Hong Kong's crisis could be China's

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See the Sol Sanders Archive By Sol Sanders SPECIAL TO WORLD TRIBUNE.COM

Hong Kong, with little notice from a world beset with crises, is passing through a decision. The formal issue is Special Administrative Chief Executive Tung Chee HwaÕs effort to push through an amendment to Hong KongÕs Basic Law which returned the former British colony to China six years ago. In theory, it is intended to increase ÒsecurityÓ. But HongKongers fear it would gut the ÒOne Country, Two SystemsÓ agreement which was to keep its 7-million people beyond the reach of repression governing the Mainland and introduce full elected government by 2007.

HongKongers, a hardy lot, most either escapees from the old Maoist China and its horrors, or their immediate descendants, have always been said to be nonpolitical. But on July 1st a modest demonstration turned into a mammoth protest, an expected 100,000 swelled to more than half a million. Nothing had been seen like it since the protests against the Beijing Tien Am Men massacres in 1989.

For visitors over the years, Hong Kong has always been Òa many splendoured thingÓ, a romantic, exciting, stimulating place. For some Western ideologues, it was even considered the example of what capitalism could do given a free hand from regulation. In truth, it was an entrepot, a product then ø and now ø of the always special conditions in its Chinese hinterland. Entrepots, especially in Asia, in their nature profit from the difficulties and stupidities of their neighbors ø as does that other example, Singapore.

During the long years of Chinese Communist economic autarkical [at best] economics, and the catastrophes of The Great Leap Forward and The Great Cultural Revolution ø MaoÕs efforts to defy the laws of common sense -- Hong Kong was an oasis. Its manufacturing base profited from the U.S. embargo against Communist China, then as the gateway when China began to develop. Its controls on immigration gave it an eager, steady, cheap labor force. The governmentÕs land sales funded the infrastructure. Dedicated British civil servants inculcated public service among their Chinese acolytes who gradually took over, even set up an anti-corruption organization to try to keep the petty thievery of lower officials [and higher ones on occasion] under control. There was even a glacial effort to introduce elected government ø alas! nowhere near complete when the accession to China came. It was the British EmpireÕs finest hour.

There was always the faint hope Hong Kong, which had become one of the worldÕs most important financial centers, would be the tail wagging the China dog. But that wasnÕt to be. It was no accident, as the Soviet Communists used to say, that the Shanghai Clique which has had so much to do with running Beijing, did everything they could to return their own metropolis to its preeminent pre-World War II position as the financial capital of East Asia.

Then Hong Kong was hit by one disaster after another. First there was the 1997 East Asian financial crisis, which although it spared China, pricked the bubble of what had seemed unlimited grown in Southeast Asia, Taiwan and Korea with Hong Kong as its hub. Then there was decline in manufacturing and property values. Then the SARS panepidemic.

But the biggest disaster was Tung, himself. In his own mediocre way, this scion of a self-made Hong Kong shipping tycoon, was constantly falling all over himself to do BeijingÕs bidding. In an effort to stem the price fall in the Hong Kong market, he dipped into the reserves in a feeble attempt to bail out the local stock market ø a no-no in the laissez faire lexicon which had dictated the city-stateÕs success. The mishandling of the SARS problem was another prime example; covering up was for him as it was early on in Beijing his principle concern. Tung and his masters in Beijing have tried to paper over its growing unemployment with a free trade agreement with the Mainland. Few in Hong Kong believe it is more than irrelevant, at best Hong Kong is rapidly turning into a disaster.

In fact, the July 1st demonstration ø which almost caught ChinaÕs new Prime Minister Wen before he could get out of town ø was a massive rejection by the HongKongers of the present administration. Tung & Co. have backed down a bit, made some concessions on the legislation which they can ram through the legislative body with its majority of nonelected officials. [Even some of the generally Òpro-BeijingÓ members have been backing away.] But now what is at issue is Tung, himself, and his administration.

BeijingÕs vaunted new Fourth Generation leadership has a dilemma: ÒFixingÓ Hong Kong, means getting rid of Tung, a loss of face. But continuing a failing administration where China has the most ÒtransparencyÓ would give the lie to any claims that there is a new reform effort at work on ChinaÕs many problems among the new Fourth Generation of leadership.