Top Stories from the Editorial/Opionion pages of the International Herald Tribune,
Wednesday, June 4, 1997

The People of Hong Kong Should Focus on the Longer Term

By Gerald Segal 
- Britain can take enormous pride in Hong Kong. Never before has colonial rule ended with such prosperity and so rich a civil society. For this reason alone, Hong Kong's prospects, at least in the short term, are good. But what lies beyond that?

 There is a worrying erosion of civil liberties in the territory, yet the main focus of attention should be the longer-term challenges. China and the outside world can affect the outcome, but the key lies in the will and wits of Hong Kong's people.

 The most important challenge is how to reshape the economy. Like other developed East Asian economies, Hong Kong has to learn to live in an increasingly competitive world with a ''hollowed out'' industrial base. Many of its industries have shifted to neighboring southern China, where land and labor costs are lower.

 The business leaders who surround the chief executive-designate, C.H. Tung, often seem short of ideas about how to enhance Hong Kong's competitiveness. It is far from clear that rule by business tycoons will be better at meeting the future challenges than rule by a distant London and a first-class local professional civil service with a laissez-faire approach.

 The competition among the business interests in Mr. Tung's team largely explains their lack of credible economic vision. Some talk of a ''new industrial policy'' with echoes of China; others of a ''high-tech'' Hong Kong. Yet others note the need to improve the environment.

 All agree that housing policy needs to be improved to reduce rents and attract more talented workers. But there are some in Mr. Tung's team who will lose a fortune if real reform is undertaken and land prices fall.

 An efficient service economy, let alone a high-tech Hong Kong, will need to raise standards of higher education. Yet Mr. Tung's team speaks of more investment in primary education. A brain drain in recent years and fear among local university staff that Chinese rule will erode academic freedom make Hong Kong less ready than Taiwan, South Korea or Singapore for post-industrial competition. 

The current obsession with short-term challenges to human rights and democracy also obscures the difficult questions of political reform. The grudge match between the British government and the incoming team over the legality of the Provisional Legislature is insignificant when compared with how groups in the new legislature to be elected by July 1998 will form political parties and vie with the chief executive and his Executive Council for real power.

 According to the Basic Law, half the new legislature will be fully elected in 2007. If two-thirds of the legislature agree, and the chief executive assents, Hong Kong can then have a fully elected Parliament on the basis of universal suffrage. How would such a body relate to an unelected chief executive? Will Hong Kong have elections for a ''chief minister,'' with a real cabinet and a majority of seats in Parliament?

 Such far-reaching democratic reforms are there for the taking, but the people have to agree on their design and then vote for them. If they are determined to defend their rights under the Basic Law, they can make the current debates about their limited democracy seem like the detritus of colonialism. 

Yet another challenge is how to deal with what some of Mr. Tung's advisers call ''Beijing's shoe-shiners.'' The chief executive is often pilloried for being China's poodle, but, as anyone who meets him knows, he is by nature a careful conservative in a Confucian mold.

 He needs no instructions from Beijing to take a tough line on dissidents or street protests, because he naturally stresses the importance of obligations to society more than individual rights. But his advisers acknow-ledge the problem with some of their number (the shoe-shiners) who are too quick to try to please Beijing and do not think hard enough about what is best for Hong Kong. When China itself is so decentralized and divided on major policy issues, there are inevitably shoe-shiners peddling different policies.

 In such circumstances, there is virtue in Mr. Tung seeking support from Beijing to control interests in neighboring Guangdong Province which want a larger slice of Hong Kong's economic pie. He will certainly need powerful friends in Beijing if he is to control the Chinese armed forces who are doing business in Hong Kong, or the mainland ''red chip'' companies who are muscling in by advertising their high-level contacts in China.

 These are all challenges that Hong Kong can meet. But if it continues to focus on short-term issues, especially debates about the rights and wrongs of the past, it will be poorly placed to meet the longer-term challenges.

 The writer, a senior fellow at the International Institute for Strategic Studies and director of Britain's Pacific Asia Program, contributed this comment to the International Herald Tribune.