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History Table of Contents
1997 Summer Conference
Summer Conference 1997
Canada and the Asia-Pacific Promise: Hope, Hype and Reality
Hong Kong and China

J. D. McGregor,
Former senior civil servant and elected member,
Legislative Council of Hong Kong

I am grateful to be given this opportunity to speak on Hong Kong and its future as an SAR (Special Administrative Region) of China.

I'm aware of the very substantial world-wide interest in Hong Kong at present and during the various ceremonies of transition from June 30 and through the early days of July.

Several thousand journalists, writers and other media people poured into Hong Kong at that time and literally thousands of interviews were conducted, more or less, with anyone willing to speak; taxi drivers and all the others.

I think that it must be the case that anyone interested in Hong Kong must have been able to read or listen to a wide variety of views on Hong Kong's future, ranging from impossibly optimistic and euphoric assessments to the gloomiest predictions of early disaster.

Before I add my own penny's worth to this crowded scenario, I want to make a few points to indicate to you why I take a particular view of Hong Kong's prospects over its economic, social and political development.

Some of the points may not seem directly relevant, but they've had an influence on me during my 46 years in Hong Kong in government, the institutional system and the political structure.

The first point I want to make is that the British government was never in the position that it could provide some form of self-government to Hong Kong, either through the grant of independence or through some form of full autonomy from China. This was largely a leased territory, whether or not China recognized the lease.

Indeed, China was in the position for many years that it could have recovered Hong Kong with relative ease and probably by negotiation, rather than by force. The British have not, therefore, had a free hand with the development of Hong Kong and especially so with political reform.

I have heard and read many opinions to the contrary, some of which were based on the very dangerous assumption that China would allow the British authorities to advance political reform in Hong Kong without direct consultation at the very least with China. In my view that was never an option.

The Hong Kong business community tried to persuade the British government — from eight years or so before the Joint Declaration between Britain and China was signed — to negotiate an arrangement which would recognize Chinese sovereignly over Hong Kong, all of Hong Kong, and extend British responsibility for the administration for 20 years after 1997.

I was personally involved in those early efforts to safeguard Hong Kong's special economic philosophy and status. My own correspondence sets out the detailed reasoning supporting this proposal.

It will seem naive at this stage, but at the time — about 1975 to 1979 — many of us thought that China would be prepared to do a great deal to protect and nurture the enormous contribution which Hong Kong represented to the Chinese economy and, therefore, to its own massive surge towards market realism and international co-operation.

I believe that Mrs. Thatcher [the British Prime Minister] began the formal negotiations over the future of Hong Kong by proposing an arrangement along the lines I've described. And she was quickly advised by Deng Xiaoping that administration was an important element of sovereignty and, therefore, not negotiable.

I have heard denials that any such proposal was advanced. I believe my personal paper indicate otherwise.

The British, therefore, were reduced to carrying out such reforms, I'm sorry to say, as the Chinese would permit. The Chinese were always unwilling to agree to anything other than a slow advance towards political maturity and democratic system of government.

The Joint Declaration, for example, did not establish an agreed interpretation of the word "election," and this ensured serious disagreement at a later stage. The British gave way to insistent Chinese pressure not to permit direct elections in 1988, despite widespread public support among Hong Kong people for that function.

The Hong Kong government undoubtedly cooked the books on the results published on a public consultation exercise. So did at least one major business organization. Business did not support early elections. Direct elections did not begin, unfortunately, until 1991, very late in the day.

The business sector in Hong Kong became fearful of the wrath of China after Chris Patten announced his electoral reform package in 1992. Businessmen and their organizations declined to support the modest democratic reforms proposed by Patten, which tested the parameters agreed in the Joint Declaration and set out in the basic law.

China reacted with deadly effect on businessmen, individual businessmen, who took the democratic line, or who opposed China politically in other ways. Such examples quickly brought the bulk of Hong Kong business, and I have to say that includes international business, into line with China on the political issues.

The spectacle was an unpleasant one for the democrats. Since this transition, I think it's fair to say, that the SAR government under supervision from China has enacted, or re- enacted legislation unhelpful to the democrats and to the promotion of democracy in Hong Kong.

It has always been clear that in regard to Hong Kong, China has been willing to accept standards of human rights, civil liberties and corporate freedom that do not exist in China. But, there are limits to Chinese tolerance and it is in the political arena that Chinese susceptibilities are most sensitive. It is not difficult to see why.

When Britain was responsible for Hong Kong, the Chinese did not have to explain why Chinese residents in Hong Kong enjoyed a vastly better life with greater freedoms that their brothers and sisters in China.

But, with Hong Kong now part of China how can China justify allowing Hong Kong people a genuinely higher degree of autonomy, which includes internal political development?

Hong Kong, a successful Hong Kong which was also markedly more democratic that China, would provide an intolerable example and Chinese leaders would be under constant and increasing pressure to extend democracy and all the rights therein to the rest of China.

So, China has a very large problem with Hong Kong. China wants to continue to receive the golden eggs from Hong Kong. That is the only reason for the one country, two systems concept and all the political arguments since the Joint declaration was signed in 1984.

But Hong Kong people have experienced the benefits of a liberal, accountable, efficient and reasonably democratic government for many years. They know their rights. And they have elected dedicated politicians to speak for them; one is here. I think I was another one.

China cannot simply shut down the entire electoral system, which has been successful in Hong Kong in recent years.

So, China now twists and turns to establish a predominantly pro-China Legislative Council within which, as Emily has predicted, democrats will be represented, but always as a minority.

Business people do not disagree with these contortions, because for their own benefit they have common interests with China. That, in my view, is a pity, but entirely predictable in all the circumstances.

What then of the future?

I do not believe there will be any further advance in democratic reform in Hong Kong in the short, or medium term. None. Existing levels of democracy will not be maintained, despite the best efforts of democrats and those of like mind.

It will not be difficult for the Chines authorities to bring pressure on the SAR government to marginalize the democrats by denying them the opportunity to carry their case to the people of Hong Kong.

Demonstrations will be made more difficult. That process has already begun. And public perceptions of this situation will ensure that the public support enjoyed by the democrats will not be reflected in future in the numbers attending demonstrations, candlelight vigils and other forms of public support for democracy.

On the economic front, however, everything will be done to ensure further growth and diversification of the hugely successful Hong Kong economy. This is one area where China will grant a higher level of autonomy to Hong Kong and to Tung Chee Hwa in the government system. Why not? China has already embarked on a helter skelter journey down the Hong Kong road, learning as they go along, but always moving in the same direction.

They do not yet follow the same economic philosophy, but they are getting closer and getting more efficient.

Down with state control and up with socialism with Chinese characteristics. That's the battle cry. When these Chinese characters are analyzed, the look remarkably like capitalistic characteristics.

Chinese IQ, as a race, has always been high. Chinese cultural leaning towards every form of education is part and parcel of everyday life; all of which ensures that when opportunity arrives the Chinese people will recognize it and use it. That process has already begun and is changing into high gear.

The immediate problems that Hong Kong will face will include a rising incidence of corruption, especially cross-border corruption. Hong Kong has an exemplary record in fighting corruption, but the picture in China is greatly different.

Illegal immigration into Hong Kong will also pose a severe problem. Indeed, that is already happening and the SAR government will not find it any easier than the British Hong Kong government [did] to get on top of this problem.

Chinese people will be encouraged to go to rich Hong Kong now that is again part of China.

There will be stresses and strains on Hong Kong's excellent civil service, run by some of the most talented and experienced professional officials I have ever known with Anson Chan as the leader. It will be difficult for the civil service to adjust to the new masters and quite probably a new order of things.

Housing is another pressing problem for the SAR government. Everyone in Hong Kong who has to rent accommodation is paying a great part of their income towards housing. Unless something is done quickly to increase supply and to stop speculation on properties — particularly the latter — Hong Kong could be priced out of the market.

If property prices continue their wild escalation there will be a point when the market surely will collapse, as it has done many times in the last. Then everyone, including the developers, will suffer.

It's a fact that at the present time in the landbank in Hong Kong in private hands, six companies, or seven companies at the most, control 70 per cent of the land available. That lends itself to consideration of a system whereby a few companies can dictate the market. It's been suggested many times that's exactly what they do.

I've tried to see both sides of the particular problems for Hong Kong and China with my own experience, which is an odd one.

I served 22 years in the Hong Kong government as a civil servant, a relevantly senior one involved with policy, and then spent 13 years running the Chamber of Commerce and was in direct contact with business houses, following their thinking. Then, [I spent] nine years in the political system, seven years in the Legislative Council and two with the Executive Council.

With all of that experience I've tried to assess the problems which Hong Kong will face when seen from the Chinese side and the Hong Kong people's side.

I have to say, therefore, that being the case, that without reservation that no matter what system of government a country develops, or has thrust upon it, and no matter what race of people is being governed, it is the right of every person on this earth to have and to enjoy the fundamental freedoms which the United Nations has set in great detail following extensive international debate.

These are freedoms which in Canada I think you take for granted; freedom of speech, freedom to assemble, to disagree, to propose change, to promote new ideas, freedom to demonstrate within reasonable legal boundaries and freedom to elect governments without fear.

Hong Kong people have enjoyed most of these freedoms. The people of China have enjoyed far fewer freedoms and those seeking such freedoms have been treated, in many cases, harshly and brutally.

Like millions of others, I joined the armed forces in World War II to defend such freedoms against tyranny and evil forms of government.

I believe communism and the systems of government dictatorships based on Communist ideology are no longer acceptable in this world and are everywhere in retreat.

I thank God that China is already in massive economic transition and I have no doubt that this will lead towards a more democratic and representative system.

Therein, I hope, lies Hong Kong's salvation.