BOOK
The future of Hong Kong: A provocative
China eams between 30 to 40 per cent foreign exchange here.
of
its
With investments and mutual interests such as these, why would Beijing want to do anything to undermine what the negotiators of the Sino-British Joint Declaration dubbed Hong Kong's "stability and prosperity"? The answer, of course, is simple: The Chinese leadership wouldn't. Equally, however, that isn't the point.
assessment Basic Law, Basic Questions: lhe Debate
Continues, edited by William McGurn, Review Publishing Company, ISBN 9627010-32-4,pp218
THE UNPREDICTABLE FACTOR:
Hong
Kong's "brain drain", and the larger nervous condition identified several years ago as "1997 jitters", exists not because no money will be made after the hand-over in nine years or because unemployment is Iikely to still the productive hands of Hong Kong's
ASK Hong Kong's secretary for general duties, Barrie Wiggham, or even the govemor, Sir David Wilson, why anyone should remain in the tenitory after 1997. The reply is an impressive list of statistics. Exports, rising, make this 400-squaremile area of earth the l3th-largest trading
workforce.
nation in the world. Per capita GDP, at US$6,761, is among the highest in Asia, leading some Westem European countries. Apart from the dominant British interests here, more than 900 American firms have invested more than US$6 billion, and Japan's 800 local firms have tripled their investment since 1981, making Hong Kong the seventhlargest investment market in the world for
Lau life an extension of govemment policy. Hicks and his fellow authors retum to this point again and again. Beijing's neurosis fo¡ control combined with Hong Kong's colonial political structure, which was never designed for either accountability or accessibility, together present the Hong Kong Special Administrative Region with a life-th¡eatenlng srtuahon.
bt
the Japanese.
FAILURE AND CONTRADICTIONS: ThC Basic Law, of course, was supposed to address this problem, and Hong Kong eagerly
seven per cent,
awaited its separation of powers, its designation of an independent judiciary, its
Clossing nears completion, four
checked and balanced division between Beijing and the SAR govemment. In the event, however, say Basic Law, Basíc' Questions essayists, Hong Kong got less than it had hoped for. Martin Lee, lawyer, Legislative Coun-
The economy is growing at a rate of with full employmenl. Kwai Chung overtook Rotterdam this year as the world's largest container poÍ. Freight volume, both sea and air, continues to accelerate, and the construction industry is booming as the HK$3 billion Eastem Harbour ahead
months
It exists because in Beijing's vision, nothing can operate beyond the control of its politics. The economy must, after all,
of schedule.
Are
these numbers symptomatic of un-
cefiainty, fragility or failing confidence? Is this sort of economy possible in a politi-
cally unstable environment? The numbers are the more persuasive when China's contribution to them is examined.
CHINA'S ROLE: In 1978, Hong Kong exported almost nothing to China, while
China supplied only 17 per cent
of
Hong Kong's imports. By 1987, however, Hong Kong drew 31 per cent of its imports from China, which, in turn, took 14.4 per cent of Hong Kong's shipments. Between 1979 and 1985, Hong Kong provided 60 per cent of China's foreign investment. The Chinese Intemational Trust and Investment Corporation owns a significant piece of Hong Kong's flag carrier, Cathay Pacific Airways. Mainland interests control l5 local banks and a huge variety of other business. More than 2,800 Chinese vessels use Hong Kong's port annually, almost 10 times the number 10 years ago. Two-waytrade is worth US$15 billion and
22 THE C0RRESPONDENT AUGUST
1
serve the state, and, in plain fact, when discussing numbers like the ones from both Wiggham and the govemor, both the "redeye disease" and greed become wildly unpredictable elements in the political equatlon. It is a potentially fatal enor to confuse free trade with freedom, as author and industrialist George Hicks points out in an essay titled "Red Capitalism", one of seven in
the book.
Hicks points to two of Asia's "four tigers", Singapore and Taiwan, as proof of Chinese economic success without liberal democracy. The difference between those two tigers and the People's Republic of China, however, is the classic difference between authoritarian and totalitarian govemment.
The former makes few demands on its citizens other than that they eschew politics. The latter, however, intrudes into every facet of both personal and professional life, making every act a tool of the state and every
98 8
cillor and Basic Law d¡after with
a seat on
the political-structure subcommittee. opens the book with a legalistic if erudite examination of the points he feels most erode the promised "high degree of autonomy". He combs the document for its flaws, finding enough significant failures and contradictions of British common law to conclude glumly that "the objectives of the Joint
Declaration are not likely to be implemented". John Walden, a former director of Home Affairs, devotes 13 pages to his fundamental concem that the Basic Law intends to preserve the current colonial system in all its parts, the better to serve undemocratic instincts.
''The intent
is plain enough,
"
he writes.
"It is to preserve the present imbalance of power whereby the civil service enjoys a virtual monopoly
of
executive decision-
making and policy formulation." Emily Lau, Hong Kong correspondent of the Far Easret'n Economic Review and long outspokenly suspicious of Beijing, suggests China's fundamental failure to grasp the essence of a free press points to a far larger
Ha
failure to grasp the fundamentals of the society in which that press exists. In fact, Lau almost need not bother arguing. Her case is framed, delivered, signed and sealed by the law drafters themselves in Chapter III, Article 39: "The rights and freedoms enjoyed by
Hong Kong residents shall not be restricted unless prescribed by law. But such restrictions shall not go beyond the necessity for the maintenance of national security, pulic order, pubìic safety, public heaìth, public morals and for the safeguarding of the rights and freedoms of other persons.
"
Frank Ching, former Beijing correspondent fo¡ lhe Wall Streel Journal, author of Ancestors. 900 years in the Life of a Chinese Family, and freelance journalist, examines
A pessimist's view of the future The confusion of the confusions -- The Great Money lllusion, by Marc Faber, Longman, ISBN o582 999049, pp 507.
MARC FABER, renowned in Hong Kong lor his pessimistic views on major international markets and known to a lesser extent for his brave, contrarian, bullish calls on such areas as Thailand, Chile, and, this year, the US dollar, explains the economic and psychological reasoning behind these conclusions in this witty, personal and erudite book. He uses a semi-diary, semi-historical-novel style of presentation to desc¡ibe his life in the financial world and the characters and momentous events which caused the often violent fluctuations in stock, bond andcommoditymarkets, and moulded his ideas on how these experiences can be used to forecast similar pattems in dilfering markets. Faber is, above all, a contra¡ian. He argues strongly for the chartist ideal which
Chang the ill-defined area of nationality. He discovers enormous cause for insecurity among holders of both British Dependent Territories Citizen and British National (Overseas) pass-
The Reverend Louis Ha, of Hong Kong's
Roman Catholic Diocese, member of the Basic Law Consultative Committee and edi-
ports.
Are they British? They possess the nationality, but no right of abode in the United Kingdom. China does not allow dual nationality. Are they, then, Chinese?
The Basic Law seems to indicate they are, but Ching cites historical and legal precedent to cast doubt on such an arbitrary
claim. China's attitude is, at best, ambigu-
tactic of conferrìng on British citizens,
ous, he says, and the
Chinese nationality
"whether they are holders of the British Dependent Terri tories Ci tizen passport or not " , is dubious.
tor of the weekly Kung Kao P¿.¡, worries that the Basic Law fails to safeguard hu-
man rights and the freedoms traditionally
glanted in Hong Kong through benign administration rather than legal stipulation, Confidence in Hong Kong has been eroded by Britain's Ieluctance to so stipulate before the handover. Ha also, however, makes the curious claim that the same Chapter III, Article 39 quoted by Lau as a clcar and present danger actually provides comfolt to civil libertarians by restrictin! the power of legislation of "the lights and freedoms enjoyed by Hong Kong residents". His essay is, in fact, the weakest selection here, treading a more conciliatory path
assumes that mass psychology influences major trends and turningpoints in marketsat
all times and thereby creates shoft- medium-
and long-term cycles both in price movements and economies. The chapter titles such as "Years of Madness", "The Casino Society" andthesub-title "Confusion of the Confusions", portray financial changes as the result of insufficiently strict crowd control -by governments and central banks on intemational investors and specuìators. Throughout these retrospective revelations, the author continually shows that the authorities can neither control these crowds nor the economies for which they are responsible. "Ireiterate my view that thosepeopÌe who claim that the US administration will prevent a recession from occurring in 1988 are expressing a level ofconfidence in government which cannot be supported by historical facts
.
!
"
This
is an easy book to read as an insight into world events over the past 40 years, and apersonalviewof the next fewdecades. It is
amply supplied with chans and diagrams to simplify the reasoning schematically and, not surprisingly, shows a deep understanding of
the forces which are
cific region
to the
likely to push the
Pa-
forefront ofworld econo-
mies in the future. Faber is stiÌl pessimistic on many markets and feels we are in the downtrend of a
long cycle
- "The
stock-markets are
clearly telling us that something stinks" but he also has "no doubt that...the entire Asian Pacific region will expand in the next 5
0 vears above-average
t2ikllïi);0,,,
AUGUST I988 THE CORRESPONDENT 23