Manifestly, and however much they look alike, the people of Hong Kong
are not only different from their presumed compatriots across the
border, but are alienated from China. Once, in Shanghai, I fell into
conversation with two men whose features were wholly Chinese,
although their clothing, their confident demeanor, their command of
English, and their obvious prosperity set them apart. Both were from
Hong Kong. I realized after exchanging a few sentences that they were
referring to the Shanghailanders as "they" and to the three of us
from Hong Kong as "we", regardless of my not being Chinese at all.
In an oddly upside-down way, I recently encountered similar scorn.
The common language of Hong Kong is a Chinese dialect called
Cantonese. To my shame my Cantonese is poor despite all the time I've
spent in Hong Kong. I therefore spoke to a non-English speaking
salesman in Mandarin, which is known as putunghua, the common
language of all China. He retorted in Cantonese, "Don't talk that
language to me. I'm not Chinese. I'm a Hong Kong man!"
The alienation, all but antagonism, between mainlanders and Hong Kong
people has been aggravated rather than allayed by the Colony's
transformation into an integral part of the People's Republic.
Immigration policy is one reason. The border between the New
Territories and Guangdong Province was for five decades closely
guarded to keep out "illegal immigrants", that is, refugees from
China. Yet many slipped across, in part because the heart of the
largely British-officered Hong Kong Police was not really in the
assignment. Today the border is more closely watched, and much less
permeable. Beijing does not want an influx of mainlanders seeking a
better living standard and greater freedom in Hong Kong. Above all,
Beijing does not want large numbers of mainlanders visiting Hong Kong
and returning to compare conditions there with those at home.
Before the transfer, tourists and businessmen from China were readily
distinguishable from the locals. Their clothing was shabby and badly
cut, and their complexions were rather muddy. They also tended to be
uninhibited, released, albeit temporarily, from harsh discipline at
home. Even in free, easy, and very rude Hong Kong, the mainlanders
were notably uncouth.
They still are. Looking for a particular trinket in one of the many
gold shops that line Queens Road Central, I was jostled by twenty or
so men and women who--even had they not been wearing plastic tags
reading Guangdong Province Tour Group--were obviously mainlanders by
their clothes, complexions, and behavior. All could afford the small
solid gold objects they were eagerly pricing--and buying. Gold does
not change in value as abruptly as fundamental situations can change
in unstable China.
The group was shepherded by three older men wearing dark blue,
high-buttoned Mao Tse-tung tunics, which are rarely seen even in
China nowadays. When I began talking with a young man, one of those
shepherds gently shouldered me aside. He was clearly not worried
about my learning more about conditions in China; I can go to
Guangdong and talk freely with most people any day. Although the
authorities there would like to stop such spontaneous conversations,
they cannot do so entirely without affecting trade, investment, and
tourism, all big money spinners. Rather, it appeared, the man in the
Mao suit was anxious to prevent his charges from learning more about
Hong Kong. Still, he could not keep them from seeing prosperity
unrivaled anywhere in mainland China.
Despite recession, Hong Kong glitters with riches and throbs with
commerce compared even with go-ahead Shanghai. But Hong Kong is now
suffering a recession that is sliding fast toward a depression. The
woes are by no means limited to the merchants and hoteliers who
depend on tourist dollars. Everyone is singing the blues, and with
good reason. By early August it had become clear that early
predictions of economic trouble were too optimistic. Data showed that
the economy had shrunk 2.8 percent in the first quarter of 1998, and
was estimated to contract a full 3 percent in the second quarter.
Release of that data, along with news that Hong Kong's major banks
were in much worse shape than anticipated, sent stocks
tumbling--which in turn completed the circle of economic gloom.
There are less transient explanations for Hong Kong's troubles as
well. Little is manufactured there today. Almost all industry has
migrated to China itself, lured by much lower wages and by greater
latitude regarding working conditions. The chief money-maker in the
SAR is money itself. Investment, insurance, banking, finance, and
speculation bring in the big bucks. But employment in finance has
fallen some 20 percent recently, and those who hang on to their jobs
have been taking swingeing salary cuts.
Rents for luxury flats have not yet dropped decisively, but they are
sagging. Domestic rents are faltering, instead of rising 20 to 40
percent on each renewal of a lease, as they did only recently. Firms
that happily paid $12,000 a month or more for an employee's flat are
now radically reducing such benefits or cutting them off entirely.
Former beneficiaries of such largesse are looking for cheaper housing
on offshore islands like little Lama, which had been virtually a
hippie colony--by staid Hong Kong standards at least.
Overall property values are also falling, particularly commercial
property. Hong Kong's formerly buoyant economy floated on inflated
property values that allowed low taxation, which in turn attracted
investment and the Asian headquarters of foreign firms. Taxes have so
far only increased slightly. But the pledge by Tung Chee-hwa,
Beijing's appointed chief executive, to build eighty-five thousand
new flats for the underprivileged in each of the next three years,
however meritorious, will certainly drive down rents and will
probably require tax increases.
Good for the less well off if it really happens, the promised
expansion of housing will not be good for the economy in general.
Property values are already down 30 to 40 percent from their peak,
and, to repeat, overvalued property has been the foundation of Hong
Kong's prosperity. In order to prevent further steep decline, all
sale of government land has now been suspended until March 1999. The
government is the sole landowner in Hong Kong, leasing land to
companies for extended periods of time, like 99 years, at very high
prices. Therefore, high land prices underwrite low taxes, while
declining land prices make higher taxes necessary.
All local trade is down for firms, except of course for essentials
like food and funerals. Newspaper and magazine advertising has fallen
sharply. And so it goes: a long, slow, funereal drumbeat. Optimists
contend that the present shakedown will make Hong Kong much more
competitive when the general Asian recovery occurs. That recovery is
inevitable, though none can say when it will start or how far it will
go. It will, of course, help Hong Kong greatly. But it will not heal
the territory's fundamental malaise, for non-economic woes beset the
government of the Special Administrative Region.
The heart of government in Hong Kong is its old Civil Service.
Stripped of all but a few of its British members, it is, first,
encumbered with an appointed executive arm that is inexperienced,
impractical, and slavishly obedient to Beijing despite the pledge
that "Hong Kong people will rule Hong Kong!" Second, it is encumbered
with a timid judiciary that has ruled itself out of cases presenting
issues that could affront Beijing; the highest court is specifically
forbidden to try any case involving politics, which can mean anything
Beijing wants it to mean. Third, Hong Kong was encumbered with an
appointed legislature that is hardly representative--and is now
encumbered with a legislature "elected" under various circumstances
that prevent true representation.
Tung Chee-hwa and his sycophants have repeatedly asserted that Hong
Kong enjoys real democracy for the first time, because the chief
executive is no longer a governor appointed by Britain. He might just
as well say, "Hong Kong people aren't interested in politics, only in
making money!" That reiterated justification long comforted those
Britons who felt a twinge of guilt at the arbitrary, indeed despotic,
way Britain ruled the Crown Colony for most of its 155 years. By and
large, the virtually absolute British governors were benevolent, but
they were still despots.
The lack of interest in politics was true--but chiefly for a small
minority of the population, the well-to-do. The rich really
didn't--and still don't--care who ruled Hong Kong or how it was
ruled, as long as they were free to make money. They were left free,
virtually untethered by law, for the Colony practiced almost perfect
economic laisser faire--and profited greatly thereby. However, the
efficient execution of the vital functions of government, which said
government reserved to itself, and the impartial administration of
British justice provided by independent courts, were essential to
Hong Kong's growth. Within that secure framework the ingenious,
hard-working, and risk-taking native Chinese population transformed
that "barren rock with hardly a house on it" described by Lord
Palmerston in 1840.
All the people were interested in making a good living; the mass of
the people was also vitally interested in practical politics. The
emerging middle class, the managers, the professionals, the
shopkeepers, the artisans, and even the workers had a stake in basic
fairness, stability, and lawfulness. It was precisely their vital
concern with politics that in 1989 first alarmed Beijing, which in
its doctrinaire ignorance had thought the people of Hong Kong little
different from the people of China.