HK ready for China's takeover

HK ready for China's takeover

In the eighth of his series on Hong Kong's transition from
British to Chinese sovereignty, our Asia correspondent Harvey
Stockwin looks at some of the varied, less somber reactions to
the changeover.

HONG KONG (JP): As Hong Kong prepares to become again, and
forever, part of China, the Great Fixation on June 30, 1997 in
this complex international city is finally coming to a head.

There is massive hype but little if any hysteria.

True as always to the commercial pragmatism which lies at the
heart of its astonishing growth, Hong Kong is being Hong Kong --
trying very hard to make a profit out of the handover. Caps,
watches, shirts, T-shirts, cups, hats, playing cards, postcards,
plus all manner of other goods are emblazoned with the June 30-
July 1, 1997 logos.

A rumor went around that using the flag of the People's
Republic of China on commercial products would soon be an offense
against the law. No problem. China's flag remains in place on
many articles until midnight on Monday, when the plastic transfer
of China's flag will be peeled off, just in case.

My personal prize for the biggest commercial scam in the
consumer goods category goes to the gweilo (foreign devil) who
has manufactured cans of "colonial air". The can is empty but the
label assures the buyer that if you inhale the contents, you will
acquire a stiff upper lip and quickly become arrogant.

Beyond the rank commercialism, Hong Kong is a mixture of
circus, casino and party. In varying degrees, it always is -- but
now the tendency is pronounced.

The circus aspect of the handover got going rather late -- a
reflection, perhaps, that feeling joyous was considered an
obligation rather than a duty. Too late it was realized that,
since Hong Kong is an international city, it ought to attract
some top personalities into the handover ring. World-famous
tenors Luciano Pavarotti and Placido Domingo were belatedly
sounded out, but it was too late. Of course, they are booked
years in advance.

I am told that Hong Kong is attracting some leading pop stars,
both Chinese and Western, but since their world of weird and
irritating sounds is totally alien to this correspondent, I
cannot tell you who. But the mixed up Western-but-Chinese
identity of Hong Kong was superbly illustrated by a poster that
has been littering the walls near where I live. It hails the
greatest pop concert in Hong Kong's and maybe the world's
history.

In the middle of the poster there is a picture of a slightly
younger Deng Xiaoping, China's former leader. Deng is waving his
hand grandly much in the manner of a ringmaster in control of the
show, with his hand hovering near the name of a British pop star
Boy George. Almost without any doubt the name Boy George meant as
little to Deng as it means to me.

The casino-like countenance of Hong Kong has been frequently
on view of late -- and not just in the Stock Exchange. First
there were, as carefully reported in the Times of India, the
stampedes after stamps, as postage stamps bearing the head of
Queen Elizabeth II quickly became an item of assumed stored
value, for all those feeling the compulsion to try and get rich
quickly. I am told that in China itself Queen Elizabeth II stamps
have been anxiously sought as a colonial memento. But whether all
those Hongkongers, who laid out thousands of dollars buying the
stamps in anticipation of a bull market, actually made a
financial killing remains to be seen.

Then there were the record 110,000 persons that turned up
recently for the last day of the races for this season. The
jackpot for the triple trio betting selection had not been paid
out for weeks, and so had accrued to an unusual size. If someone
guessed the winners for three selected races on the last day they
stood to gain a little less than US 100 million. As it happened,
no one made the triple selection. The jackpot could not be held
over and so had to be awarded. A couple of hundred persons who
guessed right for two of the three races all became millionaires
overnight -- even if they had only made a hundred dollar bet.

But the greatest Hong Kong casino right now is the Stock
Market itself. When the last British Governor Chris Patten
arrived in 1992 the HKSE index stood at 5,200. Today it stands at
a shade under a record high of 15,200. Patten, who modestly
declines to claim credit for this growth, can safely assert that
no other governor of this or any other colony had presided over
such a bull run.

Mind you, rumor has it that China, currently flush with
foreign funds, and desperately anxious to avoid the loss of face
brought about by a sudden drop in the index, has been quietly
backing the market in advance of the handover. The get-rich mania
has been most clearly on view in the trading of so-called "red-
chips". These are the shares of recently listed companies in
China.

In this, the get-rich mania in both China and Hong Kong again
comes more clearly into view. When one China firm called Beijing
Enterprises put its shares on the market recently, the shares
were oversubscribed by more than 1,200 times. A vast sum, between
HK$200 billion and HK$300 billion, was briefly tied up in the
subscription -- so much, that had any financial crisis struck at
the same time, the whole banking system would have been in
jeopardy. No one seemed to worry about this. No one seemed to
worry about the questionable aspects of these share offerings.

The prevailing ethos is -- Let the good times roll, until, of
course, there is an inevitable "correction". But right now part
of the Hong Kong mood is that many players in the casino have
kidded themselves, nor for the first or last time, that the HKSE
index will go on rising forever.

Of course, the ultra-optimistic business mood is backed up by
many "opinion polls" which claim, in varying degrees, that a
clear majority of Hong Kong people are "confident" or "very
confident" about the future. Since many of these polls are backed
by businessmen whose motives I distrust, or by academics whose
perspicacity I doubt, the results remind me that East Asians are
exceedingly prone to tell pollsters what they think the pollsters
want to hear.

But the more discerning polls by academics, who stay around
long enough to check their own findings, clearly reveal the
doubts and the anxieties that lurk just below the surface.

One indication of this is that the most determined efforts at
making the handover into a party appear to be by the young
foreigners (mostly British and American) in the yuppie-dominated
Lan Kwai Fong area of Hong Kong island near my office. They are
helped by the fact that Hong Kong is currently enjoying a five-
or six-day holiday -- June 28, 29, 30, July 1 and 2, and for many
businesses July 3 too. They intend to make the most of it.

But as I move around other districts of Hong Kong the partying
seems less obvious among Hong Kong Chinese. Indications earlier
this year, for example, were that the China-led united front in
Hong Kong was having a little difficulty organizing the required
degree of enthusiasm for the Big Event, and the resumption of
Chinese sovereignty.

Two events are pretty certain to give everyone the party
spirit even if an element of Sino-British rivalry has crept into
the show.

On the last day of British sovereignty, June 30, there will be
a 20-minute fireworks display in Hong Kong harbor, which promises
to be the best ever.

On the first day of Chinese sovereignty, July 1, there will be
an hour long fireworks display worth about US$ 14 million, funded
by the businessmen who are already making it big in China's
mythical market.

China's rule over Hong Kong is certain to start with a bang.

Window A: Of course, the ultra-optimistic business mood is backed up by
many "opinion polls" which claim, in varying degrees, that a
clear majority of Hong Kong people are "confident" or "very
confident" about the future.