Report on Hong Kong Nov1967

N O V E M B E R   1 9 6 7 by Maynard Parker http://www.theatlantic.com/past/docs/issues/67nov/hk1167.htm Expecting the worst, the visitor returning to Hong Kong would marvel at its quiet, confident calm. There are no blackened hulks of buildings, no hateful stares such as mark the burned-out ghettos of a half dozen American cities. Indeed, the jewel of Britain's colonial empire seems to sparkle with all its luster. Ferries plow across a sapphire harbor crowded with ocean-going freighters, square-sailed junks, and deadly-looking U.S. warships just in from battering North Vietnam with their cannon and planes. A new generation of Suzie Wongs, more alluring than ever in their mini-cheongsams, still pester fuzzy-cheeked sailors to buy them "one more" tea (masquerading as whiskey). Suits can still be made in twenty-four hours, and shops with showcases bulging with gold, jade, cameras, and watches still offer the luxuries of the world at a fraction of the cost paid elsewhere. Thc Hong Kong of myth, legend, and travel poster lives on. Siege Only slowly does the realization seep in that Hong Kong is a city besieged by local Communist guerrillas. Ubiquitous gray Land Rovers filled with steel-helmeted riot police armed with tear gas and carbines constantly prowl the streets. Instead of their usual wares of Tientsin rugs and carved ivory, the colony's Communist Chinese stores now plaster their windows with pictures of British police brutality, with crepe-draped portraits of slain Communist agitators, and with Maoist slogans urging the city's four million Chinese to "paint Hong Kong red from the earth to the sky."

China itself has made no overt move toward the colony -- in fact, on at least a dozen occasions Chinese Army troops have actually held back mobs of mainland Chinese hopped up on Maoist brew. But months of agitation, which has slowly escalated from labor strikes to militant demonstrations to violent riots and armed terrorist attacks, have clearly signaled the beginning of a Maoist "people's war" against the British in their own colony. The British fight with more than 12,000 police and 10,000 soldiers to preserve both the political status quo and extraordinary economic prosperity through a campaign maintaining law and order. Sortieing out from their liberated areas -- Communist storefronts, union halls, and newspaper offices, fortified with food and water and iron grills on the doors -- the Communists retaliate with propaganda, rumors, terror, labor strikes, and economic reprisals directed both against the British and against the great mass of non-Communist Chinese. Their hope is not so much to defeat the British in the streets or to force Hong Kong's Chinese through fear alone to join their side (although they dream of both), but to convince both committed and uncommitted that the British no longer have the stamina to hold on. A Labor government which only recently announced its intention of liquidating the entire British presence east of Suez by 1975 should probably not think twice about the disposal of Hong Kong should the colony cease to be economically self-sufficient. Communist laissez-faire When Hong Kong's riots first erupted in May, the reaction of the colony's residents was much the same as that of Detroit's or Newark's citizens: "How could it happen here?'' For despite the looming shadow of China, Hong Kong had always coexisted peacefully with its neighbor. China's tacit friendship was based not on love, but money. Far from creating trouble in the colony, China used its laissez-faire spirit to grub for money like any common capitalist. Although Hong Kong's Communists did operate through an intricate web which included various labor unions, newspapers, schools, and farm organizations, their main goal has always been to use the colony to earn hard foreign currency for China. To accomplish this capitalistic mission, the Communists over a period of eighteen years built up a vast network of more than 300 businesses and banks in the colony. They operated travel agencies offering tours to China, retail and wholesale grocery stores selling China's foodstuffs, department and jewelry stores peddling China's manufactures and gems, and wholesale trading companies hawking China's products to the world's buyers. Each year these hustling Communist capitalist enterprises poured more than $500 million into the Communists' most important economic organization in the colony, the bank of China. Together with $85 million in remittances collected from overseas Chinese, the bank each year transmitted to Peking more than half of China's foreign exchange. It was this immense annual profit for China which provided Hong Kong residents with sufficient confidence in the dragon next door to give birth to the colony's staggering post-war prosperity. "China will not lay a finger on Hong Kong," it used to be said, "as long as Hong Kong is useful to China." Why, then, did Hong Kong's Communists take to the streets this spring, killing the goose that laid their golden eggs and ending, probably for all time, the peaceful and profitable alliance between Hong Kong's Communist and capitalist citizens? The answer lies with Hong Kong's two neighbors, China and Macao. In China, Mao Tse-tung's Great Proletarian Cultural Revolution had unleashed thousands of Red Guards to purge those opposed to his leadership. Looking and listening over the border through the eyes and ears of Radio Peking, Hong Kong's nine Communist newspapers, and the tales of returning comrades, Hong Kong's Communist leaders grew increasingly fearful. They realized that had they been living in China they would have been quickly branded as "revisionists," publicly humiliated, and purged. All rubbed hands with the capitalists each day; for all, profit was the key concern. Most important, all were named to their Hong Kong posts by the disgraced Tao Chu and the "revisionist" president of China, Liu Shao-chi. Thus, this spring, as the reverberations from the Cultural Revolution grew ever louder, the colony's Communist leaders frantically searched for a way to proclaim themselves true Maoists, to prove their revolutionarv purity, and to forestall their own purge and possible recall to China. In Macao, they had their answer. Many China-watchers in Hong Kong had long confidently proclaimed that one of the main effects of the Culrural Revolution was to take China's mind off any foreign adventures. But the blatant Chinese Communist chauvinism which the Cultural Revolution exposed, coupled with the desire of overseas pro-Peking Communists to proclaim their ardor for Mao, doomed the countries on China's rim to an eventual spillover of the Cultural Revolution. Thus, in December, 1965, when Portuguese authorities refused to allow a group of Macanese Communists to build a school, hordes of young teen-agers fitted themselves out with red armbands and red books and poured onto the streets. In a series of bloody clashes, abetted by the bungling of Portugal's colonial police, Macao's Red Guards won a string of unexpected and unhoped-for victories which abrogated Portugal's authority in the colony in all but the most routine of official matters. Looking to Macao and eager to prove their Maoist orthodoxy, the leader of the Party's infrastructure in the colony wondered whether they could pull a Macao in Hong Kong. Their chance to try came in early May when two labor unions with justified grievances called strikes against a plastic flowers factory and a cement plant and the workers marched off their jobs. Members of both unions -- one Communist and one non-Communist -- waved Mao's books and recited his quotations as they picketed. Although the colony's Communists moved very slowly in exploiting the revolutionary possibilities of these strikes, in one case taking five days to notice the Maoist workers, they finally picked up the workers' rallying cry and hurried their cadres, unionists, and striking employees into the street against the superbly trained British riot police. "People's War," with its riots, labor strikes, psychological warfare, terror, and assassination, had come to Hong Kong. But, strangely enough, it proved to be a "people's war" without people, and this alone has kept the British from having another Aden on their hands. For the most remarkable fact about the Communist effort has been its complete failure to spark a responsive chord in Hong Kong's Chinese. Unlike Burma, Cambodia, and Nepal, where Maoism has burst the bounds of the Chinese Embassy, Hong Kong is a Chinese city; it is a colony, and it is contiguous to China. It should be ripe for revolution. Yet, throughout the entire summer, the Communists have found few compatriots at the barricades. At the most, they have turned out about 5000 supporters, and as more and more of these have deserted the ranks, the Communists have been forced to pay bums, teddy boys, and sacked striking workers in order to put rioters into the streets. Peking's caution Much of the reason for the Communist failure to win mass support lies with the apparent reluctance of Communist China to come to the aid of Hong Kong's Maoists. If Hong Kong's opportunistic Chinese thought the People's Liberation Army would invade the colony tomorrow, they would be on the streets with Mao's books today. However, Peking has shown little relish for getting more directly involved in the fray than with its now depleted $10 million grant for bankrolling strikes, and the endless babble of propaganda from Radio Peking. The only cheap little victory it can claim after months of huffing and puffing is the burning of the British legation in Peking after the Hong Kong government refused to release a handful of Communist newspaper reporters jailed for leading Communist mobs in the colony's streets. No one knows exactly why China is playing the paper tiger. Certainly the current hysteria China is fomenting has erased any thought that it might call off a confrontation in order to maintain its economic interests in the colony. Some Hong Kong China-watchers believe Peking has not intervened directly because it fears a secret joint security agreement between Great Britain and the United States for the defense of Hong Kong. Others believe that the administrative and political resources of the PLA have been stretched so thin by the demands of the Cultural Revolution that it simply lacks either the energy or the desire to take the city. A more likely reason for China's failure to take an active part in the Hong Kong disturbances, however, can be found in the pure Maoist theology generated by the Cultural Revolution. To a Maoist, a revolutionary Communist can find true salvation only by liberating himself from the yoke of imperialism by the application and rote learning of Mao's thoughts. As one of Hong Kong's newspapers put it, "We should depend upon ourselves to liberate ourselves." Hong Kong can thus come into Mao's grace only by liberating itself from within. To Peking, the task of local Communists was not to sit back and call for help from across the border, but to be Marxist missionaries for Mao, carrying the gospel to Hong Kong's heathen Chinese materialists. Almost as remarkable as the Communists' failure to wage "People's War" has been the improvised brilliance of the normally lethargic British colonial government. Some observers attribute it simply to British unflappability and others to the reasonable responses of a bureaucracy; whatever, a government made up of the remnants of a defunct British colonial service has faultlessly countered every Communist strike, rumor, and riot. In doing so, as much by propaganda as by police work, the British have coolly driven a deep wedge between the hard-core Maoists and the supporters they so desperately need, Hong Kong's Chinese. Stiff upper lip The Communists had hoped to mobilize this potential mass of support by turning a Maoist confrontation against the British into a Chinese confrontation against the British. To deny the Communists a bloody incident upon which to rally the people, the government has consistently used a minimum of police force and used it only after it has succeeded in obtaining an LBJ-style consensus of "all the people." The play of each new action has contained three acts, not two. Instead of the Communists acting and the government reacting, the government has allowed the Communists to act, waited patiently for the public to demand action, and only then moved against the Maoists with the applause of the community ringing in their ears. Even during the worst of the rioting, in late July, the police initially employed only wooden projectile guns and tear gas to oppose rampaging mobs waving iron bars and heaving Molotov cocktails. The government waited patiently for two days until citizens, from street hawker to taipan, were demanding police action. With public opinion solidified behind them, the police finally acted. Slapping a curfew on the city for two succesive nights, they opened fire with carbines and shotguns and began a series of raids on Communist union halls and stores which are still continuing. The government's campaign to discredit the Maoists has been rendered easier by the fact that, except for the nine Communist newspapcrs (three of which the government has closed down), it controls most of the public media either directly or indirectly. It operates one radio station and supplies the news for the other. Although none of the thirty non-Communist newspapers are owned by the government, most publishers belong to the establishment and rarely rock the boat. Few have reported anything but the government line, and during the worst days of rioting, some did not even bother to send reporters out on the street: they simply ripped the news off the Government Information Service's ticker in their offices. With such a pablum press, the Hong Kong resident ends up reading only what the government wants him to read. For the moment, British propaganda and police work have carried the day, but the battle remains far from over. Small-scale riots still break out intermittently; terrorist attacks against public buildings and government employees grow in intensity; within the last weeks more than 1500 bombs have been planted. Although most have been duds, some have exploded, and civilian casualties from bombings have become a new fact of life in Hong Kong. Business bust To a certain extent the Communist agitation has already taken its toll. Business investment in the colony has nearly stopped. Major industrial firms have decided to build new factories elsewhere, usually in Taiwan or South Korea. The flow of dollars, which used to run $3 million a day, from overseas Chinese through Hong Kong's free money market has ebbed to a trickle. The colony's tourist business, which usually is its second largest moneymaker after textiles, has dropped off considerably as frightened travelers stay away. Hong Kong's luxury hotels have sealed off entire floors for lack of guests and one banker predicts "more bankruptcies in the tourist shops in the next six months than in all of Hong Kong's previous history." Businessmen sadly tell each other over their pink gins that "the skyline is still the same," alluding to the unpleasant fact that Hong Kong's perpetual building boom has come to an unplanned stop. Even if the Communists were to call off their struggle tomorrow, it seems unlikely that business confidence in Hong Hong would ever return to its pre-May abundance. As one businessman put it, "It's like having a wife you thought was faithful and then finding that she's cheated. She claims it will never happen again, but you can never trust her as completely as before.'' For the riots have forced those who live in the colony to face the unpleasant reality that although the anomaly of Hong Kong may have a number of lives, it will not live forever. Underscoring this new awareness of the city's precariousness have been the privately reiterated statements of colonial officials in Hong Kong that Britain will leave as soon as it becomes convinced that Hong Kong's Chinese no longer desire British rule. As one said, "Once they indicate [presumably through prolonged, massive, and widespread rioting] they want us out, we will leave. We have no imperial, colonial, strategic, or commercial reason for remaining even if Hong Kong were defensible.'' It has not been, however, the realization that Britain might leave before its lease on most of the colony expires in 1997, but the circumstances of how the British will depart that has most disturbed Hong Kong's Chinese, especially the middle class. Until now, most of these people have contemplated only two alternatives: British rule or Chinese rule following a People's Liberation Army march across the border. Upon these two alternatives they have laid plans either to run for it or to stay. Now in the wake of Macao and the colony's current troubles has come the unsettling revelation that a third alternative exists: a twilight status where there would be a sphere of British control and a sphere of Cormmunist Chinese control with a vast, no-man's-land in the area of law and order, where the capriciousness of Red Guard mob rule might decide the issues in the streets. Even those Chinese who might have welcomed an outright Chinese take-over are not prepared to live in such a continual purgatory. Those who can are trying to get out. Visa applications at the Nationalist Chinese, Canadian, and other consulates whose countries encourage Chinese immigration have shot up 330 per cent. The consulates have long since run out of printed forms and have had to mimeograph additional applications. Although the percentage of Chinese leaving is minute, those who are leaving are the very people -- doctors, dentists, architects, and scientists -- whose departure most hurts the colony. For the great masses of Chinese, however, born in Hong Kong and without passport or profession, emigration from Hong Kong is not a possibility. They must stay.

BBC 紀錄片：末代港督彭定康

CNN Transcript: Interview with Margaret Thatcher June 30, 1997

Transcript: Interview with Margaret Thatcher

June 30, 1997
Web posted at: 6:49 p.m. EDT (2249 GMT)
On Sunday, June 29, CNN's Bernard Shaw talked with former British Prime Minister Margaret Thatcher.

---

Shaw: Lady Thatcher, from America to India to Jamaica, points in between and, now, Hong Kong. Your thoughts on losing another British colony?

Thatcher: Particularly sad, the circumstances are unique, all the other things that you mentioned we did rule over for a time and brought each to independence, because we were able to do that. What's different, you'll say with Hong Kong? Hong Kong is the subject of three agreements made many years ago. First, 1842, when we acquired the small island of Hong Kong - freehold - that is only about 4 or 5 per cent of the present land, followed by another treaty for the strip of land on Kowloon, the other side of a small bit of sea. Together these only make up 8 per cent of the present day Hong Kong. Then we went back and said that's not enough for our trading purposes; we wanted to keep a 
big trading base. They wouldn't let us have any more land freehold and they gave us a large piece of land on lease, a 99 year lease and that lease ends the 30th June, 1997. So, there we are. We always knew that was a lease and I now naturally could wish our forebears had negotiated freeholding. So by international law that land reverts to China on the 30th of June. Only, it's not barren land. It is a prosperous, thriving community; it is Chinese talent, British administration, liberty, justice and rising democracy - has been wonderful for Chinese people.

Shaw: Lady Thatcher, in the scenario you just painted, you make it sound as if all of this was with China's consent. The fact of the matter is you fought two wars, you came in and you took Hong Kong.

Thatcher: We did indeed take two wars, yes. We were, in fact, trading. There was, I'm afraid, some trade in drugs. None of us would defend that now. We have learnt a great deal in the 100-150 years 
and I can only wish that Mainland China had so much. If so we would never have had Tiananmen Square. We would never have had a cultural revolution.

Shaw: How is Prince Charles taking all this?

Thatcher: I imagine with sorrow and dignity, and we are all concerned - of course we are. 'One Country Two Systems' was Deng's idea. The question is will they really let the people of Hong Kong have the full measure of a life of liberty, of a rising democracy.

Shaw: Nearly 13 years ago, when you signed the Joint Declaration with Deng Xiaoping, you spoke of a stroke of genius. You said "One party two systems" was an ingenious idea. Do you still think so?

Thatcher: Yes, it was an ingenious idea. But ideas have to be worked out in detail. And we spent two years negotiating and Geoffrey Howe was in charge of the negotiations - he was quite brilliant - and 
he did it, and all of the provisions are there. The question is will they be fully honoured. I am afraid one has been broken. They did not like it when we decided here to have what are called the functional constituencies or occupational groups being allowed to decide who should represent them on the Legislative Council. They regarded that rather differently from the way we regarded it, and it has led to them saying that the Legislative Council which is partially elected will end with the handover and be replaced by a nominated council for a year. Obviously, that concerns us deeply.

Shaw: You said you have mixed feelings about this handover. There is this business about the troops rolling into Hong Kong-will it further scramble your feelings?

Thatcher: I think it is not so much the troops as the manner of their coming. We had from time to time, something like 9,000 troops here. Obviously, Hong Kong is a long way from home so we had to have measures to protect Hong Kong. We had 9,000 troops. Now you'll say quite likely that British troops are very different from Chinese troops. But the real trouble is they are going to come in in high publicity with armored personnel carriers. Now that is just totally insensitive. Because it was armored personnel carriers that were present at the terrible events at Tiananmen Square and immediately that raises problems with us. So that is, it is not their having troops here - although troops are usually only to defend the country against outside attack. The internal order is kept by Hong Kong Police. So there are two points. Will the troops be used for things that only the police have the authority to do? And the second is - why armoured personnel carriers? It is not right.

Shaw: The soon-to-be Chief Executive here, Mr. Tung Chee-Hwa says yes to peaceful demonstrations in memory of the Tiananmen Square massacres. He says no to any public demonstrations in support of Tibet or Taiwan. Is this a cause for apprehension?

Thatcher: To us, yes. Of course it is. Because we have a right of peaceful demonstration. You'd usually have to apply to an authority to tell them when and where you want to demonstrate and the numbers. But we would have the right for peaceful demonstration. And I think in the declaration that we agreed, the full freedoms of associations are protected there. He is now saying you can't do anything internal to China, but Taiwan of course is quite different. Taiwan is separated from Mainland China by sea and she has her own independent government, so I would not include Taiwan in that at all. But to us it is very different from our law of peaceful demonstration. Yes, that does concern us.

Shaw: Do you fear Britain's rule of law legacy is threatened?

Thatcher: It is again specifically protected, one of the things that Deng Xiaoping understood. When he said two systems, he did not like the idea of democracy at all, that wasn't in his mind. He was quite clear. He said you can keep your capitalist system and its economic liberty that has produced prosperity and he knew because he had traveled the world, that the communist system only produced poverty. So it had to go to capitalism and he accepted that. And he also knew that there was something rather wonderful in the British rule of law. So he said that you can keep those two things. For 50 years, that is what is in the Declaration - capitalist system with British rule of law, with British independent judges. And I hope, I believe, that will last. It is the greatest bulwark of liberty that we have ever known.

Shaw: Mr. Tung says he is not Beijing's puppet. Do you believe that?

Thatcher: Mr. Tung? Mr. Tung has lived in Hong Kong, he knows Hong Kong, and I think Hong Kong people are very much happier with Mr. Tung obviously than maybe with anyone from mainland China. And I think you'll find that they can go and talk to him, I think he may not be as entirely free as we would wish, but I think he'll have the well-being of Hong Kong people very much in mind and their way of life. And he lives here, he has lived here for a long time, and he is a man who'll wish to do his best for the people among who he lived for so long.

Shaw: You think he is up to the task?

Thatcher: I think he is a very significant person and he will rise to what is required.

Shaw: In monitoring Hong Kong, should China's leadership be held up to an international checklist?

Thatcher: China's leadership will be. The eyes of the world are on Hong Kong. Look at the number of people who are coming for the handover. The eyes of the world are going to watch that China honours her treaties. She may have had one or two breaches at the moment. If China doesn't honor this treaty then there is never any point in making a treaty with China. If you break one, you will break another. So it is significant to China that she is seen in the eyes of the world to keep Hong Kong a prosperous and free country and with a rule of law. And the penalties for not doing it would be that she would drop severely in the eyes of the world, get severe censure and people would not do business with her in the way that they otherwise would because they would lack the confidence. So there is that for saying that China will most probably keep her treaties in very large measure.

Shaw: Was Chris Patten's leadership here too out front, too aggressive for this culture?

Thatcher: No. Just remember when Chris came here, there had been Tiananmen Square in 1989. That shocked the world. It particularly shocked Hong Kong because they knew full well that the end of the lease was coming and something extra special was expected of Chris. He couldn't just carry on as a Governor as if Tiananmen Square had not taken place. So, yes, he did make changes, He did give them extra confidence particularly to make the arrangements for them to decide who should represent the occupational groups. And he was right to do so. And any Western country would have understood that. And here you come up against the most fundamental differences - really only countries you and I know - where the government is elected by the people and its purpose is to serve the needs of the people under a system of liberty and law. And a communist or fascist system when government is rule over people without any rights of the law that we understand, and they can just take you off the streets or they can, in fact - infringing, for saying what you like of the government as we have an opposition to do that. They can, in fact, do what they did to Mr. Wang and Mr. Wei - put them in 
prison for exercising freedom of speech, put them in prison for 14 years' sentence. And eventually they have now got economic liberty in China, because Deng Xiaoping understood that if you wanted prosperity you have to go to the capitalist system. The history of the world is that personal and political liberty will follow and it will. But it may take longer, a good deal longer.

Shaw: In your judgement, why does China have such paroxysms over the concept of human rights?

Thatcher: Because human rights is part of regarding each and every individual as being important. Human rights really come from the biblical view. In the Old Testament, the 10 Commandments are addressed to each person - each person matters. We have the biblical view of the Old Testament that each person matters and the biblical view of the New Testament of mercy and redemption. And also of true Islam of course, comes to accept the old and new testaments. It is a fundamental foundation belief - sometimes it comes from philosophies, but that is what human rights is: each and every person matters. It doesn't matter to the communist system. Communism is a system. Take all planning to government and do what you can - you order the people about. They are not significant in a communist or fascist system. To us each and every person matters - it is a sanctity at the end of it, and the differences are as basic as that.

Shaw: Is it conceivable the Hong Kong fever will spread across China's triggering social reform regardless of whether the Chinese leadership wanted them?

Thatcher: Yes. That is the hope. It is just like putting one little crystal in a big solution. You know all of the rest of the solution -in chemistry- crystallises onto the one crystal. Hong Kong: Chinese people will come to Hong Kong, they'll see and they'll say why is it different, and what is the difference? It is the same people, the same talents, but here there is a rule of law founded on the belief that each and every person matters in personal lives and they have a British administration. So they will know that if you transfer that to China, the kind of administration, the kind of rule of law, the kind of respect for the individual, they too could be a massive Hong Kong. So Hong Kong will be an example. She, I suppose, really, in a way is the flag ship of what the China people can do.

Shaw: What is the difference between negotiation, say, with the Russians and the Chinese?

Thatcher: Well, right now, Russia proved what we always said would happen, although it came quicker than we thought. We knew the communist system eventually would collapse. You can't ignore human rights eventually, without the system collapsing, particularly in the modern world where they can't keep out information on the Internet about what's happening to other countries. And also, Mr. Gorbachev - he doesn't get enough credit - realised the communist system wasn't working economically, was not producing prosperity, was meant to be the system that produced the greatest prosperity because it was all planned. It doesn't produce prosperity because it offers no stimulus or incentive to people to build up their own prosperity. So it came faster in Russia. China has no history of liberty at all. She has always been under tyranny. She went from being under Chiang Kai Shek and Kuomintang, to come under communism in 1949. It will eventually collapse also.

Shaw: Do you think this system of government here in China...

Thatcher: Communsim will eventually collapse. Indeed, it is starting. Deng Xiaoping realized it couldn't go on. So he said right - economic liberty. You can start up your own business. If you produce more than your target in the factories you can set out to sell it. They are born traders the Chinese. Beijing is so different from what it was in 1977. It has got the economic liberty. It has not yet got a full rule of law, although they are having to supply now and create a law of contract so that you can in fact enforce your own contract. Law is coming too, to China, initiative is coming to China, enterprise is coming to China. It won't stop.

Shaw: Might things have been better had there been better chemistry between you and Deng Xiaoping? During the 1982 talks, referring to you, Mr. Deng said "that woman should be bombarded out of her obstinance."

Thatcher: Well, that is what he'd want to say, wouldn't he? If you had argued with him you are obstinate. He was obstinate - he argued with me. But I didn't complain about that. We survive on argument, that is how come to the right conclusions. Yes, I was obstinate and because of that at any rate we didn't get a good agreement because of dependent detail. Because he knew we produced prosperity and he didn't and he started to change. Why? Of course, I am obstinate in defending our liberties and our law. That is why I carry a big handbag.

Shaw: Following the Falklands War, did hubris from having won that war make you believe that you could persuade the Chinese that Britain should continue administering Hong Kong with an umbrella of Chinese sovereignty?

Thatcher: No, there was no hubris in Falklands, only a fantastic relief that our people were once again free and we were not going to have an aggressor taking over British land and British people. And we don't like aggression anywhere in the world, that is why we believe in strong defense.

Shaw: Well, Sir Percy Craddock, Britain's Ambassador to China said that you had to be persuaded, that you had to be told, that there was no way Britain was going to remain an administrative force of Hong Kong with the Chinese being the mere sovereigns.

Thatcher: Well, that Deng Xiaoping told me. I'll tell you what he told me. I have written it. I said that we have done so well for Hong Kong, for Hong Kong people, that can we not have another lease say for another 50 years? He reacted very quickly. He said no. I said can we not have another lease? I said we have done so well on a territory which I know will eventually return to you. Wouldn't you really let us have...it would be an act of sovereignty to give us a management contract?

Shaw: They were outraged. Is that when Mr. Deng told you that if the Chinese wanted to they could walk right in here and take Hong Kong?

Thatcher: Oh yes he said he could. But I know that I didn't need to be told. That is why I had to ask him. But, he said to me, which really rather shook me: I would rather recover Hong Kong poverty stricken than let the British have another period of administration over Hong Kong. Now, that shows you the communist mind- not concerned about the prosperity, about the well being of the people.

Shaw: You don't trust him, do you?

Thatcher: I don't trust a communist, do you?

Shaw: I can't answer that, I am the reporter asking questions.

Thatcher: It is interesting that you asked it. No Just make an assessment of the person you are negotiating with. What I had to do was - I knew that Hong Kong was valuable to him. I knew that they could do a lot through Hong Kong that they couldn't do otherwise. And so eventually he agreed. And when he said to me: I could take it over - I could take it over this afternoon, I said yes, you could. And it would become poverty stricken, because there would be alarm, people would leave, and the world would know it was the dead hand of communism that ruined it. So, he said, what did you have on that piece of paper, Mrs. Thatcher? And I had written out a possible communique which said that we had decided to negotiate about the future of Hong Kong. Perhaps not that we'd negotiate that we'd have a series of meetings about the matters that would come up. This is 15 years, because we could not get any loans from banks for properties -anyone - in less than 15 years, so we had to negotiate. And we did the communique which I had drafted and the negotiations started and it took two years.

Shaw: At these historic ceremonies, will you be fighting back tears?

Thatcher: I hope the tears won't flow. My mind and heart will just be very full for the people of Hong Kong. And just tremendous hope that all will be well, and a determination that, along with other democratic countries in the world, we observe very carefully what is going on in Hong Kong. And we don't hesitate to speak out for the people of Hong Kong and do what we can to see that that international agreement I made with Deng Xiaoping, registered in the United Nations, is fully observed and upheld.

養了一群逆子

Feb 15, 2011 3:54 PM 港澳台　或成中美較量的風眼

http://www.chinareviewnews.com   2011-02-08 00:09:09

東盟是中美文明衝突的必爭之地 　　　　　 中評社香港 2月8日電／全國人大香港基本法委員會委員劉迺強在《中國評論》月刊2月號發表專文《中美較量的風眼狂_》。作者認為：港澳台“既是中國的一部分，但卻不由中央政府管轄的狀態。這幾個地區既是中國核心利益的所在，但卻完全暴露於美國為首的西方影響之下，更是未來中美文明沖突的風眼。”文章內容如下： 　　中國模式：西方的恐懼 　　上世紀 90年代初鄧小平提出要“韜光養晦”時，中國的國民產值只是今天的五分之一，西方世界大都認為中國會隨蘇東之後全面崩潰，只要中國不過分出位，美國就只會把中國放在一張很長的黑名單之內，不會特別針對。但到本世紀前後，中國繼續成功，經濟增長翻了一番多，一廂情願的“韜光養晦”已經開始不再奏效，美國明顯以中國為頭號針對的對象，一再挑釁，軟的、硬的，全都用上，逼中國回應，好讓它有藉口修理中國，壓抑它的成功。而以當時的國力，中國除了堅持“韜光養晦”，硬嚥下去，別無良法。 　　 2001年出現了“911”事件，形勢急轉，美國把精力集中對付阿富汗和伊拉克，主動向中國修好。曾幾何時，美國曾經先後拋出過像“Chinamerica”、“G2”等甜蜜建議，希望中國跟它聯手，讓美國繼續統領全球，並從中上下其手。中國基本上不受哄，雖然沒有一套完整和進取的外交指導思想，仍然堅守自以為成功，並且可以繼續下去的“韜光養晦”原則，拒當國際員警副手，甚至連“G8”都沒有興趣。美國在碰了一鼻子灰之餘，更遇到2009年的國際金融海嘯，西方世界不單被沖擊到零星落索，要乞求社會主義性質的國有化來解決燃眉之急，而中國經濟不但在出口市場衰退打擊之下依然維持增長，更帶動東亞經濟保持活力。 　　此消彼長之下，美國和西方世界真的感受到中國的威脅。這威脅並非來自經濟，更無關軍事力量（雖然這些因素都很重要和感覺上直接，但中國在這兩方面的體積都只是美國的幾分之一）；而在於中國整個體系，即近數年來國內外很多人在討論的“中國模式”的成功。雖然中國從來沒有刻意輸出“中國模式”，官方甚至從不用這字眼，也不鼓勵有關討論，但中國過去 60年眩目的成就擺在那裡，其他發展中國家自然會去研究和模仿。從西方的“一神傳統”望去，這會使世上越來越多人懷疑西方三百年宣傳那一套真理，連帶於90年代宣稱“美國模式優於任何發展模式”，到達“歷史終結”的至善境界的福山，最近也高度評價“中國模式”，認為“中國崛起帶來的可能是一種全新思維、一種深層次的範式變化、一種西方清b存理論和話語還無法解釋的新認知”。(注1) 這樣一來，中國模式甚至超越了同是源自西方的資本主義和社會主義的意識形態挑戰，上升至亨廷頓所預言的文明沖突。在這層次上，美國和歐盟雖然利益有所不同，具體事件的態度並不完全一致；但對“中國模式”的最終立場，卻是無二的。你可以說中國的經濟發展比西方快，你可以說中國菜比西餐好吃，但你說“中國模式”比“美國模式”或者“西方模式”強，那就接近說中國人比美國人聰明，或者中國男人那話兒比老外的長，他們是很難接受的，非得要分個高下不可。由此觀之，就不難明白奧巴馬高調宣稱美國決不會做老二，並積極把腿從伊拉克和阿富汗抽出來，重新部署，將戰略重點東移到東亞，直面“中國模式”的挑戰，並且得到整個西方世界，和還想繼續留在西方陣營之內的日本附和。 　　軟衝突隨處可見 　　根據西方的論述，當代人類的文明就是來自希臘和希伯來這兩條主線，西方當然是第一。彭定康最近經常被引用的話，認為中國在過去二千年中，除了最近的二百年，一向都是世界經濟第一位。但大部分西方人和中國某些知識分子都不認識這事實，或者認為只有最近的二百年才重要。另一方面，中國一向認為它是世界的中心，周邊的都是蠻夷，中國是泱泱大國，無所謂第二；而即使在最近二百年，當國家沉淪到次殖民地的絕境，它也堅決不做任何國家的附庸，毛澤東和蔣介石於最艱苦的時刻，都堅決不接受外來的領導。中國的文化不會自謀稱霸，但也決不會甘當老二。

　　以美國為首的歐洲中心自以為是的“一神文明”，和不能自己的“傳教文化”，碰著向不臣服和今天蒸蒸日上的中華文明，以及“寧為雞口，不為牛後”，自願取經，但不受“改造”（conversion）的陰柔包容文化。今天不是中國主觀上是否要挑戰西方（事實上，整個改革貽d放，都是在中國不挑戰世界現狀，遵守西方文明主導的“國際慣例”，更主動融入這遊戲規則當中進行的），而是中國的現況和走向已經被西方視為威脅，中國極力想避免一場正面衝突，但美國步步進逼，惡戰難免。

　　事實上，中美今天已經幹上了。因為中國擁有核武器，二戰以後從來都只以大欺小、以強淩弱的美國不會明刀明槍的跟中國打一場熱戰。但是在去年不到一年的時間，美國已經聯同中國的周邊國家，完成了對中國前所未有的海陸“C型”大包圍，並且通過大量軍售、演習等向中國耀武揚威。

而除了熱戰之外，現代國家安全範圍中的其他戰線，包括貿易戰、貨幣戰、外交戰、能源戰、糧食戰、信息戰、科技戰、文化戰、人權戰、環保戰, 中美都只能說是在交戰狀態中，暫時互有攻守，未分勝負。而從上世紀90年代蘇聯冷戰被打敗、崩析之後，入口和經濟都收縮，20年後的今天，還未復原到當年的水準的經驗，敗於一場沒有硝煙戰爭的慘痛後果，絕對不亞於熱戰。中國當然不想掙紮了200年、努力了60年，得來不易的成果毀於一旦。可以想像，美國也絕對不想面對“中國模式”風靡全球，歐洲中心文明在美國領導之下，淪為非唯一主導文明的局面。

　　因為中國從來都沒有意圖輸出“中國模式”，直至目前，中國依然堅信當前要務是爭取一個較平和的空間，在至2020年的機遇期中，做好自己的工作，繼續以較高速度增長，於期末人均GDP達到8,000美元的水準。所以即便在其周邊國家，甚至在其“經濟盟國”－東盟10+1自由貿易區中，中國也會基本上處於戰略防守狀態，希望通過在全球廣設孔子學院，加強全球新聞播放、爭取在國際貨幣基金會的投票權等手段，爭取國際話語權，保持中國不再繼續吃虧、不被妖魔化，因而被歧視，妨礙它達成這中期目標。

　　只是如果中國這策略成功，繼續保持發展的勢頭，不但經濟體積會更逼近美國，而這客觀上更證明“中國模式”成功。加上地緣關係，東盟十國，勢將更與中國共進退，重新形成西方十分擔心的東亞“朝貢體系”。因此不論中國的主觀願望如何，東盟必然是中美文明沖突必爭之地。短期來說，美國想藉南海問題拉攏東盟諸國，挑起爭端，企圖共同制衡中國的發展，而中國亦向美國正面表示南海是中國核心利益，劃下了底線。

港澳台成為未來衝突的風眼

　　沖突更加尖銳的熱點，當然是大中華圈內回歸了，在“一國兩制”之下的香港、澳門，和尚未和平統一的台灣。這些地區於中國政府的觀念中，都處“國內境外”的地位；它們既是中國的一部分，但卻不由中央政府管轄的狀態。這幾個地區既是中國核心利益的所在，但卻完全暴露於美國為首的西方影響之下，更是未來中美文明沖突的風眼。

　　於1997年香港回歸之後，中央政府堅守“不干預”的諾言到“過正”的地步。香港不但從沒有做過去殖民地化的功夫，更歌頌前朝，重用舊臣，騰出平台讓人家大搞去中國化。到今天，中學的語文政策比殖民地時代都不如，中文中學不單淪為二等地位，並且還在退縮中；中國文化、中國歷史這兩科，基本被取消。“親中”的言論，只能在讀者極少的《文匯報》、《大公報》和《紫荊月刊》這“兩報一刊”上主要以筆名作象徵性的存在；而非平面媒體，則幾乎全面淪陷。此外，法律、教育、社工等關鍵環節，都是反中的“重災區”。面對2017年開始全面普選，不投票給反對派的選民，始終少於四成，而最近一連串的民調顯示，在2010年開始，香港本土意識急劇上升，並且有逐步成為全球最反共地區的趨向。中央駐港機構“中聯辦”門前示威開始頻密，最近更有裁判署判例認為這是公共地方，示威者可以隨便進入??

　　澳門形勢表面稍好，因為傳統的愛國力量較為強大，但在回歸後十年間，支撐澳門經濟的賭業控制權，竟然稀裡糊塗的落在美國人手上，並且成為澳門最大的雇主。在香港的美國領事館，近年悄悄地升格為香港及澳門總領事館。澳門極少數的反對派，已經跟香港的反對派互為犄角，受香港反對派的支持和呼應。

　　至於台灣，經過陳水扁八年的經營，“統一”這兩個字，已經在包括國民黨在內的主要政黨之間消聲匿跡，政治光譜已收窄到只有“台獨”和“獨台”、“隱性”與“顯性”的分別。而根據民調，市民之間本土意識高漲，而語文和歷史課程和教科書，更推動形勢朝獨方向走；支持統一的市民，已逐步下降至不到一成。

　　從以上簡略的介紹，我們可以很清楚的見到，在今天美國還未下攻擊令之前，台、港、澳的形勢都已經十分嚴峻；往後幾年，三地都有重大選舉，尤其是2012年台灣和香港兩場首腦的選舉，更是決定兩地未來八至十年政治走向的關鍵。在當前的國際大環境底下，如何評價和對待“中國模式”，將會是這些選舉中或隱或顯的重要議題，每一個選民，都要就這議題作不同程度的抉擇，成了中美文明衝突風眼狂飆中無助的砂石。

　　可以想像，於未來的一年多，對於“中國模式”的攻擊，將會以不同形式不斷在台港兩地頻繁出現。最近於香港炒得天熱的劉曉波、趙連海等事件，只是這場文明鬥爭戰役的序幕，旨在向兩地市民證明中國的制度不好，“中國模式”就等於專制不民主、貪污腐敗、官商勾結、社會不公、環境污染，因而要敬而遠之；進而向外宣傳：你看，連他們在台灣和香港的同胞都抗拒“中國模式”，可見這不是好東西；西方文明雖然最近稍有挫折，但畢竟代表著“正義和真理”。而立竿見影的是台港兩地選舉很可能一再失利，局面更加嚴峻。

　　可以預見，在本文發表的時候，美國對中國新一輪的攻勢已經在進行中。對於未來兩年在自家院子內既頻且猛的連續受襲，中國不可能不作應對，更不容有失。但是習慣只守不攻的中國，弱勢已成，長期處於下風，如何在短時間之內擋住襲擊，穩住陣腳，進而扭轉局面，必將是北京領導層智慧的最大考驗。這裡，與美國的情況不同的是，“中國模式”中沒有政黨輪替，互拖後腿，政策可以快而猛，並有其極強的延續性，而且不受選舉的需要所影響。奧巴馬需要應付共和黨佔多數的國會，要分心2012年作他連任的選舉，並要做一些短期行為來討好他的選民 。

　　（本文作者劉迺強是《中國評論》月刊學術顧問）

　　
(注1)莊後舉、張西立：“近期有關‘中國模式’研究觀點綜述”，轉引自于迎麗：對“中國模式”的外交解讀。2010年研究會論文
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評﹕

香港是祖國的后花園, 是反共勢力的橋頭堡, 前港英殖民政府的高官 (例如陳方安生) 退休後﹐都被美國智庫收編﹐ 成為反共反華的先鋒顧問﹐ 這種人退休後還接受香港納稅人繼續供養他們給他們豐厚的退休金﹐ 卻幹著賣國投敵的事情﹐香港媒體受到西方資本帝國主義集團嚴重滲透﹐宣傳戰每天發生在祖國的足下﹐ 祖國卻還未意識到香港在宣傳戰上怎樣吃里扒外, 共產黨在香港沒有宣傳機器沒有代言人﹐ 幾份大陸報紙嚴重脫離時代感和脫離群眾﹐ 共產黨做好事沒人知﹐ 做錯了就被蘋果日報﹐ 明報﹐南華早報之類的和一眾新興的互聯網媒體無限上綱上線﹐中央只能在政治上拉攏著一群因為回歸而變得突然親中的官僚作為中央的政治代理人﹐ 這是沒有用的, 這些人對上投其所好, 對下脫离群眾, 所以, 香港只能做到主權回歸了祖國, 人心跟祖國的決裂比港英殖民地時代更為嚴重。 不過歷史不是直線發展的﹐本來奧黑馬班子已經磨刀霍霍沖著中國而來的了﹐ 怎知阿拉伯世界的亂局﹐ 打亂美國的外交秩序議程﹐ 希望阿拉伯人攪它十年八載﹐ 教美國和以色列忙個不開, 好讓
中國又以時間換空間去完善自己的經濟發展和各方面的建設﹐ 到時再回來看看美國折騰到什麼地步。

東方日報評論：姑息養奸十五載 餘孽篡逆臥七年

 東方日報評論：姑息養奸十五載 餘孽篡逆臥七年

Mar 21, 2012 10:52 AM

 鄧小平曾經說過，「港人治港有個界限與標準，就是必須由以愛國者為主體的港人治理香港。」回首香港回歸十五年來的風風雨雨，正是由於中央政府沒有嚴格遵守 「愛國者治港」的原則，模糊了界限，放棄了標準，才造成今日香港的亂局。尤其是今次特首選舉，當局人鬼不分，賢愚不辨，導致烏煙瘴氣，鬧劇連場

撕破臉皮 對抗中央
眾所周知，今次是小圈子選舉的絕唱，也是中央政府可以操控的最後一次，中央開放兩名建制派候選人競爭，為下屆特首普選「熱身」，這是無可厚非的。可惜事情 的發展超出了當初的預料，兩名建制派候選人不是比政綱、比能力、比民望，而是互相抹黑、互相潑糞、互相撕咬，以致亂象叢生，造成建制派嚴重分裂。其實，唐 英年及梁振英本來都是中央可以接受的人選，奈何他們同室操戈，相煎太急，充分暴露中國人喜歡窩裏鬥的劣根性，有人形容這場選舉是「濫鬥濫」，一點也不誇 張。

更不堪的是，唐英年為了維護自己及其背後的既得利益集團，竟不惜撕破臉皮，公然對抗中央。他一方面推崇反對派候選人為「君子」，另一方面辱罵同陣營的候選 人梁振英「既狼且辣」；而當唐英年醜聞纏身、民望低企、大勢已去時，他本人及支持者更明言寧願投票支持反對派，也不會投給梁振英，甚至鼓吹投白票、流選、 撤資，以此威脅中央，與當年英國人威脅遷冊、撤資如出一轍。為了製造流選亂局，他還對梁振英提出兩項既無物證、亦無人證的嚴重指控，企圖同歸於盡。權力使 人瘋狂，唐英年已到了利令智昏、不擇手段的地步。

違反保密 港府縱容
唐英年公然違反行政會議保密原則，行會秘書處事隔四日才發表聲明，指行會成員必須堅守和尊重保密制，絕對不容牴觸，如有人違反，行政長官可視乎情況採取適 當行動，包括勸喻、警告、免除職務或採取法律行動云云。然而，這份姍姍來遲的聲明既未提及唐英年的名字，也沒有說明當局將會採取甚麼行動。

事實證明，唐英年並不是孤獨的，其背後有一個龐大的利益聯盟，這個聯盟成員包括唐營、唐營B隊、大商家，還有扮演無間道的港府以及外國勢力。可以說，這場 唐梁之爭，不僅關乎特首人選，而且關乎香港何去何從。當年英國人圖謀以「主權換治權」，被鄧小平一口拒絕，但西方勢力並沒有放棄，他們知道在小圈子選舉之 下，反對派不可能勝出，所以轉而在建制派中尋找代理人，並利用競爭分化建制派，目前看來，他們的圖謀已經收到預期效果。

天要下雨 娘要嫁人
天要下雨，娘要嫁人，這場事關香港管治權的大決鬥，一般預料下屆特首普選才會出現，沒想到竟然在今屆提前發生，中央政府被殺得措手不及，陷入被動。事實 上，中央用人不當，在挑選香港領導人方面已經一錯再錯。首任特首董建華無疑是一位愛國愛港人士，可惜他老實有餘，能力不足，加上孤家寡人，在港英餘孽百般 掣肘之下，不得不半途而廢，腳痛下台。

到英國爵士曾蔭權接任特首，中央顯然已經放棄「愛國者治港」的原則，本來以為借助曾蔭權數十年公務員經驗，可以撥亂反正，改善港府施政，結果不但事與願 違，曾蔭權臨下台還要「玩鋪勁」，在今次選舉中發揮無間道本色，暗中搞鬼，「挺唐插梁」。事實告訴人們，曾蔭權治港七年，亂足七年，餘孽治港比商人治港更 加不堪。

至於唐英年，中央政府一早選定他為接班人，並悉心栽培了十年，但他除了能力低下，而且政治幼稚，根本就是扶不起的阿斗。迫不得已之下，中央只好臨時變陣， 准許梁振英落場參選，惟北京內部對此顯然有不同意見，有人挺梁，有人挺唐，訊息混亂，造成今天建制派互相撕咬的亂局。某種程度上說，唐梁之爭其實是北京派 系鬥爭在香港的延續，這正好給反對派和西方勢力提供了渾水摸魚的機會。

毛澤東說，政治路線確定之後，幹部就是決定的因素。香港的問題千頭萬緒，歸根結柢就是領導幹部的問題。三國時代，文武兼備的魏延投靠劉備，受到重用，但諸 葛亮一早看出他「腦有反骨」，一直加以防範，臨終前知道魏延必有一天會叛逆，故授命馬岱日後將他斬殺。如今的香港，「腦有反骨」者大有人在，可惜中央政府 沒有諸葛亮的先見之明，反而敵我不分，做盡親痛仇快的事，香港豈能不亂！

尾大不掉 萬劫不復
「廟堂無策可平戎，坐使甘泉照夕烽。」挑選愛國者容易，挑選既愛國又有能力者難，再說，即使下屆特首既愛國又有能力，要收拾曾蔭權政府留下的爛攤子，重新 整合建制派，又談何容易。實際上，今次建制派嚴重分裂，反對派趁機坐大，西方勢力見縫插針，在此緊急關頭，中央政府不得不施以雷霆萬鈞之力，希望扭轉局 面，怕只怕有人故意搗亂，情況已非中央所能完全控制。

「姑息養奸十五載，餘孽篡逆臥七年」，香港已經夠亂了，一旦管治權再度落入外國代理人手中，將來尾大不掉，香港必將陷入萬劫不復之地！

英國人每在一個殖民地撤退之前, 就處心積慮地在那個地方留下長期不穩定的因素 !

Nov 29, 2009 12:39 AM


香港地方雖然小, 但是祖國必須記取歷史教訓, 不要誤以為這种傳媒和政客事無大
小都要質疑都要過問都要吵鬧不休的政治文化就是民主, 就是祖國的榜樣! 

1840年中英發生鴉片戰爭，中國戰敗，在1842年簽訂【南京條約】將香港割讓給英
國。英國對華的侵略是步步為營的，當然不會以擁有香港為滿足，因為香港島實在
太小了。1856年，英國与法國聯合發動第二次鴉片戰爭，中國再一次戰敗被迫簽訂
【北京條約】，把九龍半島割讓給英國。九龍半島的面積也不大，只有46.9平方公
里，与南面的香港島隔海相望，最短的距离大約三公里。  英國人明白加九龍半島
是不可能自給自足的，于是英國又于1898年逼迫清政府簽訂【拓展香港界址專條】
租借九龍半島界限街以北的大片土地以及附近兩百多個島嶼，通稱為“新界”，為
期99年。新界与大陸連接的陸地面積是 747.2平方公里，加上 233個离島，總面積
達到 975.2平方公里，占香港區域面積的88.6％，將近九成。

如果沒有新界，香港与九龍是不可能存活的。這就是新界對中英談判的重要性!
　　
　　　　香港与九龍屬于永久割讓，但是新界是租借的，為期99年，1997年07月01日
到期。
　　
　　　　阿根廷軍隊是在1982年06月14日向英軍投降，由于新界的租期即將滿約，
三個月后“鐵娘子”撒切爾夫人就以戰胜阿根廷的軍威意气風發地來到北京要求繼
續租借新界。
　　　
　　　　中國人的策略是不談新界的租借如何延期，只談香港与九龍如何歸還。
　　
　　　　撒切爾夫人在人民大會堂還想跟鄧小平討价還价，她的理由是“香港只有
在英國人的管理下才能維持繁榮”。撒切爾夫人的話是帶有嚴重侮辱性的。
　　　　
　　　　鄧小平的回答是：“香港与九龍必須歸還給中國。主權問題是沒有談判余
地的，今天我跟你談論這個問題，是給你面子。如果英國不准備自動歸還，中國將
啟動自己的程序提前收回香港与九龍”。

        撒切爾夫人知道自己踢到了鐵板，面臨軍事攤牌。如果會場不見，那就戰
場相見。但是英國不是省油的燈，英國選擇繼續談判，利益不但要全力維護，而且
即使退讓也要一點一點地退讓，不放棄任何細節，盡可能爭取最大的利益。英國是
談判桌上的高手。
　　
      英國最大的花招是堅持用主權交換治權，這個要求被中國嚴詞拒絕。1983年
09月，鄧小平對訪華的英國前首相希思說，主權交換治權不可行，如果英國不改變
態度，中國將在1984年09月單方面公布解決香港問題的方針。一個月后，英國首相
回信同意在中國建議的基礎上繼續談判。在隨后的兩論談判中，英國确認不再堅持
香港由英國治理，也不謀求任何形式的共管，并且同意在 1997年07月歸還香港与九
龍的主權与治權。
　　
　　　　第二階段的談判從1983年12月到1984年09月，英國人要求中國承諾不駐軍
香港、要求英國駐港官員的地位高于其他國家的駐港總領事、要求中國允諾英國在
過渡期間對香港政府可能作出的改變、要求中國在 1997年后原封不動地接受英國留
下的香港政府．．．．．等等。英國的主張實際上就是要把未來的香港變成英國能
夠影響的獨立或半獨立的政治實体，直接抵触中國的主權。
　　
　　英國是老牌帝國主義，即使身處弱勢仍然不肯放手當年搶奪得來的土地。中國
對英國這些要求當然堅決反對，一項也不能接受。談判不得要令后, 英國人就在過
渡期間埋下地雷。
　　
　　[地雷一]:

赤腊角國際机場耗資兩百億美元，是全世界造价最貴的机場。由于造价非常昂貴，
而且所需要的貸款毫無疑問會跨越1997年07月01日的香港移交，1991 年09月03日中
英兩國終于在北京人民大會堂簽署了有關赤腊角國際机場的備忘錄，對港英政府在
過渡期間的授權与1997年06月30日以后的舉債都有所規范，并且清楚規定留給未來
特區政府的儲備不得少于 250億港元。中方同意中國銀行在貸款上發揮适當的作用，
中英兩國成立一個共同領導的“机場委員會”安排赤腊角國際机場的建設事宜。但
是港英政府早在 1990年04月，中英談判仍在進行的時候，就私下成立了“臨時机場
管理局”，把工程的合約悄悄地逐步發包，几乎所有的工程都包給英國的公司。
　　

       面對這么大的利益輸送, 香港的傳媒和議員們, 屁也沒響一個!
　　
　[地雷二]:

回歸前用房地產吹起經濟泡沫。等到1997年中國一接手這個泡沫就破滅了，房价直
落，股市狂跌，大量香港人破產。
　　
  [地雷三]:

制造政治上的反對勢力
　　
　　　　民間的策略就是開動輿論宣揚民主与人權。英國統治香港一百五十五年從
來不談民主，鞭刑抽打港人的時候也從不談人權。自從与中國達成政權移交后就開
始大談民主和普選，鞭子一放下來就開始大談人權。策略就是在港英政府培養和提
拔親英人士, 那時候就冒出一批黃皮白心的華人政府高官作為英國人撤退后留在港
府里面影響政治決策的代理梯隊，在第二階段的談判，英國以維持香港的穩定為理
由极力要求中國1997年后原封不動地接受英國留下的香港政府。

     這里面當然不是英國獨自包辦, 背后也有美國的份儿, 資助藏獨, 疆獨和民運
的NED 對香港每年都有撥款, 香港多個政党，均曾參与由美國組織主辦的工作坊及
資助的民間調查。

劉乃強：中情局、美极右勢力干預香港日益猖獗 日期:2007-10-23 大公报 基本法委員會成員、全國政協委員劉乃強表示，外部勢力干預港澳的問題非一朝一 夕，或只是針對某一、兩件事而言。這些干預活動是具有“持久性”及“廣泛性”， 且存在日益猖獗的趨勢，市民必須有所警惕，加以防范。 劉乃強認為，“外部勢力”干預，可以是包括台灣或其他地區的華人干預勢力在內。 對于外部勢力干預港澳事務是否較前嚴重，他認為暫難以判斷，但路人皆見的是， 外國領事就香港事務出聲的次數不斷增加，這是屬于最表面的一种干預，例如美國 駐港總領事郭明瀚近期就頻頻發表意見。而本港某份立場愛國愛港的雜志更撰文透 露，英、美等國的總領事如何鼓勵及支持陳太參選；這篇文章的內容雖未經證實， 但若然事情是真的，就表示外國勢力對港的干預已有新發展了。又例如民陣在開會 途中，竟有人明目張膽地大叫某領事館的職員曾來電，她如何交代。他認為，從上 述的例子可見，外部勢力干預港務的情況，已不像以往那般秘密地進行，而是變得 明目張膽，甚至可用“猖獗”一詞來形容。 由秘密轉明目張膽 劉乃強續道，外國在香港資助的民間組織、研究所、公關團体等机构，未經證實的 數字達二百多間。其中某些机构是比較出名的，例如“無國界記者”就是美國“中 央情報局”（CIA）所支配的机构，專門在世界各地批評一些与美國意識形態不同的 國家的人權狀況、言論自由等。 又例如一個叫做“全國民主基金會”的組織，它在一九八三、八四年左右，CIA專門 從事顛覆別國政權活動的財政資助，由于聲名狼藉，在美國國會兩院議員窮追猛打 下，這筆基金被迫公開，變成“國家民主基金”，受美國國會監管。而“國家民主 基金”由四派系勢力掌管，分別是共和党、民主党、工會及商界；其中有一個在香 港比較出名及活躍的旗下組織名叫“National Democratic Institute，簡稱NDI”， 即“全國民主學會”；該協會由民主党控制，并在香港設有辦事處，專門為本港某 些政党提供選舉策略。另一個還有一個比較出名的外國組織如Freedom House等。聞 說兩者都已經關門大吉，可能變成地下活動也說不定。 他續道，這類組織在香港主要透過舉辦明地或暗里的活動，如講座、研討會等，推 廣所謂“美國式民主”。 接受外國勢力資助 劉乃強又稱，以緬甸為例，美國在當地搞了一個名為“Albert Einstein Institute” （愛因斯坦學會），利用學術研究作掩飾，專搞顏色革命，其領袖叫做Gene Sharp， 這個人在八九“六四風波”前在北京非常活躍。 另一個叫“Eurasia Foundation”的組織，去年于青海成立了“民間組織資源中心”， 剛剛還召開了一個有關關于“非政府組織”在中國發展的會議，這組織也是出名搞 顏色革命的黑手。 美國就是通過這些分布各地的民間組織，嘗試通過顏色革命去改變那些与美國意識 形態不同的國家。 劉乃強表示，在本港的政治或研究組織里面，受外國勢力資助最多的机构，首推由 陸恭蕙領導的“思匯政策研究所”，她自己也曾承認接受NED及NDI的資助。陸恭蕙 再以這些外國資金去資助本地的各類活動，例如保護維港、推動普選、反二十三立 法等。談起陸恭蕙這個人，大約在一年前，她剛接掌了總部在美國紐約的“ 中國人 權”的主席；美國政府經常透過“中國人權”這個組織，資助一些中國流亡海外分 子，從事反對中國政府的活動。 試想想，陸恭蕙這位土生土長的港人，會与中國流亡分子有何關系？她竟然能出任 該會的主席，真耐人尋味。 此外，現時她除了收受美國給予“思匯”的資助外，還同時掌握給予“中國人權” 的財政資源，顯示美國政府是异常地信任這個人，個中關系怎能不叫人感到奇怪。 還有，美國《時代》周刊最近選出全球四十三位“環保英雄”，陸恭蕙亦是榜上有 名的三位華人之一。 除了保護維港之外，陸恭蕙跟香港傳統環保組織和活動向無關系。 干預港事層面廣泛 除了通過“思匯”間接資助外，民主党、職工盟、新力量网絡、開放雜志及人權監 察等組織，均受過NDI等机构的資助或贊助，可見外部勢力（尤其是美國）干預本港 事務的層面正日趨廣泛。最近民主党前主席李柱銘再度訪美，与美國副國務卿內格 羅蓬特及多位國務院高層官員見面，談及本港的民主發展等問題，就明顯是活生生 的外部干預例證。 劉乃強批評，李柱銘經常無理指責中聯辦官員干預港務，但自己卻跑到美國去“說 三道四”，尋求外國勢力支持；故他根本沒有資格去批評誰人干預香港事務。劉續 道，李柱銘的前助理EllenBork，是美國极右派种族主義參議員JessieHelms的下屬； 這位Ellen免費替李做了兩年助理后回美國擔任 Project for the New American Century 即“新美國世紀計划”的副總裁，這個右翼組織非常好戰，早在九二年時已撰寫報 告建議美政府攻打伊拉克。 一個美國右翼組織的要員曾擔任李柱銘的免費助理，這說明了一個什么事實呢？ 早年發生的美軍誤炸南斯拉夫中國大使館，以及中美軍机于海南碰撞事件中，李柱 銘作為中國人、立法會議員，發言時竟還處處替美國說項，劉乃強認為李柱銘的行 徑簡直可用無恥來形容！ 劉乃強稱，香港回歸十年以來，在很多政治及社會事件上，或多或少都有外部勢力 干預；盡管這些事件的起因可能是由于不同因素所引致，但外部干預卻是促進并加 劇這些事件的幕后元素，例如零三年的七一大游行等。 劉指出，間諜活動普遍存在于世界各國，想徹底消除是沒有辦法的；但他認為，各 國政府應遵守國際慣例，不應在國外從事顛覆性活動，其他國家的內部矛盾應交由 內部力量去化解。 諸如美國經常以民主之名到處進行顛覆活動，這做法就有違國際民主大勢；況且美 國國內也有很多不民主的地方，但自己卻一無反省和改進。 美借民主到處顛覆 劉乃強表示，國家主席胡錦濤在十七大報告中提出，有關“堅決反對外部勢力干預 港澳事務”的言論，絕對不會只是針對某人或某件事，而是反映問題具“持久性” 及“廣泛性”，中央必須正視及發聲。針對這個問題，香港必須研究相應措施去應 付。 他認為，最根本的方法是就《基本法》二十三進行立法，只有立法保障國家安全以 后，一切活動違例与否才有法可依，違法者亦可依法懲治。現階段市民應對這些干 預事件保持高度警惕、警覺，進而自覺地去抵制及疏遠那些勢力和尋求外部干預的 本港團体、人物及其活動。因此，揭露這些活動，藉此加強本港國民教育，使市民 認識國情，進而關注到國家安全，亦是抗拒這些外部干預的有效方法。　 ------------------------------------------------ 美「中情局分店」資助港「民主派」 編輯：《中國軍事》　　2004年09月08日 15:57:44　　 《英文虎報》日前披露，香港多個政党，均曾參与由美國組織主辦的工作坊及資助 的民調，而部分民主派組織例如思匯政策研究所、職工盟、人權監察及新力量网絡 都曾接受過美國組織資助，這些組織都是直接或間接獲美國政府支持的NED撥款，陸 續引起傳媒廣泛跟進。《東周刊》最新一期報道，NED原來与美國中央情報局有千絲 万縷的關系。《英文虎報》報道說，NED向近日不斷發放滾動式民意的思匯研究所提 供金錢援助。思匯的陸恭蕙向《星島日報》承認，過去曾接受這兩個組織的贊助， 包括03年初完成了一項有關「部長制」的研究，于去年印制了一份有關區議會選舉 具体資料的小冊子。至于今年，則接受了該組織97万5千元的資助，分別進行兩場研 討會及有關功能團体的研究。　 報道又引述陸恭蕙指，該兩個組織在香港十分活躍，甚至會主動聯絡机构提供資助， 如該份小冊子，便是NDI組織在有剩額撥款下，主動向其提供額外資助下出台的。至 于研究費用間接由美國政府而來，陸恭蕙稱，「NDI是正當團体，但錢從何來，我唔 知亦唔會去問。」她又稱非替該資助机构撰寫顧問報告，故絕對不會因應資助机构 要求，改變任何研究的內容及結果。　近年經常發表民意調查的港大民意研究中心 計划主任鍾庭耀，亦向《星島日報》承認曾于去年底接受NDI贊助，進行政党發展調 查，就跨政党發展進行調查。由于問題由該中心自行草擬，故他們亦樂于接受贊助， 而NDI亦沒有定其他條件，但他拒絕透露受資助的金額。　 NED雖聲稱為私人非牟利机构，但翻查資料，亦發現NED董事局成員与美國政府的情 報及政治工作有關，當中有前美國官員、亦有國會議員。其中，NED董事局副主席 Thomas Donahue 任職的AFL-CIO（美國全國總工會），曾在七九至九五年期間，資 助波蘭團結工會超過四千八百万港元，協助他們推翻波蘭共產党，該組織的网頁資 料形容，此行動對結束蘇聯在東歐的控制起著重要作用。而今年向李卓人任秘書長 的職工會聯盟資助八十万元的 America Center for International Labor Solidarity ，亦是美國全國總工會的屬會。 星島日報引述報導說，NED另一董事Morton Abramowitz 來頭更大，他曾在民主党執 政期間，任負責情報研究的助理國務卿，亦是一名資深外交人員，派駐過世界各地， 包括在六○年曾在香港工作。据《東周刊》報道，他亦是FreedomHouse信托人協會 成員，該協會的另一名成員Paul Wolfowitz是分析情報的專家，曾被美國前總統克 林頓委任檢視美國情報机制，与中情局（C.I.A.）經常接触。NED除了資助香港政治 組織外，亦積极向中國的海外民運組織提供資助，該組織亦資助多個藏獨團体。NED的 其中一個經費來源，是美國政府新聞處。 另外，獲NED撥款為本地政党發展提供協助的National Democratic Institute for International Affairs（NDI），原來還獲另一美國政府屬下的美國國際發展机构 USAID資助，換言之，三個參加NDI提供的免費工作坊或資助民調的政党，亦間接受 惠于美國政府。《東周刊》報道說，美國政府除多次高調邀請香港「民主派」訪美 等活動外，原來在香港也一直暗中進行一些「搞事」。 有傳媒較早前報道，80年代美國前總統里根執政期間，美國政府成立了五個資助組 織，以私人名義贊助海外推動民主活動，其中由陸恭蕙創立的思匯政策研究所及民 主党成員張炳良為主席的新力量网絡，曾獲贊助最多近百万元資金。　報道說，該 五個組織以「NED」為首，轄下有四個子組織（94年再加入兩個主要靠私人捐款運作 的子組織），負責撥出七成資助，其余三成則由NED直接分發給海外机构。其中，NED轄 下的NDI（US　National　Democrtic 　Institute　for　International　Affairs （NDI）是負責在港接触「民主派」及團体的重要窗口，但其作風十分低調及神秘， 辦事處設在半山干德道一個高尚住宅單位內，大門外也沒有任何標明是NDI的辦事處。 　 《東周刊》在報道中透露，自美蘇冷戰結束后，美國政界主流意見認為NED推動民主、 對抗前蘇聯共產政權的功能已消失，國會曾否決NED的撥款申請，其后參議院大會推 翻決定，NED才得以「死里逃生」，而近年得到政府的撥款更有增無減，原來背后有 中央情報局「撐腰」。　報道指出，NED董事局的不少成員与中情局關系密切，全面 控制NED的財政，其中一名董事Morton的來頭不小，曾任負責情報研究的助理國務卿， 在民主党執政期間，更盛傳是中情局局長的熱門人選。　 NED為人掩耳目，近年又將大部分撥款透過Freedom　House及AFL-CIO等非政府机构 發放。NED董事局副主席Thomas　 Donahue任職的AFL-CIO，曾被揭發操控一批与中 情局有關連的特工，以及東歐和俄羅斯的右翼工會領袖。　《東周刊》又指，更巧 合的是，Morton 是Freedom　House信托人協會的成員，該協會的另一個成員Paul　 Wolfowitz也是分析情報的專家，95年曾被前總統克林頓委任檢視美國整套情報机制， 与中情局經常交手。　香港文匯報則報導對，于NED這個「大財主」，多個曾受其資 助的香港「民主派」組織，不約而同地稱之為「好人」，但事實上，NED在美國政界的 聲譽极差，其背景及活動多年來備受爭議。 美國著名治家 William Engdal 在其著作中，便譏諷NED是「中情局分店」，「以往 中情局礙于政府机關的身份而要秘密進行的勾當，現在NED可明刀明槍地去做了」。 　美國政治家 Barbara　Cony亦曾批評，NED有貪污及財政混亂的坏紀錄，不單浪費 美國納稅人的金錢，更干預其他國家的選舉，有時甚至做一些与美國外交政策背道 而馳的勾當。　不過，NED本身對干預其他國家及地區的內部事務毫不掩飾，更引以 為「自豪」。在其网頁中，該組織更強調，受他們資助的香港人權監察和職工盟有 份組織香港去年的「七一」游行，更成功「推翻」《基本法》23條立法云。

在NED网站找到的2008年资助香港的数据:

China (Hong Kong)

American Center for International Labor Solidarity  ( 资助的李卓人的职工盟的"门面"机构 )
  $125,456

Civic Exchange 思汇政策研究所
  $59,967*

Hong Kong Human Rights Monitor 中国人权观察
  $170,000*


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陈方安生与美帝极右智库 The Heritage Foundation (传统基金会)

LastNovember, Mrs. Chan challenged the idea that, as the eyes of the worldturned increasingly on China, Hong Kong should emphasize "one country"and forget about "two systems." "I suggest that quite the opposite istrue," she said, "Hong Kong can best help itself and help our countryby leveraging our differences under the two-systems concept."

Well, this is the kind of statement of principle that makes me so honored by Mrs. Chan's friendship. And why The Heritage Foundation is so honored that she has agreed to serve as a member of our Asian Studies Center Advisory Board. We are under no illusion that Mrs. Chan gains stature from beingidentified with us. On the contrary, Mrs. Chan has given Heritage aprofound privilege by letting us be identified with her.

The Future of Hong Kong
by The Honorable Mrs. Anson Chan, GBM, CBE, JP
Heritage Lecture #766

http://www.heritage.org/Research/AsiaandthePacific/hl766.cfm


香港是英國埋下的一個炸彈

未代港督彭定康下了很多手腳的

一 九 九 二 年 十 月 七 日 ， 新 任 港 督 彭 定 康 發 表 上 任 之 後 第 一 份 施 政 報 告 ， 報 告 之 中 ， 提 出 多 項 改 革 香 港 政 制 的 建 議 ， 其 中 最 受 關 注 的 ， 就 是 一 九 九 五 年 立 法 局 的 改 組 ， 取 消 所 有 委 任 議 席 ， 改 為 由 新 增 的 九 個 功 能 組 別 議 席 ， 以 及 十 個 由 選 舉 委 員 會 選 出 的 議 席 所 代 替 。 施 政 報 告 建 議 將 全 港 就 業 人 口 劃 分 為 九 大 行 業 ， 每 個 行 業 的 在 職 員 工 都 有 資 格 一 人 一 票 選 出 該 行 業 的 立 法 局 議 員 。 選 舉 委 員 會 由 所 有 區 議 會 的 議 員 組 成 ， 選 出 十 位 立 法 局 議 員 ， 而 區 議 會 取 消 所 有 委 任 議 席 ， 區 議 員 全 部 由 選 舉 產 生 。 選 民 的 投 票 年 齡 ， 由 二 十 一 歲 降 低 至 十 八 歲 。 有 人 認 為 彭 定 康 的 政 改 方 案 ， 是 盡 量 利 用 基 本 法 未 有 具 體 規 定 的 「 灰 色 地 帶 」 ， 將 香 港 政 制 作 大 幅 度 改 變 ， 增 加 民 主 程 度 ， 利 用 香 港 民 眾 普 遍 對 中 國 政 府 的 「 不 信 任 」 、 「 抗 拒 回 歸 」 的 心 態 ， 推 動 「 民 主 抗 共 」 ， 使 九 七 回 歸 中 國 之 後 ， 成 為 一 個 反 抗 中 央 政 府 的 特 別 行 政 區 。 中 國 政 府 對 彭 定 康 未 有 溝 通 而 作 出 的 香 港 民 主 化 改 革 ， 十 分 疑 慮 ， 表 示 不 能 接 受 ， 中 方 明 確 表 示 ， 彭 定 康 的 政 改 建 議 一 旦 實 行 ， 中 方 不 會 接 受 ， 將 會 導 致 一 九 九 七 年 前 後 政 制 不 銜 接 ， 不 可 能 有 過 渡 九 七 的 「 直 通 車 」 ， 對 香 港 的 平 穩 過 渡 將 會 有 不 利 影 響 。 不 過 ， 彭 定 康 在 多 次 施 政 報 告 答 問 大 會 之 中 ， 堅 持 自 己 的 政 改 方 案 ， 強 調 係 推 動 香 港 民 主 進 程 的 步 伐 ， 而 且 得 到 不 少 人 的 支 持 ， 於 是 中 英 關 係 陷 入 僵 局 ， 引 發 之 後 幾 年 的 中 英 爭 拗 。
http://www.rthk.org.hk/rthk/radio1/Chinese_Contemporary_History/20081213.html


　根據政圈後來的解讀，彭定康（肥彭）赴港履新前，充分掌握香港的形勢，心中亦已有一套翻天覆地的政改計謀，他早已想逼戀棧權位的布政司霍德退位，另一方 面則打算捧陳方安生接掌首位華人布政司之職，但彭定康要捧陳方安生上位，當時最大的競爭對手有兩人，一個是楊啟彥，一個是陳祖澤。

　　楊啟彥表示，他根本無意與陳方安生爭布政司之位，他以為自己很大機會成為第一任華人財爺，但沒料到政客型港督彭定康一到，幾下手腳就把他玩走，原來肥彭心目中財爺的人選是施祖祥。

　　楊啟彥之所以玩完，是被彭定康掟下的蕉皮跣到攤攤腰，這整個過程開始於肥彭到任後的第一份施政報告。“肥彭出第一份施政報告前，有一日突然提到要搵一 個有份量兼有中文水準的高官，幫手度下‘中文版’應該點寫。”楊啟彥在官場上以中英文筆了得著稱，不少政務主任的政策文件去到楊的手中，文法句子都會被改 到花曬，甚至丟到垃圾桶的亦有之，楊有此“名聲”，自然成為肥彭度施政報告“中文版”寫手的最佳人選。

　　楊啟彥承認，當時確有到港督府赴會，肥彭把施政報告交給他；但當他細閱內容後，心知不妙，因為這份施政報告提出的政制改革藍圖，將徹底改變未來的香港政治局面。事情過了十多年，楊總結當時的處境：“看了一份不該看的報告，又做了一件不該做的事。”

　　楊說，他沒有任何心機地不斷向肥彭陳述這份事後被北京指為“三違反”的施政報告，勢必引起北京強烈反彈、徹底破壞中英雙方前期談判所建立的關係。聰明一世的楊啟彥承認，他這些言論幾等於在彭定康面前宣示了自己的政治立場，也讓彭定康摸透“此人絕非自己友”。

　　這次會面後不久，除他以外被點名有機會接班的其餘四人：陳方安生、陳祖澤、施祖祥三人都先後被委入行政局，在最高權力核心實習接班工作。被飛出局的楊 啟彥，1993年看著和他同期出道的陳方安生逐步走上權力的頂端，而自己卻被“燉”往無足輕重的運輸司一角，他終於明白仕途已到此為止。

http://www.singtaonet.com:82/hongkong/200702/t20070219_472606.html

英方改變對華策略 年近八十的魯平近日接受本港一家電子傳媒訪問時再次談到當年對彭定康「千古罪人」的批評：「我說他是『千古罪人』，我到現在不後悔這句話。我還是覺得這個 人，在這個問題上，的確對香港的平穩過渡造成很不好的影響。」他指出，因為彭定康的阻撓，平穩過渡遭遇擱淺，最後不得不成立臨時立法會，「如果是按照原來 談好的，按照那個辦法，香港情況比現在好得多。」 魯平指出，當年彭定康的問題所在是「太不了解中國」，而「利用香港，顛覆中國」更是彭背後的政治目的。「問題是他太不了解中國，缺點就在這裡，他還是抱著 那個態度，他以為到九七的時候，中國一定垮，所以我根本不管你九七年怎麼樣，我就搞我的，到時候你推翻不了，你不敢推翻。（彭定康）背後的目的，就是通過 香港，來推翻我們整個國家的政權，他利用香港這個基地來推翻我們，顛覆我們的國家。」
http://www.takungpao.com/news/07/05/22/GW-739938.htm


彭定康：中國成就威脅民主

前任港督彭定康接受英國廣播公司訪問時稱，中國的潛在威脅不是廉價貨品的出口，而是對民主制度的威脅。

彭定康早前在香港接受專訪時說，中國在傳揚人們不需要民主也可以致富的觀念，這是中國對西方的最大威脅。

彭定康說，中國是在這樣的國際體系下表現好得叫人驚訝的一個例子，但它也同時在挑戰這體系的根基。這樣的挑戰得到專制體系所歡迎，比方說，非洲的那些獨裁政體。
http://hk.news.yahoo.com/article/081123/4/9ds2.html

彭 定 康 在 多 次 施 政 報 告 答 問 大 會 之 中 ， 堅 持 自 己 的 政 改 方 案 ， 強 調 係 推 動 香 港 民 主 進 程 的 步 伐 ， 而 且 得 到 不 少 人 的 支 持 ，

為什么會得到不少人的支持呢?  真是耐人尋味 ! 

其中一個原因就是中方在香港沒有話語權也沒有做民間工作, 共產党歷來最講究背
靠群眾, 但是在香港的政改問題就死在洋鬼子手上, 正是因為沒有做好群眾工作,
宣傳國家政策。

祖國收回香港十二年, 到今時今日在香港都沒有話語權, 沒有自己的宣傳根据地,
 宣傳戰每天都發生在祖國的足下。

雖然主權做到回歸, 部分香港人也因為要跟國內做生意而放下身段一改以前傲慢的
態度, 但是多得香港的一些傳媒鋪天蓋地的天天反共反中反政府,  還有的就是在學
校教學生玩西式民主選舉游戲以灌輸給小孩子一些西式民主觀念, 人心跟祖國的決
裂比97前更嚴重, 共產党在香港再一次輸了民心和民意。

別輕言香港回歸后要等兩三代人過去后才能真正跟祖國接軌, 如果什么都不做, 只
會越來越脫軌。

香港啊香港, 不要再攪集体回憶, 來個集体醒醒吧!

香港沒有什么是國內不能代替的, 國內不但能代替, 還能做到比香港更多好,  連以
前香港人那份拼搏精神, 現在也死了。

香港不是祖國的榜樣, 香港其實是祖國的賠本貨, 香港沒有資源, 沒有養活自己的
能力, 百多年來几代人就是做洋買辦, 寄生在祖國足下的吸血虫。

祖國長期以低廉不賺錢的价格為香港提供食水和能源養活几百万香港人,   一些香
港人還做些吃里扒外為英美的主子做出反中亂港的事情, 真是天地不容 ! 

但是香港未來的命運決定在香港的群眾不是取決于政客和几家傳媒, 

老百姓的眼睛是雪亮的, 互聯网也使我們變得更加團結更加聰明,

這些人騙得一時騙不得一輩子, (看看"張五常"! 看看"新自由主義"吧! ) ,

群眾一旦醒來掌握到歷史發展的必然定律之后, 就會變成改造社會, 改寫歷史的主
要力量!

HONG KONG: A CASE OF SELF-DELUSION

HONG KONG: A CASE OF SELF-DELUSION

By
Henry C K Liu

Part 1: From colonialism to confusion

Part 2: Missing the boat to renewal

Part 1: From colonialism to confusion
By Henry C K Liu

The current severe acute respiratory syndrome (SARS) crisis highlights an obvious fact: that Hong Kong is an inseparable part of China, regardless of the artificial separation in the "one country, two systems" (OCTS) arrangement.

On July 1, 1997, China regained sovereignty over Hong Kong after one and a half centuries of shameful colonial occupation. What should have been the beginning of an era of renewed national pride and prosperity for the residents of Hong Kong, more than 90 percent of whom are Chinese, degenerated instead into half a decade of confused identity crisis and shocking economic contraction with no end in sight. The departing British had 15 years to set Hong Kong up as a time bomb for China, by disguising colonialism, the most evil of political institutions, into a haven of bogus democracy and sham freedom, and by presenting a colonial command bubble economy as a faked model of free-market fundamentalism.

Love is blind and infatuation disguises faults as virtues. As Rudyard Kipling fell in love with the pageantry of colonialism and saw racial exploitation as the "White Man's Burden", Milton Friedman, Nobel economist, fell in love with colonial Hong Kong, seduced by the wine-and-dine hospitality of its colonial masters and elite compradores. Friedman mistook Hong Kong's colonial economic system as a free market, despite Hong Kong's highly orchestrated colonial command economy.

For 156 years, Britain deftly manipulated the economy of Hong Kong, as a jewel in the British imperial crown, to opportunistically respond to changing global geopolitical forces for Britain's benefit. Even during the best of times, the average local Chinese small and medium businesses had to operate under the dictates of British colonial policy and at the mercy of monopolistic British trading firms and banks, not to mention that the average worker never had it good at all. British monopolies needed an unregulated supply network of ruthless predatory competition to keep costs low, by disguising the institutional slavery they lorded over as a free market. It was a system of survival not of the fittest, but of the fittest slaves, the ultimate of a divide-and-rule stratagem.

Friedman even apologized for Hong Kong's discretionary currency board despite his trademark monetarist advocacy for free-floating exchange rates set by foreign-exchange market forces. The linked-exchange-rate mechanism for the Hong Kong dollar was introduced by the British in 1983 as a political expediency in response to the 1982 Sino-British Joint Declaration on the return of Hong Kong to China by 1997. It was not based in the slightest on alleged monetary insights that have since been conjured up to justify the political decision. Popularly known as the peg, the linked-exchange-rate mechanism was the central factor behind Hong Kong's bubble economy in the early 1990s and has locked Hong Kong in a steadily downward spiral since the Asian financial crises that began in 1997.

From 1935-67, Hong Kong operated a classic colonial currency board pegged to the pound sterling, as part of the sterling hegemony of the British Empire, in which private British banks, not the government, issued the currency, a practice that continues today. Instability in the value of the pound in the late 1960s pushed Hong Kong to switch to a gold-backed US dollar peg. In 1946, the Bretton Woods regime came into existence, thereby forbidding the importation of gold for private purposes in signatory nations. Britain was a signatory but Portugal was not. Thus a Macau-to-Hong Kong gold-smuggling operation flourished until 1974, two years after the United States took the dollar off gold, in effect abolishing the Bretton Woods system of fixed exchange rates, when Hong Kong abolished a law that requires a special license to import gold. The tiny Portuguese colony of Macau became one of the world's biggest importers and re-exporters of gold during this period.

After the United States in 1971 suspended the Bretton Woods system of fixed exchange rates tied to a dollar pegged to gold at US$35 an ounce, the US dollar too came under periodic attack, resulting in the dollar sinking in free float. Hong Kong then decided also to let its currency float, which worked reasonably well until the commencement of Sino-British negotiations on the return of Hong Kong to China, which unleashed wild speculation against the Hong Kong dollar, a precarious colonial currency whose days were numbered. By the end of October 1983, Hong Kong pegged its currency to the US dollar at a rate of 7.8:1, in effect devaluing the Hong Kong dollar by 50 percent from its previous normal market fix of around 5:1.

To the chagrin of Hong Kong's colonial administration, Friedman publicly suggested that after 1997, "the only choice is for the Hong Kong dollar to be absorbed by the yuan and for Hong Kong's foreign reserves and foreign assets to be taken over by China". It was a rational suggestion, and if the Hong Kong Special Administrative Region (SAR) government had followed it, Hong Kong would be prospering at 9 percent growth now, along with the rest of the Chinese economy, instead of negative growth from deflation caused by a freely convertible overvalued currency.

The bogus democracy promoted by the last British governor, Chris Patten, and the free-market myth created by Friedman's fantasy have fueled Hong Kong's eager self-delusion. The so-called rule of law, so frequently touted these post-colonial days in Hong Kong, merely meant that no local Chinese business ever won a case against any British trading firm in 150 years of colonial justice. Hong Kong's low-tax myth is merely a cover-up for the exorbitant land tax disguised by the government's century-old, unseemly role as chief land speculator. Throughout its history, Hong Kong's economy has always been driven by geopolitical conditions rather than by free-market fundamentalism, much less by democracy or the rule of law.

What most analysts miss is that Hong Kong's future is dependent not on China's adherence on its OCTS policy of non-interference in Hong Kong's internal autonomy, or on the continuation of a fantasized free-market system, or rule by colonial law disguised as rule of law. Rather, it depends on whether Hong Kong can again recognize changes in the global geopolitical landscape since the end of the Cold War to reorient a new useful role in it.

The OCTS policy erroneously accepted Hong Kong's colonial regime as democratic and free-market, instead of the colonial governance and command economy that it actually was. The Basic Law, Hong Kong's mini-constitution drawn on the OCTS principle, contains defining clauses on the political and economic systems of Hong Kong that are mere fantasies of Anglo-US propaganda. The Basic Law in essence condones a continuation of Western neo-imperialism under Chinese sovereignty for another 50 years. As such, these constitutional clauses constrain the government of the SAR from any attempt to face reality and provide solutions to real problems it is facing. The artificial constitutional segregation of Hong Kong from China is now creating difficulties in Hong Kong's effort to be integrated with the booming economy of the Pearl River Delta. China has no need for Hong Kong compradorism in this era of direct contact. Neither do China's trading partners in the West.

Moreover, world trade has changed under a decade of US-imposed globalization, and is changing again with its impending collapse and restructure. Hong Kong, as an international trading center on Chinese soil, must change with the new geopolitical landscape to survive. There are increasingly undeniable indications that British propaganda to disguise colonial rule as neo-liberalism has trapped Hong Kong under Chinese sovereignty into a state of policy paralysis and rendered it impotent in disengaging itself from a downward spiral of dysfunctional obsolescence. Hong Kong will prosper only if China replaces Britain in Hong Kong and sets policies for a command economy to serve the geopolitical interest of China, as the British had done for one and a half centuries.

At the early part of the 19th century, Hong Kong was little more than a backwater cove in southern China, with no indication it would one day be turned into a world trade center by geopolitics. All through the 19th century, China had no interest in overseas trade. Thus a natural deep harbor on its coast on the South China Sea was of little significance to the Chinese economy. In the early 1800s, Hong Kong was home mostly to indigenous farmers and fishermen, pirates and smugglers. At that time, China's reluctant contact with an increasingly intrusive West took place up the Pearl River, at Canton, more correctly known as Guangzhou, some 145 kilometers north of Hong Kong. It was in Canton that traders from Britain, France, the United States and elsewhere in the West lived and worked in a small segregated enclave strictly regulated by Chinese officials. British ocean-going ships found Hong Kong's deep harbor useful for unloading and loading cargo to be barged up the Pearl River to Canton. Trade developed only slowly and in China's favor, because the Chinese economy had more to offer the Western economies than it needed in return.

The British soon found a remedy for this trade imbalance, which was draining silver steadily from the Bank of England. They illegally imported opium grown mostly in British India to China, where opium sale and use had been banned since 1729 under the reign of Emperor Yung-zheng (1723-35), and its importation and cultivation were made illegal under Emperor Jia-qing (1796-1820). It was in Canton that the illegal opium trade flourished, with great profit for the British. By 1840, the British were importing 40,000 chests of opium to China annually, selling at a price of $2,075 (Stg160) per chest that cost the British $25. US traders, such as the Delano family, as in Franklin Delano Roosevelt, also made great fortunes shipping Turkish opium to China and returning with Chinese tea and porcelain to Boston in Yankee Clippers. Much of the wealth in Boston came from this narcotic trade and provided capital for the westward expansion of the United States. This illicit massive transfer of wealth from China, one of the world's richest and largest economies at the time, played a key role in financing the economic development of Europe and North America in the 1800s.

Opium addiction in China grew to epidemic proportions within a short time, ravaging all levels of Chinese society. Qing Dynasty authorities appointed a special commissioner in Canton in 1840, with orders to stamp out the insidious opium trade. A week after his appointment, special commissioner Lin Zexu ordered his troops to surround the international enclave in Canton, and demanded that the British drug dealers turn over all of their opium contraband. After a six-week standoff, the British drug dealers surrendered more than 20,000 chests of the narcotic, which Lin burned in public.

These British opium traders, led by the East India Co and Jardine Matheson & Co, a leading British firm still operating in Hong Kong today, provoked a belligerent response from the British military with the First Opium War of 1840-42. The Opium War was depicted in British-issued textbooks used in colonial Hong Kong schools as a war to protect private property rights. On January 26, 1841, a British naval party landed on the northwestern shore of undefended Hong Kong, raised the Union Jack, and occupied the island as a navy base to make war farther north. China's outdated navy and army were no match for British naval cannons. The First Opium War ended with the Treaty of Nanking in August 1842, the first of many "unequal treaties" Western imperialist powers imposed on the decaying Qing dynasty over the next half-century. That treaty forced China to acknowledge, among other humiliating terms, British extraterritorial privileges in five Chinese trading ports. It also ceded the island of Hong Kong to the British.

Less than two decades later, the Second Opium War (1856-60) ended with another British victory and the Convention of Peking, through which London claimed perpetual control of Stonecutters Island and the Kowloon Peninsula on the Chinese mainland across from Hong Kong Island. By the century's end, other European powers and Japan had demanded and received countless concessions from a Qing Dynasty in its final stage of collapse. With the security of Hong Kong as a pretext, the British demanded a 99-year lease on what came to be known as the New Territories - land farther into China, beyond the Kowloon Peninsula. That lease began on July 1, 1898, and expired on July 1, 1997.

To understand this history properly, one needs only imagine that the United States had lost its "war on drugs" and had to cede New York City and a good part of New Jersey to Colombia, whose government had come under the influence of drug lords. The new government of the Republic of China, upon its establishment after the 1911 revolution that overthrew the decrepit Qing Dynasty, immediately declared null and void all unequal treaties imposed on China during this period of national shame. The People's Republic, established on October 1, 1949, holds the same position.

Settlement in the new British colony of Hong Kong grew slowly at first; the population rose from 32,983 in 1851 to 878,947 in 1931. Recurring social unrest in reaction to British racial oppression gave rise to Chinese xenophobia that acquired nationalistic overtones in Hong Kong. Historically, Chinese society had been a multi-ethnic melting pot until the arrival of European imperialism. Such nationalistic agitation lay hidden behind a veneer of stability and prosperity propped up by the ruling British with the help of a subservient local elite who were rewarded with leftover monopolistic royal charters considered not lucrative enough by the British trading firms themselves. Hong Kong began to prosper economically because it served the geopolitical interests of its colonial master, without any hindrance from ideological delusion about free market and democracy.

The 1911 revolution led by Sun Yatsen against the Qing Dynasty was hatched in Chinese communities overseas. Hong Kong was one of its operating bases due to the fact that British authorities were not proficient enough in the Chinese language to detect and suppress Chinese revolutionary activities under their noses. However, any anti-imperialist expression of disrespect to the British crown or hostility toward British authority was swiftly and firmly suppressed with imprisonment and/or deportation. Even after World War II, it was a criminal offense to remain seated or not to stand at attention when "God Save the King/Queen" was performed prior to sporting events and at the end of movies.

During the early decades of the 20th century, Hong Kong served as a refuge for those fleeing social disorder on the mainland during the Taiping Uprising that broke out in 1851 and during the Northern Expedition against warlords after the founding of the Republic in 1912. The outbreak of three large labor disputes, namely the first general strike in support of the Manchurian Railway workers' strike (1920), the Seamen Strike (1922) and Guangdong-Hong Kong General Strike (1925-26) reflected widespread revolutionary/nationalistic attitudes and the close linkage between Hong Kong residents and their mainland compatriots. These strikes were all brutally suppressed by the British to keep the Hong Kong economy humming, with the approval of the elite compradore class.

In 1927, the Kuomintang (Nationalists) escalated their campaign against the Communists. Mao Zedong established a rural guerrilla base in 1928. The Japanese occupied Manchuria in 1932 and the Chinese Communist government declared war on Japan, but the Sino-Japanese war did not formally break out until 1937 after the Xi'an incident, which brought about a united front against Japanese aggression. As Japanese forces advanced into China, hundreds of thousands of displaced Chinese sought refuge in British Hong Kong, bringing the colony's population at the outbreak of World War II to about 1.6 million. At the height of the influx, 500,000 homeless people were sleeping in the streets as a result of British indifference for the welfare of the colonial subjects.

Life was harsh and undignified for all of colonial Hong Kong's Chinese residents, not just the new refugees. The densely populated slums where the Chinese lived were regularly ravaged by disease, fires and typhoons and by criminal elements condoned by the British colonial administration as necessary for doing the dirty work for British opium smuggling. Primitive conditions mixed with unregulated foreign traffic made the colony without public hygiene vulnerable to recurring epidemics of new diseases.

Hong Kong society was segregated between privileged, wealthy British masters and the Chinese they employed and ruled through local compradores. Hong Kong Chinese were not allowed out after dark by a policy of race curfew. They were barred from European residential districts and parks except as servants. Most Westerners in Hong Kong treated the Chinese as "a degraded race" - in the words of a missionary. "You cannot be two minutes in a Hong Kong street," wrote another observer of the time, "without seeing Europeans striking coolies with their canes or umbrellas." An example of these racial tensions surfaced in 1857, when a Chinese baker was accused of attempting to poison his Western clients by lacing their bread with arsenic. The incident caused no fatalities, and the baker was later acquitted for lack of evidence, but not for lack of motive.

Hong Kong's fortunes rose in the 1850s and '60s as refugees flooded the colony, fleeing from the social chaos in China associated with the economic dislocation from the resultant drain of silver from widespread opium addiction and periodic foreign invasion and ruinous war reparations. The new arrivals helped the colony evolve from a drug-trading outpost into a permanent settlement, providing a productive base to serve British economic imperialism.

Western apologists stress British contribution to the development of a market economy in Hong Kong through its laissez-faire policy. What Britain actually did was to transfer wealth accumulated from imperialistic exploitation of China to Britain through an offshore island on the China coast ruled by British colonialism. Thus the argument that British colonialism built a prosperous world city on a barren rock by virtue of a superior economic system was as ridiculous as Kipling's "White Man's Burden" bringing civilization to India.

Professor Hui Po-Keung of Lingnan University, Professor Tak-Wing Ngo of Leiden University and others have written on Hong Kong's colonial compradore politics and monopolistic middle-man capitalism and the propagandistic dissemination of mythical free-market ideology in Hong Kong, despite total British control of the colonial command economy. These research findings refute the myth that Hong Kong's economic success was a result of a laissez-faire policy, or the outcome of free-enterprise response to free markets. Evidence showed that British colonial policies dictated Hong Kong's commercial and trade development to support British interests, while discouraging any local industrialization before World War II, and also blocking opportunities for industrial upgrading in the 1960s that would have enabled Hong Kong to compete independently in world markets.

The British colonial government in Hong Kong handled conflicts between China and Japan during the 1930s strictly on evolving British global geopolitical interests. British actions obstructed China's fight to preserve territorial integrity against Japanese occupation of Manchuria for fear of antagonizing a rising Japan and on the principle that foreign occupation of semi-colonial China was the international norm. The then British-owned South China Morning Post did not depict Japan in the early 1930s as the aggressor in China, lest such a depiction reflect on British occupation of Hong Kong itself as aggression.

After the Japanese seizure of Manchuria in 1939, British policy had been to appease Japanese aggression as a natural effect of geopolitical Darwinism. From the July 7 Lugouqiao incident of 1937 that formally launched the Sino-Japanese War to the fall of Hong Kong to Japanese forces on Christmas Day in 1941, British policy on China, known in the British Colonial Office as "Passage of Hong Kong", was divided into two phases. The first phase, before the fall of Guangzhou to Japan in October 1938, allowed Hong Kong to supply China on a profit basis. The League of Nations had advised its members, of which Britain was one, not to interfere with China's defensive war against Japan. The second phase, after Japanese occupation of Guangzhou, closed Hong Kong off from legally providing any supply for China.

Britain's neutrality in the Sino-Japanese war enabled British Hong Kong to trade with both China and Japan at the same time, supplying war materiel to both warring parties. This compensated for the drop in trade in Hong Kong resulting from the rapidly deteriorating war economy in China. The security of the British Empire, of which Hong Kong was a crown jewel, was conditioned on non-antagonistic British-Japanese relations. British interests in China would face unwanted threats and British status in the Far East would face further decline if German global expansion in alliance with Japan's Greater East Asia Co-Prosperity Sphere were to strengthen. Demonstrations and protests from Hong Kong Chinese against British and other Hong Kong companies trading with Japan were suppressed and calls for a boycott of Japanese goods were disallowed by the colonial government in the name of free trade and law and order.

Britain's policy of neutrality, together with Japan's blockade of the Chinese coast, made Hong Kong's Victoria Harbor and the Kowloon-Canton Railway critically important. Hong Kong became a vital route for transporting goods, commodities and munitions by sea from overseas and by train via Guangzhou to Wuhan, where Chinese forces were staging a desperate defensive battle. After Japanese destruction of the Chinese section of the Kowloon-Canton Railway in October 1937, the British agreed to Chinese proposal of building a Kowloon-Guangzhou highway as a replacement route in early 1938, as a commercial consideration. It was also a policy consistent with British geopolitical interest in preventing total Japanese military success in China, so as to avoid the possibility of Japanese pressure turning against British interests once Japanese control of China was total. The plan to import nine British-made airplanes to China from Hong Kong in November 1937 was allowed by the British Colonial Office despite strong protests by Robert Craigie, the British ambassador to Japan.

The geopolitically induced trade helped relieve the Hong Kong economy from some of the global effects of the Great Depression of the 1930s. Combining patriotism with financial benefits, Hong Kong Chinese took a leading role in supporting Chinese war efforts against the Japanese through the utilization of the Kowloon-Canton Railway and Victoria Harbor and later the Kowloon-Guangzhou highway. The British announced that keeping Hong Kong open to the mainland was crucial to China's future, while the US secretary of state applauded the "Passage of Hong Kong" as enhancing China's ability to resist Japanese invasion. Both Britain and the United States hoped that China could tie down Japanese expansionism enough to spare Hong Kong and US interests in the Pacific, particularly the Philippines, from Japanese aggression.

Hong Kong's closeness to the approaching war zone, Japan's growing threat to Hong Kong, and Britain's apprehension on a two-front war in Europe and Asia caused Britain to discontinue a tilt toward China after Japanese occupation of Guangzhou in October 1938. The Japanese, having taken Guangzhou, were more determined to cut off supplies to China from Hong Kong. When the Nazi-Soviet non-aggression pact was signed in August 1939, Britain tried to persuade Japan to withdraw from the Axis cause by offering de facto recognition of Japanese occupation of China. British appeasement of Japanese aggression in China continued until the attack on Pearl Harbor, Hawaii, on December 7, 1941.

The Chinese government's proposal to establish an aircraft-reassembly factory in the New Territories in August 1937, as well as a Hong Kong company's proposal to build two military steamers for Guangzhou in January 1938, were refused by the British under the second phase of the Passage of Hong Kong. Immediately after the fall of Guangzhou, British governor Alexander Northcote stopped all transshipment of munitions and weapons from Hong Kong to the mainland. In December 1939, the British government prohibited the reassembly of four US-made passenger planes in Hong Kong. The planes had been purchased by the Chinese government. In June 1940, in a desperate last-ditch effort to appease Japan, the British formally closed the Passage of Hong Kong and terminated British tolerance for the supply of munitions, weapons, fuel, and gasoline to China. Hong Kong banks were forbidden to handle aid funds destined for China from overseas Chinese communities. Nevertheless, massive smuggling of military materiel to China and underground financial transactions continued to benefit the Hong Kong economy.

When Japan began bombing Shanghai in November 1937, it unleashed a massive influx of refugees into Hong Kong, the greatest in its history since the Taiping Uprising in the 1850s. The population grew by 50 percent, while slum housing expanded by 8 percent only. The 650,000 refugees created problems of crisis proportion on already overburdened, substandard housing conditions while the British pampered themselves in their luxurious villas on the Peak lamenting over cocktails on the uncouth manners of the lesser breed.

During the Japanese occupation of Guangzhou, armed resistance was mounted by the Dongjiang (East River) guerrillas, originally formed by patriot Zeng Sheng in Guangdong province in 1939, comprising peasants, students and seamen. Among its members was the revolutionary sculptor Zhang Songhe, later a member of the 5th, 6th and 7th People's Political Consultative Conference, who became the chief editor of the Pictorial of the Guangdong and Guangxi column of guerrilla forces. His masterpieces include the sculpture of Anti-Japanese Guerrilla Warfare on the Monument to the People's Heroes in Tiananmen Square, sculptures in Shijiazhuang Martyrs' Mausoleum, the design of the Monument to Martyrs in Shenzhen and sculptures on the Dongjiang Monument to Martyrs.

When the British surrendered Hong Kong to Japan in December 1941, the Dongjiang guerrilla force had more than 6,000 fighters. In the wake of the British retreat, the guerrillas picked up abandoned weapons and established bases in the Japanese-occupied New Territories and Kowloon. Applying guerrilla warfare, they targeted traitors and collaborators, protected patriotic traders in Kowloon and Guangzhou, attacked the occupation police station at Tai Po, and set off bombs at Japanese-controlled Kai Tak Airport. In addition, the guerrillas rescued British prisoners of war, notably Sir Douglas Clague, Professor Gordon King, and David Bosanquet. One of the guerrilla force's significant contribution to the Allied cause was their rescue of 20 American pilots who parachuted into Kowloon when their planes ran out of fuel after the Dolittle raid on Tokyo.

Founded in January 1942, the Guangdong Renmin Kangri (People's Anti-Japanese) Guerrillas were established to reinforce other anti-Japanese forces in the Dongjiang (East River) and Zhujiang (Pearl River) deltas. The third and fifth branches under Cai Guoliang, which were sent to Hong Kong and Kowloon, became known as Gangjiu Dadui (Hong Kong-Kowloon Battalion). Led by Wong Kwun-fong and Lau Hak-tsai, the guerrilla force attacked traitors and enemy forces, while growing farm produce and protecting civilian lives in Hong Kong. In addition, the guerrilla force extended its influence in April 1942 over Lantau Island, enhancing communication with Macau and Guangzhou.

The spread of guerrilla activities into cosmopolitan Hong Kong Island assisted Chinese intelligence on Japanese strategies and operations. Furthermore, the force played an important role in saving British and other foreign figures of the Allied cause, and 89 of them - 20 British, 54 Indians, eight Americans, three Danes, two Norwegians, one Russian and one Filipino - were saved from enemy hands. However, because of Japanese control of Guangzhou and British appeasement policy, and the subsequent British surrender on Christmas Day 1941, Hong Kong was officially closed to Mainland Free China contact until the end of World War II.

On December 8, 1941, one day after Pearl Harbor, just hours after Tokyo ordered attacks on the Philippines and the Malay Peninsula, Japanese troops swept across the border from occupied China into Hong Kong's New Territories. Japanese forces quickly destroyed the colony's weak defenses, manned by fresh British troops recently redeployed from Singapore and still unfamiliar with Hong Kong geography. British commanding officers did not take seriously the idea that an "Asiatic" army could ever defeat the British Army that had been invincible for more than a century in Asia. The only effective resistance was from the small Hong Kong Volunteer Force of local Chinese youths. By Christmas Day, the British had surrendered, which brought nearly four years of brutal Japanese occupation.

The pending defeat of Japan in 1945 raised a new question of who should rule Hong Kong after the war. At the beginning of World War II, US president Franklin D Roosevelt had argued that the British should return Hong Kong to the China after the war. But at the Yalta summit in 1943, Roosevelt gave in to British prime minister Winston Churchill's insistence that Britain did not fight the war merely to give away the empire.

The British moved quickly to regain control of Hong Kong after hostilities ceased. Tokyo had ordered the Japanese forces in Hong Kong to surrender to the British. The Nationalist Chinese government held back its troops at the Hong Kong border. Franklin Gimson, Hong Kong's colonial secretary, left his prison camp as soon as he received word of the Japanese surrender, and declared himself the colony's acting governor. Gimson set up a provisional government, which welcomed a British naval fleet into Hong Kong harbor several days later. British Rear Admiral Sir Cecil Harcourt then formally accepted the Japanese surrender of Hong Kong.

Hong Kong's postwar recovery was swift. Eight months after the Japanese surrender, the colony's civilian administration was restored. Traditional colonial discriminatory taboos were relaxed in the postwar years. Chinese were no longer restricted from public beaches, parks or European residential districts, or from owning property on Victoria Peak.

World War II disrupted the socio-economic structure of colonial Hong Kong. After the Japanese surrender in August 1945, Chinese civilians returned in force to Hong Kong at the rate of almost 100,000 a month, most expecting China, as a member of the victorious Allies, to recover the Japanese-occupied colony from British imperialism, but they were sadly disappointed by events. The population, which by August 1945 had been reduced to about 600,000, rose by the end of 1947 to an estimated 1.8 million. The Chinese economy was deteriorating under the Nationalist policy of elitist capitalism, which was entirely antithetical to Chinese historical conditions. Soon afterward, as the Nationalist government began to lose support from the masses, and its army faced defeat in civil war at the hands of the People's Liberation Army, Hong Kong received a population influx unparalleled in its history. Hundreds of thousands of Chinese - mainly from Guangdong Province, Shanghai, and other commercial centers - entered the colony during 1948-49 and, by the spring of 1950, the population had swelled to an estimated 2.2 million. Since then, it has continued to rise from population inflow from China and now totals 6.5 million.

Modern Hong Kong rose from the ashes of World War II, created partly out of an urgent necessity to deal with one of the greatest refugee crises of its time. Hong Kong's economy slowed when the United States placed an economic embargo on China after the founding of the People's Republic on October 1, 1949, but the Korean War broke out in 1951 and brought new economic life to Hong Kong. It was during this period that the shipping sector of Hong Kong got its start, leasing anything that floated to the US Navy to fill the sudden rise in demand by trans-Pacific military transport.

But Hong Kong also played a critical role in supplying China unofficially. While Chinese soldiers were being killed in Korea by US-British troops, with the son of Mao Zedong among those killed, freedom of speech in Hong Kong consisted of open advocacy for the violent overthrow of the Chinese government. At the same time, any call for passive resistance to Western imperialism and British colonialism was censored and punishable with imprisonment in the colony.

Even today, the English-language press in Hong Kong remains predominantly anti-China under the guise of press freedom. When the SARS problem first broke out, the Hong Kong English-language press was full of criticism of alleged Chinese government cover-up as typical of totalitarianism, despite the fact that the main motivation had been to avoid market panic. But when Toronto adopted in essence the same approach to the SARS scare to protect its economy, the Western press was full of editorials expressing understanding.

The Korean War had a fundamental geopolitical impact on Hong Kong and its economy. The US embargo and blockade against China, plus the interference by the US 7th Fleet in the reunification of Taiwan, made Hong Kong the needed window to the outside world for an isolated China. China took advantage of a British Hong Kong as a base to run the US blockade, and for intelligence work in Taiwan and in the United States and its allies.

Although underground communist cadres came to Hong Kong in 1948 with an ultimate mission of liberating the territory, the eruption of the Korean War stabilized the geopolitical position of Hong Kong. Chinese tolerance for the continuation of British colonial rule was justified by China's geopolitical need for a window to the West. British official ignorance of Chinese political literature created a void that became the target of competition and occupation by the two ideological rivals: the Nationalists supported by US propaganda and the Communists.

During the Cold War era, global competition between the two superpowers became the backdrop of the rivalry between the Communists and the Kuomintang, making Hong Kong a key residual battleground in the ideological war in the Chinese language. British diplomatic recognition of the People's Republic and de-recognition of the Nationalist regime on Taiwan made outright ban of pro-Beijing activities untenable in British Hong Kong. On the other hand, Chinese non-recognition of British colonial rule of Hong Kong prevented Chinese diplomatic presence in the British colony. Until the return of Hong Kong to China on July 1, 1997, China was represented by the New China News Agency in Hong Kong, which served as a de facto diplomatic mission.

With its traditional entrepot role cut off by the US embargo against China in 1951, the colony was forced to develop local industries for export. Hong Kong took advantage of a continuous supply of cheap labor in the form of refugees, financed by flight capital from China, and the colonial government's traditional disinterest in regulating labor standards as long as land prices kept rising to keep government revenue flowing. But the main factor of growth of labor-intensive manufacturing was the special access to the US consumer market, kept open through a geopolitical understanding between the United States and the United Kingdom, in recognition of the strategic location of Hong Kong. This was the early kernel of globalization, with the US providing a market for goods too cheap to warrant production by high-paid US labor, and simultaneously giving US neo-liberalism an early experimental station for real-life "peaceful evolution" on the doorstep of communist China.

But unlike Japan, South Korea and Taiwan, Hong Kong did not get on a high-end manufacturing path for lack of any industrial policy. British colonial education, trade and finance policies kept Hong Kong in low-end manufacturing sweatshops for the narrow benefit of British trading monopolies and banks, which had never wanted to endow the colony with industrialization. At the same time, the Hong Kong government's long-standing land speculation that enabled a tax policy that attracted foreign investment further contributed to rapid growth of the low-end export sector. The colony began exporting in ever-increasing amounts cheap textiles, garments, low-end electronics, cameras and watches, plastic flowers, toys and many other low-priced goods made in small sweatshops, stamped "made in Hong Kong" to clear the US custom embargo on China.

But most of Hong Kong's wealth came from land speculation, with the colonial government as the chief speculator and beneficiary. This policy condemned labor in Hong Kong into perpetual under-education, low subsistence wages and sweatshop working conditions.

The influx of refugees from China continued unabated during the 1960s, providing ample cheap labor and occasional entrepreneurial human resources for the manufacturing workforce. The British colonial government left the refugees to fend for themselves, to live and struggle for survival under appalling, subhuman conditions.

In 1953, a tragic, spectacular night fire engulfed hillside shanty slums in the Shek Kip Mei squatter area on Christmas Eve, destroying tens of thousands of refugee squatter huts unreachable by firefighting equipment, leaving 53,000 homeless. The tragic event attracted the attention of the international media, and even became the backdrop of a best-selling novel about a bar girl: The World of Suzy Wong, which later was made into a Hollywood film. The British colonial government was finally spurred into reluctant action by world opinion, introducing a housing program for refugees with the construction of vast public-resettlement buildings - standard seven-story walk-up concrete structures with minimum facilities in a refugee city. With virtual dictatorial power, the colonial government managed to solve the housing problem for refugees in short order, although the result was little better than highrise concentration camps.

By the mid-1960s, escalating US involvement in the Vietnam War made Hong Kong a major supply point for the US military. Hong Kong's ports, shipping and logistics sectors grew further to serve the new geopolitical needs. The colony became a regular stop for US troops seeking "rest and recreation". It was also the West's main pre-satellite spy post into a China isolated by hostile US policy. Much of Hong Kong's prosperity during this period came from an economy that served the geopolitical aims of the United States in the Cold War. It had as much to do with free markets and democracy as cheese on the moon.

Hong Kong's "go-go" pace, while not the same as free-market dynamism, created typical problems many neutral cities such as Casablanca during World War II faced: espionage intrigues, organized crime, rampant prostitution and drug dealing, smuggling, polarization between rich and poor, ideological cynicism, political opportunism and official corruption. The colony's low-end manufacturing sector was unregulated, and the labor force had to work long hours in sweatshops under inhumane and unsafe conditions for less-than-subsistence pay with no health or retirement benefits or job security. Small entrepreneurs were forced to seek financing from predatory lenders. Child labor exploitation was routinely practiced. Human rights and civil liberties were never issues about which British colonialism cared much.

The Great Proletarian Cultural Revolution unfolded in China in 1966. While the issues raised in the Cultural Revolution on whether politics should be the determinant of the correct development path remain debatable to this day, the excesses associated with internecine political struggle of the decade-long upheaval left the nation exhausted and its economy in near-total collapse. The political cataclysm spilled over into Hong Kong. In 1967, a labor dispute at an artificial-flower sweatshop in Hong Kong quickly escalated into widespread violent street demonstrations. For several months, protesters clashed with police, overturned cars and buses, stoned hotel lobbies and shop windows, and in a general release of century-old, pent-up rage and hostility toward colonial capitalism, disrupting life and business in the colony. Several bombs were set off in a wave of terrorism. At one point, shots were fired across the border from China into Hong Kong.

British officials responded with a ruthless crackdown against the sudden release of pent-up nationalism, suspending what little civil liberty the colony had traditionally allowed, in the name of anti-communism, imprisoning thousands without trial and closing down left-wing Chinese-language newspapers. Official reports acknowledged that some 50 people were killed during the riots by excessive police force, with thousands more wounded.

To defuse a recurrence of social unrest, social and government reforms in Hong Kong followed, including the cleanup of the openly corrupt, scandal-ridden police force. At the same time, China made clear that it still considered Hong Kong a part of Chinese territory it would eventually reclaim.

It was at this point that British imperialism decided to solicit US assistance by the gradual adoption of bogus democracy and free markets as a new colonialism with a human face. The colonial government then began officially referring to Hong Kong as a territory, not a colony. British banking interests began nurturing a new breed of native compradores with special preferential bank credit. Their role was to pose as a national bourgeoisie to front for neocolonialism.

These new compradore tycoons, some speaking no English and unwashed by British upper-class education and mannerisms, dutifully bailed out British interests from the political risk of rising nationalism. They acquired British trading firms at inflated market prices with loans from British-owned Hong Kong banks, backed by profit they made in real-estate speculation, light manufacturing, shipping and retail finance and banking services for poor natives. The huge profit they squeezed from the colony were invested in British and US enterprises overseas that suffered huge losses, in a form of cross-border political transfer of wealth through the market mechanism. These new tycoons welcomed the new liberal colonialism as they benefited from token gestures of the end of racial discrimination.

The British finally allowed that rich Chinese should no longer be treated as subhuman, at least in public, setting them apart from the masses of the Yellow Herd as Honorable Whites who might even qualify for a knighthood from the queen. Compradores now could comfort themselves by claiming they were serving democracy and freedom rather than imperialism and colonialism. They posed as heroes of capitalism instead of running dogs of colonialism.

Colonialism, the administrative system of imperialism, like its slavery kin, is inherently evil. Yet the evil institution of slavery in US history did not prevent the emergence of great leaders from the South, such as George Washington and Thomas Jefferson. Similarly, the evil institution of colonialism in Hong Kong history did not prevent the emergence of a sensible administrator in the person of Murray MacLehose.

Fluent in Chinese and a student of Chinese culture and history, Crawford Murray MacLehose was first posted to Hong Kong in 1963 as a political advisor to ensure that colonial policy in Hong Kong supported evolving British policy on China. He held several other political posts in the British Empire before becoming Hong Kong's 25th British governor in 1971.

From 1971, when he assumed the post of governor, to 1982 when he left the post and returned to Britain, MacLehose, of a new breed of governors more in tune with the progressive British Foreign Office than the conservative Colonial Office, practiced an "enlightened form" of colonial administration with an eye on Cold War geopolitics. He moderated the traditional colonial attitude of aloof, discriminatory disinterest in Chinese community problems and needs. He also balanced the traditional policy of open government support for British monopolistic businesses with a new progressive social awareness. Reflecting the ideological wind from the British homeland under Labour control, MacLehose took an active role in social welfare (particularly public housing, medical care, colonial education, and protection of workers), and improved the living conditions of Hong Kong residents within the context of liberal capitalism and benign colonialism. The MacLehose administration accorded with Hong Kong's economic takeoff, laid a socio-economic foundation for the colony as a labor-intensive manufacturing center, and instilled a sense of respectable if not totally honorable identity for colonial Hong Kong residents.

MacLehose established the Independent Commission against Corruption (ICAC) to ensure rule by colonial law, even indicting mid-level British police officers and colonial officials who had run a police force and a regulatory regime known for widespread corruption. While the ICAC stopped administrative corruption in the colony, much of the regulatory regime of structural British preference remained in place and at the same time exempted US commercial interests from British protectionism. After a mass demonstration by off-duty policemen on Queensway in Central in 1976, the governor ordered an amnesty for all crimes of corruption committed before January 1, 1977, lest the entire police force had to be imprisoned. The rule of law indeed.

MacLehose initiated moves toward social welfare as effective and timely responses to mounting social and political turmoil, such as the riot against the Star Ferry fare increases in 1966 and the leftist anti-British-imperialism strikes and demonstrations in 1967. He handled deftly the student movement launched by Hong Kong University students in 1968-69, the movement to legalize the Cantonese language in 1970, and demonstrations in Queen Victoria Park in defense of Chinese sovereignty over the Diaoyutai Archipelago in 1971.

MacLehose's liberal responses and concessions protected British interests and stabilized British rule in Hong Kong by reducing the most visibly oppressive aspects of old-time colonialism. In contrast to the socio-political upheaval then raging in China, many in Hong Kong began to let the practical benefit of a peaceful life mask the political issue of national honor. The threat of communism was promoted as an anesthetic for British imperialism and colonialism with high effectiveness among the refugees, who were mostly members of the petty-bourgeois class that fled from communism in China.

The Vietnam War aborted president Lyndon Johnson's "Great Society" for the United States, but it brought economic benefits in the form of subsidized trade for Japan, South Korea, the Philippines, Singapore, Malaysia, Indonesia, Taiwan and Hong Kong. While the war created a backlash in US domestic politics against anti-communist mania, it strengthened a chain of anti-communist frontline bases in East and Southeast Asia, in which Hong Kong was a crucial link. Thus Hong Kong basked in the glory of geopolitical trade preference with the US. MacLehose became governor at the end of Hong Kong's tumultuous anti-colonial phase, but the economic fringe benefits from the Vietnam War gave Hong Kong a much needed and timely boost, which stabilized Hong Kong's economy at the beginning of MacLehose's benign rule.

After the economic takeoff in the 1970s, primary and secondary education in the colony improved by government policy and quotas for tertiary educational institutions increased. In 1969, the Chinese University of Hong Kong, a conglomeration of US missionary educational institutions expelled from China, moved to Shatin on a new campus as Hong Kong's second officially recognized public university. Notwithstanding its institutional roots as an anti-communist propaganda machine, the Chinese University provided a counter base to Hong Kong University, the bastion of British colonial elitist education. In 1970, the government agreed to convert the former Hung Hom Industrial College into Hong Kong Polytechnic.

The literacy rate and level of education of the population rose, albeit still way below world-class standards and still infested with colonial mentality of rote learning and discouragement of independent, let alone revolutionary, thinking. To this defect was added the anti-communist propaganda financed from US sources. Doctoral and postgraduate education was non-existent even for professional schools. There was no basic research in the sciences and much of the education was focused on commercial job training for clerical and mechanical maintenance work. Much of the research in the social sciences produced in this period was little more than outright hostile intelligence gathering and anti-China propaganda.

Graduates of Hong Kong universities went predominantly into careers in the docile, apolitical Civil Service. Offspring of the elite went to universities overseas and returned to join family businesses that had nothing to do with their studies. Scions of wealthy families who were promising nuclear physicists were put to work in the plastic-toy business. The professions that prospered were law, medicine, accounting and architecture. Even then, overseas professionals were routinely called in for significant assignments. This is true even today. While Hong Kong has yet to adopt a rule-based competitive policy, it has never felt the need to adopt any affirmative-action program for local talent.

In addition, in the 1970s, with the spread of television, TVB (begun in 1967) exerted a strong influence with improved public communication, particularly in the imposition of Anglo-US anti-China propaganda on an uninformed and unthinking public poisoned by a colonial education. In the early 1970s, remnants of Qing Dynasty Manchu feudal laws were officially abolished, putting an official end to one colony, two legal systems. It may be said that the MacLehose regime signaled the beginning of Hong Kong's self-delusion in the name of modernization. In reality, MacLehose repositioned Hong Kong by giving it a central anti-China role in the Cold War.

During his time in charge, MacLehose oversaw a historic period of social reform and public investment that formed the foundation for unprecedented economic growth, including the building of Hong Kong's underground transit system. Lord MacLehose was knighted in 1983, a year after his retirement. These social programs formed the foundation of Hong Kong's subsequent economic success in the command economy, not the much-touted free-enterprise myth.

In retirement, Lord MacLehose summed up his opposition as governor, to any introduction of democratic elections in Hong Kong by saying: "If the communists won, that would be the end of Hong Kong. If the nationalists won, that would bring in the communists," in an interview in Britain's Daily Telegraph. Of course even MacLehose was not delusionary enough to contemplate the possibility of the British winning. British colonialism had no use for democracy until Britain was forced to return Hong Kong to China.

MacLehose, on October 10, 1979, reported the government's housing policy of creating between 40,000 and 45,000 units annually: "The housing program continues to be of prime importance, and in the review of public-sector expenditure it was rightly given very high priority ... None of the housing, amenities, schools and landscaped surroundings would be of any value without employment. And the new towns are not intended as dormitories. So the progress of industry in the New Territories is vital." Thus public housing and an industrial policy of low-end manufacturing for a geopolitically guaranteed US market put Hong Kong on the road to prosperity.

Eighteen years later, on October 8, 1997, Tung Chee-hwa made his first address as the first chief executive of the Hong Kong SAR under Chinese sovereignty. Again, housing was a key theme. The current system, he said, had "produced erratic price patterns and left potential home buyers and developers in the lurch". He set as a goal the production of 85,000 new public and private units annually within two years.

Tung's policy speech, which laid out a five-year plan for the SAR, went far beyond MacLehose's vistas. Hong Kong's new leader unveiled plans to cut the waiting times for public rental housing from six and a half years to four years by 2003 and no more than three years by 2005. He spoke of building major infrastructure links and developing technology parks to diversify the economy into the next century. And he announced concrete initiatives to alleviate the livelihood burdens of the SAR's expanding elderly population. Tung identified improving competitiveness and education as the key challenges facing the new Hong Kong - and launched comprehensive initiatives to achieve such goals. He stressed the rapidly growing ties - notably economic, cultural and technological - between Hong Kong and China, though he was careful to omit mentioning political ties. By doing so, he was turning the attention of a new generation of Hong Kong residents to the vast opportunities that awaited them in what was officially their motherland once more. But the arm's-length attitude on political integration with China means that this vast opportunity remains elusive to the Hong Kong economy.

Most critically, Tung's vision did not include any awareness of the new geopolitical landscape. The new Hong Kong SAR, by constitution, puts fundamental obstacles in the way of its needed integration into the new Chinese economy, while its former colonial role to serve Anglo-US interests in China is becoming inoperative. Hong Kong has yet to shed its compradore mentality or its compradore policy. It continues to look at China from the outside in, representing the geopolitical and economic interests of the West, by presenting its residual colonial system as the more superior of the two systems in OCTS, instead of an obsolete system that must be restructured in time.

When faced with economic collapse from Hong Kong's failure to restructure its economy to respond to the new geopolitical landscape, the new SAR government hangs on to obsolete myths of its colonial predecessor. Hong Kong's top leaders tirelessly mouth meaningless slogans of focusing on "sound fundamentals", rule of law, free markets, small government, sound monetary regime based on its dysfunctional currency peg, in subservient tribune to US neo-liberal globalization, which has destroyed the colonial command economy. To make matters worse, it has abandoned its public housing and other social programs started three decades earlier by MacLehose, in a panic attempt to save the over-leveraged real-estate tycoons at the expense of the future of the Hong Kong economy. While the new leaders continue to pin their hope for Hong Kong on external trade, they excuse lamely their dead-end policies by lamenting that Hong Kong has no control over external factors.

Henry C K Liu is chairman of the New York-based Liu Investment Group.

 
By the late 1970s, British Hong Kong's colonial officials and business leaders realized they could no longer put off the question of what would happen to the New Territories, which makes up more than 90 percent of Hong Kong's land area. The New Territories had been leased to Britain in 1898, for 99 years, so that lease was set to expire on July 1, 1997.

In 1979, the British government initiated talks with China about Hong Kong's future. Governor Murray MacLehose unexpectedly brought up the subject during a private meeting in Beijing with Chinese leader Deng Xiaoping, who made it clear that China intended to reclaim Hong Kong.

In 1982, on the heels of victory in the Falkland Islands, British prime minister Margaret Thatcher made an ill-fated attempt to perpetuate British colonial rule over Hong Kong. She proposed British administration of Hong Kong after 1997, which Chinese officials rejected outright. Thatcher not only insisted on British sovereignty in Hong Kong, but also insisted that the unequal New Territories Treaty signed in 1898 was legal. China is not Argentina, and Deng stated his clear intent to take back Hong Kong in 1997. The bilateral talks over Hong Kong quickly deadlocked. The British had hoped to extend their control over their most valuable colony, but China refused to recognize the validity of what it considered unequal treaties forced on it by the British in 1841.

London finally conceded that there was no legal basis to force China to renew the New Territories lease, and that modern-day Hong Kong could not survive without that major portion of the colony, nor without Chinese acquiescence. In 1984, after two years of lame posturing about China's need to honor international treaties, Britain was left with little choice but to agree to China's proposal for a Joint Declaration. Hong Kong would be a Special Administrative Region (SAR), with its own legal and economic systems until 2047, 50 years after its return to China.

The Joint Declaration set a framework to handle bilateral issues between Britain and China. Deng Xiaoping applied the "one country, two systems" (OCTS) formula to the Joint Declaration for the return of Hong Kong to Chinese sovereignty. That formula had been originally fashioned as a solution to the Taiwan problem as a Chinese internal affair. Subsequent to the Sino-British Joint Declaration, Deng approached Washington directly for acceptance of the same formula for solving the Taiwan problem. The administration of president Ronald Reagan summarily turned the idea down as a non-starter. Nevertheless, the OCTS formula became official Chinese policy for the reunification of Taiwan, with wholesale Chinese political compromise on Hong Kong in deference to its implication on Taiwan.

OCTS is a fundamental error of multi-level dimensions on the part of China, not the least of which is Chinese acquiescence on the principle of foreign meddling in Chinese internal affairs. Short-term, it permitted the continuation of neo-colonialism on Chinese soil under Chinese sovereignty for another half century. This was a significant backsliding. Since the 1911 revolution, no colonialism had been allowed to exist under Chinese sovereignty, even though it continued to exist in occupied territories where Chinese sovereignty had been temporarily suspended. One of the two systems referred to in the policy of OCTS is in fact neo-colonialism disguised as capitalism. Furthermore, the system in Taiwan is national capitalism, not colonialism. Thus the policy of OCTS may apply to Taiwan, but not to Hong Kong. Because the policy of OCTS was misapplied to Hong Kong, it gave Taiwan an opening to say it did not apply to Taiwan because Taiwan is not a foreign colony. Thus the policy's original purpose was negated while political compromise on the return of Hong Kong was made for naught.

The reality today is one country: China; two governments: Beijing and Taipei; and three systems: socialism (with Chinese characteristics) on the mainland, national capitalism on Taiwan, and residual colonialism in Hong Kong. The British are gone from Hong Kong administratively, but Anglo-US neo-imperialism continues to rule Hong Kong by proxy through its overwhelming economic prowess.

The events at Tiananmen Square in 1989 altered the geopolitical context affecting Hong Kong. More ominously, Beijing's overture to gain US acceptance of the policy of OCTS opened the way for US interference on the future of Hong Kong. Up to that point, Washington had been officially neutral in a bilateral problem between China and Britain involving the redress of historical colonialism.

After Tiananmen, the issue of Hong Kong was abruptly transformed from one of righteous termination of British colonialism on Chinese soil to official Chinese acceptance of colonial institutions for 50 more years in the name of democracy and free enterprise market fundamentalism. Moreover, the issue of Hong Kong prompted the US Congress to adopt the Hong Kong Policy Act, which provides a legal basis in US law for self-righteous US monitoring on Chinese acceptance of Western democracy and capitalism in Hong Kong and, by extension, within Chinese territory.

US recognition of the People's Republic incurred the price of the Taiwan Relations Act, which binds the US with the force of domestic law to interfere in China's internal affair by helping Taiwan defend itself militarily against reunification by force from China. Similarly, US recognition of Hong Kong under Chinese sovereignty incurred the price of the Hong Kong Policy Act, which also interferes in China's internal affair by holding China to the observance of the OCTS policy with the force of US domestic law. China rejects both these US domestic laws as unacceptable interference in its internal affairs. Yet Chinese policies on Hong Kong and Taiwan are operationally constrained by these two US domestic laws.

Until Hong Kong and Taiwan are free of foreign intervention, China's status as an independent power remains blemished. If the US could unilaterally withdraw from the Anti-Ballistic Missile (ABM) Treaty on the grounds that it no longer served US national interest, why shouldn't China have the same option on OCTS when and if the policy no longer serves Chinese national interest? Because there was nothing Russia could do about US's unilateral withdrawal from the ABM Treaty, while the US can cause economic pain to Hong Kong by denying the SAR its special trade status with the US if the OCTS policy is not observed. The US has no such power over Shanghai, or Shenzhen, or any other city in China.

The British exploited to the maximum this new post-Tiananmen geopolitical climate with the full backing of US moral imperialism. Hong Kong's last colonial governor, Christopher Patten, an ambitious Conservative politician who had earlier lost his seat in parliament, arrived in 1992 to pursue the goal of setting Hong Kong up as an anti-China base by 1997, in the name of democracy as the parting gift of British colonialism. In direct violation of a bilateral understanding of "50 years without change" for Hong Kong, Patten embarked on a crash program of "democratic reforms" in Hong Kong now that British colonial rule was ending by 1997.

This was coupled with the evacuation of century-old British monopolies through inflated financial compensation from government funds. Even the British military was paid handsomely (US$1 billion) for removal expenses, for which the newly installed financial secretary, never given the option to resist, was rewarded with a knighthood for being of service to the British crown. Faithful collaborators with British colonialism were hailed as democratic community leaders and defenders of freedom. The lead member of the Executive Council that "advised" the British colonial governor (Lydia Dunn) was made a baroness for faithfully protecting British interests in the name of preserving freedom for the people of Hong Kong.

In a crash localization program, Patten hand-picked key locals to lead the civil service. Well-trained running dogs such as Anson Chan were groomed to head the allegedly apolitical civil service, with a strategy aggressively focused on insulating Hong Kong from any influence by China. Key civil servants were sent to Harvard University's Kennedy School of Government for special indoctrination in the basics of neo-liberal governance, complete with sham degrees and diplomas. Neo-liberalism replaced old-time colonialism, introducing a neo-colonialism of US economic imperialism under the pretext of preserving Hong Kong as an international city with the rule of law, free enterprise, press freedom, small government - scripts written by the Heritage Foundation and the American Enterprise Institute. This fantasy is in direct contradiction to the historical fact that Hong Kong was never more than a British colony structured to serve British geopolitical and economic interests and to enrich British monopolies through a British command colonial economy.

After the signing of the Joint Declaration in 1982, Hong Kong, still under British rule, wasted 15 years prior to its return to China, with no long-range plan to deal with the new geopolitical landscape. Hong Kong hung on to fantasies created by Anglo-US propaganda, totally intoxicated by a bubble economy created by its currency peg and a trade regime heavily dependent on geopolitical preference. While in office, Patten, working feverishly to cater to US ideological fixation, ran what British career diplomats in Whitehall labeled a sideshow, oblivious to British interest in, and need for, good long-term Sino-British relations. While Britain had no power to resist Chinese demands, the US had its trade card on both Hong Kong and China.

The agreement of "50 years without change" was surreptitiously rendered meaningless by Patten's stealth change in the political structure of Hong Kong to make the SAR ungovernable after 1997. A so-called Democratic Party with only a handful of members was formed with open US support to oppose China in the name of liberty. It was the latest version of the British strategy of perpetuating "divide and rule" in its involuntary decolonization program throughout the shrinking British Empire. On the issue of the rule of law, British common law, which was practiced only within former territories of the British Empire and not in former territories under continental civil law of the Napoleonic Code, was allowed to continue in Hong Kong under Chinese sovereignty. Yet the arrangement of the highest judicial authority resting previously in the Privy Council in London was not reciprocated by transferring that authority to the People's Supreme Court in Beijing. Hong Kong was allowed to set up its own Court of Final Appeal. This bizarre arrangement promptly produced a constitutional crisis over the issue of sovereignty in Hong Kong soon after its return to China.

As China adopted its "open to the outside" policy in 1979, Hong Kong and China both soon reaped the immediate benefits of the colony's early participation in the modernization of China. Hong Kong entrepreneurs were able to provide expertise and capital for joint venture projects on the mainland, beginning with tourism and hotels, and soon moving into infrastructure and manufacturing. As a result of this collaboration, China in return increased and changed the types of investments it had made in Hong Kong up to then. For example, in the 1970s Chinese investments in Hong Kong were mainly centered on transport, shipping, finance and distribution of Chinese export goods beyond Hong Kong. These investments were targeted to serve the needs of a still largely closed Chinese economy. By the early 1980s, investments began to include a cigarette factory, real estate and related businesses, department store chains selling mainland products, printing presses, periodicals and gas stations. These investments were focused on trading profits, beyond serving the needs of a closed economy on the mainland. China Resources, which had organized Chinese export trade through Hong Kong, evolved into a huge conglomerate. Chinese banks and insurance companies formed joint ventures with Hong Kong investors.

Between 1976 and 1981, the value of Hong Kong's domestic exports to China multiplied 120 times. The amount of Chinese goods re-exported from Hong Kong - then acting as China's only "door to the world" - comprised 31 percent of the colony's total in 1981. Today, Chinese companies and financial institutions are major players in the Hong Kong economy. Clearly, both sides enjoyed a significant increase in trade as a result of Hong Kong's effort to profit from helping China reach its goal of modernization through economic growth.

But the adverse effect on China has been the acceptance of Hong Kong's colonial economy as a model of reform for the Chinese economy. By learning about the modern world after five decades of near-total isolation through the warped experience of colonial Hong Kong, China modeled the first phase its modernization as a revival of a semi-colonial regime that the nation had endured two political revolutions to throw off. This key compromise poisoned Deng's "Four Modernizations" program and sowed the seeds of corruption in all levels of Chinese government and society and of ideological decay within the Communist Party. The Chinese economy fell into the trap of excessive dependence on exports to the West, primarily to US markets, by building a sweatshop economy along the Hong Kong model, and on foreign capital, along the path welcomed by Western imperialism. It would have been arguably acceptable as a short-term compromise for the "take-off phase" of economic development. But the export frenzy went on for 25 years at the expense of balanced domestic development, in the process letting a social services and health network and a regime of equitable distribution of wealth that had been the envy of the world deteriorate into chaos and decadence.

The adverse impact of compradore culture and associated corruption on the ideological erosion of the Chinese Communist Party was allowed to become structural. It is only recently that China has begun to refocus on internal development, away from exports, to address the imbalance between the coastal regions and the interior, to stimulate domestic consumption and to correct the problem of extreme disparity of income and polarization of wealth. On the issue of foreign capital, China has yet to apply the principle of creditary economics based on the State Theory of Money to free itself from dependence on foreign capital for domestic development. On the ideological front, the noble aspiration of serving the people has been replaced by the crass aim of serving foreign capital for profit. Getting rich at the expense of the people is not glorious, even under capitalism.

The Nazis came to power in 1933 in Germany at a time when its economy was in total collapse, with ruinous war-reparation obligations, and zero prospect for foreign investment or credit. Yet, through an independent monetary policy of state credit and a full-employment public-works program, the Third Reich was able to turn a bankrupt Germany into the strongest economy in Europe within four years, even before armament spending began. While this observation is not an endorsement for Nazism, the effectiveness of German economic policy in this period, some of which had been started during the last phase of the Weimar Republic, is undeniable.

China's pace of growth in the past two-and-a-half decades has been much touted by Western neo-liberals. Yet a case can be made that China's growth rate had been unnecessarily slow, that despite self-congratulatory complacency, China is still falling behind world standards on many measures even by its own projections. And this relative slow growth is not caused by the absence of liberal markets but by China's mistaken view that a disadvantaged participation in neo-liberal globalization is its only option.

It is time for China to realize that acceptance of this fate is not ordained by nature. Furthermore, the economic growth came with the price of unsustainable structural imbalance, malpractice in human-resource utilization and environmental management, and continuing transfer of the nation's wealth overseas through export under dollar hegemony. This self-arresting sluggish growth rate is in large measure the result of the undue influence on China's development strategy exerted by the colonial-economy mentality of Hong Kong tycoons. Such a mentality sees subservient support for economic neo-imperialism in the form of neo-liberal globalization as the only option for growth, instead of the game of voluntary perpetual indenture that it actually is.

Hong Kong's balloon economy had boomed with its new China trade beginning in 1978. By 1987, it recorded a 13.6 percent annual gain in gross domestic product (GDP). On Black Monday, October 19, 1987, the Hong Kong stock market, alone among the world's financial centers facing contagious global collapse, closed for four days. The British Hong Kong government had to use HK$4 billion (US$513 million) to rescue the Hong Kong Futures Exchange from insolvency. The international press called the Hong Kong stock market under British regulatory supervision "a badly run casino".

On the other side of the globe, Alan Greenspan, newly appointed chairman of the US Federal Reserve Board, built his reputation by releasing a single sentence that said he would supply all the liquidity the banking system needed to stay afloat after the 1987 crash. He pumped tens of billions of US dollars, a fiat currency that he could print at will, into US financial institutions by pushing down the overnight lending rate aggressively. Greenspan's move flooded financial markets with money, which helped preserve liquidity and restore confidence in the US financial system, but it started the bubble economy of the 1990s, which ended in Asia on July 2, 1997, one day after Hong Kong was returned to China. Greenspan did in essence the same thing in 1998 and again after September 11, 2001. Greenspan will go down in history as the central banker who revived moral hazard.

When the Asian financial crises began in Thailand on July 2, 1997, the new SAR government maintained with hubris that the fundamentals of Hong Kong's economy were sound. It had US$112 billion in foreign reserves, no external debt, a currency pegged to the US dollar, low taxes, business-friendly government, rule of law, freedom of information, etc, etc. Hong Kong was confident enough to contribute US$1 billion to the International Monetary Fund to help contain the crisis within Thailand. Government leaders were calmly announcing that all Hong Kong needed was to stay the course and keep its "confidence" in what they mistook as a passing storm. They were painfully oblivious to the fact that staying the course would lead Hong Kong directly toward a whirlpool of economic collapse in not a passing storm but a fundamental structural collapse of the neo-liberal global financial architecture. They were also blind to the fact that the Hong Kong economy's easy ride on the geopolitical magic carpet was coming to an end.

The neo-liberal mantra began to sound like empty pitches of snake-oil pushers on the Cross Harbor Ferry. No one could answer the embarrassing question: with such good fundamentals, why are the factual data so consistently bad and for such a protracted period?

By August 1998, the SAR government had to intervene in the Hong Kong stock market, buying up more than US$15 billion in publicly traded blue-chip stocks to fend off speculative attacks on the Hong Kong dollar. Since 1997, Hong Kong has been locked in a downward spiral by staying the course.

All kinds of harebrained schemes surfaced. The government used US$1.74 billion of public funds to lure the Disney Co to Hong Kong, at a time when Disney has been facing financial problems worldwide, and the potential of theme parks as a development stimulant having visibly peaked. Hong Kong Disneyland Phase 1 will include a Disney theme park, Disney-themed hotels and retail, dining and entertainment facilities. It will occupy 126 hectares, and can be expanded to 180 hectares in the future. Phase 1 is expected to open in 2005. The project involves a total commitment of HK$22 billion (US$2.8 billion) in public funds (infrastructure, loans and equity). In its first full year of operation, Hong Kong Disneyland is expected to attract more than 5 million visitors, including 1.4 million new tourists, and stimulate additional spending of HK$8.3 billion. The government claims that over a 40-year period, the project is expected to generate economic benefits amounting to HK$148 billion. Any Hong Kong entrepreneur would tell you that a sixfold return over a 40-year period is hardly a financial gold mine, notwithstanding that the estimated return is denominated in soft "economic benefits", not hard cash.

In all, Hong Kong has proposed some US$77 billion in government-supported infrastructure and other major projects over 15 years, intended to get the stagnant economy moving again. That is massive by any standard - amounting to US$12,000 per resident, about 50 percent of 2001 per capita GDP. But many of these proposed projects fail to coordinate with mainland development plans, let alone fully integrate with them, if not in predatory competition with the Pearl River Delta economy. Hong Kong's vision of itself as the front parlor for entertaining foreign investors and the well-appointed sales office, with the Pearl River Delta as the servants quarters and the factory floor, has not been well received by mainland officials. Many of Hong Kong's plans have to do with keeping the Pearl River Delta from effectively competing with Hong Kong rather than true cooperation on an equal basis for mutual benefit. This is because compradorism does not thrive on equality. It is also the mentality behind Hong Kong's insistence of not wanting to be a "Chinese" city, a view relentlessly expressed by Patten protege chief secretary Anson Chan until her "early retirement".

Such grand schemes have pushed public spending up to 24 percent of GDP, producing a budget deficit while contributing little to constructive restructuring of the Hong Kong economy, which requires full integration with the mainland economy. In the manner that SAR government Requests for Proposals are written, many of the construction and consulting contracts will go to foreign firms in the name of an open market, at a time when the local unemployment rate is over 7 percent, inching toward 9 percent by most forecasts. Also, the thinning demand for local professionals further exacerbates the ongoing brain drain from Hong Kong.

In 1997, when the British returned Hong Kong to Chinese sovereignty, public expenditures accounted for just 17 percent of GDP, albeit calculated on a substantially larger GDP. From 1998-99 to 2001-02, government expenditure recorded a cumulative growth of 17 percent in money terms, while GDP registered a cumulative fall of 5 percent. Public expenditure in the economy averaged about 16 percent in the mid-1980s, about 17 percent in the mid-1990s, but rose to 22 percent in 2001-02. In the face of economic downturn since 1997, the SAR government has consciously adopted a counter-cyclical fiscal policy, keeping expenditure growth above the projected growth trend of the economy. But the government's fiscal stimulant has been focused on ineffective spending, neglecting unemployment and public housing, and integration with the mainland economy. The government has recently cut social welfare payments by 11 percent and in effect reduced the minimum wage for new contracts of foreign domestic helpers by about the same. A recent deal with civil servants will cut their salaries by 6 percent in two stages.

In addition, price rigidity in public-expenditure contracts causes prices to continue to rise despite general deflation in the economy. The government's stated target is to reduce public expenditure to 20 percent of GDP or below by 2006-07. Unless this reduction is achieved through a rise in GDP rather than a cut in public expenditure, it will further distress the economy.

Land premium, constituting 22.6 percent (HK$63.6 billion) of revenue in 1997-98, fell to 4.4 percent (HK$8.5 billion) in 2002. This is the center of the problem. Hong Hong's export partners are mainland China (34 percent), the United States (23 percent), Japan (6 percent), Germany (4 percent), the United Kingdom (4 percent), Taiwan (3 percent), and Singapore (2 percent), with China trade expected to be the leading growth potential. Yet a proportional share of public expenditure has not been directed toward further integration with China.

With the outbreak of the Asian financial crisis in the second half of 1997, the Hong Kong economy suffered severe setbacks, and for the first time in recent memory it recorded negative growth on an annual basis in 1998. The economy rebounded temporarily and attained double-digit growth in 2000 on naive and false expectation that what went down must go back up. But along with the global economic downturn, the Hong Kong economy slowed abruptly again in 2001. The Hong Kong economy yielded growth averaging only about 2 percent per annum between 1998 and 2002. Yet China, Hong Kong's largest trading partner, consistently registered growth rates above 7 percent in the same periods. This disconnect is largely the result of Hong Kong's failure to integrate its economy with the mainland economy.

And there is serious talk of new taxes in Hong Kong, including one on border crossing to the mainland and a new tax on goods and services. New taxes are always unpopular, especially in a traditionally tax-shy city with a maximum 15 percent tax rate on personal salary income and a 16 percent tax on business income. Most in Hong Kong pay no salary income tax at all and only 13,000 people in a city of 7 million pay the peak rate of 15 percent. But the real regressive impact is the obstacle such border-crossing taxes erect against the needed integration of the two economies.

Disparity in costs between Hong Kong and the Pearl Delta is about 10:1 at present. Integration with the Pearl Delta would require Hong Kong costs, particularly wages and rent, to fall drastically even as Pearl Delta costs rise. This cost disparity vastly exceeds that between West Germany and East Germany or that between New York and New Jersey. Since the opening up of the mainland in the 1980s, Hong Kong enterprises, leveraging the low costs there, have expanded their production capacity and enhanced Hong Kong's cost competitiveness globally. Hong Kong's domestic economy has upgraded itself in tandem with its exploitation of low labor and land cost on the mainland. But Hong Kong has been siphoning off most of this profit, only a small portion of which has been reinvested on the mainland. Even then, the reinvestment has been concentrated in more sweatshop production for more export, rather than in socio-economic development. The rest of this profit has been going into bidding up real estate prices in Hong Kong and into money-losing real-estate investment in the US, Britain, Canada and Australia in the form of flight capital through most of the 1990s. In recent years, profit from Hong Kong has been poured into wireless and telecommunication ventures overseas, with unhappy results.

Support services for the Hong Kong trading sector and its mainland factories replaced the local manufacturing sector as the fastest-growing sector. The South China region has now evolved into one of the world's prolific production bases. Since the mid-1990s, service industries on the mainland have also been developing apace. During this period, a bubble economy emerged in Hong Kong, giving rise to high operating costs in the colony, pushing some Hong Kong service industries to move northward as well. Moreover, after its return to China, Hong Kong residents, in increasing numbers, travel across the boundary to shop and vacation, adversely affecting Hong Kong's domestic consumption and the retail sector and its real-estate base.

In the process of economic integration, the price differential between Hong Kong and the mainland will inevitably narrow gradually through factor price equalization. The price of tradable products should adjust swiftly because of relatively free trade between the two economies. But fixed rents in Hong Kong prevent this adjustment from taking shape without widespread business failures and bankruptcies.

The adjustment of non-tradable factors such as land and labor will be slow and painful. However, factor price equalization does not mean that price levels between Hong Kong and the mainland will be the same, just as New York, London and Tokyo have relatively higher prices than their neighboring areas. Prices in Hong Kong will generally remain higher than prices in the Pearl Delta for some time, but the exponential gap cannot remain forever. The conventional wisdom is that the magnitude of this price differential will hinge largely on Hong Kong's ability to provide high-value-added services and goods. But God has not forbidden the Pearl River Delta from developing high-value-added service and goods production. Ironically, the high cost disparity gives more of a boost to the Pearl River Delta's downhill effort to develop such services and goods than to Hong Kong's uphill effort to maintain the cost differential.

As the bursting of the bubble economy coincided with economic restructuring, Hong Kong has experienced heavy deflationary pressure, exacerbated by the linked-exchange-rate mechanism tied to a US dollar that, despite its recent decline, is still overvalued. Hong Kong property prices have dropped from their peak by more than half. And because of the economy's disproportionate reliance on the real property sector, this has magnified the economic crisis. High labor costs in Hong Kong force pay cuts and layoffs, causing high unemployment and underemployment, which in turn reduces domestic demand, particularly consumer spending, as well as incentives for more education and training, shrinking the economy further in a downward spiral.

China's growth so far is based on labor-cost advantage in the global export market, coupled with low land costs and environmental liabilities. Even then, the growth rate is unsustainable on exports alone as the global economy stagnates and global trade shrinks. To keep the growth rate above 7 percent, China would have to focus on domestic development. Hong Kong's future rests on its role in China's domestic development.

Shenzhen, the Special Economic Zone (SEZ) just north of Hong Kong, is keeping a close watch on its cost structure to ensure that it does not escalate to levels that have weakened Hong Kong's competitiveness. Increasingly, other Chinese cities, including Shanghai, are using Hong Kong as a model to avoid, rather than to emulate.

The Hong Kong government budget deficit at the end of the financial year in March was a record amount that represents more than 5 percent of projected 2003 GDP. It was far above the original estimate, mainly because government revenue was 19.2 percent less than originally estimated. Moody's, a major international rating agency, has estimated the 2003 deficit to be as high as HK$90 billion. Government revenue will continue to shrink, as the bulk of it comes from land revenue. Since Hong Kong has no capital-gains tax, there will be an adverse impact on revenue from salary income as Hong Kong shifts wage-earning activities to the Pearl River Delta. The currency peg is a hindrance to economic recovery and cannot hold, notwithstanding government intransigence on the issue.

Local polls on top popular concerns repeatedly show democracy trailing by wide margins major livelihood issues, such as rising unemployment, small business bankruptcies, home mortgage foreclosures, education, crime and public health. The chief executive has introduced a mild form of industrial policy that will help the SAR compete in select, strategic industries. Hong Kong is now solidly dependent on its ability to integrate with the rest of China's economy.

The effect from exports on the domestic sector has been weakening in the past 20 years. Less than 30 percent of the working population is now in trade-related fields. Domestic demand is still very weak as the local economy has yet to recover from the severe wounds of the economic crisis and all disposal income has been soaked up by real estate costs, depleting purchasing power even for the still employed.

China feels the need to support the stagnant Hong Kong economy to prevent the link between Chinese sovereignty and economic depression, but is rather helpless because Hong Kong's Basic Law, its mini-constitution, specifically forbids Chinese interference in Hong Kong. Yet the cause of Hong Kong's economic woes has little to do with Chinese sovereignty. It has to do with Hong Kong's delusion about its geopolitical free ride as a free market, made inoperative after 1997 when the United States abandoned preferred trade treatment for Hong Kong for lack of geopolitical incentive now that it is part of China. But the mainland economy is thriving. Hong Kong's economy is in trouble not because it is now under Chinese sovereignty, but because Hong Kong refuses to be Chinese. Why should China feel the need to defend residual colonial compradorism in Hong Kong, which claims superiority over socialism with Chinese characteristics on the mainland?

Hong Kong's self-styled central banker, Joseph Yam Chi-kwong, head of the Hong Kong Monetary Authority, whose central bank function has in effect been stripped by the peg, recently warned publicly in writing that "a fiscal deficit carries the risk of leading to an interest-rate shock if a budget package lacks credibility or community support". Since the Monetary Authority operates under the direct control of the Financial Secretary, one can assume that its head was speaking for the government. The message is clear that the danger of a budget deficit is directly related to the defense of the currency peg. In other words, the peg is preventing Hong Kong from using a fiscal deficit to counter the most difficult economic crisis, despite the fact that Hong Kong has more than US$100 billion in reserves. Yam is an open admirer of Alan Greenspan, whose style Yam tries hard to emulate, notwithstanding the difference in background and training between the two. But Greenspan is flooding the US, and by extension the world, with US dollars that he can print at will, and in fact threatening to print more to fight deflation and to support President George W Bush's $300 billion deficit. But Yam, with US$120 billion in reserves, is unable to tolerate an US$11 billion deficit because of the peg.

An interest-rate shock resulting from an attack on the peg in 1997-98 pushed Hong Kong dollar inter-bank rates far above their US dollar equivalents and sent the Hong Kong economy into a tailspin. Hong Kong is not Argentina, which has been done in with dollar debts and its currency peg. But it is acting like Argentina with its budget crisis.

Yam also warned that the ability of Hong Kong's banks to absorb such an interest-rate shock without adjusting their lending rates has been eroded in recent years by greater competition and lower profitability. Thus the government is acknowledging that a free credit market is detrimental to Hong Kong's financial wellbeing.

On November 12, the Heritage Foundation and the Wall Street Journal released the 2003 Index of Economic Freedom. The Index is an annual survey of the world's economies, including country-by-country analyses and the most up-to-date data available on foreign investment codes, taxes, tariffs, banking regulations, monetary policy, black markets, and more. For the ninth consecutive year, Hong Kong was named the world's freest economy. The Heritage Foundation rates Hong Kong No 1 in its index of economic freedom and the People's Republic of China No 127. Apparently, freedom is inversely related to growth rate.

In 2001, Hong Kong's GDP was US$162.6 billion with an export value of $201.9 billion. The Pearl River Delta had a GDP of $258 billion with an export value of $289.1 billion. The growth rate differential between the two is 15:1 in favor of the Pearl River Delta. For Hong Kong to be calling the shots for the future of the region would be the tail wagging the dog.

Concerted efforts have been made by the government to promote and position Hong Kong as Asia's world city. The Brand Hong Kong program, launched in May 2001, is billed as a long-term undertaking to focus greater international attention on Hong Kong's strengths and advantages as the most free, open and cosmopolitan city in Asia. In July 2000, the government established a dedicated department, Invest Hong Kong (InvestHK), to spearhead efforts to attract inward investment. InvestHK actively promotes Hong Kong as the premier business hub in the Asia-Pacific region, and as the best location to access the enormous potential of the mainland market. The government's message to the world is that major reasons companies are attracted to Hong Kong are low and simple taxes, the free flow of information, political stability and security, corruption-free government and excellent communications, transport and other infrastructure. But the real reason is the potential of the China market.

Central to Hong Kong's long-term success is greater economic cooperation and inter-dependence with the adjoining Pearl River Delta hinterland, which has specific advantages and significant potential as a consumer market, a trading hub, a manufacturing base, a services market and as a destination for investment. An economy cannot be sold like brands of cigarettes or diapers. If fundamentals behind prosperity are missing, no amount of selling will make up for a delusion of grandeur. Hong Kong will do better to spend its money where it counts, such as a full-employment program.

The Pearl River Delta, which includes Hong Kong and Macau, is the fastest-growing and most affluent region in China. It has a population of about 48 million, which is more than the populations of Canada, Taiwan or Malaysia. The Pearl River Delta has a GDP of US$258 billion - more than Switzerland, Sweden or Austria - which would put it among the world's top 20 economies. Hong Kong has helped fuel the Pearl River Delta's rapid growth and development over the past two decades. Hong Kong is the largest investor in the area, and there are more than 36,000 Hong Kong-linked companies employing more than 5 million people in Guangdong province.

Despite the depth and breadth of these links, there is a need to boost significantly cross-boundary cooperation and integration to build on existing strengths and synergies and maximize the area's potential. The emphasis is on free flows of people, goods and capital between the Hong Kong SAR and the Pearl River Delta's major cities, which include Guangzhou, Shenzhen, Zhuhai, Zhongshan, Dongguan, Foshan, Huizhou, Huiyang, Huidong, Zhaoqing and Jiangmen as well as Macau. This cannot be accomplished with Hong Kong setting itself apart as an autonomous and non-Chinese entity.

Yet not until last July did Hong Kong's first Economic and Trade Office in the mainland open in Guangzhou to promote economic cooperation and to strengthen business and economic liaison between Hong Kong and the Pearl River Delta.

The chief executive, Tung Chee-hwa, announced in his Policy Address in October 2001 an ambitious infrastructure plan worth HK$600 billion (US$77 billion). Of this, one-third would be spent on expanding the railway network to make it the backbone of Hong Kong's public transport system. From 2002 to 2007, six new rail projects costing US$13 billion (HK$100 billion) will come on line at a rate of about one a year. The existing railway network will be expanded by 40 percent to more than 200 kilometers. Urban areas will be connected with new towns in the eastern and northwestern parts of the New Territories. Yet there were no priority projects to improve linkage with the mainland until recently. A second rail passenger boundary crossing at Lok Ma Chau will be developed to handle the substantial growth in two-way travel and commerce across the boundary, but no target date has been announced. By contrast, a dedicated rail link will be built to Hong Kong Disneyland, due to open in 2005.

Plans are being developed for another six new rail projects before 2016. These include a Port Rail line linking the container port at Kwai Chung with the railway network in the Pearl River Delta and a high-speed railway linking Hong Kong to Guangzhou via Shenzhen. The year 2016 is 13 years in the future.

Over the next decade, more than 100 kilometers of major trunk roads will be constructed and improved, including the Deep Bay Link and the Shenzhen Western Corridor. Total investment on these projects will be more than HK$100 billion. The proposed Shenzhen Western Corridor will provide a strategic link between Hong Kong and Shenzhen across Deep Bay. It is an integral part of the infrastructure being put in place to provide more and faster cross-boundary links with the mainland to expedite the flow of people, cargo and capital between Hong Kong and the Pearl River Delta. Again, no target completion date has been announced.

Hong Kong has one of the world's busiest boundary crossings. In 2001, about 106 million people and 11.3 million vehicles crossed back and forth between Hong Kong and the mainland. Every day, an average of about 313,000 people and more than 31,300 vehicles cross back and forth between the Hong Kong SAR and the mainland, with most people heading into neighboring Guangdong province.

Container Terminal 9 (CT9), now being built on Tsing Yi Island by the private sector, is aimed at consolidating Hong Kong's position as the world's busiest and most efficient container port. The 68-hectare project will have six berths and a design capacity to handle more than 2.6 million 20-foot-equivalent units (TEUs) a year. CT9 is expected to be completed in 2004, and will bring annual total capacity at the Kwai Chung Container Terminal Basin to more than 15 million TEUs. The new marine basin will be able to handle the largest container ships currently on the drawing boards. Yet the private interests behind these projects have emerged as the most vocal and influential opposition to logistic integration with the Pearl River Delta. A proposal for a 15 billion yuan (US$1.83 billion) bridge linking Hong Kong, Macau and the mainland Chinese city of Zhuhai, which neighbors Macau, has sparked bickering among Hong Kong tycoons over their special interests (see The New York of Asia: Port in a storm.

The container-terminal industry, speaking through the powerful Hutchison Whampoa Group, opposes moves that may affect the current governmental arrangement of privately developed container terminals. The Hong Kong Container Terminal Operators' Association, which represents private terminal operators, including Wharf's Modern Terminals, CSX World Terminals and Hutchison Whampoa's Hongkong International Terminals, while claiming not to be against the bridge project, was quoted by the press as being opposed to "proposals that changed the government's port development policy so as to create an unfair situation for the existing players".

The proposed bridge would be a regional infrastructure that would be key in integrating Hong Kong and the Pearl River Delta into one vibrant regional economy. In that sense, would be vital to the economic survival of Hong Kong and beneficial to Guangdong province and China in general.

Shenzhen's port reported fast growth last year. The SEZ port handled about 87.67 million tons of cargo and 7.62 million TEUs, representing a 32 percent increase in volume and a 50.1 percent growth in container throughput. The figures elevated Shenzhen ahead of Los Angeles and Rotterdam to become the world's sixth-busiest container port in 2002.

Hong Kong remained the world's busiest container port and handled an estimated 19 million TEUs in 2002 - a 6.6 percent increase over 2001. Shenzhen aims to increase its container-handling capacity to 11 million TEUs by 2005 and 18 million TEUs by 2010.

Shenzhen airport's passenger and cargo traffic increased 20 percent and 35 percent year-on-year respectively in 2002. Passenger numbers jumped to 9.35 million, while cargo volume leaped to 334,100 tons. By comparison, Hong Kong International Airport's growth was slower - passenger numbers grew 4.5 percent to 33.5 million in 2002, while cargo traffic was up 19.5 percent to 2.5 million tons. Shenzhen airport operated 120 domestic and nine international flight routes in the year, whereas Hong Kong had 130, of which 40 were to and from the mainland.

The number of mobile-phone users in Shenzhen increased to 6.05 million in 2002 from about 3.88 million in 2001. Some 174 fixed-line and mobile phones are owned by every 100 residents in Shenzhen in 2002. During the year, the SEZ's Internet user numbers surged to 1.88 million, from 1.06 million in 2001. Hong Kong had about 6.22 million mobile-phone users in 2002, up 82 percent over the previous year, representing a penetration rate of about 91 percent. Registered Internet users in the SAR totaled 2.36 million in 2002. But Hong Kong's population is about 6.8 million while Shenzhen's is about 4.7 million. Taking this into consideration, Shenzhen had caught up with Hong Kong in telecommunications. Both Hong Kong and Shenzhen have reached saturation in telecom market growth. Future growth would come from other cities in the Pearl River Delta. Shenzhen's gross domestic product grew 15 percent last year to 223.9 billion yuan, enabling per capita GDP to reach US$5,561 (HK$43,376), the highest in the mainland.

Hong Kong government revenue has fluctuated wildly between 14 percent and 21 percent of GDP in the past decade, largely affected by volatile land lease revenue. The government's long-term fiscal strategy and tax reform needs to address issues related to its excessive dependence on land lease revenue and the narrow tax base.

The performance of companies involved in real estate in Asia has lagged far behind those in non-real-estate sectors since 1997. In Hong Kong, the five-year average return on capital employed for non-property sectors since 1997 was 17.3 percent, compared with merely 6.7 percent for diversified firms with both property and non-property businesses and only 6.5 percent for real-estate companies. The listed companies in Hong Kong that have done well since 1997 are the ones with heavy investment in China.

Even the British-dominated Hong Kong General Chamber of Commerce has been urging the SAR government to listen more to the business community on economic integration with the Pearl River Delta. Chamber director Eden Woon, a US citizen and a former US Air Force intelligence officer, said he was pessimistic about the government's handling of issues concerning integration with the Pearl River Delta. He complained that businessmen generally did not have enough say in such issues as cross-border infrastructure, environmental protection and immigration policies. Woon called on the government to set up a "Greater PRD Council", an unofficial forum like the Asia Pacific Economic Cooperation (APEC) forum, in which council members would meet annually to discuss business issues of delta integration. Under a proposal Woon handed recently to the government, several committees would be set up to deal with key issues. Michael Enright, co-author of The Hong Kong Advantage and a professor at the School of Business at the University of Hong Kong, notwithstanding the embarrassment of the mysterious disappearance of the so-called Hong Kong advantage, echoed Woon's views.

The proposal of Woon and Enright of an APEC-type forum, a loose coordination body of private interests from different sovereign states, would further reinforce the separation of the Hong Kong from the Pearl River Delta by treating the two Chinese entities as de facto sovereigns.

While Adam Smith realized the growing importance of capital in economic progress, he also was apprehensive of the growing danger of its abuse. His attitude of distrust toward the capitalist as an advisor of government has been clearly stated: "The interest of the dealers in any particular branch of trade or manufactures is always in some respects different from and even opposite to that of the public. The proposal of any new law or regulation of commerce which comes from this order of men ought always to be listened to with the greatest precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous but with the most suspicious attention."

The SARS crisis shows that far from wanting smaller government, the public wants stronger government leadership and action, to improve public hygiene and health services, to reduce unemployment, to help small businesses in distress, to revitalize the economy with full integration with the mainland.

Three things have been made clear by the severe acute respiratory syndrome (SARS) crisis: 1) People when frightened look to the government for help. People want more government, not less, in times of crisis. 2) People are prepared to give up freedom for protection, especially when they never enjoyed freedom under colonialism to begin with. 3) Everyone wants government intervention to save the market; no more laissez faire, which never existed under colonial command economy. Bottom line: when things get tough, people want more socialism.

With 30,000 people lining up to apply for 3,600 openings, to call it a crisis is an understatement. The "round up the usual suspects" approach will not be enough.

The government has announced that US$128.2 million will be set aside to promote Hong Kong and to encourage the return of exhibitions, to get trade activities back to normal after the spread of the SARS crisis is brought under control. The government has also announced it will create 21,500 training places and short-term jobs to strengthen service training in the most SARS-affected areas. These jobs will provide home-cleaning services for the elderly and boost environmental hygiene. The program will cost about US$55.12 million. This public-health budget is less than half of the government's public-relations budget. The government will do well to reverse the priority. What is needed is a full-employment program to improve environmental hygiene and other community services (see On offer: A full employment program for Hong Kong by Henry C K Liu and L Randall Wray, March 30, 2002).

Chief Executive Tung Chee-hwa has been the target of political attack by the so-called Democratic Party members in the Legislative Council, blaming him for alleged incompetence and weak leadership in this period of economic crisis. These individuals were noticeably docile and silent during colonial rule. What kind of democratic party is it that has only 590 members, with a chairman who never faced even token elective challenge from the party's founding in 1994 to his voluntary retirement in 2002? And they have the nerve to accuse the chief executive, who has faced two elections since 1997 in accordance with election procedures stipulated by the Basic Law, of being not democratically elected? But most hypocritical of all is that the loud opposition from this party of 590 to Hong Kong's integration with the mainland is one reason Hong Kong is in such a state of economic paralysis.

Tung is an honest, hard-working, conscientious and patriotic leader that any city would be lucky to have. If anything, he is excessively democratic, trying to represent fairly all the diverse and often opposing interests in the community and overseas. His constitutional authority is much weaker than that of the British colonial governor, who enjoyed total dictatorial power, unchecked by any Basic Law, and with the colonial judiciary system in his pocket.

Hong Kong's economic woes are the result of a paradigm shift in geopolitics, not poor leadership. Hong Kong's problems are not made by Tung Chee-hwa, nor can he be expected to solve them without Hong Kong waking up to the geopolitical reality that its fate is tied to its willingness to be an integral part of the motherland. The people of Hong Kong should unite behind Tung to let him lead Hong Kong into an era of renewed national pride and prosperity.   

[The article appeared in AToL on May 22, 2003]