Storm over Hong Kong

December 25, 1992

Britain agreed in 1984 to give Hong Kong to China in 1997. N one doubts it will do so. Britain and China are in a war of words over what it is that Britain will hand over, the Hong Kong of 1984 or a new one Britain is frantically creating.

China agreed to keep Hong Kong socially and economically as is for 50 years after the takeover. Does that give Britain the right to transform the place first? In debating that, Britain and China are strangling the goose that lays the golden eggs.

There was never anything democratic about Britain's colonial rule over Hong Kong. The people were not consulted. The governors were Sinologists from the Foreign Office. They deferred on most matters to Beijing. But when Britain agreed to hand the Hong Kong Chinese over, many got nervous and invested in places of escape, staying on with suitcases packed.

Meanwhile, foreign investment has flooded in. Hong Kong remains attractive as the window to China. Gray-market Chinese money comes out to speculate in Hong Kong real estate. All was cozy till this year, when Prime Minister John Major of Britain gave the governorship to a deserving politician.

Chris Patten won't wear the 19th century regalia, won't kowtow to China's emperors and tries to guarantee the personal freedom of the Hong Kong Chinese. One of his measures is to make the legislative council somewhat more democratic than it would otherwise have been by the 1995 election. Another is to build a giant airport, which represents a construction boom, a lot of debt and a depletion of cash in the strongbox before China gets it.

Beijing fulminates against all this. It swears no plane will be allowed in mainland airspace to land at the airport. Mr. Patten is going ahead. The legislative council approved money to start the airport. China says it will honor no Hong Kong contracts that it has not approved. A lot of Hong Kong Chinese cheer Mr. Patten while Western money panics, sending the Hong Kong stock market into a tailspin. At the risk of oversimplification: people stuck in Hong Kong find Mr. Patten their champion, while businessmen from elsewhere propitiate the gods in Beijing.

The British position sounds foolish, in that Britain will leave as scheduled no matter what. But the British bet is that the paranoid, insecure, neo-Maoist edge of Beijing will depart with the ancient Deng Xiaoping, well before 1997, leaving more flexible rulers who will not fear the Patten reforms. But for the time being, the Anglo-Sino shouting match is doing more to depress business in Hong Kong and South China than congressional threats to China's U.S. trading status ever could.

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