Threats to Hong Kong

September 09, 1994

Hong Kong was a British colony without an elected government in 1984 when Britain agreed in cede it to China in 1997, in return for China's respecting its institutions. Capitalism and personal rights were part of the deal. Democratic reforms promulgated since by the current British governor, Tory politician Chris Patten, were not.

So the vote of China's Standing Committee of the National People's Congress -- to disband in 1997 the Hong Kong legislature that will be wholly elected for the first time next year -- does not violate the letter of the 1984 accord. Britain has no stomach for holding onto Hong Kong after June 30, 1997. Nothing is going to stop China's takeover of the colony, where Chinese banking and political influence are already strong.

That said, the Beijing bellicosity is a blow to confidence, and will likely send more Hong Kong entrepreneurs scurrying to third countries over the next three years. It undermines the notion that Beijing will really leave Hong Kong and its people alone to prosper, as promised.

China will not need Hong Kong's immense financial services quite as much in 1997 as seemed certain in 1984. That is because the growth of China's indigenous capitalism has outstripped all expectations. The liberation and expansion of suppressed Shanghai, to resume its 1920s role as importer of Western capitalism, will incubate on the mainland more of the services for which Hong Kong has been indispensable.

The action in Beijing was politically counter-productive for another reason. If Hong Kong has been called the sprat to catch a mackerel, that larger fish is Taiwan. Any chance of bringing the booming, prosperous Chinese island state peaceably into the single China that both Beijing and Taipei pretend exists rests on the example of Hong Kong. Only if faith is kept with Hong Kong would Taiwan permit itself a closer relationship with -- or within -- China.

Political change in China itself, brought on by the inexorable economic revolution that is washing away communism, may make all this moot by 1997. The Communist monopoly on power is becoming illusory. It probably cannot long survive the passing of senior leader Deng Xiaoping, who has just turned 90.

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