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The International Position of Hong Kong*

Published online by Cambridge University Press:  17 February 2009

Lucian W. Pye
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Extract

Uncertainty about Hong Kong's future has been aggravated by lack of precedent. When before has there been an established date of termination of colonial rule set by treaty? Even more confounding is that the history of the Crown Colony provides so little guidance as to its future. The usual practice in facing uncertainty is to look to the past to chart trends, identify propensities and make projections. All of these standard methods are, however, to no avail with respect to the future of Hong Kong. We are left to the mercy of that purported ancient Chinese saying, “Prediction is exceedingly difficult, especially with respect to the future.”

Type
Hong Kong Briefing
Information
The China Quarterly , Volume 95 , September 1983 , pp. 456 - 468
Copyright
Copyright © The China Quarterly 1983

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References

1. Keatley, Robert, “Britain, China state positions on Hong Kong,” Asian Wall Street Journal, 4 10 1982Google Scholar. Probably the most conventional interpretation of Hong Kong's successes is that it combines Chinese economic talents with a system of British law and order. Charles T. Cross, however, has suggested a refreshing and challenging thought when he says, “I hope I'm not too cynical, but much of Hong Kong's success comes not from being a decent place, a fair society, even though the British try to hold it in some bounds. It is well-run only because so much is allowed: e.g. gambling at the race tracks pays for most of the social services; triads keep in line many immigrants. I don't see how a formula could be devised which would allow any 21st-century Chinese government to disavow responsibility for such an anachronistic society in China while claiming sovereignty. At the same time, I don't see Hong Kong being ‘reformed’ in its social aspects without losing the incentives which drive Hong Kong's inhabitants. First among these is the freedom to fool around in non-productive ways” (private communication).

2. Ching, Frank, Asian Wall Street Journal, 17 02 1983Google Scholar.

3. New York Times, 27 September 1982.

4. Alain Cass and Colina MacDougall, Financial Times (London) reprinted in Asian Wall Street Journal, 15 December 1982.

5. Wren, Christopher, New York Times, 13 10 1982Google Scholar.

6. New York Times, 24 September 1982.

7. New York Times, 1 October 1982.

8. Harris, Peter, Asian Wall Street Journal, 13 10 1983Google Scholar.

9. Ching, Frank, Asian Wall Street Journal, 17 02 1983Google Scholar.

10. Ibid.

11. Lohr, Steve, New York Times, 18 01 1983Google Scholar.

12. The Chinese position that all the treaties were “unequal” and hence properly “null and void” would seem to carry with it the implication that 1997 should be a year of no significance. By arguing that the treaties that ceded Victoria and the tip of Kowloon in “perpetuity” lack validity the Chinese open themselves to the logical rebuttal that they should equally disregard the treaty deadline of 1997. But to assume that the Chinese might feel bound by such logic is probably to engage in the type of wishful thinking common to speculations about Hong Kong's future.

13. Fung, Vigor Keung, Asian Wall Street Journal, 16 11 1982Google Scholar.

14. From the time public speculation about negotiations over Hong Kong's future began in mid 1982 until the end of the first wave reactions in early 1983 there was a decline in Hong Kong property values of 50% or more and the Hong Kong stock exchange dropped from 1300 on the Hang Seng index to a nadir of below 700 in early December. (New York Times, 18 January 1982.) Concurrently there were reports of Hong Kong money being invested in U.S. West Coast property and in the emerging Wall Street bull market. As with any flow of capital it is impossible to separate “pull” from “push,” but it is significant that Hong Kong was at the time rife with rumours of impending economic crisis and the number of Hong Kong citizens seeking “green” cards for immigration to the United States more than doubled. Representative of the mood in Hong Kong was the apocryphal story about a meeting between billionaire Hong Kong shipping magnate Y. K. Pao and Deng Xiaoping shortly before Mrs Thatcher's visit to Beijing. Supposedly Deng asked Sir Yue-kong and two other Hong Kong tycoons, “Why should it make any difference for business if the Chinese flag flew over Hong Kong instead of the Hong Kong flag.” They responded by saying it wouldn't matter at all, but the next day on returning to Hong Kong they moved half a billion dollars out of the Crown Colony. (Asian Wall Street Journal, 22 September 1982.)

15. The Economist, 31 July 1982, p. 16.

16. Wong, Jesse and Lachiaca, Eduardo, Asian Wall Street Journal, 22 12 1982Google Scholar.

17. Ching, Frank, Asian Wall Street Journal, 18 02 1983Google Scholar.

18. Y. C. Jao has done a detailed analysis of all the different economic benefits China derives from Hong Kong, from its trade balance to remittances and unrequited transfers to tourism, but his conclusions are only impressive in the context of the current relationship. He avoids the obvious question of how much China might benefit by incorporating Hong Kong into its economy. (“Dependency is a two-way street,” Far Eastern Economic Review, 20 January 1983, pp. 38–42.)

19. Keatley, Robert, Asian Wall Street Journal, 18 10 1982Google Scholar.

20. On the critical role of Shanghai for the economy of the People's Republic see: Howe, Christopher (ed.), Shanghai: Revolution and Development in an Asian Metropolis (Cambridge: Cambridge University Press, 1981)CrossRefGoogle Scholar.

21. Davies, Derek, “The pragmatists prevail,” Far Eastern Economic Review, 20 01 1983, pp. 26–30Google Scholar. Like many critics of Prime Minister Thatcher's scolding of the Chinese during her visit to Beijing, Davies fails to publicize the fact that Zhao Ziyang was the first to behave undiplomatically by revealing to journalists China's non-negotiable position on his way to his talks with her.

22. The Economist, 12 March 1983, p. 52.

23. Keatley, Robert, Asian Wall Street Journal, 18 10 1982Google Scholar.

24. The Economist, 31 July 1983, p. 61. The tacit understanding between Chinese and Hong Kong authorities is illustrated by the way the Hong Kong Government apparently fell in line with the Chinese theory that, if permitted, Chinese should be allowed to go “from one part of China to another” but if not permitted, they should be sent back. In so doing the British got the understanding that there would be limits on the numbers of “legals” and that all “illegals” returned would not be harshly treated. Even more subtly, Hong Kong officials have quietly returned overly obstreperous Chinese secret agents at the border with only the bland communication that one of their citizens would be coming home on a specified date.

25. One ingenious proposal by the lawyer David J. Scheffer is to use the model of the Panama Canal Treaty of 1978 in which sovereignty over the Canal Zone went to Panama but the United States assumed the continuing obligation to manage the canal until 1999. Rule during the transition period will be by a joint commission of five Americans and four Panamanians with leadership passing in 1989 from an American to a Panamanian. “Hong Kong's case in international law,” Asian Wall Street Journal, 29 October 1982.

26. Davies, Derek, Far Eastern Economic Review, 20 01 1983, p. 30Google Scholar.

27. According to The Economist, 12 March 1983, Thailand is offering permanent residence visas to “entrepreneurs who invest at least 10 m. baht ($435,000) in a new business or buy at least 8 m. baht's worth of Thai government bonds.” The Philippines in November 1982 “promised residence to any foreigner who invested $200,000 in the country,” and Singapore, while not admitting that “it is after the regional financial business that has traditionally been Hong Kong's” has introduced “a five-year tax holiday for bank loans syndicated out of Singapore” (p. 78).

28. Lee, Mary, Far Eastern Economic Review, 20 01 1983, p. 30Google Scholar.

29. Lohr, Steve, New York Times, 17 09 1982Google Scholar.

30. For the hostility of the Chinese authorities towards China Spring and their charge that it is led by an immoral turncoat with Taiwan connections, see: Lee, Mary, “Peking springs into action,” Far Eastern Economic Review, 23 03 1983, pp. 35–36Google Scholar.