Business to run as usual in HK after June 30

By Hyginus Hardoyo

The Jakarta Post's Hyginus Hardoyo visited Hong Kong from Dec. 10 to Dec. 15, last year at the invitation of Cathay Pacific and JW Marriott Hotel Hong Kong. His reports are written in three articles on this page.

HONG KONG (JP): The prospects for Hong Kong's business sector will likely remain bright over the next few years, despite the transfer of the territory's sovereignty from Britain to China at the stroke of midnight on June 30 this year.

Local executives told The Jakarta Post they were optimistic that the handover, which will mark the end of Britain's 99-year lease on the territory, will not invoke significant changes in Hong Kong, which has a population of over six million.

The executives' confidence is completely in contrast to gloomy predictions made by people from other parts of the world, many of whom fear that the transfer of sovereignty will hurt Hong Kong.

Under a unique arrangement referred to as "One country, two systems", Hong Kong will become a Chinese special administrative region, which will be given a high degree of autonomy.

Stephen Wong, public relations department manager of the Hong Kong Tourist Association (HKTA), said under such an arrangement, Hong Kong's capitalist lifestyle will remain unchanged for 50 years after 1997.

Noted businessman Tung Chee-hwa, who is acceptable to both China and Hong Kong, was elected last month as the chief administrator for the territory, taking office after Beijing formally assumes control next July.

"We are fortunate to have Mr. Tung," Wong said. He said there would not be many changes, because Hong Kong will continue its own political, social and economic systems.

China will concentrate on manufacturing while Hong Kong will focus on services, including tourism, which now ranks second in terms of foreign exchange earnings after textiles and garments, he said.

China, for example, will boost the production of goods and Hong Kong, as a major transport and business hub, will trade them, he said.

"The year 1997 is only a comma for Hong Kong, not a full stop," he said, "and our focus is not on July, but after that month."

Tanya Reed, Cathay Pacific's corporate communication manager in Asia and Peachie Dieken, public relations manager of the JW Marriott Hotel Hong Kong, shared Wong's opinion.

Both Reed and Dieken believed that China will not ruin Hong Kong because the territory, with its favorable business environment -- ranging from low taxation, free trade, no exchange controls to an excellent infrastructure -- functions as a goose which lays golden eggs.

"The central government in Beijing will be responsible for defense and foreign affairs, though even in this area many international arrangements, including air services agreements, will be handled directly by Hong Kong, subject to Beijing's oversight," Reed said.

Hong Kong will have its own mini-constitution, which guarantees the preservation of the territory's capitalist system. The mini-constitution is called the Basic law, a codified version of the details in the Joint Declaration signed by Britain and China in 1984.

The emphasis is very much on preserving Hong Kong as it is. For example, Hong Kong will retain its own currency; the border controls between Hong Kong and the rest of China will remain and English will remain an official language, she said.

"Perhaps the key concept underlying the transfer is that the people of Hong Kong, wherever in the world they are from, will be free to stay, as will the multinational companies which many of them work for. In other words, business as usual," Reed said.

Wong further said in general, Hong Kong people are very optimistic about their future, with businesses running well and stocks on the local bourse growing steadily.

Many Hong Kong people who fled abroad during the Tiannanmen tragedy in 1989 are now coming back because they see a wide variety of opportunities in Hong Kong, he said.

Tourism

Based on such optimism, Wong projected tourist arrivals to jump to 15 million this year, from an estimated 11.6 million last year and 10.2 million in 1995.

Demand for hotel rooms is high, with some establishments already fully booked for June and July by those who are interested in witnessing the process of Hong Kong's sovereignty handover, he said.

Among the luxury hotels enjoying the windfall during the June to July period is the JW Marriott Hotel Hong Kong.

"Booking substantially jumps for that period," said Christ Tsoi, JW Marriott's marketing director.

However, a good selection of rooms in most categories is still available. By next June, there will be at least 34,300 rooms in 89 hotels, Wong said.

Most hotels are offering multiple-day packages, with minimum stays ranging mainly from three to seven nights.

Wong explained that inbound tourism contributed HK$75 billion (about US$9.71 billion) to Hong Kong's economy in 1995, as compared to HK$88 billion from textiles and garments.

HKTA data shows the territory's major source market in 1995 was China, with 2.2 million arrivals, up 15.4 percent over the previous year. Taking the number two spot was North Asia (Japan and South Korea), with two million visitors, an increase of 18.6 over 1994.

The third largest market was Taiwan with 1.8 million visitors (up 5.8 percent), followed by South and Southeast Asia with arrivals reaching 1.4 million (up 6.2 percent).

Other major markets that showed an increase included Europe, Africa and the Middle East with 1.2 million arrivals (up 0.4 percent), and Australia, New Zealand and the South Pacific with 336,000 visitors (up 4.2 percent).

Only the Americas showed a slight decrease of 3.9 percent for the whole year, with arrivals reaching just under one million at 986,000, according to the data.

Tourist arrivals from Indonesia alone fell by 1.6 percent, 136,059 in the January to September period last year from 138,228 in the corresponding period in 1995.

Wong also said to further promote Hong Kong as the most popular travel destination in Asia, HKTA is now concentrating on ASEAN countries, including Jakarta, Surabaya and Medan in Indonesia, Cebu in the Philippines, Chiang Mai in Thailand and Kuching in Malaysia.

"I hope not only Jakartans know about Hong Kong, but also people from other smaller cities," he said.

In Hong Kong, where the work ethic is a driving force, festivals and fairs are a welcome part of life. The arts and film festivals, sports galas and food fairs all liven the local scene.

Wong said this year's spotlight will include art and cultural and performance groups from a number of countries, including Russia.

"We invite overseas performance groups, including Indonesian groups, to come to Hong Kong. But we want really top class groups," he said.