When East Meets West Hong Kong Transition Will Test the Future of U.S.-Chinese Ties

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THIS WAS the city where two cultures converged, Asia's great exception. For 156 years, this tiny, turbulent hub of traders and deal-makers was the narrow conduit linking an insular Chinese empire to a Western world it kept at bay.

But at 15 seconds past midnight on Tuesday morning, when the Union Jack comes down, the British colonials sail away on the royal yacht Britannia and a new Chinese regime assumes control, the character of Hong Kong will change forever.

One minute, this frenzied city will stand as a triumph of Western modernism and law, even if 98 percent of its residents are Chinese. The next, Hong Kong will officially become a Chinese city, subject to a set of rulers and mandates from a communist capital. Never before has a socialist state acquired a freewheeling capitalist economy. Beijing has pledged not to crush Hong Kong with tanks or troops but to nurture it and to learn about individual initiative and taking risks. "There are no guides in history, no books to turn to," said Tung Chee-hwa, the shipping tycoon handpicked by Beijing to guide the transition. But how this great city is compelled to change and adapt, and whether it prospers or fails, will test the legendary mettle of Hong Kong's residents. What happens next in Hong Kong, in the grand social and political experiment now taking shape, will also tell us more about China than we have known. Can Beijing accept Hong Kong's belief that the best government is one that leaves the economy alone? Or will Beijing's need for strict control, its fear of dissent and its lack of sympathy for free expression undermine its success? Will China's ambitions for its people and its growing demand for resources eventually threaten its Asian neighbors? Can the successful reincorporation of Hong Kong offer a peaceful path toward reunification with Taiwan, China's prosperous runaway province of 22 million? Can Beijing abide by international rules on trade and arms control? Friend Or Foe Friend Or Foe And ultimately, will China prove to be America's friend or foe? "A lot of people look to the future of China as what's at stake here," says Michael DeGolyer, a political scientist at Hong Kong Baptist University, who is monitoring the transition. "Hong Kong has no choice but to go back, but China has no choice but to go forward. Who changes whom? That is the question." Hong Kong offers China its best ticket to the future. After all, it is the dynamism of Hong Kong's entrepreneurial people that has done the most to transform China since it unlocked its gates to the world just 20 years ago. So far, Hong Kong and the company it keeps - the Chinese tycoons of Asia - have funneled 60 percent of total foreign investment into China, more than $220 billion. "Everybody believes that a smooth return of Hong Kong is in China's own interest," said Minxin Pei, a native of Shanghai who teaches political science at Princeton University. "So if China cannot handle even a process that is in its own interest, then it is very hard to convince most people in the West that China can be a responsible member of the international community." China's rulers insist that the new "special administrative region" will operate under a "high degree of autonomy" from Beijing. The shorthand is "one country, two systems." But do the communist rulers know enough not to mess with capitalist success? Can they resist the temptation to slowly tear down the British colonial supports that were crucial to Hong Kong's dramatic rise - an unobtrusive government, an honest civil service, an independent judiciary? "If Hong Kong becomes a Chinese city," one tycoon said, "Hong Kong is dead. It must remain a cosmopolitan city." Intentions Unclear In the United States, China's basic intentions seem unclear, its motives suspect. A new chorus of anti-China activists - from the right and the left - condemns the Beijing government for not improving human rights, for failing to protect intellectual property and for forcing women to have abortions. …


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