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Can Hong Kong's Prosperity Survive a New Set of Rules ?


Before he departed for Hong Kong and other points east to watch its transition from colonial to Chinese rule July 1, the Compass asked Penn law Professor Jacques deLisle about the shift.

Q. As Hong Kong switches from British to Chinese rule, how do the residents of Hong Kong view the changes?

A. From the perspective of a lot of people in Hong Kong, this is a great nationalist moment. Imperialism is ending. Chinese - and to a degree, Hong Kong Chinese - are ruling Hong Kong. There's a lot of pride in that.

On the other hand, there is a lot of concern in Hong Kong about what Chinese rule will bring. After the Tiananmen incident in Beijing in 1989, the colonial government introduced a series of democratic reforms and a bill of rights and revised laws restraining political activities.

These changes have garnered considerable popular support in Hong Kong, initially out of fear that what happened in Beijing in 1989 could happen in Hong Kong in 1997, but recently such rights and accountability have become what people in Hong Kong expect out of their government.

Q. What are the changes in Hong Kong's institutions of government and what effect are they likely to have on democracy?

A. Three key institutions will change, and each has implications for democracy.

The chief executive
First, the colonial governor will must be a Hong Konger. The executive is the most powerful branch of the Hong Kong government.

The first occupant of the office, Tung Chee-hwa, was nominally selected by a committee of Hong Kong people acceptable to Beijing. In a sense this is a step forward for democracy and local accountability. On the other hand, Tung was picked by Beijing and has been much less a friend of democratic reform and civil liberties than was Chris Patten, the last colonial governor.

The legislature
Second, the most democratically elected legislature in Hong Kong's history - with two-thirds or more of its members able to claim at least an indirect popular mandate - will be dissolved. Elected in 1995, it was originally scheduled to serve through 1999, but China rejected the laws under which it was elected as too swiftly democratizing.

It will be replaced by an appointed body named by the same committee that chose Tung. About one-half of this provisional legislature is drawn from the prior elected one, but the pro-democracy members of the old body have been thoroughly excluded.

We don't yet know the rules for the new legislative elections which Tung has promised will be held within a year or so. There is little doubt that they will be less favorable to the democrats who did so well in the 1995 vote.

The courts
Third, the judiciary, the institutional underpinning for Hong Kong's celebrated rule of law, will change as well.

The highest court for Hong Kong has been the Privy Council in London, Great Britain's supreme court. After July 1, the tribunal of last resort will be a local Court of Final Appeal.

The idea is to make the judiciary compatible with Chinese sovereignty and less alien to Hong Kongers, while preserving the continuity of the common law system and the tradition of neutral and independent courts. A key measure is to have the top court's five-member bench include both Hong Kong judges and one foreign judge from a common law jurisdiction such as Britain, Canada or the United States.

But here too there are worries that the new court may not be enough to protect government under law and, thus, hopes for democratic and accountable government.

Consistent with China's constitutional structure, the court will be subordinate to the National People's Congress in Beijing, which also retains the power to interpret the laws, including the Basic Law (Hong Kong's constitution).

Also, the court will not have jurisdiction over certain issues of relations between Hong Kong's government and Beijing or over the so-called acts of state, which might be as narrow as defense or foreign affairs, but might be read more broadly.

As the worries about the court suggest, the effect of Hong Kong's reversion on democracy is often more subtle than the decisions that the elected legislature and some laws on civil and political liberties must go.

Q. What are some of those worries?

A. For example, there has been a cozy relationship for years now between many of Hong Kong's business elites and the leadership in Beijing. These ties have been the mechanism through which many questions of law and policy have been handled during the run-up to reversion. And this arrangement has taken its toll on popular programs.

One case is social spending. Attempts to increase it were stalled because Beijing didn't want to risk spending down government reserves and business didn't want higher taxes or a welfare state. The result frustrated not only democratic politicians and their supporters but also Hong Kong's traditional, pro-China and populist left.

Q. If you read the tea leaves, what kind of future would you predict for Hong Kong?

A. I hate making predictions, but my best hunch is, that China so desperately wants and needs Hong Kong to prosper and that Beijing and the Hong Kong government will manage to check, at least in the short run, any serious threats to the existing economic system.

Hong Kong is, after all, the goose that lays the golden eggs for China, for Hong Kong tycoons and for multinationals in the region. Hong Kong and China are one another's most important trade and investment partners. The economic incentives to make it work are enormous.

But there are at least three risks:

Many of the professionals and the middle classes have foreign passports. And those are the people who have been the strongest support for democracy. Affluence tends to create some demand for democracy and if those people really do demand democracy and civil liberties, and the rollback is serious, they might leave. That would be an economic disaster for Hong Kong.

The promise is "one country, two systems," the pledge that Hong Kong will be allowed to maintain its social and economic systems, its pre-existing laws, its separate economic status and its high degree of autonomy in government.

Business in Hong Kong seems to be betting that China will be willing and able to provide a reasonably strong rule of law for the economy and that it is tenable without keeping all the last-minute democratic reforms of the colonial government.

That is probably a good bet on what the Chinese government also intends to do. The question is whether that package works - economic order with retrenchment in political liberties and democracy - and whether the government in Beijing is able to implement any policies no matter how well-designed and well-intentioned.

Return to Compass Features for July 15, 1997