationalities

were not bounded by these rules. The authority’s explanation was that the number of

pregnant women from other countries seeking obstetric service in Hong Kong was not

common.

The New Policy

Increase in Charge

Effective from February 1, 2007 when the new measures were implemented, the

charge for delivery in public hospital increased from HK$20,000 to HK$39,000.

HK$39,000 is the minimum rate that covers the charges for the delivery (vaginal or

operative) and the first three days of hospitalization in general wards for the



53

concerned delivery. An additional HK$9,000 will be charged for those who have not

made a prior confirmed booking for their delivery and / or have not undergone the

antenatal checkup provided by the Hospital Authority during the pregnancy. The

major aim of doubling the service charge was again to make it closer to or even over

the price level set by private hospitals. So that the Mainland mothers will shift to

private hospitals. The imposition of HK$9,000 additional charge was to deter

Mainland pregnant women from seeking obstetric service in the last minute. It also

encourages the Mainland pregnant women to have prenatal checks before their

delivery in order to reduce the risks to the mothers, their babies, and medical staffs.

Defaulted Payment Prevention Mechanism

As mentioned in last chapter, without an effective defaulted payment system, the

consumers will never see the real costs of their consumption. To effectively

internalize the costs to the Mainland mothers, the Hospital Authority implemented

several measures for collecting outstanding medical fees. Upon registration, the

Mainland mother-to-be is required to produce proof of address. Additionally, the

Authority will defer submission of birth data to Birth Registry for Mainlanders until

outstanding fees are paid up to 42 days. Those, including both Hong Kong residents

and non-Hong Kong residents, who have outstanding fee will only be provided with



54

emergency services. Furthermore, administrative charge will be imposed for late

payments. Finally, the Authority is also exploring the possibility of hiring

international debt collection agency for pursuing Mainland bad debts.70

Having learnt from previous lessons, the government knows clearly that the problem

cannot be solved solely by increasing the service charge. People in Mainland China

are getting wealthier. People who can afford HK$39,000 for giving birth to a baby

are countless.71 Besides, Mainland people might still find HK$39,000 worthy as they

can flee from one child policy penalty and their children can enjoy Hong Kong social

welfare benefits. Therefore, the government implemented other supporting measures

to ensure sufficient obstetric service is available to local pregnant women.

Centralized Registration System

The Bureau developed a centralized booking system for both private and public

hospitals. Every Mainland woman must make prior booking in person and settle the

full payment in advance. Priority is reserved for local women and only when extra

quotas are left will be allocated to Mainland women. In any case, the number of

70 Discussion Paper on ‘Impact of the use of Obstetric Services by Mainland Women on PublicHospital Resources’ by Legislative Council Panel on Health Services. (8 January 2007), LC Paper No.CB (2) 761/06-07(03).71 On the first day of the implementation of this new measures, totally 734 Mainland pregnant women

made registration through the Hospital Authority centralized booking system and brought HK$28.6million revenue to Hong Kong Government within in single day. ‘Authority cashes in on pregnancypolicy’, South China Morning Post, (2007-02-02).



55

quota for Mainland mothers would not exceed HK$12,000 per year. After the

Mainland women have made the reservation, a booking certificate will be issued to

them. Every Mainland mother-to-be is required to produce such certificate to

immigration officer upon entry to Hong Kong. Entry of those Mainland women at

the advanced stage of pregnancy72 who have no booking would be denied.

Tightened Immigration Control

The Bureau also anticipated that those who have not made reservation nor had no

money might try to get through the immigration control points by concealing or

disguising their pregnancy. Body check facilities and medical officers were

stationed in all checkpoints to provide advice on the physical conditions of the

non-local pregnant women. Those who were found to be pregnant for more than 28

weeks and without booking certificate will be denied entry.

The new policy was put forward in January 2007 and was fully implemented in

February. In spite of the rush, there was no big opposition or objection from the public,

pressure groups or politician at the time it was implemented. The public generally

welcomed the policy which had considerably released their anxiety over the situation.

72 To avoid dispute, the authority has defined ‘advanced stage of pregnancy’ as being pregnant formore than 7 months i.e. 28 weeks.



56

CHAPTER FIVE

EVALUATION OF THE NEW POLICY

Introduction

According to the figure released by the Health, Welfare, and Food Bureau, the number

of Mainland pregnant woman giving birth in Hong Kong public hospitals dropped

significantly after the implementation of the new measures in February 2007. In the

first nine weeks of the new policy until April 4, 2007, totally 3,800 Mainland women

gave birth in Hong Kong. 1,190 of them gave birth in public hospitals. 371 of

them sought last-minute obstetric service from emergency wards. When compared

with the figure of the same period last year, although the total number of Mainland

women coming to Hong Kong only dropped by 4%, the number seeking services from

public hospitals dropped significantly by 35%. Mainland pregnant women seeking

emergency delivery service even dropped by 75%.73

By looking at the figure, it seems that the new measures have successfully shifted the

Mainland mothers-to-be from public to private hospitals. Besides, the

implementation of centralized booking system together with immigration control has

73 ‘Birth fee drop for wives ; charge for cross-border couples could fall to HK$20,000’ SCMP

(2007-04-17) and ‘內地孕婦來港分娩個案降4%’ Singtao Daily, (2007-04-16)



57

deterred people from seeking last-minute service from the emergency wards.

However, since the new policy has been implemented for just two and a half months,

the duration is too short to see the real effectiveness of the policy. Therefore, instead

of focusing on the output of the policy, this chapter will be the evaluation of the new

policy with focus on its design and implementation.

Richard F. Elmore stated that certain types of problems predictably bring into play

certain responses from policy makers; these responses are called instruments.

Different policy instruments have different operating characteristics, strengths, and

implementation problems. Certain instruments fit certain problems and objective

better than other instruments. Therefore, it is good to know something about the

potential effects of different policy instruments before one chooses among them.

The study of policy instruments then can be useful in strengthening the predictive

capacity of policy analysis that would be helpful in policy design.74

As a broad policy objective is to be achieved far in the future, while the instrument

choice is real and will have immediate consequence75, this chapter will evaluate the

new policy by referring to the choice and design of the policy instruments.

74

Elmore. R.F. (1987) ‘Instruments and strategy in public policy’. Policy Studies Review.75 Bemelmans-Videc M, Rist R.C. Vedung E. (1998), Carrots, Sticks and Sermons, Policy Instrumentsand their Evaluation, USSA New Brunswish : Transaction Publishers. Pp. 41.



58

What is Evaluation?

Evaluation is the systematic application of social research procedure for assessing the

conceptualization, design, implementation and utility of social intervention

programmes.76 Evaluation of a policy cannot do away with figures and data on the

policy outcome, which is generally referred as ‘output / outcome evaluation’. In fact,

all phases of the policy process, from problem analysis through monitoring

implementation to the appraisal of the actual result of the policy can be evaluated.

Apart from ‘output / outcome evaluation’, there is also ‘process evaluation’ where the

evaluation focuses on the process of designing and implementing of policy or

programme.

When evaluating a policy, no matter ‘output evaluation’ or ‘process evaluation’, there

should be some criteria by which to judge the adequacy of the policy the criteria of

‘good governance’ – the central values of which government actions is appraised.

According to Marie-Louise Benelmans-Videc, the values of good governance include

effectiveness, efficiency, legality, democracy, and legitimacy77.

76 Rossi, P.H. and H.E. Freeman. 1993. Evaluation : A Systematic Approach. Newbury Park, CA : Sage.

Pp. 5.77 Bemelmans-Videc M, Rist R.C. Vedung E. (1998), Carrots, Sticks and Sermons, Policy Instrumentsand their Evaluation, USSA New Brunswish : Transaction Publishers. Pp. 41.



59

Effectiveness is the degree of goal-realization due to the use of certain policy

instrument. It includes both positive and negative effects brought by the policy

instrument. Efficiency refers to the input-output ratio of the policy instrument. It

includes the problems of implementation of the policy instrument through devised

means. Legality means the degree of correspondence of administrative action in

designing and implementing policies with the relevant formal rules as well as with the

principles of proper process. Democracy is the degree to which administrative

action in designing and implementing policies correspond with accepted norms as to

government-citizen relationships in a democratic political order. The final value is

legitimacy, which is the degree to which government choices are perceived as just and

lawful in the eyes of the involved actions. These central criteria of good governance

need to be combined, while at the same time they compete or conflict, e.g. policy

instruments that score high on the democracy criterion often have a price tag in terms

of their efficiency. Therefore, the choice of policy instrument instruments is a search

for optimum solution, a prioritizing process, and a balancing act.78

78 Bemelmans-Videc M, Rist R.C. Vedung E. (1998), Carrots, Sticks and Sermons, Policy Instrumentsand their Evaluation, USSA New Brunswish : Transaction Publishers. Pp. 6-9



60

Classification of Policy Instruments

Nowhere in the international literature on policy analysis and public administration is

to be found a uniform, generally embraced classification of policy instrument. The

policy instruments can be categorized in many ways. In this paper, policy

instruments are categorized by the degree of authoritative force or degree of

constraints involved in the government effort. By such, policy instruments can be

defined as regulation, economic means, and information.79

Regulatory Instrument

Regulations are measures undertaken by government to influence people by means of

formulated rules and directives that mandate receivers to act in accordance with what

is ordered in these rules and directives. Regulations often associated with threats of

negative sanctions such as fines, imprisonment, and other type of punishment.80

Regulation is often chosen by the governments as a policy tool because it appears to

be more certain and effective as regulatory instruments define the norms, acceptable

behaviour or to limit activities in a society.81

79 Bemelmans-Videc M, Rist R.C. Vedung E. (1998), Carrots, Sticks and Sermons, Policy Instrumentsand their Evaluation, USSA New Brunswish : Transaction Publishers. Pp. 59.80

Ibid. Pp. 31.81 Bemelmans-Videc M, Rist R.C. Vedung E. (1998), Carrots, Sticks and Sermons, Policy Instrumentsand their Evaluation, USSA New Brunswish : Transaction Publishers. Pp. 59.



61

Regulatory instruments are not without weakness. It is argued that regulations are

ineffective in changing behaviour if there no social consensus around the government

policy underlying the regulatory instruments. The effectiveness of a regulatory

instrument is associated with its legitimacy. Additionally, effectiveness also greatly

depends on the nature of the policy context, which also determines the capacity of the

government organization to ensure compliance.82 An illegitimate regulation might

lead to non-compliance and the cost of non-compliance might even greater that the

cost of the problem itself.

Economic Instrument

Economic policy instruments involve either handing out or the taking away of

material resources from the addressees to make it cheaper or more expensive in terms

of money, time, effort, and other valuables to pursue certain actions. What makes

economic policy instruments different from regulations is that the addressees are not

obligated to take the measures involved. They may decide not to make use of the

government incentive, either positive or negative, because they hesitate to take the

measures required to get it.83 Taking cigarette consumption in Hong Kong as an

82

Bemelmans-Videc M, Rist R.C. Vedung E. (1998), Carrots, Sticks and Sermons, Policy Instrumentsand their Evaluation, USSA New Brunswish : Transaction Publishers. Pp.71.83 Bemelmans-Videc M, Rist R.C. Vedung E. (1998), Carrots, Sticks and Sermons, Policy Instruments



62

example, since cigarette smoking is hazardous to health, the government fells the need

to do something to discourage people consuming cigarette. Instead of formulating

rule to totally ban the purchasing of cigarette in the market, the government imposes

heavy tax on it and makes the smokers’ habit more expensive.

Economic policy instrument is flexible and usually has higher legitimacy when

compared with regulatory instruments, as the addressee has no obligation to follow

the regulation. The addressees have the right to choose. However, the

effectiveness of economic instrument must rely heavily on the relationship between

the economic incentive and the policy goals. Sometimes, the addressee might

already have decided to behave in the desired way, in which case economic incentive

or disincentive has been unnecessary.

Information

The third type of instrument is information which influences people through the

transfer of knowledge, communication of reasoned argument and persuasion. 84

Through advertisement, education, diffusion of printed material, amassing and

packaging etc, citizens are informed of what is right or wrong, good or bad. How the

and their Evaluation, USSA New Brunswish : Transaction Publishers. Pp. 32-33.84 Ibid. Pp. 33.



63

people should act and behave and what people are allowed to do. It is worth

highlighting that information can be either a policy instrument in its own right or a

metapolicy instrument in the sense that it is used to disseminate knowledge of the

existence, meaning, and availability of other policy instruments.85 The former refers

to information as a policy instrument while the latter refers as information on policy

instrument.

Evaluation of 2007 Policy

Policy Instruments

The policy implemented in 2007 is a combination of economic, regulatory, and

informative policy instruments. It increased the public obstetric service charge for

Mainland women from HK$20,000 to HK$39,000. Mainlanders are not obligated to

pay the adjusted service charge. They can choose not to come to Hong Kong for

giving birth if they hesitated to give the amount of money or they can seek service

from private hospitals in Hong Kong. The financial disincentive increased the cost

of action and prompted the addressees to undertake activities that will achieve the

goals of the government.86

85 Bemelmans-Videc M, Rist R.C. Vedung E. (1998), Carrots, Sticks and Sermons, Policy Instruments

and their Evaluation, USSA New Brunswish : Transaction Publishers. Pp. 48.86 Bemelmans-Videc M, Rist R.C. Vedung E. (1998), Carrots, Sticks and Sermons, Policy Instrumentsand their Evaluation, USSA New Brunswish : Transaction Publishers. Pp 79.



64

To avoid defaulted payment and enhanced the effectiveness of the policy, it imposed

regulations requiring all Mainland obstetric service seekers make prior registration

and settle full payment before delivery. Those Mainland women at their advanced

stage of pregnancy without booking certificate would be denied entry. Those

seeking obstetric service without registration will be penalized for HK$10,000. To

avoid non-compliance, body check facilities are put in place in border checkpoints to

ascertain the health condition of pregnant Mainland women. There is also yearly

quota that set the upper limit of vacancy allocated to Mainland women to ensure

sufficient obstetric service is available to local women.

Many new policies in Hong Kong in recent years like to use information either as a

tool or as a package. Well before the policy is put forward, there are advertisement,

press release, and consultation papers to raise people attention on the subject.

However, since the target of this policy is Mainland women, we do not see large-scale

promotion or publicity on this policy in Hong Kong.

Choice of instruments

From policy instrument perspective, policy formulation is the art of choice making.

There are two factors which shape the choice of policy makers : the first one is the



65

problem identification and the second is the resources and constraints faced by policy

makers.87 The decision making process is an exercise of give and take which involves

the trade-offs of effectiveness and efficiency, the capabilities of implementing

institution, the political and fiscal costs of selecting a particular instrument, and the

different constituent pressures faced by the policy maker.88

In late 2006 when the issue received the hottest debate, different people had different

focuses on the issue that led to different proposals on the solutions. Some focused

on the problem of defaulted payment, some focused on the residency of the children

while some focused on the quality and availability of obstetric service in public

hospitals. There were suggestions to request Mainland pregnant women to pay

deposit upon entry at border checkpoints and withhold the issue of birth certificate to

their children if they fail to settle the hospital bill. Some even suggested amending

Basic Law to redefine the residential status of children born in Hong Kong with

Mainland parents.

In January 2007, the government announced its plan in tackling the service seeking

behaviour of Mainland pregnant women while no extremely authoritative measures as

87 McDonnell, L.M., Elmore, R.F. ‘Getting the Job done : Alternative Policy Instruments’, Educational

Evaluation and Policy Analysis, Summer 1987, Vol. 9, No. 2, Pp 144.88 Bemelmans-Videc M, Rist R.C. Vedung E. (1998), Carrots, Sticks and Sermons, Policy Instrumentsand their Evaluation, USSA New Brunswish : Transaction Publishers. Pp. 151.



66

listed above could be seen in the proposal. Although these measures will surely

bring effectiveness and efficiency due to their degree of coerciveness, the level of

legitimacy would induce difficulties in implementation. The political cost and the

cost of non-compliance are so high that the government cannot afford. After NG

Ka-ling case89 in 2002, reinterpretation of Basic Law became a taboo of Hong Kong

government which was condemned to have ruined the autonomy of Hong Kong under

‘One Country, Two System’. The possibility of seeking reinterpretation was ruled

out by the Secretary for Security on the first day it was proposed.

As the policy objective is to ensure sufficient obstetric service to local pregnant

women, there is no need to totally deny service to non-local women. Instead of

implementing absolute prohibition, Hong Kong government chose conditional

prohibition, which granted permission to Mainland women to come to Hong Kong if

they have fully settled the obstetric service charge in advance. On one hand, the

prior registration requirement allow the authority better control the number of

Mainland pregnant women seeking public obstetric service. On the other hand, it

can reduce the possibility of defaulted payment. More importantly, the children born

in Hong Kong might become our future workforce, which will relieve the problem of

89 NG Ka-ling and others v. the Director of Immigration. FACV No. 14 of 1998.



67

the ageing population faced by the society. With the consistently low birth rate, it is

estimated that by 2030, 27% of the total population will be aged 65 and above.90

Allowing Mainland mothers to give birth in Hong Kong is one of the methods in

ensuring the sustainability of Hong Kong population growth.

In the meantime, the policy doubled the service charge to make the charging level of

obstetric service in public hospital more inline with that in private hospitals. The

economic mean has changed people’s behaviour and successfully shifted the service

seekers from public hospitals to private hospitals. Finally, the imposition of yearly

quota ensured sufficient obstetric service is available to local pregnant women, which

is the goal of the policy.

Regulation seldom results in uniform compliance. There is always individuals resist

compliance if by doing so they can reap positive benefits. The government then put

in place series of measures to avoid non-compliance. Apart from prior registration

system to prevent defaulted payment, the authority also set up body check facilities in

border checkpoint to ascertain the pregnant women’s medical condition. However,

there are still intermittent reports on Mainland women gained entry to Hong Kong by

90 2006 Population By-census, Census and Statistics Department, HKSAR Government.



68

disguise or forgery. Recently, a Mainland woman crossed the border with a forged

registration certificate that was issued by a medical practitioner in Hong Kong.

Other illegal acts such as illegal smuggling of pregnant women from Mainland China

to Hong Kong and overstaying in Hong Kong waiting for delivery are common. In

fact, what the government can do is to reduce the variation of behaviour to a tolerable

level because the enforcement cost for uniform compliance is prohibitively high.

Design of Policy

However, it is not a perfect policy; it also has its downsides. The way the policy is

designed is unexpectedly insensitive which made it subjected to challenges. Firstly,

the policy is discriminatory in nature. It only applies to Mainland women. Women

from all other countries are not covered by the new policy, which means pregnant

women from USA, UK, Japan, Sri Lanka, and Thailand etc are not required to make

prior registration for giving in Hong Kong. They would not be any barrier from

entering Hong Kong solely on the ground of pregnancy. What more, they only have

to pay HK$20, 000 for giving birth in Hong Kong. Government’s explanation was

that non-local pregnant women from places other than China are a clear minority and

would not pose threat to the Hong Kong public medical service just does not sound

convincing. If the policy goal is to protect the welfare of Hong Kong pregnant



69

women, the new service charge should apply to all obstetric service seekers from all

over the world, instead of just targeting Mainland pregnant women. The legitimacy

of the new policy is doubtful.

Moreover, the policy was criticized for failing to take care of the real need of Hong

Kong people. Among the 20,577 Mainland women coming to Hong Kong for giving

birth in the first 10 months of 2006, 39% of them are married to Hong Kong males.

These Mainland women expressed that they will not pay HK$39, 000 even if they

have money as they found it unfair to be treated differently. Fifty Hong Kong males

who have wives in Mainland China marched to Central Government Officer on April

1, 2007 and May 13, 2007 to demonstrate against the new policy. They found it

unfair as they are required to pay extra for service and welfare entitled by every Hong

Kong people. Their grievance over the policy is understandable.

Conclusion

The choice of policy instrument appears to have stricken a balance between

effectiveness, feasibility, and legitimacy. The figure in the first three months after

the implementation of policy has initially approved the policy’s effectiveness in

reducing Mainland women’s demand over public obstetric service. After the



70

implementation of the new policy, there is a significant reduction in the number of

Mainland pregnant women giving birth in public hospitals. According to the figure

released in early-April 2007, among the 3,800 Mainland women gave birth in Hong

Kong, 1,190 of them gave birth in public hospitals. It dropped by 35% when

compared with the figure of the same period last year. The new pricing system has

successfully shifted the demand from public to private hospitals. Besides, the

registration system and immigration control have deterred people from taking free

lunch.



71

CHAPTER SIX

THE WAY FORWARD

Introduction

Judging from some key indicators of policy outcome such as the number of Mainland

women giving birth in public hospitals, the implementation of the policy has been a

success. In the three months after the implementation, the goal of relieving the

pressure of public obstetric service has been achieved by shifting Mainland pregnant

women from public hospitals to private hospitals. The number of Mainland pregnant

women seeking obstetric service between February and April this year dropped by

37% when compared with the figure of the same period in 2006. However, is the

problem really solved? Does it mark an end to Hong Kong people’s anxiety about

the influx of Mainland immigrants?

Long Term Implication

Government knows that Hong Kong people's concern is not just the availability of

obstetric service. The primary worry is the implication of Mainland children's

inclusion in our society in the end. In the first nine weeks after the implementation

of the new policy, Hospital Authority received 10,170 registrations for obstetric



72

services, in both private and public hospitals, from Mainland women91. Based on

this figure, it is estimated that the number of registration will reach twenty or even

thirty thousand by the end of 2007. They are all entitled to the education, medical

services, housing facilities, and other welfare services of Hong Kong. The

implication for Hong Kong resources will be significant. In fact, the demand of

welfare services from these newborn babies has surfaced progressively. From

August 2006 to March 2007, there were 102 children born to Mainland parents

applied for Comprehensive Social Security Assistance (CSSA)92. The figure might

seem trivial when compared with the total number of children born to Mainland

parents every year. However, its implication cannot be overlooked. Otherwise, we

will commit the same mistake as committed by our judges in CHONG Fung-yuen

case in 2001.

Social Disintegration

The uncertainties faced by Hong Kong people made them worry and anxious.

Besides, there were signs of deepened social disintegration after the issue became the

center of discussion last year. Hong Kong residents, married with Mainland wives,

91 ‘Birth fee drop for wives ; charge for cross-border couples could fall to HK$20,000’ SCMP

(2007-04-17) and ‘內地孕婦來港分娩個案降4%’, Singtao Daily, (2007-04-16)92 The applicants’ ages ranged from two months old to 17 years old. Source : Social WelfareDepartment.



73

complained that they are discriminated and are not provided with the same rights and

benefits enjoyed by other Hong Kong residents. Other Hong Kong people argued

that allowing Mainland women married to Hong Kong males to give birth in Hong

Kong at normal rate would expose our medical resources to exploitation.

With the short-term problem being solved, the government should focus its effort on

the long term planning in order to balance the population and the resources. This

can be achieved by restructuring the current policy on obstetric services and better

management of welfare resources.

Restructure of obstetric service policy

Reorienting Policy Target

First, the objective of the policy has to be re-oriented to meet the real need of Hong

Kong people. Instead of protecting the benefit of local pregnant women, the policy

should aim at protecting the right and benefit of Hong Kong residents as a whole.

The welfare of those Hong Kong residents with Mainland wives should be cared for

equally. The best and simplest way in achieving this is by standardizing the service

charge for all Hong Kong families. That means Mainland women married to Hong

Kong residents only have to pay HK$100 per night for giving birth in public hospitals.

By doing so, the government can show its care and support to all families in Hong



74

Kong without differentiation which would definitely be beneficial to restore social

harmony. As most of the opposition of the current policy was from Mainland

women married to Hong Kong residents, the above-suggested policy would gain

support that is more public.

Extending Quota Coverage

Secondly, to better manage the number of Mainland women giving birth in Hong

Kong, the quota system should extend to cover the registration in private hospitals.

Under current policy, the quota system is not applicable to private hospitals. From

February to April, there were 10,170 Mainland women registered for obstetric

services in Hong Kong, 3756, around 36% of them sought service from public

hospitals 93 . Without proper control, Mainland women giving birth in private

hospitals might pose unbearable pressure on the resources of Hong Kong at a later

date.

Increasing Charge for Couples who are Both non-Hong Kong Residents

Thirdly, for those couples who are both non-Hong Kong residents wishing to give

birth in Hong Kong, as their children might be educated, living, and seeking medical

93 “內地婦急症室產子減75% 四成不付款”, Mingpao (2007-04-13)



75

and welfare of all kinds in Hong Kong, they are required to pay extra as compensation

to the Hong Kong government. The payment is expected to be in line with the

amount of the one-child policy penalty i.e. around HK$100,000. The aim is not to

raise public revenue. The whole purpose is to reduce their incentive to give birth in

Hong Kong to the minimum. Apart from protecting Hong Kong people’s benefits,

the increase in charge has the effect in screening incoming pregnant women. Those

seeking obstetric services in Hong Kong would be willing and capable in paying the

services, which can reduce the possibility of defaulted payment.

Supportive Measure

As the charge is so high, it is very likely that people will try every possible mean to

come to Hong Kong illegally. Series of measures have to be put in place to avoid

non-compliance. It can be achieved by strengthening of Immigration control and

implementing a defaulted payment prevention system.

I) Immigration Control

An experienced Immigration officer served in Lok Ma Chau border-crossing point

revealed that in the past few months after the implementation of the new policy,

Mainland pregnant women without registration certificate tried different means to



76

come to Hong Kong. Apart from the most commonly used tricks that was disguising

as non-pregnant woman, there were also Mainland mothers claimed feeling unwell

and sought medical treatment at the border crossing points. Immigration officers had

no choice but to send these Mainlanders to the nearest hospitals. After medical

treatment, these Mainland women refused to leave the hospital. They even

threatened to commit suicide if repatriated. Some Mainlanders waited in the area

between China and Hong Kong clearance counters and sought obstetric service from

the border crossing point when they were ready for delivery. Few falsified

registration certificates while others became nasty when being denied entry.

The possibility of non-compliance can be minimized by strengthening the

communication with Mainland and solving the problem by working in partnership.

They should establish a cross-border system that cover two issues. First, if a

Mainland woman leaves Mainland China to Hong Kong, and the Mainland public

security officer at clearance counter reasonably believes that she is at her advanced

stage of pregnancy, the officer should not allow the pregnant woman to leave China

unless the woman can produce a valid registration certificate. Second, Mainland

women claim feeling unwell and seek medical service from Hong Kong

border-crossing points should be handed over to the Mainland public security officers



77

who will either render medical treatment on the spot or send the women to the nearest

hospitals for treatment.

The system is expected to reduce the possibility of abusing medical service due to

policy loophole. However, it requires cohesive communication and cooperation

between Mainland and Hong Kong authorities. More importantly, it needs the active

participation of Mainland China. China government should realize that such

service-seeking behaviour of Mainland women is not simply a Hong Kong problem; it

is a cross-border problem. The behavior poses significant impact on the population

policy of Mainland China. As those babies born in Hong Kong will not be counted

as China population, the one-child policy will be less effective in controlling the

number of population in China.

As the whole obstetric service policy lies heavily on the effectiveness of the

immigration control, Immigration Department should invest more resources in

training their staffs, especially those serving in border checkpoints. Training should

focus on the authority empowered to Immigration officers under the new policy, the

communication skills and the negotiation technique. The training will better equip

the officers and make them more confident and competent in carrying out their duties.



78

II) Defaulted Payment Prevention System

Even under strict immigration control, Mainland mothers can still enter Hong Kong

illegally. Some are illegal immigrants while some are two-way permit holders, who

have overstayed in Hong Kong after the expiration of their TWP. In these cases, the

government should take actions to show her intolerance to these immigration offences

and the determination in collecting full payment by criminalizing non-payment of

hospital fee and charging all illegal immigrants and overstaying pregnant women with

heavier penalty to deter illegal acts. Those who fail to settle full service charge

before they leave the hospitals will be wanted and denied egress from Hong Kong.

The purpose is to reduce people’s incentive to come to Hong Kong for giving birth

illegally.

Civil Education

Due to excessive negative reports by the media, these babies born to Mainland women

were discriminated by other Hong Kong people that resulted in serious social

segregation. The government should exert greater effort in promotion the positive

image of these newborn babies by publicizing the benefits and advantages brought by

them. They should be portrayed as the pillar of our society, which will be the

solution to our aging population problem in the future.



79

Vision in Education, Housing, Medical Service and Other Welfare Policies

In 2006, 63% of the newborn babies were born to mothers from Mainland China and

became the major source of population growth in Hong Kong. Besides, there was

growing proportion of these newborn babies whose parents are not Hong Kong

residents. The government should recognize the implication of the growing number

of these newborn babies and their family profile to our existing and future social

policies.

Education

These children may seek education, accommodation, medical service, and welfare of

all kinds in Hong Kong. The government should monitor the trend of the

service-seeking behaviour of Mainland women and project the demand on education,

housing facilities, social assistance, and medical care in the coming decade. All

policies have to be reviewed to meet the need of our next generation. The most

imperative one would be our education policy. Due to the ever-declining birth rate94

,

totally 127 primary schools closed down between 2001 and 2006 due to the low

enrollment rate. These schools are either demolished or left idle. Many teachers

lost their jobs and many students are forced to transfer to other primary schools.

94 The number of birth in Hong Kong dropped from 85,000 in 1980 to 67,700 in 1990 and to 48,200 in2001. Census and Statistic Department. http://www.censtatd.gov.hk/showtableexcel2.jsp?tableID=004.



80

However, since 2001, Hong Kong's population has rebounded. The number of birth

rose from 48,200 in 2001 to 65,000 in 2006, with children born to Mainland mothers

formed the major part of the population increase. They successfully brought our

population back to 1990 level. This means the whole society’s demand on education

will increase in the coming decade. If the government has insight and takes a

proactive role in forecasting our demand on education in the future, we might be able

to avoid unnecessary chaos as such.

In the past, with our geographical layout, the demand on boarding schools was low

which made the number of boarding schools limited. With the increase proportional

of newborn children whose parents are not Hong Kong residents, the demand on

boarding schools might increase. If these children seek education in Hong Kong, it

is very likely that they will not live with their parents. On the other hand, if they

remain residents in Mainland China, it would take considerable time for them to travel

to school. The government should consider either encouraging private sector to run

boarding schools, which provide all in one services to these children so that their

education, accommodation and catering are being taken care, or the government can

provide the services by herself so that the quality of education and living environment

can be assured.



81

Social Welfare Assistance

To better protect Hong Kong people’s welfare and avoid social resources being

abused, the existing social welfare system needed to be reviewed. Under current

policy, any person who has been Hong Kong resident for 7 years or more and has

resided in Hong Kong for at least one year is eligible for applying CSSA. These two

requirements are exempted for those who are under 16 years old. That means those

children born to Mainland parents are all eligible for applying CSSA on the day they

are born in Hong Kong. These children can get HK$1,955 per month if can pass the

financial test95. Social Welfare Department should develop a system with Mainland

China to collect reliable information on the applicant’s financial situation to avoid

deception of the social assistance programs. Besides, as the assistance is provided to

the Hong Kong born children only, the amount and the mode of assistance also needs

to be reviewed. Furthermore, to ensure the assistance goes directly to the applicant,

government should reduce the amount of cash assistance and explore the feasibility of

using voucher or direct subsidies to service providers to avoid assistance being

misused.

95 To be eligible for CSSA, the applicant’s capital asset should not be more than HK$34,000 for ‘singleperson’ application.



82

The government should look into far too many issues. However, it is not the purpose

of this paper to list out all policies the government has to review. The objective of

this section is to highlight that the government should note the significant implication

brought by these newborn babies to our society. The government should extend its

focus from the availability of public obstetric service to the long-term planning of

social policies to ensure sustainable development of Hong Kong society as a whole.

Conclusion

These newborn babies are Hong Kong residents, which is an irrebuttable truth. They

have the right to enjoy the welfare, education, and medical service in Hong Kong

while they also have the obligation to contribute to the community. Whether they

will become the pillar or the burden of the society depends on the government’s

attitude and determination in nurturing them and builds their sense of belonging

towards Hong Kong that makes them recognize Hong Kong as their home.



83

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‘Birth fee drop for wives ; charge for cross-border couples could fall to HK$20,000’

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87

Annex A

Birth Statistics

Total Number of Birth in Hong Kong

Year Number of Births in HK

Number of babies born to Mainland

women in HK

(% to the total number of births)

2001 48219 7810 (16%)

2002 48209 8506 (17.6%)

2003 46965 10128 (21.6%)

2004 49796 13209 (26.5%)

2005 57098 19538 (34%)

2006

(first 10 months)

52265 20577 (39.3%)

Family Profile of babies born to Mainland mothers

Year

Total No. of babies

born to Mainland

women

Number of babies

born to Mainland

women in HK

% to the total number

of babies born to

Mainland women

2001 7810 620 7.9%

2002 8506 1250 14.7%

2003 10128 2070 20.4%

2004 13209 4102 31.1%

2005 19538 9273 47.5%2006

(first 10 months)

20577 12678 61.6%

Source : Discussion Paper on ‘Impact of the use of Obstetric Services by Mainland Women on Public Hospital

Resources’ by Legislative Council Panel on Health Services. (8 January 2007), LC Paper No. CB (2)

761/06-07(03).



88

Annex B

Chronology of Major Events affecting

Hong Kong Immigration Policy on Mainlanders

1841 Hong Kong became British colony

1940 Immigration Control Ordinance introduced

1941 Second World War

1949 Immigration Control Ordinance stipulated that no person may enter

into the Colony without an entry permit, natives of Guangdongprovince were exempted.

1950 Hong Kong Government introduced a quota system to balance the

numbers of those entering into and those leaving the Colony.

1950 Outbreak of Korean War

1950 The United States imposed an almost complete embargo on Chinesetrade, which brought Hong Kong entrepot trade to a standstill.

1966 Outbreak of Cultural Revolution in Mainland China

1974 Introduction of ‘reach based’ policy.

1980 Abolition of ‘reach based’ policy

1980 China and British governments finally reached an agreement on the

daily quote of One Way Permit. Maximum 150 legal immigrants were

allowed to enter Hong Kong for settlement per day.

1983 Mainland China reduced the OWP quota from 150 to 75 per day

1984 Signing of Sino-British Joint Declaration.

1993 Mainland China increased the OWP quota from 75 to 105 per day



89

1995 The daily quota for OWP further increased to 150 per day

1997 Change of sovereignty

1997 Hong Kong hit by Asian Financial Crisis

1998 Unemployment rate of Hong Kong reached 7%

1998 Introduction of ‘Shangwu’ (Business visit) endorsement for Two-way

Permit.

Relaxation of ‘Tanqing’ (Relative visit) endorsement requirements.

2001 Court of Final Appeal ruled that any person born in Hong Kong is

Hong Kong residents in CHONG Fung-yuen case

2003 SARS Outbreak

2003 Introduction of Individual Visit Scheme



90

Annex C

Growth of Population in Hong Kong (1841 – 2006)

0

1000

2000

3000

4000

5000

6000

7000

8000

1 8 4 1

1 8 5 1

1 8 6 1

1 8 7 1

1 8 8 1

1 8 9 1

1 9 0 1

1 9 1 1

1 9 2 1

1 9 3 1

1 9 4 1

1 9 5 1

1 9 6 1

1 9 6 6

1 9 7 1

1 9 7 6

1 9 8 1

1 9 8 6

1 9 9 1

1 9 8 6

2 0 0 1

2 0 0 6

Year

T h o u s a n d ( s )

Source : The figure from 1841 – 2001 were taken from CHAN, J. ‘The Evolution of Immigration Law

and Policies : 1842-2003 and Beyond’ in CHAN J., Rwezaura, B. (eds) Immigration Law in Hong

Kong : An Interdisciplinary Study, Hong Kong : Sweet & Maxwell Asia (2004)

The figure for 2006 was drawn from Census and Statistics Department, HKSAR Government.



91

Annex D

Map of Cities covered by Individual Visit Scheme in 2007

Shanghai

Chongqing

Chengdu

Beijing

Jinan

Xiamen

Fuzhou

Quanzhou

Hangzhou

Tianjin

Nanjing

WuxiSuzhou

Taizhou

Ningbo

Shenyang

Dalian

Nanchang

Changsha

Haikou

Nanning

Guiyang

Kunming

Shijiazhuang

Zhengzhou

Changchun

Hefei

Wuhan



92

Annex E

No. of Mainlanders Visited Hong Kong (1997 – 2006)

8.46 m *

0

2

4

6

8

10

12

14

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

* Individual Visit Scheme implemented in Mainland China in July 2003.

Source : Tourism Board

Million(s)



Annex F

Obstetric Service Charges in Hong Kong Private Hospitals

Service charge for Hong

Kong residents

Service charge for

Mainland motherHospital

Normal

Delivery

Caesarean

Delivery

Normal

Delivery

Caesarean

Delivery

Special Arrangements

for Mainland Pregnant

Women

Hong Kong

Sanatorium and

Hospital

(養和醫院)

HK$13,800 –

HK$32,000

HK$17,800 –

HK$43,800

Same as charges for Hong

Kong residents.

Deposit for Mainlanders

HK$50,000 (general

ward)

HK$100,000 (private

ward)

St. Paul Hospital

(聖保羅醫院)

HK$12,500 –

HK$25,280

HK$15,180 –

HK$28,880

HK$30,000 –

HK$42,800

HK$35,000 –

HK$488,00

Additional Administrative

Charge – HK$1,000

Canossa Hospital

(嘉諾撒醫院)

HK$13,100 –

HK$51,700

HK$16,600 –

HK$94,100


Kong residents.

Administration Fee

HK$15,000

Adventist Hospital(港安醫院)

HK$15,800 –HK$41,800

HK$25,800 –HK$85,500

Same as charges for HongKong residents.

Hong Kong

Baptist Hospital

(香港浸信會醫院)

HK$13,680 –

HK$32,880

HK$15,800 –

HK$37,780


Kong residents.

Administration Fee

HK$10,000

St. Teresa’s HK$13,000 – HK15,000 – HK$24,000 – HK$25,000 –

Documents

An Evaluation on 2007 Obstetric Service Policy in Hong Kong_a Solution to the Service Seeking Behavior of Mainland Pregnant Women