UPDATED: 20:37, June 22, 2007

The European Commission issued its annual report on China's Hong Kong Special Administrative Region (HKSAR) Friday, saying the European Union (EU) recognized the success of the "One Country, Two Systems" since Hong Kong's return to China.

The eight-page report, acquired by Xinhua here Friday from the Office of the European Commission in Hong Kong, was the ninth such report by the European Commission since 1997 when China resumed the exercise of sovereignty over Hong Kong.

"The Commission recognizes that in general the 'One Country, Two Systems' principle has been respected and is working well for the people of Hong Kong," the report said.

The EU supports the "One Country, Two Systems" principle and the respect for human rights and individual freedoms enshrined in the Basic Law, according to the report.

The HKSAR government continues to enjoy a high degree of autonomy in economic, trade, fiscal, financial and regulatory matters, and the people of Hong Kong benefit from their own legal systems, an independent rule of law, individual property rights, freedom of speech and market economic systems, according to the report.

The EU-Hong Kong bilateral trade recorded strong growth in 2006 with the EU being Hong Kong's second largest trading partner in 2006, only after China's mainland.

EU's statistics show its trade with Hong Kong totaled 25.8 billion euros in 2006, with its imports from Hong Kong reaching 14.2 billion euros, up 33.9 percent year on year.