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World: Hong Kong Returns To China In Seven Days

  • Stuart Parrott

Hong Kong, 24 June 1997 (RFE/RL) -- One week from now, the sovereignty of Hong Kong is to be transferred to China after more than 150 years of British colonial rule.

For China, the handover at midnight on June 30 will mark the end to a humiliating era of European colonialism, and a glorious reunification with the motherland. For Britain, the handover of its last great colony will mark a final retreat from empire, with all its anachronisms and burdens.

For those most affected, the 6.3 million people of Hong Kong, the prospect of living under Beijing's sovereignty has prompted mixed feelings. Polls show that most people are positive about the change, but many fear that the future will bring curbs on civil liberties and general uncertainty.

Recent opinion surveys have shown that a majority of respondents were optimistic about Hong Kong's future economic performance but that less than 50 percent were optimistic about the political future. It is a view widely shared by journalists covering the handover, human rights activists and members of the international financial community: Hong Kong will be allowed to prosper economically, but will probably not enjoy the same range of civil freedoms that existed previously.

The handover will draw about 4,000 foreign dignitaries and 8,000 journalists from around the world for an event which is considered to have no historical precedents. The world is about to see incorporation of a freewheeling laissez-faire capitalist society into a nation where power is centralized and the leaders proclaim themselves to be communist. Moreover, although the territory may be small, the political and historical significance to China of the transfer of sovereignty is immense.

As Hong Kong prepares to mark its return to China with a two-day extravanza of fireworks, feasting and farewells, our correspondent reports on the issues surrounding the handover.

A Brief Overview

Hong Kong, at the mouth of the Pearl River in the South China Sea, is a major international financial, trading and business center. Despite its size of less than 1,100 square kilometers and its lack of natural resources (apart from one of the world's finest deep-water harbours), Hong Kong has achieved remarkable success in recent years.

It is the world's seventh largest trading economy. The Heritage Foundation, a prominent conservative think tank in the United States, says Hong Kong is the world's freest economy. The International Institute for Management Development describes it as the third most competitive economy after the United States and Singapore.

Its per capita Gross Domestic Product (GDP) by the end of this year should reach $207,800 Hong Kong ($26,000 U.S.), second only to Japan in Asia.

Hong Kong is the world's busiest container port, has the world's busiest international airport in terms of cargo, and is the fifth largest financial center in terms of the volume of external banking transations. Hong Kong is served by 525 banks and is the world's ninth largest exporter of services, ranging from accounting to telecommunications.

It has some of the lowest tax rates in the world: a maximum of 15 percent on salaries and 16.5 percent on corporate profits. The average annual growth rate in terms of total GDP in the 10 years to 1997 was almost 6 percent -- far higher than most European countries.

Hong Kong is one of the world's top exporters of garments, toys and games, electronic products, and light industrial products. Much of Hong Kong's success can be explained by the fact that it is a gateway to China. Hong Kong is China's biggest trading partner. It is also the largest external investor in China, accounting for about 60 percent of total foreign investment there by the end of 1996.

Much of this investment has been made by billionaire Hong Kong entrepreneurs, financiers and industrialists, who have prospered under the British colonial regime of low taxes, a stable legal regime and minimal bureaucratic obstructions. Investment by Chinese billionaires in diaspora has largely fueled the economic resurgence of China.

The United States in particular has a profound interest in what happens in Hong Kong. There are more than 1,100 U.S. companies with regional bases in Hong Kong. The U.S. Chamber of Commerce estimates that U.S.-based companies employ 10 percent of Hong Kong's 2.5 million workers.

Governing 'One Country, Two Systems'

Democratic activists argue that Chinese sovereignty will mean a loss of civil liberties, and the takeover of Hong Kong by Chinese bureaucrats. Chinese officials counter that they will live up to their commitments to maintaining Hong Kong's separate character.

For the moment, it is useful to look at what has been agreed by Beijing and London. There are two important documents which are meant to guarantee the continuity of the territory's stable way of life. These documents are the Sino-British Joint Declaration, signed in 1984, and the Basic Law of the Hong Kong Special Administration Region -- approved by the Chinese National People's Congress in 1990.

These documents rest on the cornerstone of the late Deng Xiaoping's pledge that Hong Kong will be allowed to retain its capitalist way of life and freedoms for at least 50 years after handover. The celebrated formula proposed by Deng was "one country, two systems."

At midnight on June 30, Hong Kong will become a Special Administrative Region of China. Beijing will take over from Britain responsibility for Hong Kong's defence and foreign affairs: Chinese troops will replace the British garrison.

The first contingent of People's Liberation Army troops will march in over the border several hours before midnight July 1. The symbols of sovereignty will change: the Hong Kong flag will be replaced by the Hong Kong Special Administrative Region flag. The Union Jack will disappear (as will Queen Elizabeth's crest on mailboxes and other British-era relics).

The Joint Declaration and the Basic Law guarantee the following:

Hong Kong will enjoy a high degree of autonomy.

No organ of the Chinese government may interfere in Hong Kong's affairs.

Hong Kong will be vested with executive, legislative and independent judicial power.

Hong Kong's government will be composed of Hong Kong inhabitants.

Social and economic systems will remain unchanged.

Rights and freedoms will continue to be protected by law.

Hong Kong will remain a free port and separate customs territory.

The Beijing Government will not levy taxes on Hong Kong.

The maintenance of public order will be the responsibility of Hong Kong, not the Central People's Government.

Hong Kong will be able to continue to establish economic relations with other countries. It will, for example, maintain its network of economic and trade offices in a number of world cities. Hong Kong will also formulate and implement its own monetary and exchange rate policy.

Areas Of Concern

The immediate cause for concern is China's appointment of a non-elected provisional legislature to replace Hong Kong's parliament. The parliament was democratically elected in 1995 in a vote encouraged by the outgoing colonial governor, former Conservative politician Chris Patten.

Patten has been sharply criticized by China for belatedly introducing democracy in Hong Kong after a century and a half of colonial rule when Hong Kong's people were denied a vote, and rule of the territory was conducted by non-elected colonial governors appointed by London.

Both British Prime Minister Tony Blair and U.S. Secretary of State Madeleine Albright have said they will boycott the July 1 investiture of the non-elected legislature -- although they'll attend the handover.

Another pressing cause for concern is the plan by the territory's China-appointed new administrator, Tung Chee-Hwa, to reintroduce repressive (but seldom-used) colonial-era legislation governing the right to free assembly and other freedoms. Tung confirmed this week that tighter laws on protests will take effect at midnight on June 30, despite the fact that the new laws will not be passed until hours later when the provisional legislature takes office.

One of the most prominent voices for the maintenance of civil liberties has been Martin Lee, a Hong Kong Chinese lawyer who leads the Democratic Party and who has repeatedly appealed to the world community to defend Hong Kong's freedoms.

Lee noted that in the Joint Declaration, Britain and China promised Hong Kong an elected legislature, an independent judiciary, the rule of law, personal freedom and a capitalist economy. He noted that these promises formed the basis for the British parliament's and the international communityts support for the pact.

Lee says that today, China's policy towards Hong Kong can be summarized in a single word: control. He said China is planning profound changes to roll back civil liberties laws, and elected institutions. He also said that China has intimidated Hong Kong's lively press, which has a degree of freedom paralleled in few places in Asia.

For their part both the British government and the United States have called on Beijing not to interfere with freedoms in Hong Kong.

U.S. Treasury Secretary Lawrence Summers said on a recent visit to Hong Kong: "My message is simple. There is no firewall between economic freedom and freedom in its many other dimensions."

Summers said: "If the two systems are going to merge, it is in everyone's interest that China become more like Hong Kong than the other way around."

Other critics say that the political climate in China today is more repressive than in 1984 -- when terms were set for Hong Kong's handover -- and London's agreement with Beijing has given Hong Kong residents little real protection.

Human rights activisits cite the following additional concerns:

The Communist Party

Under Deng Xiaoping's "one country, two systems" model, the territory will not be run by the communist party. But many observers believe it will be hard to keep the party out of Hong Kong's affairs.

Press Freedom

Amnesty International has said Hong Kong's economic success depends on the free and open flow of information. But Amnesty says: "This will be lost if the press is not allowed to freely engage in debate and legitimate scrutiny of the government."

The respected "Asia Times" newspaper said in a recent editorial: "Press freedom is guaranteed by the 1984 Sino-British Joint Declaration and the 1990 Basic Law, but such guarantees are written into the constitutions of many nations when in reality they exist hardly at all. Looking at the Hong Kong media, what disturbs us is that there are already troubling signs that such freedoms will be slowly eroded and delimited."

The legal system

The critical issue is whether the system of law and impartial justice that Britain has bequeathed to the colony, as well as the autonomy of the judiciary, will survive under China's sovereignty. One reason for Hong Kong's economic success and economic stability are said to be the rule of law upheld by an independent judiciary. These principles have been in place even though the territory for 156 years was under the control of a colonial regime that did not admit, until recently, a democratic vote to its citizens.

Independence of the civil service

Top civil servant Anson Chan has indicated anxiety over the future neutrality of the civil service. Many of Tung Chee-Hwa's close advisors are business people and fears have been expressed that they may undermine the role of senior civil servants like Chan. Another serious concern is whether the civil service will remain immune to bribery. Recent polls have shown sharp concern about corruption, seen as endemic in China, transferring to Hong Kong as well and sapping its vitality.