High Political Anxiety on the Eve of a New Era

This city-region, where big is beautiful and nothing that matters is small, will soon be the crucial test of China’s willingness--and ability--to join the new world of the 21st century in a democratic spirit.

At midnight June 30, 1997, Hong Kong is to be turned over to China as a “special administrative region,” after 155 years of British rule. The famed Gurkha battalions, the British Army’s garrison here, are already leaving.

Inevitably, the central question is whether Beijing will allow Hong Kong the freedom it now enjoys or gradually impose authoritarian controls on it. The answer remains clouded, but Hong Kong’s fate is intimately tied to the overall Chinese political evolution, as China becomes Asia’s economic and military colossus on its way to superpower status.

China’s rising might, and its implications for the future of Hong Kong and the rest of Asia, were the overwhelming reality at a recent three-day conference of the World Economic Forum. Chinese officials and entrepreneurs who run billion-dollar, profit-making enterprises on the mainland came with soothing messages regarding Hong Kong’s fate.

The economic decision is the easiest. The consensus at the forum was that China has everything to gain and nothing to lose, economically, by allowing this port city to continue functioning as Asia’s principal trade and financial capital, particularly because Beijing has hundreds of billions of dollars invested here, mainly in real estate and construction, and already owns around one-quarter of the region’s total assets. Uncounted billions of dollars more of Hong Kong (and Taiwan) money are invested in mainland businesses and industries, creating a natural skein of ownership and financial control. Beijing’s Bank of China is probably more powerful today than the city’s private banks combined. Everybody seems to be everybody’s partner or associate across the porous border still dividing Hong Kong territories from China proper.

Hong Kong is indeed an economic powerhouse. Its per capital annual income is $20,000, high by world standards, even though its extraordinary affluence is not wholly shared by the 6.2 million inhabitants of the territory. A vast underclass lives cheek-by-jowl with Hong Kong billionaires, millionaires and the upper classes. It remains a magnet for illegal immigrants from the Chinese countryside, where living standards are lower than those in Hong Kong’s slums.

The mainland areas bordering Hong Kong are growing quite rich themselves, having become the centers of farm and small industrial production serving the city. The new reality is that growth and wealth radiate from Hong Kong, where unemployment is a negligible 2.8%.

In June, China will inherit the world’s largest container-ship port (much of its trade moves through Hong Kong), one of the world’s largest airports, now under construction on an artificial island, as well as more than $60 billion in foreign-currency reserves, an impressive trade and financial infrastructure and the best-performing stock exchange in the world.

The belief that Beijing will act rationally in matters economic has restored much of the business confidence lost when Britain agreed, in the 1980s, to return Hong Kong to China. Runaway local capital is returning, along with fresh investments from foreign sources.

Optimism, however, is much more tempered when it comes to Hong Kong’s political future. Chris Patten, the British governor who will turn Hong Kong over to China, is among those who still needs convincing when it comes to Chinese good intentions. Summing it up at the forum, Patten insisted that “Hong Kong needs economic liberty and political freedom,” that the future hinges on whether “China is prepared to trust Hong Kong, and that the approaching transfer of sovereignty and maintenance of the rule of law are a unique challenge.”

In this realm, however, Chinese intentions are disturbingly unclear. It is not a secret that many wealthy Hong Kong citizens are obtaining additional British or foreign passports in order to flee in an emergency.

Many people here simply do not believe that Beijing will “trust” Hong Kong, politically, even under the highly controlled system, designed to pass for democracy, currently being set up by China. Given the Chinese leadership’s categorical rejection of any form of political liberalization to coincide with its economic reforms, it is hard to imagine that any kind of “democratic virus” would be tolerated for long in Hong Kong.

Accordingly, a free press, an independent judiciary and civil service are thought to be in serious jeopardy. Signs of self-censorship in the Chinese-language press have already begun to appear. Preparations for a coming purge were suspected when Beijing recently requested the immediate transfer of Hong Kong civil-service personnel files.

The man who will run Hong Kong is Tung Chee-hwa, a 59-year-old millionaire shipping magnate. He was chosen chief executive by a 400-member Selection Committee picked by Beijing. A provisional legislature, similarly hand-picked, will replace the elected Legislative Council. But real power is expected to be exercised by a resident Chinese vice minister of foreign affairs, a major general of the People’s Liberation Army garrison to be stationed in Hong Kong and the head of the Hong Kong Communist Party, who is still to be named because the party is illegal in Hong Kong.

The unanswered question is whether Tung will stand up for Hong Kong’s rights when challenged by the People’s Republic of China. He promised in a speech to the forum that “there will be no change,” adding that in Beijing’s view, success in Hong Kong “will make China’s unity with Taiwan easier.”

Should violations of human rights occur in Hong Kong, they would pose a potentially serious problem for the Clinton administration, because the United States-Hong Kong Act, approved by Congress in 1992, affirms that “the human rights of the people of Hong Kong are of great importance to the United States and are directly relevant to United States interests in Hong Kong. . . . “ Should the president determine that “Hong Kong is not sufficiently autonomous” to enjoy any form of special treatment under United States laws--if, for example, human rights are violated--the act authorizes him to suspend such laws. This would, of course, be direct retaliation against China.

What most worries people in Hong Kong is that China will do what it pleases concerning human rights and freedoms, because Beijing no longer thinks that Washington is serious about its human-rights commitments.

If this is so, China will have signaled, through the Hong Kong “test,” that it will join the new world only on its own inflexible terms.