Hong Kong's long-term future bright

By Gwynne Dyer

LONDON (JP): "Chiang Kai-shek was preparing to take Hong Kong," said Arthur May. "They had troops ready to march in. Once the flag was up, that stopped everything. No one moved." And so Hong Kong didn't fall to the Chinese Nationalists in 1945, and then to the Chinese Communists in 1949.

As a result, Hong Kongers missed the Great Leap Forward, and the great famine that followed, and the ten-year chaos of the Cultural Revolution, and all the other violent upheavals that have devastated the lives of mainland Chinese over the past fifty years. Instead, Hong Kong became "New York in Asia", a shimmering mirage of capitalist prosperity that looked like it had arrived in south China direct from Mars. And all because of Arthur May's flag.

May, an engineer in the British colonial service, was interned when the Japanese seized Hong Kong in 1941. Four years later, when Japan surrendered, May was still in a prison camp, and he had lost almost half his pre-war weight. He was a 97-pound (40- kg) weakling -- but he knew where to find a British flag.

It would be two weeks before British forces arrived in Hong Kong, and meanwhile the colony was up for grabs. Chinese Nationalist troops were nearby, eager to repossess Chinese territory and confident that the United States would not defend Britain's colonial rule in Hong Kong. So Arthur May slipped through the fence of the prison camp, evaded the demoralized Japanese guards, went to the home of his aged parents -- and retrieved the British flag he had hidden in a cushion.

Helped by a group of unarmed Indian troops who had also just freed themselves, May hoisted the flag at the top of The Peak, the highest point on Hong Kong island. Other British ex-prisoners then set up a "provisional" British authority in the old headquarters of the French Catholic missionaries -- and Chiang Kai-shek's troops stayed where they were. It's one thing to take a territory from the defeated Japanese, quite another to seize it from an ally.

On such small things history turns. Hong Kong stayed British for another half-century, and was transformed from a steamy, squalid seaport of half a million people to a city of 6.3 million people (98 percent Chinese) that has been described as "Blade Runner without the bad bits". But now the extra half-century Arthur May bought for the old Hong Kong is over.

At midnight today, the remaining population of the British empire will drop by 90 percent. When British Governor Chris Patten formally hands Hong Kong over to the representatives of the People's Republic of China, four centuries of British imperial history come to an end. Hardly anybody in Britain cares about that -- but they certainly care in Hong Kong, which is falling under the rule of the largest remaining totalitarian state on the planet.

What does the future hold for the six million citizens of the ultimate capitalist city? On the political front it's pretty clear: Britain's brief, last-minute attempt to bring a measure of democracy to the running of Hong Kong will be dismantled the moment the People's Liberation Army marches in. Beijing doesn't want anybody in the rest of China getting ideas above their station.

"(China) will have control of the executive, the legislature, and the judiciary," said Martin Lee, leader of the Democratic Party and one of Hong Kong's leading human rights advocates. "They will control the universities and the press...Press freedom will be the first casualty, and if there is no press freedom, no other freedom is safe."

Most Hong Kong Chinese are resigned to a future of being careful about what they say, and to whom. Already the colony's once-lively media have ceased all criticism of China. And if that's as bad as it gets, most people will put up with it. If there is another massacre on the scale of Tienanmen Square, of course, all bets are off, but few people expect to see that again.

Besides, around ten percent of Hong Kong's people have taken the precaution of acquiring some foreign citizenship (mostly in Canada, Australia, or the U.S.). Since all these countries make generous provision for family reunification in their immigration laws, probably around 20-25 percent of Hong Kongers could leave if they had to. That would account for the majority of those with the money and the language skills to leave at all.

But if Beijing's apparatus of repression is mostly kept outside Hong Kong's boundaries, life should change relatively little for most people in Hong Kong. At the moment, the dominant concern about Beijing's rule in Hong Kong is not the tyranny of the Communist state, but the monumental scale of its corruption.

According to a survey of business opinion late last year, China ranks first in all Asia for corruption, ahead of Vietnam, Indonesia, the Philippines, and India. Hong Kong ranks dead last, together with Japan and Singapore. Now these two places are being put together. Hong Kong's position as Asia's leading center for business and finance will not long survive if the mainlanders bring their habits with them.

"What we have in Hong Kong now is a culture of clean government," said Michael Leung, head of the Independent Commission on Corruption, in an interview last year. "I cannot see why anybody would wish to destroy that culture. That would only undermine the promise of 'one country two systems', and undermine the basic philosophy of keeping Hong Kong prosperous, useful and helpful to China."

Leung is whistling in the dark. The once austere communist cadres who run China and their businessmen cronies are corrupt precisely because they don't care about the party or the state. They will not be deterred by considerations of the national interest, and they are very greedy. And the problem is not just corruption: some people in power don't want Hong Kong to succeed.

"We have worked out a three-stage plan," boasted Wang Zhan, director of the Shanghai-based Development Research Center, in an interview early this year. In the first phase it would be Shanghai, not Hong Kong, that becomes China's national financial center by the year 2000. In the second phase, by 2005, Shanghai becomes Asia's regional financial hub. And by 2010, it becomes a global financial center -- leaving Hong Kong far behind.

Walk the streets of Shanghai, especially in the new Pudong financial district across the river from the old city center where 140 high-rise office buildings are going up at once, and you grasp the seriousness of Shanghai's ambition.

Add the fact that people with roots and or interests in Shanghai (the so-called 'Shanghai mafia') now form the largest identifiable group in the Politburo and upper ranks of the Communist Party, and you understand why even the richest people in Hong Kong are quietly worried about reunification.

For them, it isn't a question of civil liberties. (Enough money can usually buy you all the civil rights you want). It is rather a question of business climate. Shanghai's partisans in Beijing might deliberately let the rot spread in Hong Kong in order to cripple the competition, for everyone understands that there are two claimants to the position of China's commercial and financial capital, and only one can win.

If this pattern of official corruption at home and veiled hostility from Beijing does set in, then Hong Kong's near-term future is bleak. We won't see a mass exodus unless there is massacre in the streets, but the number of discouraged people quietly leaving Hong Kong each year could soon exceed the 40,000- 65,000 who have been leaving annually during the 90s.

First the bad news, but then the good news...which is that Hong Kong is bound to be all right in the long term. Whatever the short-term setbacks due to manipulations by the Shanghai gang, the region stretching 100 km. (70 miles) up the Pearl River from Hong Kong to Guangzhou (Canton) is bound to emerge as China's business and financial capital in the long run.

It's easy to be overwhelmed by the sheer scale of the immense building site that is Shanghai in 1997, but Shanghai is a normal metropolis on the scale of Moscow, Manila, or Chicago. It has around 9 million people now, and it's unlikely to grow even twice as big during the next few decades.

Hong Kong is the southern anchor of an as-yet-unnamed city on a different and hitherto unseen scale. The whole Pearl River delta, from Guangzhou at its apex to the coastal enclaves of Hong Kong and Macao at either side of the river's mouth, is becoming a single huge city serving the immense hinterland of south China. It will be a megalopolis of up to 40 million people, as many as the entire country of Spain (Poland, South Africa, South Korea) -- and Hong Kong will be its downtown.

Shanghai cannot compete with that no matter how much government help it gets. By the time the rest of China democratizes, the Hong Kong-Guangzhou axis will be firmly established as the world's biggest city. Hong Kong people may have some rough times in the next few years, but they just have to wait. In the end, they cannot lose.

Window A: At the moment, the dominant concern about Beijing's rule in Hong Kong is not the tyranny of the communist state, but the monumental scale of its corruption.