World/COVER

FAREWELL Britannia

Hong Kong faces an identity crisis as its handoveo China looms

CHRIS WOOD,LILLIAN SO February 3 1997
World/COVER

FAREWELL Britannia

Hong Kong faces an identity crisis as its handoveo China looms

CHRIS WOOD,LILLIAN SO February 3 1997

FAREWELL Britannia

World/COVER

Hong Kong faces an identity crisis as its handoveo China looms

CHRIS WOOD

LILLIAN SO

At one second past midnight on July 1, a century and a half of British rule will end in Hong Kong, and the territory will revert to Chinese sovereignty. Exactly where real power in the strategic 400-squaremile city-state will then lie is open to much speculation. But a good bet is an elegant chamber a I quarter-mile away from the soon-to-be-vacated l governor’s residence. The China Club is not I marked on any tourist map. Gleaming RollsRoyces and Mercedes-Benzes deliver wealthy members discreetly to a private entrance at the side of the landmark old Bank of China building. A private elevator serving only the 13th floor conveys them to a dining-room where caged birds fill the air with rippling song, and light gleams on starched linen, polished rosewood and silver chopsticks. Here, swaddled in the elegance of pre-revolutionary Shanghai, Hong Kong’s leading plutocrats meet in well-protected

The official residence of the governor of Hong Kong is a low colonial villa hidden behind bamboo hedges and whitewashed walls spiked with medieval-looking wrought iron. On most days, two police officers stand guard at the ornate formal gateway. Five months from now, there will be little left for them to protect. Late on June 30, the current tenant, Gov. Chris Patten, will leave his home of the past five years. The Union Jack will flutter down for the last time from its sturdy mast in the front yard. The staff will turn out the lights.

M Ï privacy to discuss business. And, increasing13 ly, to decide how politics will be played in 11 the territory.

p g How far those decisions reflect the wider d interests of Hong Kong’s 6.3 million resi-

dents, most of whom will never eat a meal

with silver chopsticks, is another matter entirely. “China has a very sincere desire to maintain the stability of Hong Kong,” believes Albert Cheng, the host of a popular Hong Kong radio call-in show. “And the first thing they want to do is keep the rich people happy. Unfortunately, a lot of people in Hong Kong are not rich and don’t agree with that. But we have no choice.”

That much is certainly true. Neither London nor Beijing has ever asked the people of Hong Kong to vote on their political future. If they had, opinion polls suggest they would have chosen H independence. But political self-determination is a value that has

little resonance for China, a nation intent on controlling all lands it lays claim to from Taiwan to Tibet. There are other values that

■ * may look different in an Eastern light than when viewed from H1 the West. Freedom of speech is one: Beijing has already set I g down sobering limits on what it will allow the media to publish

■ I after Hong Kong becomes a Special Administrative Region of * I China later this year. And civil liberties are another: last week, 1 y newly selected SAR chief executive Tung Chee-hwa raised conI! I troversy by endorsing China’s plans to repeal a series of British

■ * laws, including key parts of the territory’s Bill of Rights.

The adjustment awaiting Hong Kong, in fact, is as much psychological as it is legal or political. Since its establishment at British gunpoint in 1842, Hong Kong has prospered as an antechamber to empire, a place where useful ambiguities could be maintained for I the sake of trade and diplomacy. Peopled by * refugees from the decay of China and ad| venturers from the rest of the globe, it has ï seldom stopped making money long enough § to give much thought to its own identity or I culture. Now it must, as it seeks to preserve 5 its uniquely creative economic spark at the I same time as it rejoins China.

3 Under the principle, agreed to with Britain in 1984, of “one country, two systems,” China is committed to protect Hong Kong’s free-market economy for 50 years after 1997. Prosperity under British rule has brought Hong Kong billions of dollars in accumulated wealth and turned it into one of the most influential financial centres on earth. Crucially, it provides 60 per cent of all new investment in China. Beijing and big business would both like to see that role maintained—and more. Most analysts believe that if Hong Kong’s economy remains vigorous after July 1, it may be a model for the eventual reunification of China and Taiwan. Gaining back the breakaway island is the most cherished goal of Beijing’s foreign policy.

For Canada, which has declared 1997 the “Year of Asia Pacific” and will host an annual gathering of the region’s leaders in November in Vancouver, there are other reasons to watch events closely in the months ahead. Hong Kong is Canada’s 10th-ranking trading partner, contributing $460 million to the country’s trade surplus in 1995. Beyond that, the metropolis at the mouth of the Pearl River holds emotional ties for roughly 500,000 Canadians who have family roots there. Another estimated 110,000

Hong Kong residents carry Canadian passports. “Due to the size of our population here and the size of the Hong Kong population in Canada,” says Canadian commissioner to Hong Kong Garrett Lambert, “China acknowledges the legitimacy of our interests.”

But in "world political and financial capitals, there are nagging doubts. Will Beijing get it right? Does the Chinese leadership know what it is doing, attempting to manage a free market it barely understands? Might Beijing, through ineptitude rather than malice, kill off its golden goose?

ITie urgency of those doubts has heightened as preparations for Chinese rule have picked up pace in recent weeks. Shrugging off criticism that its methods were undemocratic, a Beijing-appointed committee in December named Shanghai-born shipping magnate Tung, 59, to replace Patten as chief executive of Hong Kong on July 1. The same committee, heavily weighted with representatives of Hong Kong’s business elite, later named 60 more individuals to a provisional Legislative Council that will replace one elected under British rules in 1995. The new body, opposed by Patten, pointedly excludes several popular current legislators whose liberal views have long been anathema to Beijing.

The crew-cut Tung has promised a stable transition, saying that he will keep most of the territory’s existing senior civil servants. And his goals for Hong Kong sound similar to those that Patten himself might espouse. Tung calls for “a stable, fair, democratic society with compassion, clear direction and common goals.” But Patten has sniped steadily at his successor, describing his selection as “a farce.” Undeterred, Tung responded in his first speech after the vote: “For more than a century, Hong Kong has been a colony. Now, we are finally masters of our own house.”

Despite concerns in other quarters, Tung’s optimism is widely shared among his peers in business. Two powerful indicators of undimmed confidence in the future are a sizzling stock exchange, whose Hang Seng share price index has reached record levels in recent weeks, and a bull market in real estate now fully recovered from a bearish year in 1995.

For those with cash to play in either superheated arena, “suddenly 1997 became a golden year instead of a crisis,” asserts radio host Cheng. “The arrow is up,” agrees Alvin Lee, executive director of the 900-member Canadian Chamber of Commerce in Hong Kong. “The mood is very positive.” Beijing is keen to get that message across. At the prompting of Lu Ping, director of the mainland’s Hong Kong and Macau Affairs Office,

21 of the territory’s richest tycoons contributed $18 million to endow the Better Hong Kong Foundation to promote the territory’s prospects overseas. Among them was Li Ka-shing, whose holdings include Vancouver’s Expo Lands development, Calgary-based Husky Oil and the largest individual stake in the Canadian Imperial Bank of Commerce. Says Leonie Ki, the foundation’s administrative secretary: “We believe China will keep Hong Kong as an international financial centre and as a window to listen to different views from all over the world.”

The central government is somewhat less interested in what Hong Kongers themselves think of their return to Chinese sovereignty. Of the territory’s 5.8 million ethnic Chinese, most are only a generation or two removed from searing memories of turmoil, persecution and grinding poverty in what is now Communist China. When people in Hong Kong’s teeming streets think of the mainland, wrote academics Nyaw Mee-kau and Li Si-ming in a report on Hong Kong affairs published last year by the Chinese University Press, they think of “corruption, human rights violations,

The greatest fear is that the mainland will bring corruption back to Hong Kong’

authoritarianism, brutal crimes and environmental degradation.”

Support for the territory’s return to China may be at a record high in public opinion surveys—but it is still under 40 per cent. Observed David Bottomley, managing director of Asian Commercial i Research Ltd.: “We still have 60 per cent ! of people who ideally would prefer Hong ; Kong not to be a part of China. The great: est fear,” the pollster adds, “is that the j mainland will bring corruption back to ! Hong Kong.” Echoed by many Hong Í Kong residents, the fear of corruption takes many forms, from the subtle advantages that good guanxi—a special relationship—may convey to competitors in a business deal, to the thousand small cuts inflicted by systemic graft, bribery and kickbacks.

Prompted by public outrage over particularly flagrant police corruption in the early 1970s, Hong Kong’s colonial administration created an independent agency to target the problem—and extended its authority to business as well as the public sector. Twenty-three years after its creation, the Independent Commission Against Corruption remains, despite some embarrassments, one of Hong Kong’s most respected agencies. ‘We have demolished syndicated corruption in Hong Kong,” boasts outgoing commissioner Michael Leung. “What we have now is pockets of corruption.” Still, Leung acknowledges, “we know that corruption is a serious problem in China. There might be spillover into Hong Kong after 1997. This concern is real.”

The “spillover” could well become a torrent. One particularly weak spot in Hong Kong’s defences against corruption lies just a few blocks from Leung’s downtown office, behind the white cement and narrow windows of what is currently the Prince of Wales Barracks. After July, it will become one of several garrisons in the territory for 10,000 troops of the People’s Liberation Army. At home on the mainland, the PLA has turned increasingly from military to business manoeuvres in recent years, operating everything from bicycle factories to prostitution and piracy rings. Beijing has instructed units earmarked for its Hong Kong garrison to stay clear of business. But how effective that admonition will be in the face of Hong Kong’s many temptations is open to question. Beijing, meanwhile, has yet to say how far local authorities may go to prosecute PLA troops who offend.

Leung’s own views are uncompromising: “Anybody in Hong Kong breaking the law on corruption will be charged and will be prosecuted. I don’t think any exception should be made for the PLA.”

But some critics question whether Hong Kong’s plutocrats have the resolve to keep up the fight against corruption. “Only poor people resist corruption,” suggests Cheng. “You talk to rich people, they love corruption. They think if they have money, corruption means they have special privileges.”

Meanwhile, a new element has been added to the climate of privilege in Hong Kong. Since the mid-1980s, dozens of China-owned companies—

often directed by children or other family members of influential political figures on the mainland—have established offices in Hong Kong. As business contacts between the territory and the rest of China accelerate after the handover, the number is expected to rise sharply, increasing the likelihood of shady mainland business practices infecting Hong Kong. The highly influential Larry Yung Chikin, chairman of giant CITIC Pacific—Beijing’s flagship presence in Hong Kong—called publicly for renewed vigilance against just such corruption. Undermining the force of his sentiments, however, were his and CITIC’s own favored connections: Yung is the son of Chinese Vice-President Rong Yiren, and his company plans to share a Hong Kong headquarters complex with the PLA after July.

In this, at least, Hong Kong’s public and the leadership in Beijing may find an affinity of interest. The central government regularly launches “strike hard” drives against corruption on its home ground. Authorities in neighboring Guangdong province, meanwhile, have turned increasingly to the ICAC for assistance in battling graft across the territory’s border. The police in the two jurisdictions have also co-operated closely to combat a wave of cross-border crime. After the handover, Hong Kong will remain closed off from the mainland by a heavily patrolled fence.

But that affinity of interests is unlikely to extend to freedom of speech and other civil liberties. There, Beijing has laid down expectations that are far from what Hong Kong is used to after decades of an unfettered press and open political debate. Last May, Hong Kong and Macau director Lu enthusiastically told CNN that Hong Kong’s radio, television and newspapers would be free to “say anything they like” after July. Then he quickly made an exception: “Of course, [advocating] two Chinas would not be allowed. Certainly not.” The same month, 40 Hong Kong journalists protested against Chinese attempts to limit their coverage of a committee working on the transfer of sovereignty. And in November, Foreign Minister Qian Qichen, after renewing assurances that Hong Kong would continue to have a free press, added: “I don’t regard creating rumors and making personal attacks as a type of press freedom.” During his campaign for office, Tung echoed Lu’s and Qian’s views, praising free speech while noting the need to make exceptions—such as advocating independence for Taiwan.

Other freedoms are also under attack. Last week, a mainland group working to bring Hong Kong’s laws into line with those of China and the Beijing-approved Basic Law—Hong Kong’s posthandover constitution—recommended stripping key guarantees from the Bill of Rights and other laws covering protest demonstrations, political parties and the privacy of personal data. Patten called the proposals “legal nonsense” and said Britain would officially

protest. Washington also expressed concern. Tung insisted the changes did not involve human rights but were merely a matter of weighing freedoms against responsibilities. “You need to find the right balance,” he said.

Still to come are further and potentially harsher limits on public debate. After more than a million people marched in Hong Kong to protest the regime’s actions at Tiananmen Square, Beijing insisted that provision for new measures against dissent be included in the Basic Law. As a result, Article 23 of the document requires Tung’s new administration to enact laws prohibiting “sedition” « and “subversion,” as well as any politic ical activity by foreigners on Hong g Kong soil. Sedition, notes Hong Kong 5 University law professor Nihal Jayaw| ickrama, is “speech intended to bring 5 the government into disrepute—exactly what an opposition is expected to

do.” The international expert in human rights adds that there is no offence called “subversion” in common law. In China, however, both charges are routinely used to prosecute dissidents like Wang Dan, a onetime Tiananmen Square activist, for making pamphlets, placards or videos critical of government. “Now,” says Jayawickrama, “they want to introduce that into Hong Kong.”

In fairness, political debate was hardly encouraged undermost of Britain’s rule either. Nor were elections. The one in 1995, which elected the current Legislative Council, was the first in which every member was elected and every eligible citizen got to cast a vote. And while only 400 members of Beijing’s elite selection committee cast ballots for Tung or one of his two rivals in the race for chief executive, that was still a wider poll than any of his predecessors had ever faced; all of them were appointed directly from London. “The process wasn’t a bad one,” says Canada’s Lambert,

“considering the process which it replaces.” Tung claims that his selection marked “the first step in Hong Kong’s democratization.” The timing of additional steps, he added, will be determined “according to the Basic Law and the actual situation” in Hong Kong. It is likely to be a slow march. Tung also restated his belief that “our society has become too politicized in recent years.”

Still, tolerance and creative politics will plainly be needed as Hong Kong searches for an accommodation between its Oxbridge and Confucian heritages. Driven by the need to define and protect what has sustained their commercial vitality and enviably free, mobile society, Hong Kong’s people are just beginning to ask, “Who are we?” says Tom Polin, a Hong Kong-born, U.S.-educated editor for the regional newsweekly Asiaweek. “Are we Hong Kongese? Are we Chinese? What kind of Chinese are we?” Nyaw and Li agreed in their report: “The people of Hong Kong are experiencing an identity crisis. Nationalistic feelings are on the rise, yet there is a strong sense that we, Hong Kongers, are not them, mainlanders.”

A related question is the place in Hong Kong’s future of 450,000 foreign residents. For some, including many Canadians, the transition promises at least one benefit previously denied to all except British expatriates: eligibility for the right of permanent abode in the territory. Others, especially people from the Indian subcontinent holding a British overseas passport, face continued uncertainty about their right to remain after July 1. Ethnic Chinese-Canadians originally from Hong Kong face difficult choices. They can claim an automatic right of abode in the territory if they are

settled there on June 30. After that, returnees will either have to give up their Canadian citizenship or opt to be treated as foreigners, gaining permanent residency after seven years. The thousands of Chinese-Canadians who have flooded airline and hotel reservation desks in order to be physically present in Hong Kong on June 30—believing that this would secure their right of abode—will be disappointed. Mere presence in the territory on the night of the handover will not be sufficient.

Many expatriates presently working in Hong Kong predict that their numbers will decline. One reason is the growing number of young, highly educated Hong Kong natives returning from foreign universities and snapping up jobs that once went only to English-speaking foreigners. Another is the elusive but persistent sense that Hong Kong is a closing window on a society that has sel-

dom wished to look outward. “I emphasize the worth of the Chinese value system,” Tung told the committee that elected him. He added that “we should also welcome foreigners—as tourists and investors.” He did not say “citizens.” In fact, Chinese values have always included a strong streak of xenophobia. In keeping with China’s constitution, Hong Kong citizenship after July 1 will be available only to those who are racially Chinese.

It is a small fact, and probably has little bearing on Hong Kong’s ability to pursue its ongoing obsession with making money. But in a broader sense, it distils what will be different about Hong Kong after the Union Jack is folded and put away for the last time. Beijing clearly has no objection to wealth: the denizens of the China Club are likely to grow just as rich under the People’s Republic as they did under the throne of Britain. But if they want to do it in the free and open Hong Kong they have enjoyed until now, they, as well as Tung Chee-hwa, will have to convince Beijing that those values are not exclusively “Western,” they can also be Chinese. That may be the biggest struggle of all. □

COVER

Still to come are potentially harsher limits on public debate

A LEASE ON LIFE

The territory of Hong Kong (rarely called a colony any more) consists of Hong Kong Island, the Kowloon Peninsula and the New Territories, each acquired separately by Britain but now fused together until at least 2047.

1842: China cedes Hong Kong Island to Britain after losing the First Opium War, fought when China tries to stop the illegal British trade in the drug.

1860: Britain gains the Kowloon Peninsula after winning the Second Opium War.

1898: Worried about security, Britain leases the rambling New Territories and outlying islands from China for 99 years.

1984: Recognizing that its nowbooming possession is not viable without the New Territories, Britain agrees to China’s demand for return of the whole of Hong Kong when the lease expires on July 1, 1997. Their Joint Declaration promises Hong Kong “a high degree of autonomy” for 50 years.

1996: Shipping tycoon Tung Chee-hwa is chosen as posthandover chief executive by a mainland-appointed committee.

1997: After a handover ceremony late on June 30, the British governor will sail from Hong Kong harbor on the royal yacht Britannia. As the Chinese flag rises at midnight, mainland troops will enter the new Hong Kong Special Administrative Region.

2000: Britain’s consultative role in transitional issues ends.

2007: First year under the posthandover constitution, the Basic Law, when the electoral system can be re-examined.

2047: End of the Joint Declaration’s 50-year period for capitalist Hong Kong to retain separate policies from the socialist mainland, under patriarch Deng Xiaoping’s “one country, two systems” formula.