On first sight nothing much has changed in Hong Kong since the British colony was returned to China at midnight on 30th June 1997. No one has been arrested for his or her political views. The People’s Liberation Army keeps out of sight inside the Prince of Wales barracks. The corporate skyscrapers still glitter in the wintry sun. The history of British rule still casts its shadows: the noonday gun, originally from a Jardine Matheson opium brig, is fired each day as a token of respect to the Royal Navy; and in Victoria Park a bronze Queen Victoria watches serenely over picnickers and annual mourners for the Tiananmen massacre.
For the moment, political anxiety is masked by economic bad news. Property prices are crashing; tourists are staying away from an overpriced city; and the stock market has lost almost half its value in less than six months. Many estate agents, which dominated the shopping streets only a year ago, are boarded up. And because the Hong Kong dollar is pegged to the US dollar, services are becoming prohibitively dear for people from countries with debased currencies-that is, all of southeast and east Asia. I have lunch with a western stockbroker who used to be one of Hong Kong’s greatest boosters. Fresh out of a job, he looks pale, and tells me that Hong Kong could be in for a very rough time.
The most ominous disaster has been the collapse of Peregrine Investments Holdings Ltd, Hong Kong’s cockiest brokerage house. It went bust because of one colossal loan ($260m) to a dodgy entrepreneur with connections to the daughter of Suharto, Indonesia’s strongman. This was the kind of deal which made much of Asia tick. Peregrine’s founder, Philip Tose, was one of the noisiest promoters of capitalism, Asia style, based on authoritarian rule and crony connections. Now this system looks vulner-able. Hong Kong, under British rule, with its relative fastidiousness about the rule of law, was neither as raw nor as corrupt as other countries in the region. But since Hong Kong was handed back to Beijing, whose politics and economics are as corrupted by cronyism as anywhere in Asia, things could unravel fast. Hong Kong’s economic future depends on the political future of China. The question is to what extent Hong Kong can affect that future.
If you are a subscriber, please log in »
This article is available to subscribers only
Subscribing to Prospect is the most reliable and convenient way to receive the magazine every month, and offers the best value.Subscription Types:
Online
An online subscription offers you complete and unlimited access to the entire website, including our searchable archive of every back issue of Prospect, and a PDF edition of each new issue: all this for just £20 per year. Purchase an online subscription »Renewal
Renew an existing subscription »Institutional access
If you are a library, business organisation or any other large institution that needs a multi-user licence, you can obtain institutional access.
Share
Subscribe to post comments
Print
