Trade Minister Reassures Investors on Hong Kong’s Future

NEW YORK —  John Chan sipped a glass of water and briefly closed his bloodshot, travel-weary eyes. Hong Kong’s trade minister knew that the questions were coming about how the blood that had been spilled in Beijing would wound the freewheeling British colony that becomes part of Communist China eight years from now.

Chan predicted that any wounds would heal but admitted that he is uncertain about what looms ahead.

“Those were very sad events, indeed,” Chan told reporters in New York during a visit that followed the Chinese government’s crackdown on the pro-democracy movement. “It is time to be humble about our lack of knowledge about what is going on in China.”

For the frenetic colony of free enterprise that sits like a fragile egg on the southern Chinese frontier, the bloodletting fractured a veneer of confidence that China will permit Hong Kong to maintain its way of life for 50 years after the 1997 takeover, as promised under a historic Sino-British pact.

The June 3-4 killings and their aftermath devastated prices in the Hong Kong stock market, weakened property values, led to record requests for emigration visas and drained bank vaults as many depositors spirited their money abroad, fearing more turmoil.

Even Hong Kong optimists began to quietly question whether Britain made a grave mistake five years ago by agreeing to surrender the colony, a vestige of Opium War days that has since blossomed into one of the most fabulously successful industrial and financial centers of Asia.

For Chan, a 46-year-old, native Hong Kong Chinese who speaks flawless British-accented English, the Beijing crackdown and its impact on the colony have presented the greatest challenge of his career and personal life.

Chan must try to convince Americans and other foreigners with billions of dollars invested in Hong Kong that their money and property not only are safe but also will grow in value during the pre-takeover years and beyond.

He also must try to persuade Hong Kong’s 6 million people to trust that China will honor its pledge to leave them alone after the scarlet hammer-and-sickle flag replaces Britain’s Union Jack on July 1, 1997--the official termination of British authority under the joint declaration.

“What gives the Sino-British agreement its teeth is that it’s a binding agreement,” Chan said during his trip earlier this month to Washington and New York, where he expounded on the virtues of Hong Kong’s economy to lawmakers and business groups, and rejected suggestions that the territory is doomed.

“China has an excellent track record of honoring its international commitments,” he said. “Even in the dark days of the Cultural Revolution, the Chinese honored their agreements. They kept Hong Kong supplied with food and water.”

In his view, China not only will protect Hong Kong’s way of life, but also will continue exhorting its entrepreneurs to share their expertise with the rest of the country.

Chan is a senior native Hong Kong member of the British administration and has been a career colonial official for the past 25 years, with posts that have ranged from government spokesman to the governor’s private secretary.

Perhaps for that reason, Chan has no choice but to put the best face on a potentially explosive problem and has gone out of his way to show that he wants to stay in Hong Kong.

He was deeply involved in the negotiations that climaxed with the Sino-British agreement in 1984 and is a member of the Sino-British Land Commission, a body established under the agreement to oversee the sale and allocation of property in the years up to 1997.

In 1987 he became deputy chief secretary and was responsible for formulating constitutional reforms aimed at giving Hong Kong a democratically elected government prior to the Chinese takeover. He became trade and industry secretary in March.

His responsibilities now include Hong Kong’s international trade relations and its involvement in world commercial organizations, such as the General Agreement on Tariffs and Trade.

Unlike his British colleagues, however, Chan does not have a British passport or right of residence in Britain. He grew up and went to school in Hong Kong. He lives there with his wife and two children. He recently purchased an apartment in Hong Kong and said he does not keep any overseas bank accounts.

“My family and I remain committed to Hong Kong,” he said. “I was born here; my father was born here.”

Hong Kong, he said, “is not China. It is not going to be run by China. It will be run by Hong Kong people under the agreement.”

Nonetheless, events in China over the past few weeks have jolted many other Hong Kong people into concluding that the Beijing government has no regard for international opinion when confronted with a threat to its political supremacy. In the view of skeptics, if Hong Kong eventually is seen by the Chinese Communist Party as a destabilizing influence on the rest of the country, it would use whatever means necessary to fortify itself at Hong Kong’s expense.

This scenario strikes the deepest fear into the Hong Kong government because it raises the possibility of chaos. Many Hong Kong residents are refugees of past Chinese political convulsions and now have no place to go. Britain has made no special arrangements to accept them.

For that reason, Chan and other members of Hong Kong’s colonial administration recently began to press London to reconsider its immigration policy concerning Hong Kong residents.

“Britain has a moral obligation to the people of Hong Kong,” Chan said. “They want to acquire an insurance policy, a home of last resort, if things really turn bad.”

The lukewarm response of the British thus far, Chan said, “indicates this is not an easy matter for them.”

Chan admitted that he is not a trained Sinologist and that the stunning crackdown on political dissidents in China took him by surprise. Nonetheless, Chan said, if it had to happen, he is grateful it happened in 1989, not 1996.

“One of the silver linings on this dark cloud is that it’s given Hong Kong people a hard shock--like an injection, an immunization against the next rude shock,” he said.

As for his own future under the Chinese Communist umbrella, Chan smiled philosophically.

“If I do well in the next eight years,” he said, “maybe I’ll get a promotion.”