Hong Kong: Just How Much Democracy will China Tolerate?

December 13, 1992|By TED CHAN

Hong Kong, a borrowed place on borrowed time, is trying to change course in the 11th hour.

The world financial center has only 4 1/2 years to create a representative government that is secure enough to handle the head winds of post-British rule.

But the Chinese Communists hold the cards, and they are in no mood to recut the deck to accommodate the democratic proposals of new Hong Kong Governor Chris Patten. Their trump card is abrogation of all agreements protecting the British colony's future -- and the threat of that happening has shaken the colony's financial markets and intensified public debate over his approach.

The optimists can only hope that China is playing its well-worn game of intimidation to the brink followed by negotiation.

They believe that Beijing's economic self-interest won't let the // colony's stock market nose dive too far or allow potential investors to be scared away. After all, China is the third-biggest foreign direct investor in Hong Kong manufacturing (behind the United States and Britain). And China's holdings are listed on the Hong Kong stock market.

Historically, the British have ruled over Hong Kong with a delicate touch, turning one of the world's best natural harbors into a thriving bastion of capitalism on the southern belly of China.

But Mr. Patten is not the mild-mannered sinologist that London has dispatched to its teeming outpost in recent decades. His reputation is that of a brass-knuckled politician, well-schooled in the art of political fisticuffs.

His apparent assignment is to push through a plan to make 40 seats on Hong Kong's Legislative Council electable by popular vote, seen as a major step toward creating democratic institutions in the port-city before the 1997 takeover.

The council should vote on the proposal by the spring. That is assuming Mr. Patten does not buckle under pressure by financial moguls to withdraw his proposal and mollify China.

But China has time to wait. Hong Kong's markets are remarkably resilient. They will recover in due time. Besides, it is evident that the sinking financial markets undermine support for Mr. Patten among the pragmatic moguls of Hong Kong's economy. Their influence is formidable.

What really seems to be at stake for China is national sovereignty and political control. And when those are threatened, the octogenarians who rule China stiffen.

They grew up in the shadows of British, German, Russian, French and Portuguese colonialism and fought against the invading Japanese. After foreign presence was routed, Mao Tse-tung founded the People's Republic in 1949, declaring that "China has stood up." Regaining "lost territories" -- Hong Kong, Taiwan and Macao -- became a matter of national honor.

Britain acquired Hong Kong in three treaties: Hong Kong Island in 1842; the Kowloon Peninsula just across the harbor from the Hong Kong Island in 1860; and the New Territories -- the China mainland area adjacent to Kowloon and more than 200 adjacent islands -- in 1898.

In theory, Britain holds Hong Kong Island and the Kowloon Peninsula in perpetuity. Only the New Territories -- the China mainland adjacent to Kowloon and hundreds of largely uninhabitable islands -- are to revert to China in 1997. But there is no question that Hong Kong Island and the Kowloon Peninsula -- the financial, commercial and residential hubs -- could exist by themselves.

In the early 1980s, when long-term Hong Kong investors sought China's intentions, paramount leader Deng Xiaoping didn't hesitate. He wanted Hong Kong back.

To the Chinese Communists, all the treaties on Hong Kong are "unequal" because China, crippled with natural disasters, an inept government and backward military, was on its knees. It was time to redress history. So what if the British had turned barren rock into a world financial center? So what if nearly all of Hong Kong's people wanted the status quo to continue?

The talks on the takeover were held in Beijing in closed, biweekly meetings near the Peking Hotel. Hong Kong's stock market went on a roller coaster, hanging on every nod, handshake and nuance.

Britain emphasized that Hong Kong was too valuable economically to China for a sudden change. Both sides realized that if direct Communist rule was scheduled for 1997, investments in Hong Kong would dry up through the rest of the 1980s and into the 1990s. London's argument prevailed.

The 1984 Sino-British Joint Declaration allowed Hong Kong a 50-year reprieve from direct Communist rule. The city would be a special administrative region within China -- creating a "One China, Two Systems" formula -- and Beijing would not send officials to rule over Hong Kong.

At the time, the British gave the impression that Hong Kong would have a largely democratic administration in place well before 1997. It would be the type of action that Britain had performed in the twilight years of its other colonies in Asia and Africa, a sort of peace offering for all the decades of exploitation.

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