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The European Commission's 2002 annual report on the Hong Kong Special Administrative Region assesses the implementation of the "one country, two systems" principle and reviews developments in legislative, institutional, and individual rights fields. The report notes that the Central Government of Beijing reaffirmed its adherence to the principle, with Prime Minister Zhu Rongji and President Jiang Zemin reiterating their commitment to maintaining stability and prosperity in Hong Kong.

The report highlights the practice of Falun Gong in Hong Kong, where the group enjoys freedom to practice, but notes an incident where 16 demonstrators were arrested and charged with obstruction or assault. The Court of Final Appeal ruled that the right to protest is not absolute and requires a delicate balance.

The report also discusses the right of abode for mainland Chinese in Hong Kong, where the Court of Final Appeal ruled that most claimants did not have the right of abode, but recognized a "legitimate expectation" for several hundred appellants.

Institutional developments include the election of Chief Executive Tung Chee-hwa for a second term, where he was the only validly-nominated candidate, and the introduction of an accountability system for government members. The report concludes by assessing economic developments and EU-Hong Kong relations, noting that the EU remains a significant trading partner for Hong Kong.