The Discovery of Computer Crime in Hong Kong: A Case Study of the Crime Creation Process

 

Kam C. Wong
Associate Professor, Department of Public Affairs – Criminal Justice, University of Wisconsin
wong@uwosh.edu

 

Abstract

On July 1 of 1997 Hong Kong was returned to China. At that point in time, Hong Kong was still operating as a traditional economy. Except in some circles - banking industry, stock exchange, information technology firms - information highway has yet to arrive and computer crimes were rare occurrences. After 1997, the Hong Kong Special Administrative Region (HKSAR or SAR) government pledged to develop Hong Kong into a 21^st century cyberport. Overnight, information security emerged as a major concern and computer crime became a huge problem. How and why did the criminalization of computer deviance occurred? In what way is computer crime different from traditional crime? Are computer offenses mala in se vs. mala prohibitum crimes? What were the forces involved and process taken in “creating” computer crime? Such research questions become more intriguing, enticing, urgent, and necessary when one realizes that imperial China did not recognize intellectual property. Contemporary Hong Kong has no respect for copyrights. Both have no experience with and conception of computer crime. How computer crime becomes a cognizable phenomenon in Hong Kong deserves investigation; first as a mean to understand the indigenous crime creation process – factors involved, dynamics transpired - in Hong Kong, and later in providing empirical data to theorize upon such a process in a traditional (Chinese) culture.

This article investigated how computer crime is created in Hong Kong; a subject matter never explored before in the literature. It is observed that the creation of computer crime is a top down affairs and an externally driven event. It resulted from the convergence of a number of factors and involving a host of parties, played out over time (1996 – 2003), including 1997 transfer of sovereignty political dynamics, private sector (e-banking, e-stock trading) security needs, government IT policy (cyberport development) considerations, foreign anti-privacy concerns, community outrage over Internet gambling, and last but not least sensational computer crime news coverage.

Keywords: Computer crime, crime creation, e-commerce, e-banking, privacy.

---

This is a refereed article published on: 22 August 2005.

Citation: Wong, 'The Discovery of Computer Crime in Hong Kong: A Case Study of the Crime Creation Process’, 2005 (1) The Journal of Information, Law and Technology (JILT).<http://www2.warwick.ac.uk/fac/soc/law2/elj/jilt/2005_1/wong/>.

---

1. Introduction

The Hong Kong economy is increasingly and irreversibly relying upon computer mediated communication (CMC) and the Internet to operate. In 2002 “A Self Assessment of Hong Kong’s Readiness for E-Commerce” (2002) found that the Internet is an integral part of Hong Kong’s business and private life. Hong Kong has an advanced telecommunications infrastructure, characterized by high speed and versatile functionality. PC penetration is growing fast: it grew from 34% in 1998 to 50% in 2002. There are over 190 ISP offering competitive pricing and cutting edge services. Consumers in Hong Kong are making use of the Internet to send e-mail, surf the cyberspace, carry out research and conduct low value commercial transactions. Hong Kong business executives aggressively use the Internet to promote their ventures. 35% of businesses are using Internet for their operations, including marketing, customer support, enhancing efficiency and conducting transactions electronically. Hong Kong's government is using the Internet to cut cost and promote efficiency, e.g., electronic tendering and purchasing since April 2000. ¹

The Internet has also become a catalyst for economic reform, social development and political change. ² The amount of government, business, financial and personal communications and data transmitted by, processed with and stored in computers is voluminous, and increasing at an exponential rate. The import, impact, influence and implications of the Internet in Hong Kong go far beyond what has been contemplated. ³ The history and legacy of the computer in Hong Kong is still being written.⁴

Similar to many developed nations,⁵ the phenomenal growth in the usage of computers, CMC and Internet in Hong Kong has been accompanied by an increase in computer related crime since the late 20^th century. ⁶ This has led to call for critical review of cyberspace governance philosophy, law and practices.⁷ The study of cyberspace governance in Hong Kong is still at its early stage.⁸ As yet there are limited scholars or policy makers who have taken the challenge to conduct a comprehensive study on the subject.⁹ Academic publications on cyberspace governance in Hong Kong are rare.¹⁰ This paper is an attempt to fill in the research gap, albeit in a small way and limited fashion. Specifically, this research investigates the process of computer crime creation in Hong Kong, i.e., the development of computer crime as a cognizable criminal problem in Hong Kong.

This article is organized in the following way. After this brief introduction, the “Statement of problem” and “What is crime creation?” will delineate the scope, state the focus, and define the key concept of this article. This is followed by a brief review of “The Nature, Prevalence and Distribution of Computer Crime” in Hong Kong in order provide a context for the understanding of this research. The next section “The emerging computer crime problem for the government” looks at the emerging crime problem from the Hong Kong government perspective in the late 1990s and early 2000s and concludes that there are legitimate causes for concern. “The Discovery of Computer Crime in Hong Kong by the public” is the heart of the article. It traces the development of computer crime in Hong Kong from 1996 to 2003. Finally, the “Conclusion” summarizes many of the major findings in the article as it discusses some of the more important implications of this research.

2. Statement of Problem

On July 1 of 1997 Hong Kong was returned to China. At that point in time, Hong Kong was still operating as a traditional economy. Except in some circles - banking, stock exchange, IT – the information highway had yet to arrive and computer crimes were rarely reported. After 1997, the HKSAR government pledged to develop Hong Kong into a 21^st century “cyberport”. Overnight, information security emerged as a major concern and computer crime became a huge problem. How and why did the criminalization of computer related deviance occur? Particularly, what were the forces involved and processes taken in “creating” computer crime?

Such research questions become more intriguing, enticing, urgent, and necessary when one realizes that imperial China did not recognize intellectual property and contemporary Hong Kong has no respect for copyrights. Both have no experience with and conception of computer crime. How computer crime becomes a cognizable phenomenon in Hong Kong deserves investigation independently as a mean to understand indigenous socio-legal forces and dynamics in crime creation at work, and collaterally as a way to theorize about how new crimes are created in a traditional (Chinese) culture.

The subject matter under research has never before been explored in the literature.

3. What is Crime Creation?

“Crime creation” as used in this article means that the deviant acts constituting computer crimes - hacking, spamming, Internet vices – are not intrinsically wrong¹¹ but positively created by people and parties, with values to promote, interests to defend and status to maintain.¹²

By adopting the term “crime creation” (with reference to the discussion of cause and cure of computer crime) this research raises issues and makes problematic instinctive,¹³ unreflective¹⁴ and uncritical¹⁵ approaches to computer crime that assume, first, that it is all wrong;¹⁶ second, that it is all crime,¹⁷ third, that it must be dealt with formally;¹⁸ fourth, that it should be formally sanctioned by law;¹⁹ lastly, that it should be punished by criminal sanction not civil compensation or public administration.

The idea that crime is “created”, i.e. positively made, and not “natural”, i.e. intrinsically evil,²⁰ received its strongest endorsement from Howard Becker. Building on the work of Cooley²¹ and Lemert²² Becker departed from classical theorist who postulated that crime is inherently evil, immoral or bad, and suggested that crime is a result of the social reaction of others. He called this “labeling theory”.²³ He specifically states:

“'Deviance is created by society, as ''social groups create deviance by making the rules whose infraction ''constitutes deviance--, and by applying those rules to particular people and labeling them as outsiders....[D]eviance is not a quality of the act the person commits, but rather a consequence of the application by others of rules and sanctions to an ''offender''.... [D]eviant behavior is behavior that people so label'' ²⁴ (underline supplied).

The people who establish and enforce the rules which create “deviance” and label “outsiders” are “moral entrepreneurs”: “Moral entrepreneurs are those who create and enforce rules. The prototype of the rule-creator is the crusading reformer.”²⁵ Moral entrepreneurs go about making and enforcing moral imperatives in order to: (1) defend the legitimacy of their moral position;²⁶ (2) protect the underclass;²⁷ (3) maintain their superior social status and powers in society;²⁸ and (4) perpetrate their rule and consolidate their influence.²⁹ Moral entrepreneurs seek to secure the above by law and with the help of (fellow) professionals.³⁰

Becker’s insight – crime not as “a quality of the act” – was anticipated by legal positivists, who insisted that a crime is nothing more than a legal wrong, i.e. an intentional wrongdoing which is prohibited and punished by law³¹ and echoed the conflict between radical and critical criminologists.³²

4. Nature, Prevalence and Distribution of Computer Crime

In this section, we will describe the nature, prevalence and distribution of computer crime in Hong Kong. This brief review of the computer crime situation in Hong Kong provides necessary context and supplies helpful insights into understanding how computer crime was created as a conceptual, moral, and (finally) legal classification of human experiences.

The Emergence of Computer Criminality

In 1996, the first year computer crime records were kept, there were only 21 cases of computer crime, 4 involving hacking, 6 the publication of obscene articles, 4 the criminal damage of data and 7 others for a total of 21. This was increased to 34 cases in 1998, and 317 in 1999 (238 involving hacking, 32 the publication of obscene articles, 4 the criminal damage of data, 18 internet fraud and 25 others). (Table 1) The jump in official computer crime during this time might not be due to a precipitous rise in computer crime as much as it resulted from a new social awareness and government interest in pursing computer crime and control. ³³

---

The Development Trend in Computer Crime

Looking at it as a trend, the report of computer statistics from 1996 to 2004 shows a record of continuous growth from 21 cases in 1996 to 588 cases in 2003, an increase of 2700%. The greatest surge was between 1998 and 1999, when the growth rate was 832%. In 2001, there was a slight decrease in reported computer crimes to 235 cases. (Table 2) The drastic jump between 1998 and 1999 is most probably a result of government efforts at promoting computer crime awareness, but it is also likely due to changes made by the police force regarding their enforcement and reporting practices. The slight drop during 2001 – 2002 might attributable to the bursting of the dot.com bubble and the slow-down of the IT industry during the period. However, the Hong Kong Police (HKP) attributed the decrease in computer crime in Hong Kong to the public’s awareness and self-help on computer security, and their successful effort to detect, arrest, prosecute and convict computer criminals in four major cases.

---

Additionally, the government's Newspapers Registration Section (NRS)³⁴ received a total of 156 public complaints regarding pornographic materials on the Internet between July 2001 and Dec. 2002. (Table 3)

---

Distribution of Computer Crime

Further analysis of computer crime statistics reveals that over the period between 1996 – 2004, the most prevalent computer crime was hacking: “Unauthorized Access to Computer by telecommunication”. 75% of the cases in 1999 and 2000 were ‘hacking’ cases. Hacking grew from 4 cases in 1996 to 403 in 2003, a jump of 9975%, with the highest jump occurring between 1998 and 1999, i.e. from 13 cases to 238 cases, a surge of 1730%. (Table 4)

---

Table 4: Total Reported Hacking Cases: 1996 – 2004

In recent years, the number of hacking drops while crimes in electronic commerce, such as e-banking theft and e-fraud cases, increases. In 2001, 65 cases of electronic deceptions were recorded, including use of stolen identity to obtain goods or services via the Internet, such as e-shopping and e-auction. There were also 8 e-banking theft cases in 2001 involving HK$4.4 million. The HKP is much concerned with e-banking thefts because they pose significant threat to Hong Kong as a major international finance centre.³⁵

Impact of Computer Crime

As to the financial impact of computer crime in Hong Kong, HKP data show a fluctuating trend, from HK$ 19,186,201 (highest) in 2001 to 4,565,284 in 2002 (lowest) to 7,643,737 in 2003. (Table 5)

---

---

Breaking down the relationship between computer crime and its financial impact further, we see that most of the financial losses were due to virus attacks. Virus attacks accounted for 93.4% of all financial losses in 2002 and 67.1% in 2003, for an average of 82.9 % (HK$4.878/5.97 million) during the reporting period. (Table 6)

---

5. An Emerging Computer Crime Problem for the Government

This section documents the first signs of the computer crime problem in Hong Kong, as viewed from the Hong Kong government’s perspective.³⁷ The question to be addressed is: What was the state of computer crime in Hong Kong in the eyes of the government in late 1990s and early 2000s?

Computer Crime is More Serious Than Officially Reported

In 1998, according to HKP official crime statistics, there were only 34 computer related crimes in Hong Kong. By 2000, the figure has jumped to 368 cases. The official data hardly tell the whole story.

Away from most public eyes and within the ranks of the government's IT officials there was worry. HKCERT data revealed that a computer crime wave was coming. In the year 2000, there were 116,000 hacking and 1,259,650 virus attacks affecting 4,733 computers, costing $1,375,650 in damages (Table 7 and 8). And the situation appeared to worsening. Hacking, the most common computer attack, grew from 116, 000 cases in 2000 to 286,000 in 2003. Viruses, the most dangerous and damaging form of computer attack, grew from 1,259,650 (2000) to 1,446,500 (2001) before drifting downward to 819,550 (2003). (Table 8)

---

---

Privacy: Main Concern of the Public

The Hong Kong Privacy Commissioner's Office ("the PCO") conducted annual surveys into the public’s attitudes towards privacy issues in Hong Kong. The “Opinion Survey Personal Data (Privacy) Ordinance: Attitudes and Implementation - Key Findings,” commissioned by the PCO³⁸ and conducted by the Social Sciences Research Centre of the University of Hong Kong (2002)³⁹ revealed that privacy was considered an important social issue for individuals (7.63 (2000), 7.58 (1999), 7.63 (1998), 7.64 (1997), just behind air pollution (8.21 (1999), 8.30 (2000) and unemployment (8.10 (2000), 8.75 (1999), 8.42 (1998), 7.95 (1997). but ahead of food hygiene (7.37 (2000), health services (7.26 (2000), 7.43 (1999), 7.48 (1998) care for the elderly (7.25 (2000) and sex discrimination (6.79 (2000), 6.68 (1999), 6.83 (1998), 6.44 (1997) (Table 9).⁴⁰

The survey also revealed that more and more people were using the Internet in their personal and business affairs (26% in 1999 to 44% in 2000). Of the respondents, 52% expressed privacy concerns regarding their purchases on the Internet (to the degree of 8 out of a 10 points scale). Of which 84.3% were afraid of “money loss due to interception of credit card” and 72.2% were afraid of “misuse of data by third party”. (Table 9)

---

Finally, when asked about their attitudes towards the invasion of their privacy at work, respondents were more concerned about telephone eaves dropping than e-mail checking by their employers while they were at their work stations (8.78 vs. 7.93). E-mail checking was also slightly less offensive to the respondents than video monitoring in the work place (7.26 vs. 6.81). (Table 10)

Altogether, the PCO survey (2000) showed that privacy was a relatively important social issue in Hong Kong, being the third out of seven important social issues mentioned. With respect to concern with privacy on the net, 52% of the net users were afraid of the loss of privacy when conducting B to C transactions on the net, including loss of credit card information (84.3%) and misuse of personal data (72.2%). Finally, the monitoring of their computer use in the workplace was considered by those surveyed to be fairly invasive, although not as invasive a practice as their employers listening in on their telephone conversations (8.78 vs. 7.81).

People are Not Respectful of Intellectual Property

Hong Kong's people have little respect for intellectual property or the copyrights of others. According to the “Survey on Public Awareness of the Importance of Protecting Intellectual Property Rights 2002” (IPR Study),⁴¹ conducted by The Chinese University of Hong Kong (TEL/21/08/2002/ Ref.390), on behalf of the HK Intellectual Property Department, ⁴² Hong Kong's people have a habit of purchasing pirated or counterfeit products (Table 11).⁴³

In the year 1999, most respondents admitted to having violated IP rights (IPR) by purchasing pirated or counterfeit products, i.e. 59.3. It appears that men, the young and the educated were the biggest offenders, with the youth dominating. That pattern persisted, all be it at a lower level in 2002. In 2002, a full 49.2% has made such illegal purchase of infringed goods. (Table 11) This is telling in three respects: First, on the eve of campaign promoting IT security, most people in Hong Kong has a very cavalier attitude towards IP R. Second, this complacency toward IPR is more prevalent amongst those with university education. This survey finding suggests this is not a problem with lack of respect for copyrights is not necessarily due to a lack of knowledge or education. Third, the situation has not changed much in four years (1999 – 2002).

If self-reported IPR breach is high, we can expect reporting of others (friends or colleagues) to be higher. The concern with lose of face and exposure to liability should reduce full disclose and honest admission. Turning to respondents’ friends and colleagues we find that the illegal purchase level in 2001 was 67.9%. This should come close to the actual level of violation, except for purchases or use of counterfeits unknown to respondents (27.6%). If some of these unknown figures are taken into account, the figure of illegal counterfeit purchases might reach up to the 70s or 80s.

---

Next, we look at the reasons why people engage in the purchase of pirated and counterfeit goods in search of a better understanding of how Hong Kong people are disposed towards rights in general and intellectual rights in particular. Here there are many causes for alarm. The top three reasons for infringing on the IPR of others are (Table 12):

(1) price differential between counterfeit and original;
(2) excessive profits of businessmen;
(3) people’s selfish mentality.

By far the number one reason, year in year out, for justifying infringement of IPR is the first - price differential between counterfeit and original IP goods, i.e. 33.6 (1999), 42.3 (2000), 45.5 (2001), 44.6 (2002). On an average, the first reason outranked the second by more than double, i.e.166 vs. 74.2, or 2.34 times. The gap is also widening, thus more and more people claim price differential as the reason for infringement in 2002 (44.6) vs. 1999 (33.6) and less and less people claim excessive profits in 2002 (16.3) vs. 1999 (18.1).

---

---

The impression one gets from this data set is that instead of blaming themselves for the lapse of judgment and feeling morally guilty, people in Hong Kong chose to blame others for their own indulgence in the use purchase of illegal counterfeit goods. This is a typical case of “Techniques of Neutralization” at work,⁴⁶ especially given the fact that people know morally that IPR infringement is morally apprehensible (Table 13), if not legally wrong (Table 14):

In saying that the counterfeited products were just too cheap and genuine goods were just too expensive, the respondents are staking a claim of “denial of responsibility”. In other words, I cannot help myself, the market forced me to do it. And in saying that “Businessmen reap excessive profits” IPR violators are staking a claim of "denial of the victim". In other words, the merchant deserves it and is charging unreasonably high prices, being greedy and acting unconscionably. They are the one to be blamed. In both instances, the respondent fails to reflect upon his/her own problem and carry the responsibility, making him an amoral, if not even an anti-social person.

---

Table 13: Responses to statement, “It is against morality for a consumer to buy counterfeit or pirated goods knowing that they are infringing.” (%)

---

All told, the IPR Study shows that the people of Hong Kong do not respect IPR. They will purchase illegal counterfeit goods knowing that it is morally wrong and illegally impermissible, and blame the pricing structure or sellers’ greed for their own wrongful conduct, instead.⁴⁸ This immoral attitude within a broader amoral culture is aptly described by a showbiz celebrity Mr. Michael Hui:

“If people were seen spitting on the ground, they might try to clean the spit secretly with the sole of their shoes; if people went to buy pornographic magazines, they would do it secretly and wrap the magazines with newspapers to avoid being seen by others; but those people who purchase pirated CDs will not feel ashamed, they patronize stores selling pirated CDs like going to carnivals......"⁴⁹

This spells trouble for Hong Kong’s future development as a vibrant cyberport and prosperous digital financial center, as one Hong Kong legco member remarked:

“The future development of Hong Kong is oriented towards high technology. To establish a technology and knowledge-based economy, the protection for intellectual property rights is of utmost importance. …Otherwise, not only the innovative products and the hard work of their designers will be at risk due to the lack of protection for intellectual property rights, the position of Hong Kong as a commercial and financial centre will also be at stake. In that case, I am afraid the general public will become the ultimate victims eventually.”⁵⁰

IT Professional is Concerned About IT Security

In 1999, Dr. Louis C.K. Ma, Vice-President, Hong Kong Computer Society, conducted a survey⁵¹ of Information Systems managers and Chief Information Officers⁵² about the importance of various information management issues. From Ma’s survey (1999, 2004 (projected) and comparison (prior surveys 1990, 1994) it is evident that the IS managers rated “Improving Information Security and Control” as a very important issue in repeated surveys: ranked 9 in 1994, 13 in 1999 and 5 in 2004 (projected).

While security concern lagged behind “Improving the Effectiveness of Software Development” in terms of IS management priority (#1 in both 1994, 1995, before dropping to 5 in 2004), its importance is on the rise, suggesting that its importance is growing. The survey's results, which show security's relative lack of importance compared to other issues, has to be read in the context of traditional IS management philosophy and culture. Given limited resources, is it is more important to spend money on “Improving the Effectiveness of Software Development” or “Building a Responsive IT Infrastructure’ than on “Improving Information Security and Control” for the reason that security and control impedes operations and do not contribute to the bottom line. (Table 15)

---

A Computer Crime Problem in the Making?

Judging by the above set of data, and from the perspective of Hong Kong government officials, one wouldl be hard pressed to conclude that there is a computer crime wave, much less a crime crisis, is in the making. First, the HKP official computer crime data is low, in the hundreds, not thousands. A majority of the reported cases involve hacking. Hacking, while offensive, is considered by most to be a nuisance, more than a crime. Second, the HKCERT reported that computer attack damages are in the millions not tens of millions. Many of them are as a result of virus attacks, a complex technology intrusion, and on companies, a less threatening white collar crime. Very few resulted from fraud on individuals, a more personal crime. Third, turning to the survey of citizens on privacy, citizens of Hong Kong consider privacy to be an important, but not the most important, social policy issue. It is just behind air pollution and unemployment but ahead of food hygiene, health services care for the elderly and sex discrimination. When asked whether they objected to employers plying on their computer (reading e-mail (#2), checking site visited(#4) while at work, they found it objectionable, but not as objectionable as some other practices, such as listening in on phone conversation (#1) or videoing the workplace (#3). Fourth, what the citizens of Hong Kong are truly concerned about is the loss of privacy when they use the Internet to conduct person to business transactions. But such net activities are relatively rare. People in Hong Kong do not have a habit of using the Internet to engage in personal B to C commercial activities. Finally, when information security managers were asked, the issue of “Improving Information Security and Control” never ranked above 5/24 and was ranked as low as 13/24.

But as intimated before, there are also causes for concern, especially for those who want to see a computer crisis coming. Hong Kong government officials are a conservative lot and a careful bunch. They are given worse case scenario bureaucratic training and are exposed to a self-promoting organizational culture. As evidence for the emerging crisis they point to the following: computer crime jumped (in relative terms) from 26 cases in 1999 to 367 cases in 2000, also the number of computers affected and the total financial loss or average financial loss per company has increased markedly. ⁵³ More significantly, survey after survey shows that the people of Hong Kong are not respectful of IPR and are willing to purchase and use counterfeited goods, notwithstanding moral condemnation or legal prohibition. These trends are seen as obstacles to Hong Kong's development as a 21^st century digital city of the world.

6. The Discovery of Computer Crime in Hong Kong by the Public

Cyber risk is a psychological phenomenon. Computer crimes are an intangible entity. Electronic privacy is a moral concept. They are neither real or material. That is to say, they have to gain public awareness – cognitive recognition and emotional resonance - before they become real, and of consequence to people.

Historically and culturally⁵⁴ China has no conception of intellectual rights.^{55- 56} For instance, many Chinese hold that the sage writings of the past contain the secrets of Chinese civilization and it is not only not a crime to recite classical authorities without attribution, it is a sign of intellectual prowess to be able to recite at will passage after passage, sometimes verbatim, of learned treatises. ⁵⁸ Moreover, the people of Hong Kong are a pragmatic lot. They are known more for making fast money than following established principles. They try hard to work around rules and make short cuts, instead of honoring the rights of others and respecting the rule of law.⁵⁹ To them anything and everything in life is a “game” to be won at all costs.⁶⁰ Given China's historical approach to intellectual property and the attitude of Hong Kong's citizens toward copyrights, it should come at no surprise that people do not take intellectual property rights seriously nor do they understand computer crime completely.⁶¹ It will take time for the people of Hong Kong to be re-educated.

The “discovery” of cyber risk, computer crime and electronic privacy then resulted from the convergence of a number of other factors, including post-1997 privacy concerns, government IT security concerns, private e-banking security considerations, foreign anti-privacy and anti- counterfeiting campaigns, domestic moral outrage with off shore Internet gambling and public awareness of sensational computer crime news.⁶²

Post-1997 Privacy Concerns

One of the major driving forces behind making the Internet safe and securing computers from unauthorized access and intentional information theft came from a most unexpected quarter, pre- and post-1997 politics. One of the major issues in the run up to the 1997 transfer of sovereignty of Hong Kong from the British government to the PRC was human rights protections, including privacy.

As far back as 1984, the “Joint Declaration” paved the way for the return of Hong Kong to China on July 1, 1997.⁶³ The Joint Declaration provided that the rights and freedoms enjoyed by the people of Hong Kong would last for 50 years, to be secured by a Basic Law.⁶⁴ Specifically, Article 3(5) of the Declaration provides:

As a result, the Basic Laws of Hong Kong (1997)⁶⁵ specially provide for the guarantee of basic human rights. Specifically, Article 29 provides that the "homes and other premises of Hong Kong residents shall be inviolable. Arbitrary or unlawful search of, or intrusion into, a resident's home or other premises shall be prohibited."

Article 30 further provides that the:

"freedom and privacy of communications of Hong Kong residents shall be protected by law. No department or individual may, on any grounds, infringe upon the freedom and privacy of communications of residents except that the relevant authorities may inspect communications in accordance with legal procedures to meet the needs of public security or of investigation into criminal offenses."

Rights under The Joint Declaration (1984) and Basic Law (1997) are not self executing. They need to be implemented by law, and actualized with executive actions. This fell on the shoulder of Christ Pattern (1992 to 1997), the last (28^th) Governor of Hong Kong. As governor he made clear that: “The British role is to discharge our colonial responsibilities honourably and competently.”⁶⁶ In practice that meant pursuing a two prone strategy: introducing democratic institutions and establishing a human rights regime.

The work of the Hong Kong Law Reform Commission on “Reform of the law relating to the protection of personal data” (1989 – 1994) (1994 Report) should be understood in this historical and political context. Hong Kong's transition of sovereignty began long before 1997 and continued with Chris Pattern's democratization, liberalization and legalization policies.

The “Terms of reference” of the 1994 Report states: “On 11 October 1989 the Attorney General and the Chief Justice referred to the Law Reform Commission for consideration the subject of "privacy". The Commission's terms of reference were:

"To examine existing Hong Kong laws affecting privacy and to report on whether legislative or other measures are required to provide protection against, and to provide remedies in respect of, undue interference with the privacy of the individual with particular reference to the following matters:

Following on the heels of the 1994 Report, the Law Reform Commission took another look at some of the more salient privacy issues raised by electronic data interception, interference and theft. This resulted in the issuance in December 1996 of a report entitled, “Report on Privacy:Regulating the Interception of Communications".⁶⁷ The 1996 Report observed:

“The rapid expansion of the Internet, and the resultant increase in the amount of personal information available on-line, has made the public more concerned about the privacy of their communications. Service companies are likely to use privacy as a competitive weapon in winning customers.”⁶⁸

The growth in the use of electronic communications systems by industry had increased the need for secure communications in areas such as banking and finance. Service carriers were aware that an inability to safeguard customer information would adversely affect customer relations and their businesses. Another concern was that of theft of proprietary information”⁶⁹

Ominously, the 1996 Report warned of the coming privacy crisis. “The development of advanced communications networks is likely to be hindered unless service carriers can assure the public that there is adequate security for their communications.” The President of the United States Telephone Association asserted that:

“If the public becomes skittish about using the public network for fear either that it is full of ‘back doors’ designed so that their local sheriff will be developing a dossier on them based on call set-up information, that fear will translate into reduced use of the system. The result will be the loss of billions of dollars in potential revenue, and along with that many of the jobs, the taxes, and the benefits that we anticipate from the information age.”⁷⁰

While the 1996 Report mainly addressed government interception of electronic data and intrusion into computer domains, the warning applied equally to cyberspace interception and intrusion of all kinds.

This detour into 1997 politics and the Hong Kong Law Reform's Commission on “privacy (1994 Report, 1996 Report) makes abundantly clear that the “discovery” of computer crime and electronic privacy in Hong Kong was driven by many forces and advanced along a number of paths. However, the people of Hong Kong have yet to come to terms with the panopoly of issues that surround cyber risk, computer crime and electronic privacy in Hong Kong today. How these issues will enter their collective psyche and ethos is the subject matter of the proceeding section. Afterwards, an effort will be made to document the ways in which Hong Kong came to “discover” computer crime.

Automated Trading and E-Banking Security Studies

In the mid-1990s, the Hong Kong government started to worry about e-security issues in conjunction with its desire to develop information infrastructures to improve government efficiency and business productivity, e.g. automated stock trading and e-banking. This required the government: “To instill confidence in the public …[and to] set up proper mechanisms to ensure the security and soundness of transactions made through the open communication networks.”⁷¹

Automated Trading Study

In mid 1996, the SFC formed a Working Group to consider prospects and problems, issues and solutions to introducing "Automated Trading Systems" (or ATSs). The Working Group produced the “REPORT OF THE SECURITIES & FUTURES COMMISSION WORKING GROUP ON AUTOMATED TRADING SYSTEMS - PUBLIC CONSULTATION (February 1997s) (Hereinafter 1997 ATS Study). ⁷² It pointed out:

“(C)(17) (iii) Security. Security is one of the foremost concerns of investors in deciding whether to go on-line.⁷³ Whilst many sites have been tested and appropriate security systems implemented, hackers and other parties are constantly attempting to break security codes, passwords and other authentication measures to access company and customer information.

(C) (17) (iv) Privacy. Privacy issues are also among the primary investor concerns related to on-line trading, particularly in the US and Europe...⁷⁴”

The SFC was much concerned with system and operational integrity and security issues, especially security. The members of the Working Group and the brokers interviewed by the SFC identified security as an area of deep concern.⁷⁵ -⁷⁶ Their concern was based on the understanding that, while the dematerialisation of trading functions had significantly increased efficiency, virtual data was far more susceptible than physical data to unauthorised and malicious destruction. On-line trading had made financial institutions vulnerable in a way that was not possible off-line. “The Commission noted that the Hong Kong Monetary Authority on 6 July 2000 issued a Guidance Note on the “Management of Security Risks in Electronic Banking Services”⁷⁷. In September 2000, the HKMA then issued a new Guidance Note entitled, “Independent Assessment of Security Aspects of Transactional E-banking Services”⁷⁸

The E-Banking Study

In 1997, the Hong Kong Monetary Authority (HKMA), the quasi-government banking watchdog, launched one of the first computer crime and information security studies in Hong Kong: “SECURITY OF BANKING TRANSACTIONS OVER THE INTERNET.” (1997)⁷⁹ (Hereinafter “1997 e-banking Study”) The study sought to identify the security risks associated with e-banking in Hong Kong. The study was conducted in part because the Seventh Schedule to the Banking Ordinance requires banks to maintain adequate accounting systems and adequate systems of control ”to mitigate the risk of loss of confidentiality and the risk of unauthorized access to institutions' internal computer systems.” The HKMA has to play a leadership role in maintaining standards and in providing structures. The major security risks identified by HKMA in the 1997 study were false authentication, interception of information on route and unauthorized access to database accounts. The HKMA report also concluded:

"The use of sophisticated cryptographic techniques, firewalls and other security tools can provide security that is comparable to that offered in physical transactions. However, similar to a physical transaction, the effectiveness of such measures would be largely dependent on their proper implementation and the establishment of a set of comprehensive policies and procedures that are rigorously enforced.”

For the first time in Hong Kong government policy circles, the 1997 Study placed the issues of computer malfeasance and electronic transactional risks squarely on the table, first as private e-business obstacles that needed to be overcome in order to launch e-banking and later as part of the public IT policy debate that needed to to be resolved before Hong Kong could be developed into a modern “Cyberport”.

In hindsight, the importance of the two 1997 studies - ATS and e-banking - go far beyond merely highlighting e-banking risks in an electronic age. The 1997 Studies helped to raise public consciousness over the emergence of computer crimes and cyber risks. In so doing, both of these studies set the stage, laid the agenda and defined the issues for future debates over the shapes and contours of cyberspace governance.

Government IT Security Concerns

In 1999, the Hong Kong government formally launched the Cyberport project to promote Hong Kong’s future economic development. The vision of Cyberport states:

“The Cyberport aims to provide an important Information Technology (IT) flagship infrastructure to attract, and thus create, a strategic cluster of local and overseas companies and professional talents specialising in Information Technology (IT) applications, information services (IS) and multi-media content creation.” ⁸⁰

The success of the Cyberspace project ultimately depended on the government of Hong Kong's ability to secure the information highway and protect IT infrastructures from potential cyber barons and computer criminals. ⁸¹As a result, around this time, i.e. late 1990s, there was much discussion in and out of government as to how cyberspace should be regulated and made safe. ⁸² The most prominent, enduring and controversial debate surrounded who would be responsible for cyber security in Hong Kong.⁸³

Unlike in the United States,⁸⁴ the issue of whether to govern or not to govern cyberspace was never an issue. From the beginning, the question was always how much to regulate cyberspace. ⁸⁵ In June of 2001, the Deputy Secretary for Security, Cheung Siu-hin, announced the government’s cyberspace governance philosophy and computer security strategy. As the Secretary put it, a choice had to be made between having an Orwellian Big Brother “watching our every move” or having some basic rules for the information highway. The government’s “approach has been to treat regulation as the means to establish minimum ground rules to secure fair play.”⁸⁶ The Secretary was quick to add that government regulations would not be the sole solution to cyberspace security, as they were not necessarily the most efficient and effective solutions to computer crime and information security problems. The best strategy involved educating the public in order that they might help secure themselves, for instance, encouraging the public to adopt best practices, preserve computer forensic evidence and actively work with the private sector (IPS) to reduce security risks. ⁸⁷ -⁸⁸ Such an approach promoted community cyberspace policing⁸⁹ through raising public awareness of computer-related crimes and security issues.

Foreign Anti-Piracy Campaign ⁹⁰

In the 1990s, Hong Kong was the piracy capital of Asia, if not even the world.⁹¹ A cursory inspection of the British colony (known then as a dependent territory) showed that in 1996, software piracy was a growth business.⁹² Pirated software could be bought openly, cheaply and safely everywhere ⁹³ from the Golden Shopping Arcade (GSA) and Computer 33 Plaza in Shumshuipo to the "Internet Zone" at Whampoa Gardens and the Sinoplaza in the Mong Kok section of Kowloon.

A 1996 IIRA 301 Country Report took note of the prevalent and seriousness of the problem:

“CD-ROMs containing pirated computer software, both business applications and entertainment titles, are flooding the market in Hong Kong. Seizures of these pirate CD-ROMs skyrocketed from 5400 in 1994 to 176,872 in the first nine months of 1995, a 44-fold increase on a monthly basis. This contraband often takes the form of compilations, in which the massive storage capabilities of the CD-ROM format are used to package dozens of unrelated computer programs from a variety of sources, with a legitimate market value of tens of thousands of US dollars, for sale in Hong Kong at a minuscule percentage of the legitimate price. For instance, the latest versions of Autodesk's AutoCAD Release 13 (retail price US$4,250), Novell's NetWare 4.1 (retail price $2,845) and Lotus's Smartsuite were packaged with over 100 other programs owned by different companies and sold openly in Hong Kong in October 1995 for HK$50 (US$6.50). Pirated versions of Microsoft's Windows 95 were on sale at the Golden Shopping Arcade within a week of the operating system's launch on August 24, 1995.”⁹⁴

Hong Kong retail computer software piracy was also found in cyberspace. In August of 1996, the Business Software Alliance (BSA), working closely with the Alliance Against CD-ROM Theft (AACT), closed down an Internet site called Sammy Game Center, which offered illegal CD-ROM products for sale and export to the United States, the Netherlands, Sweden and Canada, via the net.⁹⁵

To the (foreign) intellectual property industry, the economic impact of Hong Kong counterfeiting was great. According to International Intellectual Property Alliance (IIPA) data, from 1995 to 1998 the level of piracy in computer programs for business applications and entertainment software was: 1995 (business 62%, entertainment 75%), 1996 (65%, 73%), 1997 (67%, 70%), 1998 (59%, 72%). (Table 16)

Foreign intellectual property owners adopted a two-pronged strategy to stem the tide of pirated software originating in Hong Kong. First, they conducted education program and launched awareness campaigns to inform the public as to the magnitude and seriousness of the piracy problem in Hong Kong. Second, they applied political pressure on the Hong Kong government to clamp down on piracy and counterfeiting; demanding more law enforcement, stricter legislation and heavier punishments.

In order to mobilize the Hong Kong public, the foreign and domestic intellectual property coalition staged mass rallies, e.g. an anti-piracy march in Hong Kong on March 17, 1999, to heighten public awareness about over the grave cibsequences and negative impact of piracy in Hong Kong.⁹⁶ The message was as clear as it was dire: Copyright piracy was causing serious losses to Hong Kong economy and grave harm to Hong Kong's reputation as an international trading center. Piracy of intellectual property is a crime. Hong Kong people should not buy pirated goods. Hong Kong government should take resolute actions against counterfeiters. The public was urged to appeal to the Hong Kong Government to take resolute measures to fight the crime of piracy.⁹⁷

Beyond public education and political actions, the intellectual property coalition threatened the Hong Kong government with possible USTR 301 trade sanction, if it did not take immediate and effective measures to put intellectual property piracy under control. For example in 1995, IIPA's Special 301 recommended to place Hong Kong on Special Mention status (equivalent to USTR's Other Observations category) as a result increased flow of pirate materials from China into Hong Kong. ⁹⁸ In 1996 IIPA recommended placing China on Watch List to encourage Hong Kong to devote more resources to copyright enforcement and. In 1997 IIPA wanted to place Hong Kong on the Priority Watch List because of the worsening digital piracy problem. Ambassador Barshefsky placed Hong Kong on the Watch List on April 30, 1997. In 1998, the USTR agreed with IIPA’s recommendation to keep Hong Kong on the Watch List.⁹⁹

Through public pressure and trade sanctions, IIPS was able to compel the Hong Kong government to take resolute actions against piracy, including more effective legal measures, e.g. licensing of CD copying machines, and take more aggressive enforcement actions, e.g. more raids against the pirate organizations, against privacy and counterfeiters.¹⁰⁰

On December 16, 1998 Mrs Selina CHOW, Legco members for the retail industry, moved the following motion:

"That, in view of the recent proliferation of pirated compact discs in various districts, this Council urges the Government to immediately review the existing policies and strengthen the co-ordination of various law enforcement authorities, so as to combat more effectively the manufacture, importation and sale of pirated video, music and software compact discs; furthermore, the Government should strengthen its publicity and education programmes with a view to making the public aware that the infringement of intellectual property rights is immoral; this Council also urges the Government to actively consider amending the relevant legislation in order to empower the law enforcement authorities to prosecute those engaged in the pirated recording of movies in cinemas and consider the imposition of fines on purchasers of pirated compact discs, thereby achieving deterrent effects."

In February 1999, the Hong Kong Government published a consultation paper entitled "Combating Intellectual Property Rights Infringement in the Hong Kong Special Administrative Region: Possible Additional Legal Tools".¹⁰¹ The paper proposed a number of measures to fight piracy and counterfeiting, including including piracy and counterfeiting offences under the Organised and Serious Crimes Ordinance; amending the Copyright Ordinance and the Trade Descriptions Ordinance to provide for the confiscation of criminal proceeds from intellectual property infringement offences; introduction of mandatory or standard sentences for copyright and trade mark offences; closure orders against premises used repeatedly for piracy or counterfeiting activities; immediate closure orders for premises used for piracy or counterfeiting activities; banning unauthorized video recording in cinemas; banning video equipment in cinemas; and imposing consumer liability, including imposing a fixed penalty for possession of infringing articles; creating a smuggling offence in respect of the import or export of infringing articles; recasting the offence of possession of infringing articles.

As a result of the consultation process, the Legislative Council passed an amendment to Organized and Serious Crimes Ordinance to include piracy and counterfeiting offences On January 12, 2000, it also proposed to criminalizing the possession of an infringing article other than for personal, domestic use.

On the law enforcement end, the government also took more aggressive actions against piracy in 2000 to pacify the foreign concerns. For example on June 22, 2000, the Internet Task Force of Hong Kong Customs conducted the first raid in Hong Kong against an Internet site selling pirate software, where Microsoft Windows 2000, Microsoft Project 2000 and Symantec pcAnywhere were sold at HK$20 per copy. Two suspects were arrested and three computer servers, two computers, 76 pirated discs and other computer equipment worth approximately HK$50,000 were sized.¹⁰²

The foreign anti-piracy movement has the net effect of educating the Hong Kong public to respect intellectual property rights and moving the Hong Kong government to be more solicitous of intellectual property rights. In the process, it was successful in making one kind of computer crime, that of stealing of intellectual property electronically, tangible and real.

Moral Outrage and Economic Pressure Against Internet Gambling

Gambling is a favorite pastime in Hong Kong.¹⁰³ Take soccer gambling as an example. The Hong Kong government Home Administration Bureau survey shows that in May 2001, 2.4% or 120,000 people in Hong Kong have betted in soccer gambling.¹⁰⁴ An independent Chinese University of Hong Kong gambling survey conducted at the same time actually shows more gamblers, i.e. 6.2%¹⁰⁵ or 340,000 people. The conservative estimate was that soccer gambling annual turnover amounted to $200 billion a year.¹⁰⁶

With the introduction of off shore and Internet gambling¹⁰⁷ the situation got worse. The growth of offshore gambling is further evident by a ten fold increase in telecommunication volume between gambling Country X (widely suspect to be U.K.) and Hong Kong (see Table 17 )

The Hong Kong government’s policy towards gambling is one of: “restrict gambling opportunities to limited and authorized gambling outlets only.”¹⁰⁸ The reason for such a permissive but restrictive gambling policy is a realization that gambling cannot be altogether prohibited. Thus, it is better to authorize, regulate¹⁰⁹ and limit it to a bare minimum in order to satisfy existing demands.¹¹⁰ This policy concedes that unregulated gambling would only contribute to unlimited gambling, underage gambling, criminal connection, gambling fraud, and loss of revenue for charity. ¹¹¹

Gambling in Hong Kong is regulated by the Gambling Ordinance (Cap 148) and Betting Ordinance (Cap 108). Hong Kong government derived substantial and continual tax revenue from gambling activities, i.e. from about 7.21% (HKD 11,051 millions) of government revenue in 1995 to that of 5.12% (HKD 11,930) in 1999. (Table 18)

---

---

Offshore (Internet) gambling challenged the monopoly of Hong Kong Jockey Club, the only authorized gambling house in Hong Kong. With the discovery of information highway, Internet gambling becomes more prominent and has become the betting avenue of choice. Survey conducted in 1999 by the international Internet usage measurement firm, NetValue, found the number of Hong Kong residents visiting gambling sites almost doubled between October and December of 1999 to 41 percent of the population, from 22 percent before. According to the NGISC (1999) report on Internet gambling, it is estimated that the number of online gamblers were more than double from 1997 to 1998, an increase from 6.9 million to 14.5 million.¹¹²

The Jockey Club and other officials have requested the Hong Kong government to pass legislation to outlaw offshore bookmaking.¹¹³ But, Andrew Cheng, Chairman of the Bills Committee on Gambling refused the overture. In March 31, 1999, the Hong Kong Legco took up the issue of Internet gambling and its impact on Hong Kong’s economy and morality.¹¹⁴ In February 2000, Hong Kong government contemplated stopping the use of credit card for Internet gambling. ¹¹⁵ But this proposal was jettisoned when Hong Kong Jockey Club declared that it would accept credit card for its own Internet gambling starting September 2000.¹¹⁶

Finally, in May 2002 Legco passed the Gambling (Amendment) Ordinance and ban off shore gambling, with maximum of 7 years in jail and $5 million in penalty of brokers and 9 months and HK$30,000 for gamblers.

The legislative victory against off shore gambling was a result of two potent forces at work, i.e. one economic and the other moral. They joined hand as a powerful political force in pressuring the government to act.

Economically, the Hong Kong government and Hong Kong Jockey Club stand to lose billions every year if off shore – Internet gambling is not regulated.

Morally,¹¹⁷ there was great public outcry that increase gambling will led to more individual destructions, ¹¹⁸ family tragedies,¹¹⁹ youth problems,¹²⁰ and social inequities.¹²¹

Notwithstanding public objections, the Internet has been used to side step legal probation against promotion of gambling in the media. The Internet has been used to promote and facilitate football gambling, e.g. 「g-win」allows for direct betting on the net, which runs against the “Gambling [Amendment] Ordinance. September 19, 2003. ¹²² Resourceful gambling organizers have been using Internet to promote gambling to the youth.¹²³

Finally, on July 10, 2003, the Legco passed “Betting Tax (Amended) Ordiance” and legalized soccer betting.

The above recitation of fight against the legalization of soccer gambling and off shore betting shows that it is a contentious issue implicating many interests and affecting some very basic values in the Hong Kong community. As a result, the fight against off shore soccer gambling, led by amongst others the Society of Truth and light, turned out to be the most potent common causes to unit the Hong Kong people against cyber crime. The Jockey Club of Hong Kong is against off shore betting because it wants to maintain its monopoly over gambling, for economic, status and power reasons. The religious and social services groups are against off shore gambling because they are concerned with its corruptive impact on the young and destructive tendency on individuals and families. The government is against Internet shore gambling because it erodes its tax base and challenges its legal authority. All three joined hands to condemn Internet gambling as being harmful to the youth, risky to gamblers and beneficial to off shore brokers; the same kinds of shortcomings and risks afflicting all e-transactions. In the end, the anti-off shore gambling movement acted as a mass education forum and natural public awareness campaign in instructing the Hong Kong people of all persuasions about the ill effects and criminogenic potentials of the Internet. The public was able to see for themselves, for the first time, in a close and personal way, what uninhibited Internet can do to their economy, morality, youth and family.

Overnight, cyber harm, experienced in the form of off shore gambling, become recognizable, tangible, material, consequential, and more importantly visceral. Cyber criminality is no longer conceived of as distant commercial risks in Central District, to be discussed in abstract terms, ¹²⁴,or received as personal software “deals” in Shamshuipo or Wabchai, to be felt in positive ways, but something that is destructive of careers, harmful with kids, damage to family and corrupting in the community.

Cyber harm has arrived, and here to stay. All it takes now is for the public’s perception of cyber ills and harms be validated and reinforced. For this the public turn to the media portrayal of a moral and legal crisis in the making.

Public Awareness of Computer Crime and Privacy

Three high profile cases, one in 1995 and the two other in 1999, sensitized the Hong Kong public about the kinds of law enforcement and piracy issues that can be raised in an cyber era.

One of the earliest case drawing the public’s attention to the need for better or more competent computer crime law enforcement in Hong Kong was that a fumbled computer raid conducted by the HKP and Telecommunications Authority (OFTA) in 1995.

On March 4, 1995, the HKP and OFTA conducted a raid to shut-down seven ISPs for "commercial crimes involving computer hacking". The IPSs were suspected of providing a telecommunications service without a license. The unannounced raids have the unintended effect of shutting down Internet and E-mail links of 10,000 accounts. ¹²⁵

The raids raised a number of controversial and embarrassing issues, including: “What does this signal for the future of freedom of information and freedom of speech in Hong Kong? What does this do to Hong Kong's International business reputation regarding competition and free trade?” Last, but not least, whether the HKP and or OFTA were cognizant of, sensitive to or otherwise concern about these issues before, or even after, they carried out the raids.¹²⁶ The competency of HK government bring the cyber crime law enforcements agencies into dispute internationally.¹²⁷ This case pointed to the fact that Hong Kong law enforcement agencies are not ready for the cyber age.

Another high profile case raising this time the issue of computer privacy was that of HKSAR v. Tsun Shui Lun [1999].¹²⁸ The case happened in April 1998. It involved Tsu Shui Lun, a technical assistant, to a radiologist at Queen Mary Hospital. Tsu used his computer access at the hospital to retrieve medical records of the Secretary for Justice. He shared the records with his wife, friends and two local newspapers. He was arrested and prosecuted under Section 161 (1) (C) of the Crime Ordinance (Cap.200), i.e. theft of computer data for personal benefits.

Tsu defended himself by saying that he released the information to the newspapers not for personal pain, a legal requirement, but “because the public have the right to know the truth", i.e. that the government has lied about the medical conditions of the Secretary of Justice requiring her hospitalization. The case raised a furor in Hong Kong over the public’s right to know, a government employee’s ethical duty to keep a secret and ultimately a patient’s privacy. In a still larger context, the case raised the broader issue of computer security.

The third case raised the issue of government power of search and seizure of confidential computer data held by the press (media). In November of 1999, a leading anti-government newspaper, Apple Daily was searched by the Independent Commission Against Corruption (ICAC) in a corruption investigation. It was alleged that the paper’s journalists were bribing police officers to supply police information. Later two police communications officers and one reporter were sent to jail for selling and purchasing of police information. During the ICAC search for evidence at Apple Daily computers were seized and data base were searched for evidence.

The three (selected) high profile cases reported here are important milestones to Hong Kong’s journey of computer crime “discovery”. They are important milestones because, viewed individually in point of time and together as a time series, they tell us how far we have come in recognizing computer crime and electronic privacy issues. The fact that the cases were able to precipitate a debate over privacy of patience (case 2), authority of search and seizure (case 3) and competence of cyber investigation (case 1) is the clearest indication yet that computer crime as an existential entity has penetrated our psychic and invaded our hearts and mind. It is too early to tell whether the Hong Kong would give in to intellectual thieves and privacy intruders, but the battle of order has been drawn. The cyber criminals are coming.

The Arrival of Computer Crimes

The first reported computer related crime case was in 1995. In 1995, Hong Kong law enforcement officials cracked a major credit card fraud ring in Hong Kong and Shenzhen, seizing equipment and computer data. Each fake account was sold for US$250. ¹³⁰ In November of 1996, a disgruntle computer technician brings down Reuters trading net in Hong Kong. In November 10 of 1997 the drgaonserve.com was hacked in Hong Kong. In February 9 of 1998 SunSITE was hacked in Hong Kong. ¹³¹ 

Major computer related crimes cases started to appear in 1999 with some degree of frequency.

One of the more colorful hacking stories in the 1999s was that of “Hong Kong Blondes.”¹³² The Hong Kong Blondes was a self organized anti-establishment group that used their IT proneness to subvert communist China’s dictatorial regime and international corporation’s exploitative practices. Starting with 1998, Hong Kong Blondes launched a series of cyber attacks against the PLA's computer systems through DoS or "Denial of Service" – by overloading PLA web sites with millions of hits. They further hacked into PLA’s site and start to corrupt its data base through erasing, altering or falsifying information. As time progress, the group begin actually to install codes within the PLA computer mainframes to monitor the electromagnetic signals emitted by PLA computers by remote means. Hong Kong Blondes even managed to place “social engineers” (cyber mole to work in PLA) to obtain access codes. The Ministry of Public Security acknowledged such illegal attacks and unauthorized access on their web (72,000 cyber-attacks launched against the PLA between January to September in 2000) with 165 successful penetration in 2000 alone.

On May 20 of 1999, the HKP, after prolonged investigation (five months) successfully broke up an organized hacking syndicate, seizing computers and CD-ROMS. A total of 10 people between the age of 16 – 21 were arrested; three hackers, a middleman and six buyers of passwords. This is the first organized hacking case investigated and prosecuted case in Hong Kong.¹³³ The case started with IPS filing a complain of hacking with Computer Crime Section of the Commercial Crime Bureau (CCB) which launched an investigations in January.

According to police, the hackers hacked into 200 legitimate accounts to get their passwords. The passwords were sold at HK$350 (US$45.13) for a month's access. The buyers would use the illegal access codes to rack up Internet times worth between HK$2,000 and HK$3,000 a month. The going rate for Internet access was HK$150 ($19.34) and HK$1.98 ($0.26) per hour for Public Non-Exclusive Telecommunications (PNETS) license fee. The hackers were also guilty of setting up a Web site to sell illegally download music at HK$88 ($11.35) each or HK$160 ($20.63) for two CD copies.

In June of 1999 seven Hong Kong teenagers were arrested for using stolen credit card numbers on the internet to purchase computer products worth more than HK$1 million .¹³⁴

On April 4, 2000, Magistrate Ian Candy imposed custodian sentence on three hackers (Po Yiu-ming, 19, Tam Hei-lun, 19, and Mak King-lam, 18), sending them to jail and detention center for 49 computer related offences, for illegally hacking into Internet accounts. Po stole a total a total of 127 login names and passwords from the Internet and resold them. Mak admitted to establishing a web to sell illegally down loaded MP3-format songs for $88 each (US $11) for a total of $15,000 (US $1,900). According to the investigators: "It is ... the first case brought to the court involving an Internet user selling stolen data to reap unlawful profits." ¹³⁵

In 2000, a Hong Kong IPS discovered unauthorised alterations to its web page. It subsequently received a message demanding that several thousand US dollars be deposited in a Russian Bank account in order for the attacks to cease.¹³⁶

Finally, the Department of Public Prosecution in Hong Kong mounted a number of successful prosecutions in Hong Kong in 2001 – 2002.

---

The whole purpose of this section on recitation of computer criminal cases from 1995 to 2002 is to show that by 2002 computer crime is accepted very much as part of the landscape and scenery of information highway in Hong Kong. The challenge is now to devise effect measures to prevent their occurrence and ameliorate their impact

7. Conclusion

This investigation helps the readers to understand how computer crime developed in Hong Kong, in the backdrop of an entrenched Chinese culture and as informed by post 1997 political developments. The investigation, drawing upon Becker’s sociological insight that: “Deviance is not a quality of the act the person commits, but rather a consequence of the application by others,” adopts the thesis that (computer) crime is made, not natural or self evidence.

In the process of this investigation, the author discovered that the “creation” (by government) or “discovery” (by people) of computer crime in Hong Kong resulted from the convergence of number of forces, e.g. political (1997 transition), legal (privacy), economic (e-banking), moral (e-gambling), involving many parties, e.g. HKSAR, HKJC, and foreign anti-privacy coalition, and people and played out over a long period of time, i.e. 1996 to 2003.

This research offers a number of theoretical insights and empirical findings:

First, this investigation found that as a governance philosophy and a crime control strategy, the HKSAR government’s approach to computer criminality was to treat it not as a new kind of crime, to be legislated by the government, but as traditional crimes make easy and accessible by technology, to be dealt with by the private sector. This understanding of and reaction to computer crime is driven by strong cultural forces and informed by equally vibrant socio-political traditional principles. Culturally, Chinese civilization believed in a non-changing, physical as well as moral, universe, constituted by two fundamental cosmic forces interacting with each other: the positive (yan) vs. negative (yin) forces,¹³⁷ in a perpetuate struggle to maintain a delicate balance.¹³⁸ This gives rise to the conventional wisdom that nothing in life really changes, and correspondingly, the notion that the best way to deal with adversities in life, including crime, is not to seek positive change but to embrace them with acceptance. ¹³⁹ This philosophy of life (morality) informs that the best way to deal with problems is “wuwei” or “do nothing”, and in practical context, doing nothing more than is absolutely necessary. With computer crime, this means dealing computer criminality with existing criminal law. Politically, this Chinese philosophy resonance well with British colonial mentality and was adopted as a pragmatic de factor British colonial policy in Hong Kong before 1997. ¹⁴⁰ After 1997, the same such “positive noninterventionist” social and economic policy survived the British rule and become as a part of HKSAR approach to governance, i.e. minimalist government and hands off administration.

Second, this investigation found that the Hong Kong people were slow in taking computer criminality seriously, much less recognizing it as morally reprehensible. This neutral – benign attitude toward computer criminality, deemed incomprehensible and exceptional by westerners, is in fact very natural and reasonable, when one takes into account Chinese cultural attitude towards crime. ¹⁴¹ Traditionally and culturally, crimes in China are considered moral breaches (mala in se) and not just mere legal wrongs (mala prohibitum). People were punished for moral failures not legal violations.¹⁴² This spontaneous understanding of crime and viscera reaction to offending could still be found in Hong Kong. As a result computer criminality was never considered as “real” crime deserving of moral condemnation and social rejection.¹⁴³

Third, this investigation found that Cohen’s “moral panic” approach to the understanding of criminalization of computer crime, does not quite explain Hong Kong’s historical circumstance, cultural conditions and contemporary situation. Hong Kong is a place given to pragmatic governance, negotiated politics, flexible policies, and consensus rule. It is not driven by adversary parties or confrontational politics, with issues defined in definitive right or wrong terms, much less absolute black or white manner.

Fourth, the lack of finding to sustain a “moral panic” thesis in the running up to the criminalization of computer law, does not reject the potency of “moral panic” to explain criminalization process once and for all. Rather, it speaks to the fact that Cohen’s model is not universal, and has to be revised in light of local circumstances and as applied to indigenous culture. Thus, a question is raised whether the “moral panic” rule applies at all in dictatorial communist state, e.g. China, or paternalistic administrative state, e.g. Hong Kong, herein discussed.

Fifth, this investigation observes that to reject Cohen’s “moral panic” approach is not to deny Hong Kong government’s dominant role in spinning a “morality play” to convince the Hong Kong people that computer crime is a looming menace and emerging play, and that the people (not government) should be doing something about it.

In order to fully account for Hong Kong government’s role in “creating” computer crime (out of paternalistic instinct) to be “discovered” by the people (based on lassize faire policy), it is necessary to reveal certain historical, cultural and political factors that define Hong Kong government’s approach to governance.

Historically, Hong Kong is an apolitical administrative state. All political differences are resolved at the administrative level with one best mean to well defined end approach. ¹⁴⁴

Culturally, the operations of Hong Kong are informed by two Chinese cultural traits, i.e. paternalism and elitism. Paternalism means the government knows “best”. Elitism means experts know “all”. Since government also has all the experts and expertise, government is in the position and expected to deliver the “best” policy for “all”.

Politically, Hong Kong still holds onto a consensual - utilitarian – collective approach to governance. This means all policy disagreement should and can be resolved by agreement (consensual) through negotiation and compromise with cost-benefit analysis (utilitarian) of the material kind, and for the public good (collective) in the long term. ¹⁴⁵

An administrative state with a government knows best mentality and pragmatic approach to governance exhibits certain tendencies: pro-active social planning and stern central administrative control. This is revealed and made apparent by the following speech of Mr K. C. Kwong, Secretary for Information Technology and Broadcasting (ITB) on occasion of The 14th International Computer Exposition (May 7, 1998):

In not so many words, the Secretary of ITB has:

First, affirmed the ubiquitous nature of computer in Hong Kong, as a matter of fact: “It has become an integral part of our life”;

Second, confirmed the dominance and priority of Hong Kong government developmental scheme, as a non-negotiable item: “We are determined to make Hong Kong a leader in the information world of tomorrow”;

Third, demonstrated the government’s foresight, as a fundamental task: “The Hong Kong Special Administrative Region Government is fully aware of the importance of this development”;

Fourth, displayed the government’s proactive posture, as a basic administrative practice: “That is why we have recently set up the Information Technology and Broadcasting Bureau which will be responsible”;

Fifth, revealed the government’s paternalistic tendency for the collective good of all, as a philosophy of governance: “Consistent with our economic philosophy, we will be promoting the development of an environment in our community which stimulates creativity and fosters advances in the use of information technology”;

Sixth, showed the government’s administrative and expert approach to problem solving, as a settled expected for all: “We look towards you - IT professionals, computer manufacturers and suppliers, service providers and everybody else in the IT industry for support in our endeavour”.

The YK2 "Millennium Bug" problem further allowed the Secretary to put the government’s paternalistic and elitist approach to problem solving in practice; revealing it all for those who care to observe:

(1) Educating the public and raising their awareness to the needs with facts (the way the administration sees it): “The problem occurs because, in order to save memory space, we used to record years in our IT systems and equipment using the last two digits rather than all four, thus 98 instead of 1998. This means that those systems and equipment cannot distinguish, for example, between the year 2000 and the year 1900. It sounds trivial but it means that many of our equipment and IT systems, if not rectified, could fail when we reach the Year 2000”;

Depending on ones sense and sensibility or disposition and conviction, what the HK government did to YK2000 problem can be described as “moral panic” tactics of sorts. But they might be better explained by history, culture and politics that inform the HK government’s colonial past and administrative state present. View in this light, the HHSAR is not creating a “moral panic” as much as it is acting out its destined role based on long history and rooted culture.

It certainly could be argued on behalf of Cohen that “moral entrepreneur” is everywhere and a “paternalistic – administrative – consensus” government is as likely to engage in “moral panic” activities to made dissenters and naysayer comes to terms with the government’s vision and programs. This argument has some facial appeal, but ultimately it fails to be convincing for the following reasons. The HKSAR government needs not resort to “moral panic” to amplify risk in order to break people’s resistant: First, HKSAR is convinced that most people trust the government to do the best. Most of the people are indeed supportive of the government, as a matter of course. For those who don’t, they will be ostracized by the people. Second, the HKSAR is adept in convincing the people that what is good for the government (collective) is ipso facto good for the people (individual), or at least sincerely done for the people’s own good. Third, the HKSAR believes in the malleability of humans. It believes in educating people, instead of compelling (scaring) people to come to terms with the government view. Fourth, the HKSAR does not subscribe to a winner takes all, still less a take no prisoner approach, to policy development. Rather, it believes in compromise and negotiation, in order to accommodate differences of opinion and conflict of interests, with the hope of building permanent alliances, durable coalitions and lasting rule. Fifth, the HKSAR takes a holistic view of things. This means that they are more concerned with maintaining good relationship with people than scaring them into submission. Sixth, the HKSAR takes a longer view of things. That means it does not want to cry wolf one time too many and loss the trust of the govern and legitimacy of the governed.

Finally, this investigation concludes with the observation that interest party politics best explain Hong Kong computer crime criminalization process.¹⁴⁶ Observing computer crime creation up close, one finds interest group theory to be a better fit than Marxist model. Instead of one sweeping war (WWII) orchestrated by a grand master (Marx’s capitalist or Cohen’s moral entrepreneur) there are many (Iraq) battles commanded by various coalition commanders. There is thus not one “moral panic” being manufactured but many “morality plays” being constructed. These “morality plays” sometimes reenact each other’s plot, much like Alien 1, II, III, but most of the time, they play with their own script and dance to their own tune, echoing and reflecting, supplementing and reinforcing, yes, even rejecting and denying each other. How “morality plays” intersect and interact with each other depends less on design than by default, as reflecting the spirit of the time, as dictate by opportunities of the moment, as driven by the dynamics of the situation and as influence by personalities of the time.

Interest group politics is as unpredictable as they are exciting. “Morality plays” can be scribed with the best of effort, but their ultimate acceptance hinges on individual performance and situational contingences.

Notes and References

¹ See APEC E-Commerce Readiness Assessment Guide – A Self Assessment of Hong Kong’s Readiness for E-Commerce” (2002). See also “Report on Internet Use by Hong Kong Industries,” Cyberspace Center, The Hong Kong University of Science and Technology, May 1997. (The Report describes and discusses the findings of three computer utilization surveys conducted in Hong Kong, namely Hong Kong Software Manufacturers survey, Hong Kong Computer Industry survey and Mini-survey of Hong Kong's General Industries. The findings show that between 97 – 98% of the computer industries are connected to the Internet. With the general industries, the connectivity varies, from a low of 28% for the Household industry to a high of 71% for the Electronics industry, with 42% for the Women's Garments industry and 30% for the Piecegoods/Textiles industry in between.) http://www.cyber.ust.hk/survey/index.html.

² For a study of the diffusion of Internet in China and its determinants, see William FOSTER, Seymour GOODMAN and Zixiang (Alex), “TAN, The Internet and E-Commerce in Greater South China (Taiwan, Hong Kong, Fujian, and Guangdong)” (September 28, 1999) http://mosaic.unomaha.edu/schina.pdf.

³ For a discussion of Hong Kong preparedness and potential for e-commerce, see Karin Cheung, Hua Fung The, Erick Tseng, Adelaide Zhang, “THE GROWTH OF ASIAN E-COMMERCE: SOCIOPOLITICAL, ECONOMIC, AND INTELLECTUAL PROPERTY TRENDS” (nd.) no source (Hong Kong IT development suffers as a result of government traditional laize faire policy (lack of regulations) and industry’s wait and see (conservative) attitude. IT security is also an impediment for robust IT development, “4.5. The HK Government”) www.ptcforum.org/res-asi.pdf.

⁴ Hong Kong has no National Information Infrastructure Project to speak of before 1995, though Hong Kong Information Technology Federation and Hong Kong Generation Chamber of Commerce has championed for its establishment. On December 6, 1996, the Legislative Council (Legco) Panel on Information Policy was formed to discuss the issues surround: “Development of Information Highway and Internet in Hong Kong.” Correspondingly the government established the Information Infrastructure Advisory Group (under Office of the Telecommunication Technology) (IIAG) on March 21, 1997 to develop information highway in Hong Kong. The charter of IIAG include: “To advice on the development and regulation of the information technology in Hong Kong.” See Hong Kong Monetary Authority (HKMA), Financial Technology Infrastructure for Hong Kong (HKSAR, December 1997) pp. 31 – 32. In mid 1996, Hong Kong Securities and Future Commissions, a Working Group on Automated Trading System was set up to study the development of an automated trading system with the help of Internet. One major principles of the Group was to study: “The performance of surveillance and regulatory functions, maintenance of security and control procedures and back-up arrangement.” See Hong Kong Securities and Futures Commission (SFC), REPORT OF THE SECURITIES & FUTURES COMMISSION WORKING GROUP ON AUTOMATED TRADING SYSTEMS (HKSAR January 1997), 6.3.

⁵ “United Nation Manual on the prevention and control of computer related crimes,” International review of criminal policy Nos. 43 and 44 http://www.uncjin.org/Documents/irpc4344.pdf.

⁶ Mike Carlson, “Firms Plagued by Computer Viruses,” South China Morning Post December 7, 2000; Chan Vivien Oak Kuen, “Tougher Law for Hacker,” South China Morning Post, February 7, 1998; Jo Bowan, “Security Warnings as Net Crime Soars,” South China Morning Post, February 22, 2001; “Credit Card Worries Curb Web-buying,” South China Morning Post, July 27, 2000.

⁷ Cook Beryl, “Expert Urges Change to Computer Law,” South China Morning Post, April 24, 1993; Daniel Kwan, “Deputies seek Safeguard on High-tech Trade,” South China Morning Post, April 3, 1999.

⁸ The first comprehensive study of computer crime and cyberspace governance in Hong Kong was conducted in March 2000 with the launching of the “INFORMATION INFRASTRUCTURE ADVISORY COMMITTEE - Establishment and Work of Inter-departmental Working Group on Computer Related Crime,” IIAC Paper No. 06/2000 Security Bureau. (The paper outlines the background, organization and charter of the Inter-departmental Working Group on Computer Related Crime.)

⁹ One of the earliest policy study is Legislative Council Panel on Security Computer-related Crimes LC Paper No. CB(2)1187/99-00(04) on 2 March, 2000. http://www.legco.gov.hk/yr9900/english/panels/se/papers/b1187e04.pdf.

¹⁰ One of the earlier professional papers on computer crime, legislation and control in Hong Kong was compiled by the Senior Assistant Director of Public Prosecution (HKSAR) and relied entirely on newspaper accounts (47 footnote references) to support his assertions in the paper. Richard Grand Turnbull, “Fraud and The New Technology – A Hong Kong Perspective.” Paper presented at the 17^th LawAsia Biennial Conference, October 4 – 8, 2001, Christchuch,New Zealand, http://www.nzls.org.nz/conference/pdf%20files/TurnbullSa2.pdf .

¹¹ Howard Becker, Outsiders: Studies in the Sociology of Deviance (1963) (“[D]eviance is not a quality of the act the person commits…”). The thesis that crime is inherently wrong finds biblical support in “The Theological Theory of Crime.” (According to Apostle Paul’s view of the nature of crime can be gathered from the following premises: (1) The law of God defines crime; (2) Man is capable of crime because of his sinful or “fallen nature” (Adam’s apple); (3) Government deter criminals and punishment crimes in the name of God; (4) Only God can offer the ultimate salvation from sinful transgressions of crime.) http://www.freeservants.us/crimetheology.html Later, science comes to its aid, with the founding father of the positive school of criminology, Cesare Lombroso ( 1835- 1909) arguing for biological determinism, or criminals are born bad, i.e. being savages or atavistic throwbacks to an earlier an undeveloped stage. Lombroso, L'Uomo delinquente (Criminal Man) (1876).

¹² Austin Turks, Conflict Theory (1969) (Criminlization as a manifestation of structural conflicts between the powerful and powerless.) There are two renditions to this thesis. The more scientific and neutral version, as proposed by Turks, suggests that conflicts are natural to all humans and inherent to with every society. (In this regard Turks assumption of human nature and state of nature is more like Hobbes (1588-1679) than Rousseau (1712-1778), more Hanfeizi (c. 230 BCE) than Meng Zhu (372-289 B.C.). The more political and radical version, spearheaded by Marx, suggested that conflicts are class based and materialistically structure. Marx theory of class domination and exploitation, again, is capable of two interpretations. The positivistic and conspiring version suggests that the capitalists conscious of their self interests, deliberately set out to consolidate their powers and fortify their control through law, courts and police. The historical and structural version observes that capitalists, with the best of intentions, cannot help but engage in dominating and exploiting conduct, as responding and reacting to forces of historical materialism. This paper subscribes to Turks’ conflict theory of conflict, and with it social construction of reality and crime.

¹³ By being “instinctive”, this author means that our understanding of things or matters is driven by external instinct or stimulus. In more layperson’s term unprocessed or knee jerk reaction. “Instinctive” or “instinctual” is akin to, but not identical with “intuition” which is “The act or faculty of knowing or sensing without the use of rational processes; immediate cognition.” D. Perkins, “The Meaning of Intuition as a Natural Language Concept” (April, 2002). While both of them are automatic (unprocessed) reaction to the understanding of external things, only the former is not based on rationality. “Intuition” suggests embedded meaning that is derived from a larger frame of reference - individual, social or cultural. Finally, “institutive” understanding is often explained with reference to naturalness. Human beings are born to a larger universe of things, and thus are regulated by those embedded “natural” laws that structure and inform the universe. See Laozi, Dao De Jing (The Book of the Way) (Translation and Commentary by Moss Roberts) (2001) (Dao De Jing can be translated as "Canonical text (jing) on the Way (Dao) and virtue (de)." All things in the universe are informed by Dao or the way, a transcendental natural principle that works through all things.

¹⁴ By being “unreflective” this author means not given to thought or thinking. The American Heritage^® Dictionary of the English Language: Fourth Edition. 2000. (“Not reflective; unthinking.”) “Unreflective” describes the process of arriving at a conclusion – understanding of things. The American Heritage ® Dictionary of the English Language, Fourth Edition (2002).

¹⁵ By being “uncritical” this author means: “Not critical; undiscriminating or indulgent” This is usually reflected in acceptance of conventional wisdom without further inquiry, questioning or debate, i.e. the consensus model of crime and punishment.

¹⁶ Consider something to be “wrong” is the first step to take action against it. See Donald Black, The Social Structure of Right and Wrong (San Diego: Academic Press, 1993).

¹⁷ That is to say it is not private wrong. It is not a moral, economic, or social wrong requiring adjustment, but criminal wrong requiring punishment.

¹⁸ That is to say not through informal social control, e.g. mediation, reconciliation, or compensation.

¹⁹ That is the public wrong should be dealt with by law and not by other formal mechanism, e.g. licensing, inspection, administration or supervision.

²⁰ Under common law, crimes are now usually classified as mala in se, which are deemed to be inherently evil and mala prohibita, which are considered violations of technical rules, such as traffic violations.

²¹ The concept of “looking glass self” argues that ones self image and self-feeling is defined by the perception and judgment of others. Charles Cooley's Human Nature and the Social Order (1902).

²² The concept of “social constructionism” argues that reality is manufactured by means of shared social meanings gained through our interaction with each other. Social Pathology (1951).

²³ Howard Becker, Outsiders: Studies in the Sociology of Deviance (1963).

²⁴ Id. p. 9.

²⁵ CHAPTER 8 -- ''Moral Entrepreneurs”.

²⁶ Id. 149.

²⁷ Id. 148.

²⁸ Id. 149.

²⁹ Id. 153.

³⁰ Id. 153.

³¹ "Crime is an intentional violation of the Law, committed without defense or excuse and penalized by the state." Paul W. Tappan, “Who Is the Criminal?, 12 Am. Soc. Rev. 96, 98-99 (1947).

³² Paul Walton and Jock Young, The new criminology revisited (New York, N.Y.: St. Martin's Press, 1998).

³³ 2 March 2000 Legislative Council Panel on Security, “Computer Related Crime” LC Paper No. CB2 1187/99-00(04) (2 March 2000). http://www.legco.gov.hk/yr99-00/english/panels/se/papers/b1187e04.pdf.

³⁴ Newspaper Registration Section (NRS) is one of the enforcement agencies of the Control of Obscene and Indecent Articles Ordinance, Cap. 390.

³⁵ See Hong Kong Police Force, “HKP-Statistics Page: 2001 Crime Situation” at http://www.info.gov.hk/police/aa-text/english/statistics/statsframe-t.htm. (Visited 30 November, 2002).

³⁶ http://www.infosec.gov.hk/engtext/general/crc/statistics_3.htm.

³⁷ The next section “V. The Discovery of Computer Crime in Hong Kong” (infra) will document the Hong Kong people’s experience and perspectives on computer crime.

³⁸ The first part of the survey was a telephone survey of around 1,600 members of the community (aged 16 or above) and the second part was a postal survey that involved a self-administered questionnaire of 485 organizations drawn from 23 sectors. Both parts of the survey were conducted between March and May 2000.

³⁹ www.pco.org.hk/english/publications/files/survey_e2.doc.

⁴⁰ See “Figure 1: Importance of social policies in Hong Kong”.

⁴¹ “Survey on Public Awareness of the Importance of Protecting Intellectual Property Rights 2002,” Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong (TEL/21/08/2002/Ref.390). Commissioned by Intellectual Property Department, HKSAR. (IPR Study) The survey is an annual survey conducted since 1999. The survey has tree objectives: (1) examine public awareness of intellectual property rights; (2) compare results of all years; and (3) ascertain effectiveness publicity Intellectual Property Department campaign. The survey was conducted between August 21-26, 2002 by phone interview with 2000 people, age 15 and over. The response rate is 50.2% or with 1,006 successfully interviewed. The sampling error is at plus and minus 3.04% at 95% confidence level. http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN010253.pdf.

⁴² While this IPR Study does not directly address issues of Internet IPR issues (except tangentially in Table 6: “Judgment on Six Situations of Infringement of IP Rights (%)” when respondents were asked whether “copying a licensed software from office to home” is or is not considered infringement of IP rights (id. p. 7), the findings can be validly use as a proxy indicator of Hong Kong people’s attitude and behavior towards Internet based IP rights. There is no reason to believe that people’s attitude towards IP rights abuse would change if they were dealing with computer related issues. If anything, people’s attitude and conduct towards Internet IP right is likely to be more permissive, indulging and abusive.

⁴³ The IPR Study reported both purchasing and using survey result. Only purchasing survey result is reported and analyzed here for two reasons. The survey result – in percentage points and pattern - from purchasing is near identical between the two, e.g. in cases of purchasing vs. using by family members, the data show: Purchasing – Often – None 42.2 (2002), 39.0 (2001), 36.4 (2000) vs. Use – 40.0 (2002), 35.5 (2001), 31.9 (2000). Second, purchasing by far is more reflective of respondents’ attitude towards IPR than just using. Purchasing requires respondent to invest time, money and exposure in violating IPR.

⁴⁴ Table 18, IPR Study, pp. 18 – 19.

⁴⁵ See IPR, Table 16., p. 16.

⁴⁶ Sykes and Matza, Delinquency and Drift (1964) (They propose the five Techniques of Neutralization: Denial of responsibility ("It wasn't my fault!"); Denial of injury. ("I am hurting no one”; Denial of the victim. ("They deserve it") Condemnation of the condemners. ("They probably did worse things in their day!") Appeal to higher loyalties. ("I need to rob the rich to save the poor?!")

⁴⁷ Hong Kong people’s overall knowledge with intellectual property rights (IPR), while improving, is still low (Table 12). Thus , over a quarter of the people (28.0) do not know what IPR in 2002 and only over only slightly over 40% was able to correctly associate IPR with copy rights/copy piracy. Sex (male – 79.8%), age (below 30 – 77.2%), educated (teritiary education – 92.2%) and income (HK$20,000 – 91.3) are better able to know about IPR.

⁴⁸ Swinyard, WR, Rinne, H., & Kau, AK 1990. The morality of software piracy: A cross-
cultural analysis. Journal of Business Ethics, 9(8): 655-664.

⁴⁹ Hong Kong, Legco OFFICIAL RECORD OF PROCEEDINGS, Wednesday, 16 December 1998, Legco member DR TANG SIU-TONG floor speech. http://www.legco.gov.hk/yr98-99/english/counmtg/hansard/981216fe.htm.

⁵⁰ Id.

⁵¹ Ma sent 200 questionnaires to Hong Kong IT Management Club members in the last quarter of 1998 and the first quarter of 1999. Most of them are CIOs or IS managers in medium/large organizations in the Hong Kong Special Administrative Region (HKSAR) of China. The questionnaire asked the respondents to rate the importance of 24 IS management issues in the current year (1998/1999) and five years ahead (2003/2004) based on a 10-point scale with 1 being least important and 10 being most important. 28 questionnaires were returned (a response rate of 14%). The result was compared with findings from Saxena, Ma & Cheung (1993) Burn, J.M.; Saxena K.B.C.; Ma, L.C.K. & Cheung H.K. (1993) Critical issues of IS Management in Hong Kong: a cultural comparison, Journal of Global Information Management, fall, 28-37 (Data gathered in 1990) and by Moore (1996) Moore, T.T. (1996) Key issues in the management of information systems: a Hong Kong perspective, Information and Management, 30:301-307 (Data gathered in 1994).

⁵² Dr. Louis C.K. Ma, “Critical Issues of Information Systems Management in Hong Kong, Vice-President, Hong Kong Computer Society (2004).

⁵³ However, while the increase is evident, the impact in relatively minor given the total number of numbers of computers in service and size of the economy. More significantly to observe, no sooner has the computer crime wave started, it shows sign of abating, e.g. total number of computer attacked dropped from 5460 of 2002 to that of 4098 of 2003, with the total finance loss to companies dropped from HK$1,835,883 (2002) to 1,221,400 (2003) and loss per company dropped from HK$5,632 to 3,116.

⁵⁴ The proposition that culture inform, shapes and dictate individual choice is not longer in double. BRYAN W. HUSTED, “THE IMPACT OF INDIVIDUALISM AND COLLECTIVISM ON ETHICAL DECISION BY INDIVIDUALS IN ORGANIZATIONS,” Instituto Tecnológico y de Estudios Superiores de Monterrey and Instituto de Empresa http://egade.sistema.itesm.mx/investigacion/documentos/documentos/4egade_husted.pdf (last visited Feb. 26, 2005). See also : Christie, P. Maria Joseph; Kwon, Ik-Whan G.; Stoeberl, Philipp A.; Baumhart, Raymond, “A Cross-Cultural Comparison of Ethical Attitudes of Business Managers: India, Korea and the United States,” Journal of Business Ethics, Vol. 46 No.. 3 (2000)
This is more so in a monolithic culture and collective society like China past, where diversity is equated to deviance and individuality is looked upon at dissent.

⁵⁵ Peter Yu, “The Second Coming of Intellectual Property Rights in China.” Occasional Papers in Intellectual Property, Benjamin N. Cardozo School of Law, Yeshiva University, No. 11 (Imperial China has no notion of property right) p. 4.

⁵⁶ Legge (reprinted by Hong Kong University Press, 1960, vol. III). “THE CANON OF SHUN” and “THE CANON OF SHUN” p. 15.

⁵⁷ Confucian learning was canonized during Eastern Han Dynasty. The Emperor decreed the Five Confucian Classics to be the standard text for education: Book of Poetry, Book of Documents, Spring and Autumn Annals according to Mr. Tso (Zuo), Book of Zhou Rites, and Book of Changes. The Five Classics” provided external standard and internal bearings for self-cultivation and government rule.

⁵⁸ Peter Yu, “The Second Coming of Intellectual Property Rights in China.” Sect II: “Causes of Privacy and Counterfeiting Problems in China” pp. 16 – 18. (Unlike the west, imperial China did not consider copying the words and work of others to be morally apprehensible, socially inappropriate or legally wrong. It is consider “a noble” things to do.) See also William P. Alford, To Steal a Book Is an Elegant Offense: Intellectual Property Law in Chinese Civilization (Stanford, CA: Stanford University Press, 1995).

⁵⁹ Fung Chi Pang, Singing against Hong Kong People (Speedy rainbow publishing limited 1998) (The four defining personality traits of Hong Kong people are opportunism (zhisheng), use the brain (silao), struggle with everything (bosha) and to go all out(fen shen). Hong Kong people are pragmatists and utilitarians, more Machiavelli than Kant.) The personality of Hong Kong people were shaped by its unique history. Most of the people in Hong Kong came as “political” migrants escaping from Communist China trying to make a living on a barren rock ruled by the British as a colony. The Hong Kong people’s survival instincts make them impatient with rules and contemptuous of rights; pragmatism is the only ideology. Richard Hughes, Borrowed Place Borrowed Time (London: Andre Deutsch, 1968).

⁶⁰ For a more detail analysis of Hong Kong people’s social psychology, or as the author put it games Hong Kong people play, George Adams, GAMES HONG KONG PEOPLE PLAY - A SOCIAL PSYCHOLOGY OF THE HONG KONG CHINESE (GEORGE ADAMS 1991).

⁶¹ “Hong Kong a world leader in illegal downloading,” January 15, 2004 at 11:07 AM (According to TNS market survey (500 computer users), Hong Kong music fans lead the world in illegal download of music files from the Internet: 48% surveyed has illegally download once, 81 percent with 15-24 age group, 25 percent downloaded more than 250 songs. more than a billion Hong Kong dollars (130 million US) of songs; at least 130 million songs in the one and a half years.) http://www.boycott-riaa.com/article/9908 See “Major New Study Finds 52 Percent of Software in Use in Hong Kong Is Pirated: Over US$101 Million in Losses Last Year” Business Software Alliance (BSA), July 7, 2004 (The privacy rates of countries in Asia Pacific region are: China (92$), Vietnam (92%), Indonesia (88%), Pakistan (83%), Thailand (80%), Other AP (76%); India (73%), Philippines (72%, Malaysia (63%), Hong Kong (53%) Korea (48%), Taiwan (43%), Singapore (43%), Australia (31%), Japan (29%), and New Zealand (23%), See Privacy Study BSA, July 2004, esp. page 7. http://www.bsa.org/globalstudy/loader.cfm?url=/commonspot/security/getfile.cfm&pageid=16947&hitboxdone=yes.

⁶² “STATEMENT CONCERNING POLICE ACTION ON INTERNET PROVIDERS,”4 March 1995 http://courses.cs.vt.edu/~cs3604/lib/Crime/hongkong.html.

⁶³ Sino-British Joint Declaration on December 19, 1984. (An Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People's Republic of China on the Future of Hong Kong signed on 19 December 1984.)

⁶⁴ The drafting of Basic Law begins in 1985 when the National People's Congress appointed the Basic Law Drafting Committee, comprising of more than 50 mainland and Hong Kong members.

⁶⁵ Adopted on April 4, 1990 by the Seventh National People's Congress of the People's Republic of China at its Third Session. See Y. Ghai, Hong Kong's New Constitutional Order: The Resumption of Chinese Sovereignty and the Basic Law (Hong Kong University Press 1997).

⁶⁶ Jesse Alan Gordon and Charles Wong, “Hong Kong Beyond 1997: An Interview with Governor Chris Patten and three Legco Members,” The Harvard Journal of World Affairs, 1994.

⁶⁷ The 1996 Report “Terms of References” are anchored within that of Reform of the Law relating to the Protection of Personal Data and states: “The issues raised at items (a) and (b) in the terms of reference were addressed in the Law Reform Commission report on Reform of the Law relating to the Protection of Personal Data published in August 1994. Most of the recommendations of that report were adopted with the enactment of the Personal Data (Privacy) Ordinance (Cap. 486) on 3 August 1995. This report deals mainly with item (d).” See paragraph 5 to “Introduction” of 1996 Report.

⁶⁸ See 10 (b) to “Introduction” of 1996 Report.

⁶⁹ See 10 (c) to “Introduction” to 1996 Report.

⁷⁰ See 10 (6) to “Introduction” to 1996 Report.

⁷¹ SECRETARY FOR INFORMATION TECHNOLOGY AND BROADCASTING Testimony. Legco Proceedings. Wednesday, 4 November 1998 (“Furthermore, we plan to introduce an enabling bill on electronic commence to the Legislative Council next year. The bill will make specific provisions for digital information, legal endorsement for electronic signatures, the establishment of a certification authority and such like matters.”)

⁷² http://www.sfc.hk/sfc/html/EN/speeches/public/consult/consultation/003.html#WORKING.

⁷³ SFC Bulletin - Issue No. 38 - October-December 1999 - "A Survey of Online Trading" - p12

⁷⁴ "Challenges to the Network: Internet for Development" http://www.itu.int/ti/publications/INET_99.

⁷⁵ These areas include: (i) proper segregation of employee duties, (ii) the use of alpha-numeric passwords, (iii) a password which must be equal to, or longer than 8 characters or digits, (iv) a requirement for clients to change their passwords at regular intervals, that clients have the option to change their passwords at any time, (iv) an automatic time-out feature for site access, (v) using the latest encryption technology to ensure secured communication with clients, (vi) transaction database to be logically separated from web servers, (vii) normally, web servers to reside in the Demilitarised Zone (“DMZ”), (viii) installation of firewalls to shield web servers and internal network from outsiders, (ix) firewalls to have appropriate rules, (x) control and operation of important devices (such as firewall and routers) be divided into two parts resulting in the use of two passwords, (xi) intrusion detection devices be implemented to monitor any unauthorised access, and (xii) ideally, router access controls to be implemented to provide an additional layer of protection.

⁷⁶ “Management of Security Risks in Electronic Banking Services” – A Hong Kong Monetary Authority Guideline Note – 6 July 2000 - http://www.info.gov.hk/hkma/eng/guide/index.htm.

⁷⁷ “Management of Security Risks in Electronic Banking Services” – A Hong Kong Monetary Authority Guideline Note – 6 July 2000 - http://www.info.gov.hk/hkma/eng/guide/index.htm.

⁷⁸ “Independent Assessment of Security Aspects of Transaction E-banking Services” – A Hong Kong Monetary Authority Guidance Note - 26 September 2000 – http://www.info.gov.hk/hkma/eng/guide/guide_no/guide_1511xb.htm.

⁷⁹ The study was conducted by “Study Group on Electronic Banking” established by the HKMA in July 1997. SECURITY OF BANKING TRANSACTIONS OVER THE INTERNET http://www.info.gov.hk/hkma/eng/guide/guide_no/guide_1511xb.htm.

⁸⁰ http://www.cyberport.com.hk/article/cp_info_en/cpa_00004_en.html.

⁸¹ “Development of Information Superhighway and Internet in Hong Kong,” Submission to Legco Panel on Information Policy Meeting on Friday, 6 December 1966, Hong Kong Internet Service Providers Association. (“Security is critical to the development and operation of a vital Information Superhighway.”)

⁸² Letter: “Consultation Paper on Copyrights Bill, Response of the Hong Kong Internet Service Providers Association” December 2, 1996. Hong Kong Internet Service Providers Association. (“The ISP being a carrier cannot bear responsibility with respect to copyrights of any material contracted by the Owner to be processed and transmitted by the Internet.”) “Comment on the Review of Electronic Transaction Ordinance,” April 24, 2002. Hong Kong Internet Service Providers Association. (Many small companies cannot protect the integrity of their data based because they have no dedicated server for different IT functions.) http://www.hkispa.org.hk/publicpapers.html.

⁸³ White Pape: “Legislation: One of the key pillars in the fight against spam” Developed by the Hong Kong Anti-Spam Coalition, January 2004. (According to result of Survey on “Unsolicited e-messages ” by Legco councilor (IT), some people is against government taking on anti-Spam role because of concern over privacy and freedom of speech.) http://www.asiadma.com/downloads/research/pdf/100040/HK_Coalition_Position_Paper_v.7.0.pdf.

⁸⁴ See John Perry Barlow, “A Declaration of the Independence of Cyberspace” (Ferbrayr 8, 1996) <barlow@eff.org> (“Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather. We have no elected government, nor are we likely to have one, so I address you with no greater authority than that with which liberty itself always speaks. I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us. You have no moral right to rule us nor do you possess any methods of enforcement we have true reason to fear.”)

⁸⁵ Some scholars argue that there is no such thing as non-regulated cyberspace, i.e. order in cyberspace implies passive coordination if not assertive governance. The debate is not able whether to regulate but with delineating what is the purpose of regulation, i.e. coordination vs. control, determining who is regulating, e.g. cyber users vs. big government vs. powerful cooperation, and deciding upon how to regulate, e.g. grass roots regulation or imposed order. David Johnson and David Post, “Law and Borders-- The Rise of Law in Cyberspace,” 48 Stanford Law Review 1367 (1996) (Cyberspace has real boundary and requirements of law. But the legal regime must be adjusted to the characteristics of the cyberspace, not transferring from the conventional material world.) Milton Muller, “The "Governance" Debacle: How the Ideal of Internetworking Got Buried by Politics,” (Regulation of Internet has shifted from neutral coordination and facilitation to political control and suppression.) http://www.isoc.org/inet98/proceedings/5a/5a_1.htm.

⁸⁶ The Hong Kong government’s position thought clear on its face raises more questions than it solve. First, what is “minimum” vs. “mazimum” is not ascertainable in the abstract. Second, the question of “minimum” to whom needs to be resolved? Ultimately, the issue of reasonableness of cyberspace regulation cannot be disposed of by simplistic and jargonistic “minimum” vs. ”maximum” rule. The essence of the debate is never how much to rule, a legal question, it is for what ends the regulations should be directed, a philosophical issue.

⁸⁷ Again, when the Hong Kong government looks toward the public and community to help to secure the cyberspace, it was less a move to promote political accountability but a strategy to enhance efficiency and cost effectiveness.

⁸⁸ “Information Security: Whose Responsibility”. Speech of Cheung Siu-hing. Deputy Secretary for Security, Opening Ceremony of the Internet Commerce Exposition and Conference, June 21, 2001. (Hong Kong government acknowledged that regulations cannot be the only answer to information security. )

⁸⁹ For discussion of history and philosophy of community policing, as applied to China context, see Kam C. Wong, Community Policing in Comparative context: P.R.C. vs. U.S.A. (November 11, 2001). (On file with author).

⁹⁰ Gregor Urbas, “Cybercrime Legislation in the Asia Pacific Region” Cyercrime Summit, Centre for Criminology, University of Hong Kong, April 25 – 26, 2001. (Over the last two years, Microsoft Corporation has launched campaign against privacy and counterfeit of proprietary computer software. It closed down 88,000 Internet sites offering counterfeit software and conduct hundreds of raids on counterfeiting sites in China (including Hong Kong and Macau), Malaysis, Philippines, Singapore, Taiwan and Thailand.)

⁹¹ “Piracy in Hong Kong: IGN64 goes undercover in Sham Shui Po and looks at piracy devices and their impact on the N64 scene.” April 8, 1999. http://ign64.ign.com/articles/067/067652p1.html.

⁹² For a tourist first person account of software piracy, see “Exploring the Internet: Round One, Hong Kong” (Microsoft Word for Windows in the U.S. costs U.S. $129, after special discount. In the Golden Shop ping Center it fetched. U.S. $12.50. AUTOCAD (15 high-density disks) or even a full distribution of SCO's Open Desktop sold for U.S. $138 and the U.S. it was priced U.S. $1,000. ) http://www.museum.media.org/eti/RoundOne06.html.

⁹³ “Piracy in Hong Kong: IGN64 goes undercover in Sham Shui Po and looks at piracy devices and their impact on the N64 scene.” April 8, 1999. http://ign64.ign.com/articles/067/067652p1.html.

⁹⁴ Excerpt from the IIPA Special 301 Recommendations on Hong Kong, February 20, 1996.
http://www.iipa.com/rbc/1996/rbc_hong_kong_301_96.html.

⁹⁵ GrayZone Digest, September 1996. http://www.grayzone.com/996.htm#hongkong.

⁹⁶ “Hong Kong Anti-Piracy March.” GrayZone Quarterly Digest March 17, 1999, http://www.grayzone.com/hkmarch99.htm (The message was that piracy hurts Hong Kong economy and jobs. People should not buy pirated goods and should report counterfeiters. The Anti-Piracy March was supported by Asia Television Ltd., Blockbuster, Business Software Alliance (BSA), Cable and Satellite Broadcasting Association of Asia (CASBAA), Composers and Authors Society of Hong Kong Ltd. (CASH),Hong Kong Cable Television Ltd. Hong Kong Cinema & Theatrical Enterprises Association, Hong Kong Cinematography and Television Lighting Association, Hong Kong Fine Arts Association, Hong Kong Film Awards Association, Hong Kong Film Directors' Guild, Hong Kong Internet Service Provider Association Hong Kong, Kowloon & New Territories Motion Picture Industry Association Ltd. (MPIA), Hong Kong Optical Disc Manufacturers Association (HKODMA), Hong Kong Performance Artists Guild Hong Kong Record Merchants Association Ltd., Hong Kong Screenwriters' Guild, Hong Kong Small & Medium Business Association, The Hong Kong Stuntman Association Hong Kong Theater Association, Hong Kong Video Industry Association, HMV, International Federation of the Phonographic Industry (IFPI), Motion Picture Association (MPA), Motion Picture Production Executive (HK) Association, Movie Producers & Distributors Association of Hong Kong, Movieland, Music Publishers Association of Hong Kong Ltd., Society of Cinematographers (Hong Kong), Society of Film Editors (Hong Kong), Software Publishers Association (SPA), South China Film Industry Workers Union, Television Broadcast Ltd. (TVB).

⁹⁷ “Hong Kong Anti-Piracy Day a Major Success,” IFPI Press Release March 17, 1999.

⁹⁸ On January 1, 1996, the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) went into effect. In general terms, TRIPS requires an enforcement system that: permits effective action against infringements; provides expeditious remedies which constitute a deterrent; is fair and equitable; is not unnecessarily complicated or costly; and does not entail any unreasonable time limits or unwarranted delays. TRIPS requires that member countries must apply their criminal laws in cases of commercial piracy; it is not enough to merely have laws on the books unless those laws are used effectively. Failing that USTR can impose trade sanctions. "Copyright Enforcement Under the TRIPS Agreement"” International Intellectual Property Alliance (IIPA) http://www.iipa.com/rbi/2004_Oct19_TRIPS.pdf .

⁹⁹ IIR County Report 2000.

¹⁰⁰ Legco proceeding, OFFICIAL RECORD OF PROCEEDINGS, Wednesday, 16 December 1998

¹⁰¹ For a response see “Hong Kong Software Industry Comments on June 1999 Trade and Industry Bureau Submission to The Legislative Council Panel on Trade and Industry” CB(1)1457/98-99(02) (June 3, 1999).

¹⁰² Microsoft Licensing: Hong Kong Copyright Law, “Hong Kong Customs First Crackdown on Online Sale of Pirate Software (L),” June 28, 2000. http://www.microsoft.com/hk/licenses/cases.htm (Visited 11/08/04).

¹⁰³ For a first person account of gambling in Hong Kong. MICHELLE LEVANDER “Log On Your Bets,” Times (Asia) Nov. 5, 2001. (“Living in Hong Kong, it's hard not to get caught up in playing the odds. Gambling fever is woven into its history:..”)

¹⁰⁴ Home Affair Bureau, Public Consultation on Gambling Review : Consultation Report (HKSAR March 22, 2002), “Chapter 3: The Proliferation of Soccer Betting Activities” 3.6 The figure is underestimated because of respondents’ unwillingness to admit to illegal gambling to government surveyors and the survey did not include people who bet with friends.

¹⁰⁵ The difference in finding is likely to be the result of a more reliable methodology, CUHK is not a government agency and has no law enforcement responsibility. As a result, respondents were likely to be more forthcoming and honest with their answers.

¹⁰⁶ Home Affair Bureau, Public Consultation on Gambling Review: Consultation Report (HKSAR March 22, 2002), “Chapter 3: The Proliferation of Soccer Betting Activities” 3.6.

¹⁰⁷ See Id. “Betting with Offshore Bookmakers”, esp. 3.14. Internet gambling offers a number of advantages: full time availability, ease, cheap, choices, worldwide access, comfort and secrecy at home.

¹⁰⁸ Home Affair Bureau, Public Consultation on Gambling Review : Consultation Report (HKSAR March 22, 2002), “Chapter 3: The Proliferation of Soccer Betting Activities” 3.2.

¹⁰⁹ Id. 2.3.

¹¹⁰ Id. 2.4.

¹¹¹ Home Affair Bureau, Public Consultation on Gambling Review : Consultation Report (HKSAR March 22, 2002), “Chapter 2 : Gambling Policy “ esp. 2.2.

¹¹² National Gambling Impact Study Commission (June 18, 1999). “Hong Kong battle against Internet betting continues,” December 11, 2004. Thoroughbreedtime.com.

¹¹³ “Offshore Internet Gambling Leaves Hong Kong Out Of Pocket, Inside China,” Reuters February 22, 2001 (Jockey Club estimates it was losing HK$50 billion ($6.4 billion) a year to high-tech and illegal bookmakers. JC paid 11% of its income to the government as betting duties, a major source of income for the government . In Lunar New Year 2001, the Jockey Club collected eight percent less than last year.)

¹¹⁴ Hong Kong Legco, OFFICIAL RECORD OF PROCEEDINGS Wednesday, 31 March 1999 http://www.legco.gov.hk/yr98-99/english/counmtg/hansard/990331fe.htm.

¹¹⁵ Mingbao March 2, 2000.

¹¹⁶ Hong Kong Economic Journal. February 26, 2000.

¹¹⁷ Those who fight against gambling is being called: “Moral person” “Moral person” hardworking in the background: (「&#36947;德佬」&#32972;後的實幹) The Society for Truth and Light March 31, 2002.
http://www.truth-light.org.hk/article_v1/jsp/a0000278.jsp.

¹¹⁸ Yee Ah, “Gambler story (1) Leaving the Police” (&#36077;仔故事&#65288;一&#65289;　&#38626;&#32887;&#35686;察) (Ah Ke learned to gamble when he was young. He had a good paying job as a police. When he was in the Marine, he emerged himself gambling and borrowed large sum of money. He finally has to escaped to China to avoid the debt.) The Society for Truth and Light . January 31, 2000. http://www.truth-light.org.hk/article_v1/jsp/a0000129.jsp Yee Ah, “Gambler story (2) A father who was transfixed with gambling” (&#36077;仔故事&#65288;一&#65289;　一個沉&#36855;&#36077;博的父&#35242;) (Ah Ping was an illegal immigrant from China. He took a job as barber. Because he was hooked onto gambling he had constant arguments with his wife. His affected his daughter who felt that he has no confidence with the father and still less hope with the family.)

¹¹⁹ For a collection of newspaper cases of individual and family tragedies as a result of gambling, March 2001 to May 2001, see Chan Yin Ping “Horrifying tragic gambling cases” (&#36077;博慘案&#39514;心動&#39748;) (There were 14 cases of suicides or illegal activities by desperate gamblers and 13 cases affecting family members or friends, leading to 14 deaths.) The Society for Truth and Light, July 30, 2001 http://www.truth-light.org.hk/article_v1/jsp/a0000227.jsp.

¹²⁰ Leung Lan Tien Wei, “Gabling culture spread, poising of youth” (&#36077;&#39080;&#34067;延　&#33660;毒&#38738;少年) Hong Kong Economic Journal, July 13, 2000. (Gambling culture is spreading in Hong Kong, especially amongst the youth. The Jockey Club encouraged families to bring their young ones on “Jubilee Day” to have a taste of horse raising. The media encouraged gabling mentality by speculating on stock, e.g. Tom.com, and promoting soccer betting with gambling tips and league tables in mainstream sports page.)

http://www.truth-light.org.hk/article_v1/jsp/a0000021.jsp See also Professor Chung Kim Wah, “Do not underestimate the negative impact of gambling activities on youth” (不&#35201;低估&#36077;博活動對&#38738;少年的&#36000;&#38754;影&#38911;) (Research show that early exposure to gambling legitimize gambling in the eyes of the children and have long term impact on youth healthy moral development.) January 31, 2000. The Society of True and Light http://www.truth-light.org.hk/article_v1/jsp/a0000127.jsp.

¹²¹ Choi Chi Sum, “The legalization of gambling, taxing the poor people in diguish” (&#36077;波合法化　&#35722;相窮人稅&#65289;Hong Kong Economic Journal March 21, 2002. (The legalization of soccer as a way to increase government tax revenue will encourage more people to gamble. Currently there are 80,000 illegal soccer gamblers in Hong Kong. Legalization of soccer will increase the number to 1.12 million.)

¹²² Chan Yin Ping, “Gambling media without regulation, the true nature of promotion by various major media” (&#36077;波&#36039;&#35338;無王管: 各大傳媒宣傳&#36077;波實況) http://www.truth-light.org.hk/article_v1/jsp/a0000402.jsp

¹²³ Edwin, “A shocking view of gambling” Candle Web July 30, 2001.

¹²⁴ In 2003 only 7% of Hong Kong public 15 years old and above used the Internet for “online purchasing services for personal matters” and barely 1% of Hong Kong business establishment “having sold goods, services or info thru’ electronic means” in 12-months before the survey.

¹²⁵ STATEMENT CONCERNING POLICE ACTION ON INTERNET PROVIDERS

4. March 1995 (95/03/13) http://courses.cs.vt.edu/professionalism/Crime/hongkong.html.
   

¹²⁶ “STATEMENT CONCERNING POLICE ACTION ON INTERNET PROVIDERS,”

4. March 1995 http://courses.cs.vt.edu/~cs3604/lib/Crime/hongkong.html.
   

¹²⁷ Michael W. Kim, “How counties handle computer crime?” Ethics and Law on Electronic Frontier (Fall 1997) (There was a lack of coordination between Hong Kong Police Commercial Crime Bureau and Office of the Telecommunications Authority, leading to a duplication of investigative effort and resulted in offenders avoiding criminal punishment altogether with payment of HK$700 administrative license fees.)

¹²⁸ HKSAR v. TSUN SHUI LUN - [1999] HKCFI 77; HCMA000723/1998, 15 January 1999

¹²⁹ “Hong Kong's media face to face with the Taiwan factor,” 2000 ANNUAL REPORT JOINT REPORT OF THE HONG KONG JOURNALISTS ASSOCIATION AND ARTICLE 19 © HKJA and ARTICLE 19 (JULY 2000).

¹³⁰ M. E. Kabay, “The Information Security Year in Review: 1995” http://www2.norwich.edu/mkabay/iyir/1995.PDF.

¹³¹ “Timeline History of Computer Hacking” This site starts to track hacking since 1990. http://www.francesfarmersrevenge.com/stuff/misc/hack/timeline.htm.

¹³² Anthony C. LoBaido “Hong Kong Blondes Build Techno Army Against Communist Chinese Government” <smongol-l> 24 Mar 2000 (The author conducted the only seven weeks long interview with the leadership of Hong Kong Blondes.) See also “Thai hackers claim responsibility: Hong Kong Blondes satellite group says it made cyber-attacks,” WorldNetDaily February 15 2000.

¹³³ “Hong Kong Computer Hacking Syndicate Smashed.” IT Daily 1999 MAY 30 (Newsbytes)

¹³⁴ Lo, Alex (1999) Computer Crime a Magnet for Teens. South China Morning Post June 6, p 2.

¹³⁵ “Singapore, Hong Kong crack down on teen hackers,” CNN March 23, 2000.

¹³⁶ Lo, Victor Yik-kee, “Tracing and Tracking Suspects Across Computer Networks.” Paper Presented at the 8th World Congress of the Asia Crime Prevention Foundation, Beijing, China (2000) http://www.acpf.org/WC8th/AgendaItem2/I2%20Pp%20VictorLo%2C%20HK.html

(visited November 6, 2004).

¹³⁷ The western rendition of yin and yang could be found in the thinking of Hegel (1770 – 1831) dialectics. As a school of thought Hegel’s dialectics echoed yin-yang thinking in observing that cognitive ideas as with material things in the world were constantly being formed, destroyed, changed and mutated as propositions (theses) encounter counter-propositions (anti-theses), forming new sythesis.

¹³⁸ The I Ching, James Legge, tr., Sacred Books of the East, vol. 16 [1899] http://www.sacred-texts.com/ich/index.htm#contents.

¹³⁹ “The Daoism(Taoism) Philosophy” http://www.daoism.net/

¹⁴⁰ Colonial rule in Hong Kong was one of indirect rule. Lau Siu-kai, " The Government, Intermediate Organizations, and Grass-Roots Politics in Hong Kong.” Asian Survey Vol. 21, No. 8 (Aug., 1981), pp. 865-884. This dovetail neatly with traditional imperial China governance philosophy and social control practice, i.e. indirect rule by way of family. See Hsiao, Kung-ch'uan. Rural China: Imperial Control in the Nineteenth Century (Seattle: University of Washington Press, 1960) and Ch'ü, Tung.-tsu. Local Government in China under the Ch'ing (Cambridge, Mass.: Harvard University Press, 1962).

¹⁴¹ Hsu Dau-lin, “ Crime and Cosmic Order,” Harvard Journal of Asiatic Studies, Vol. 30 (1970), pp. 111-125. (The common understanding that crime in imperial China was considered a disturbance of totality of social qua moral order (Derk Bodde, 1967: 43, 331) was ill informed, from the public and commoners perspective.)

¹⁴² “Confucianization of the Law: A Study of Speech Crime Prosecution in China,” E-Law Volume 11, Number 3 (September 2004). (In imperial China Confucianization of the law meant that law gave expression to and provided enforcement of Confucius ethics.)

¹⁴³ I thank one of the reviewer who pointed out to me: “It might be useful, here, to note the parallels between the notion that crime is created versus being natural and the criminal law’s distinction between crimes that are mala in se (evil in themselves) and mala prohibitum (the product of regulation).” This comment has allowed me to investigate into how Chinese culture understood crime as a moral vs. legal phenomenon, elaborated above.

¹⁴⁴ Anthony B. L. Cheung, " Rebureaucratization of Politics in Hong Kong: Prospects after 1997 Asian Survey, Vol. 37, No. 8 (Aug., 1997), pp. 720-737.

¹⁴⁵ Ambrose Yeo-chi King, " Administrative Absorption of Politics in Hong Kong: Emphasis on the Grass Roots Level,” Asian Survey Vol. 15, No. 5 (May, 1975), pp. 422-439 (Consensus was achieved through elite integration with broad grassroots consultation and participation. Eddacott called this “government by discussion.” (Government and People in Hong Kong (Hong Kong University Press, 1964), p. 229, King called this “Synarchy rule”.(citing Fairbank1957).

¹⁴⁶ Ambrose Yeo-chi King, " Administrative Absorption of Politics in Hong Kong: Emphasis on the Grass Roots Level,” Asian Survey, Vol. 15, No. 5 (May, 1975), pp. 422-439