Hong Kong Hong Kong lease of life!

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¿RAFFITT PTA figures Aftér the Battle of the Falklands, another part of the British colonial empire is attracting the limelight. Last week the value of shares on the Hong Kong stockmarket (third largest in the world after New York and London) crashed by 27%.

The world recession, protectionism in the EEC and USA against Hong Kong products, high interest rates and a local speculative building boom in high-rise office blocks and luxury flats had long threatened to topple the stockmarket. What triggered the slump was news from Peking and London about 1997.

Britain presides over a borrowed place; On borrowed time. Hong Kong's population is 98% Chinese. British rule results from unequal treaties in the 19th century. The People's Republic of China has always claimed sovereignty over Hong Kong, refusing to recognise those treaties which ceded Hong Kong island and Kowloon peninsula to the British, and leased the New Territories till 1997.

Hong Kong is very different from the Falkland islands. Everyone but the most diehard Empire fanatic knows that the whole of Hong Kong, not just the leased New ' Territories, is China's for the taking and there is no question of sending a task force there. The colony continues to exist because of its economic benefits to China and the capitalist world.

Chinese leaders have said that they will reclaim Hong Kong 'when the time is ripe' ', but meanwhile Vice-Chairman Deng has asked investors to set their minds at ease.

Now however, economic pressures have forced both governements to begin to declare their hand semi-publicly. While the British and Chinese governments prefer to keep heir discussions private and commit themselves to nothing in public, commercial ventures in Hong Kong especially those involving and deals and the siting of factories in the New Territories, depend on security over at least 15 rears.

London has already prepared the ground by ippointing a Foreign Office nandarin (who of course speaks Mandarin) Sir Edward Youde, ! former Ambassador to Peking, as he new Governor of Hong Kong. He and the former Jovernor have been busy sriefing Margaret Thatcher or her forthcoming visit to china and Hong Kong, here the colony's future vill no doubt be the central tem of discussion.

Mandarin Youde China's leaders have ›pened up the debate by setting up a high-level vorking party, and consultng with prominent businesspeople and top managirs of its own Hong Kong ›ased enterprises such as he Bank of China, and ¡everal newspapers. t has floated elements of is position in a couple of Iong Kong journals: • •China does not recoglise the legality of past inequal treaties, and claims full sovereignty over Hong Kong, Kowloon and Macau (neighbouring Portugese colony). Restoring sovereignty cannot be postponed to the distant future. • The method of one nation, two systems, will be used to solve this question i.e. Hong Kong and Macau will continue as capitalist societies. ••Specifically, Hong Kong shall remain a free port.

There is no mention of how this is to be administered, and the question of the role, if any, of the current British and Portugese administrations is avoided. There is no mention of any process to consult with the Hong Kong people.

The Deng leadership has paved the way, first with joint ventures with Hong Kong and other investing capitalists, and then with the establishment of Special Economic Zones (SEZ) which give investing capitalists even greater autonomy. This is part of the overall economic policies which the regime has adopted to modernise the economy with foreign capital, and with capitalist management techniques. (The new draft constitution has deleted workers' formal right to strike, and factory managers have been given new powers to discipline workers by fines and even the sack, in order to impose speed-ups).

Hong Kong provides both an important source of investment capital, as well as capitalist techniques of exploitation. This is in addition to its other economie benefits to China: Hong Kong buys a quarter of China's exports, brings in about 40% of its stal400 BURMA Rangoon (India)

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foreign exchange earnings, according to the Far East Economic Review. China's leaders would like to see Hong Kong as a super SEZ, to continue to reap such economic benefits as well as resolve the question of sovereignty.

If this is successful, it will demonstrate that such coexistence can work, and thus act as a further way of softening resistance in Taiwan to reunification with China.

The Hong Kong and Taiwan question are thus linked, and on both issues Deng ; and co. tread carefully, wary of providing ammunition for leftist opponents within the Party. Having been forced to compromise over US arms sales to Taiwan, Deng and co. need a success over Hong Kong to neutralise his critics within the Party.

It is not clear exactly what the Foreign Office have suggested to Thatcher - most probably some form of lease-back