Business booming as usual in Hong Kong

Date: 09/10/1997

By Thomas Klau

THREE months after the UK handed control back to China, the watchword in Hong Kong seems to be very much 'business as usual'.

And in capitalist Hong Kong, that means the boom goes on. With economic growth projected to accelerate from an already impressive 4.9&percent; last year to 5.5&percent; in 1997, Hong Kong remains a strikingly modern city where towering banks dominate the skyline, gleaming Rolls Royces purr along congested streets and the pursuit of happiness seems largely defined as that of money.

Meanwhile, the city's new masters in Beijing seem intent on keeping their presence as discreet as possible. Visitors expecting red flags, large Mao or Deng portraits or other traditional paraphernalia of the world's largest remaining Communist dictatorship will be disappointed.

Outwardly, there is little to proclaim China's mastery over the territory.

British street names have remained unchanged, and fears that the take-over would be followed by an immediate clamp-down on the media or opposition groups have not been realised - at least so far.

And while China's People's Army now occupies the Prince of Wales building, its name is still the same and soldiers reportedly make only rare public appearances.

The US-based Committee to Protect Journalists has acknowledged that even the most critical newspapers continue to be published without “overt reprisals”. However, the committee also points to an increasing tendency towards self-censorship.

A crucial test for the degree of free speech and democracy China will be prepared to allow will come in May next year, when 2 million voters will be called upon to elect the first parliament under Chinese rule.

The former colony's apparent political stability was a crucial factor in shielding Hong Kong from the dramatic currency crisis that engulfed many of its neighbours in South East Asia.

While Thailand and Malaysia's currencies crashed - with dramatic short-term consequences for economic activity and employment - Hong Kong became a safe haven for investors eager to escape the turmoil next door.

The forthcoming visit to Brussels by Hong-Kong's Chief Executive, Tung Chee-Hwa, on 20 October will give the EU the occasion to map out a route for the future development of its relationship with Hong Kong - one of the Union's most important trading partners in South East Asia.

The European Commission is keen to sound Tung out about the prospects for concluding a cooperation accord, the possible scope of which is still under discussion in Brussels itself.

“We want relations to remain strong and, if possible, to intensify them,” said a Commission official. “Tung's visit will be an occasion to find out where we stand, and talk about where we want to go.”

One sticking point in the negotiations might be the EU's insistence that all cooperation accords should now contain a human rights clause - a condition which might trigger opposition from Beijing.

Sources say that it is unclear to what extent China would demand to be openly involved in the talks on such a deal, which might well become a test case for the degree of Hong Kong's formal autonomy.

“Our main aim would be to reinforce our trade links”, explained a Commission official.

Last year, the EU's trade surplus with the territory rose steeply to an impressive 10.2 billion ecu, up from 0.4 billion ecu in 1995.

But some of this increase may have been due to Hong Kong's role as a transit point for trade with China. This makes it difficult to establish exactly how much of the trade was with the territory itself.

The problem is made worse by the fact that statistical instruments used in Hong Kong, in China and in the EU differ significantly, adding question marks over the data's reliability.