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January 13, 1998

Hong Kong Six Months After the Change-Over

Four Views

by Edmund Tsang

[Author's note: The views of the four people profiled here should not be considered to be representative of their respective professions, but merely reflect the diverse views of Hong Kong's citizens.]

Like a significant portion of Hong Kong's professionals who received their university education and training overseas, Kenny Leung Kin-Man graduated with an engineering degree from McMaster University in Canada in 1973. He joined Union Carbide upon graduation and worked his way to become a plant manager in Sault Ste. Marie, Canada, then was transferred to stints in Hong Kong, Taiwan, and Thailand. "The next transfer would have been to Mexico City, which I didn't really want to do," Kenny said in his cramped office on the tenth floor of a 16-story building he owns in an older section of the business district in Central Hong Kong. He also owns the investment and security company, which has a staff of 20, he started a little over ten years ago with a classmate from secondary school. As an indicator of the tremendous growth experienced in Hong Kong, particularly in its real estate, Kenny said a square foot of his office has increased from about HK$300 ten years ago to over HK$7,000 now.

Kenny says he recognizes the contribution of Great Britain toward the stability of Hong Kong, which provided an environment where much wealth has been created, benefiting a lot of Hong Kong people since the 1960's, including himself. "There is no better place to raise capital, with the exception of maybe the United States," he said. And this opens the door for Hong Kong people to participate in other affairs of the city, both in the political and the social spheres. Even the exclusive Her Majesty's Hong Kong Royal Jockey Club eventually opened its door to the Chinese majority, Kenny explained. He reasons that without the stability, however, there might not be the economic development. "You look at Africa and the Middle East, the poverty and the instability," Kenny said.

The investors that his company serves include "all walks of life, people who see stocks as long-term investments as well as those playing the market," Kenny said. His company as well as others in Hong Kong also provide an alternative channel for investors from mainland China, Kenny added.

Kenny believes "nothing will change drastically" because of Hong Kong's revision to the People's Republic of China (PRC). "Who could have thought Hong Kong would be where she is today 10, 20 years ago," Kenny asked. "What happens later, nobody can tell. But you can't turn back the clock. Too many people have enjoyed the standard of living in Hong Kong, regardless of what happens in the upcoming legislative election [in May, 1998]." He believes Hong Kong will continue its growth and progress, and he considers the recent economic downturns "cyclic." "Maybe sometimes you have to take two steps forward and one step back, before you can move forward again," Kenny said.

"I feel very lucky," said Kenny, who is 48 years old. "No matter what happens in the future, my life experience is something that I can take with me and use as a guide."

John Ng Hing-Woo, age 50, runs an art supply and equipment business in Wai Chai. After graduating from secondary school he began working there to learn the business started by his father, eventually taking over about ten years ago. In that capacity he has conducted business with China before the change-over.

"During my first year, all businesses were conducted in cash because the banking bureaucracy in China was incredible," explained John. "A check issued in Peiking could not be cashed in Guangzhou. There was no direct deposit, so you had to go and collect the check."

But China has emerged from that era in which Hong Kong played a very important role in China's transformation, John explained. "Hong Kong is no longer the stop-over point on the way to China," John added. So in a way, the opening up of China has hurt his business a little bit, John explained.

Concerning the election in May, 1998, John said he hasn't paid it much attention because like most Hong Kong people, voter participation is a new experience made available only in the last years of the British colonial government. "Do you remember studying about it in school?" asked John by way of making a point about political participation under British rule. "I hope my children will participate because the tradition has been established." He said he detected "no change" since the change-over, and he does not believe it will matter much to his work and life.

He attributes the present economic slowdown in Hong Kong, which started a year ago, to crises in real estate and currency exchange in Southeast Asia, as well as the completing and winding down of several major infrastructure projects in Hong Kong, including the completion of the second under-the-harbor tunnel connecting the western section of Hong Kong island to the Kowloon peninsula, the world's second- longest suspension bridge linking Kowloon to Lantau Island where the new airport is located, and the Hong Kong Convention and Cultural Center, and the near completion of the new airport.

The loss in tourism money is primarily due to fewer visitors from southeast Asia because of their home countries' financial woes, John said. "We all know Americans would go to a MacDonald and spend a few dollars on food, but someone from the rest of Asia would go to a Chinese restaurant and spend several hundreds and maybe a thousand dollar in meals."

[John's assertion is supported by a December 1997 news article in the New York Times, which quoted from a recent report published by the U.S. Tourism Works for American Council. The article says that in 1996-97, 46.3 million international visitors to the U.S. spent $90.5 billion while 52.3 million American visitors to international destinations spent $64.5 billion.]

John is optimistic about Hong Kong's future. "Hong Kong people have the ingenuity to deal with whatever comes its way," he added.

Judy Levine immigrated with her family to Canada when she was 13, but she and her American husband moved back to Hong Kong about ten years ago. Judy is a dentist three days a week, spending the rest of her time meditating and pursuing her artistic and intellectual interests.

For Judy, the change-over has not yet reached the subconscious level yet. "I still write Hong Kong on envelopes, instead of Hong Kong, China or Hong Kong, SAR," Judy explained. (SAR is Special Administrative Region, as Hong Kong is now officially called.)

"The people who are going to be hurt by the change-over are the working people, not the professional or the business people," Judy said, referring to a recent decision by the provisional legislative council -- the one appointed by China to replace one elected by popular votes -- to remove a ban on unlimited import of labor in the construction industry. "For professionals, the change-over is not a survival issue; for the construction workers, it could become that," Judy said. Working people are squeezed by the high cost of living in Hong Kong, Judy said, and the legislation concerning the import of foreign labor could undercut a worker's livelihood.

According to newspaper accounts, the only member representing labor on the 60-member provisional legislative council voices his concern that the recent legislation could open the door to import labor in other industries, and would be used by management to lower the wages paid to Hong Kong workers by tapping into the large labor pool in mainland China. With many of the state-owned industries in PRC being privatized, it is expected that millions of workers will lose their jobs. Labor formerly had a greater representation in the dissolved popularly-elected legislature.

"For me and other professionals, Hong Kong has more options than most cities in Europe and North America," Judy said. "Even with the change-over, I believe I still will have all these choices."

While there have been more avenues for the Hong Kong people to express their opinions during the last few years, Judy is not sure that is the equivalent to political participation in their own governance, she added. And the public certainly have fewer voices after the change-over. In May, 1998, Hong Kong will hold its first election after it changed its status from a British colony to a Special Administrative Region of PRC. Under the election rules devised by the current provisional legislative council, whose members are basically appointed by China even though an election was held, a 60-member legislature will be constituted. In the new legislature there will be 10 members appointed by PRC; 30 members representing "functional constituencies," to be elected by 180,000 members drawn from business and industries, professional and labor organizations, and civil service; and 10 "regional constituency" members elected popularly from ten geographic districts.

K.W. [who is unidentified at the discretion of the author] received his bachelor and masters degrees in mathematics from the Hong Kong University. At 48, he is a senior member of Hong Kong's Civil Service and he is thinking about retirement, which he can do officially when he reaches 55. He did not sign up for a plan announced last year to extend the retirement age to 60, because he says his job has lost some of its appeal. Instead of spending time working with teachers to train and support them, a lot of his time during the last several years is taken up by preparing for reports and testimony before the legislative committees. "We are the scapegoat for everybody," K.W. added. He is also not optimistic about Hong Kong's future under China's leadership.

The public announcement by some PRC officials that people in Hong Kong's Civil Service are too highly paid does not add to the confidence of this group. Unlike the civil services in many nations in southeast Asia which are poorly paid, Hong Kong's Civil Service is widely acknowledged as incorruptible and recognized as contributing to the environment of doing business in Hong Kong. Compensation for the Civil Service, especially for the senior members, is good. Senior staff members receive housing and children's education allowances that are almost equivalent to their salaries, and until the last few years, have received pay raises each year that were larger than the inflation rate (the raises are now closer to inflation rates).

Like many of his colleagues in the professional class, K.W. made plans to emigrate when the change-over was announced more than a decade ago. His wife and their daughter established citizenship in Australia in 1996. And because Britain agreed to grant immigrant status to a limited number drawn from the civil service during the last moment of its rule in Hong Kong, K.W. now travels with a British passport. He even bought a flat in London as a home base for his two children, who are attending school in England. His oldest son enrolled in a boarding school in 1996, and his youngest daughter joined her brother in April, 1997.

Early December, 1997 found K.W. busy working late on weekdays and on Sunday to finish up his work, before he boarded a plane to spend Christmas with his wife and children in London. He said instead of the children flying home, he will join his wife, who was already in London, so they could drive their son, who will begin college next fall, to an internship position over the Christmas break in north London. "If he wants to enter a university like Cambridge, the internship experience will benefit his application," K.W. said. His youngest daughter will be finishing Secondary 4 (equivalent to 10th grade in the U.S.) next summer.

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