The Hong Kong Special Administrative Region (SAR) is headed by Chief administrator Tung Chee Hwa. Mr. Tung began his second 5-year term on July 1, 2002, after his nomination by a selection committee accomplished by the Basic Law. His selection was approved by China's State Council. The selection committee is made up of 800 Hong Kong residents from four constituency groups: commercial, industrial, and financial interests; professionals; labor, social services, and religious interests; and the legislature, the Chinese People's Political Consultative Conference, and the P.R.C. National People's Congress. Legislative Council elections were held in September 2000. According to the Basic Law, Hong Kong's constitution, the Legislative Council has 30 members elected by functional or occupational constituencies, 24 directly elected members, and 6 elected by an election committee. In 2004, this will change to 30 functional members and 30 directly elected members.

The 2000 elections were seen as free, open, and widely contested, although there was criticism that the functional constituency and election committee elections were undemocratic because so few voters were eligible to vote. In July 2002, the Hong Kong Government implemented the Principal Officials Accountability System, which was designed to make the government more responsive to public concerns, and added a layer of 11 political appointees, directly responsible to the Chief administrator, to run the 11 policy bureaus. Three other senior civil service positions--the Chief Secretary, Financial Secretary, and Justice Secretary--also were converted to political appointments, although without a change in personnel.