HK's spirit of enterprise continue

Pana Janviroj, The Nation, Asia News Network, Bangkok

A lot has been happening in Hong Kong, the crossroads of East Asia. The special administration region, despite being hit hard by the SARS virus, can never be easily dismissed as a vibrant economy, and as a democratic outpost in this part of the world.

First, the good news -- for the people of Hong Kong, but also for the region. Chief Executive Tung Chee-hwa has announced that his government had decided to withdraw the unpopular anti- subversion bill. The bill would have curbed freedom of speech and Hong Kong's lively free press.

The official reason was that it was better for the Hong Kong community to focus its efforts on revitalizing the economy following the Severe Acute Respiratory Syndrome rather than to be polarized by a bill.

Beijing had supported the bill because it believes that such a tough security law would help to bridge the administrative and ideological gap between the "one country, two systems" of government. But the bill was bitterly opposed by many residents of Hong Kong and half a million of them staged an unprecedented street protest.

The anti-subversion bill had been closely watched by all countries in the region as well as many throughout the democratic world because it had the power to influence the thinking of regional politicians and democracies as China continues its inexorable rise -- politically, economically and militarily.

While it was not an outright victory for the people, since Tung continues to insist on his government's mandate to pass a security law, the episode does shed light on the thinking of policymakers in Beijing -- in that they can display flexibility when they want to and are also prepared to listen to the voices of Hong Kong residents. And they know where Hong Kong's priorities lie.

The other good news for Hong Kong is that it is continuing to invest for the long term. While it is struggling like Singapore to regain its lost momentum, Hong Kong has announced a US$3.1 billion redevelopment project aimed at transforming itself into Asia's cultural hub. The huge project on a 45 hectare site on the west Kowloon peninsula is scheduled for completion in 2012.

The special administrative region was earlier chosen for a Disney theme park. The latest venture will consolidate the former British colony as a place to visit by the growing middle classes in the mainland China, India and Southeast Asia.

Here, Hong Kong is inviting the private sector to build the complex because they would be able to operate it more efficiently and it would minimize the burden on the government's finances.

Not such good news, however, is a report that Beijing has not responded positively to promoting the use of the renminbi in Hong Kong. This idea was intended to integrate further the flagging economy with mainland China.

The proposal has come at a time when wealthy mainland business people are being encouraged and helped to step up their investments in Hong Kong's property, light manufacturing and services sectors -- giving the special administrative region a big boost in the wake of the SARS impact. Some quarters suggest that Beijing's policymakers are not totally convinced of this offshore renminbi scheme as it may give Hong Kong another edge to compete with Shanghai.

The currency issue is unlikely to go away now that there is international pressure for China to loosen the renminbi exchange system. Hong Kong operates a unique currency board with the Hong Kong dollar fixed to the US dollar.

As confidence returns to Hong Kong, more visitors are traveling to this East Asian gateway economy. For Thais, it remains one of the most visited places on earth.