[Congressional Record Volume 143, Number 93 (Friday, June 27, 1997)]
[Senate]
[Page S6783]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          HONG KONG REVERSION

 Mr. GLENN. Mr. President, next week the eyes of the world will 
be focused on Hong Kong when the British dependent territory reverts to 
Chinese control. The end result of a negotiated agreement between the 
United Kingdom and China, the reversion itself is widely accepted and 
not a matter of controversy. Nevertheless, how China will handle the 
dynamic and thriving territory of Hong Kong in the near and longer term 
future is a matter of great interest, and of considerable difference of 
opinion.
  I count myself among those who are cautiously, I underscore 
cautiously, optimistic about the future of Hong Kong. The principle 
reason for my cautious optimism is a belief that, in this area, China 
will be guided primarily by consideration of its economic self 
interest. Many have likened Hong Kong to the goose that laid the golden 
egg. That characterization is well deserved. Simply put, China has an 
enormous stake in continued economic growth and prosperity in Hong 
Kong. Over the last several years, economic growth in Hong Kong has 
averaged 5 to 6 percent a year; Hong Kong is now the eighth largest 
trader in the world; and its GDP of almost $24,000 per capita exceeds 
that of several western industrialized nations. Hong Kong is an 
international business and financial center. The Hong Kong and Chinese 
economies are already intertwined and codependent. Hong Kong is a 
source of substantial investment in China and a conduit for Chinese 
exports around the world.
  To a large extent the Chinese leadership has staked its legitimacy 
and its future on the ability to bring growth to China's economy and an 
improving standard of living to its people. Over the next 5 years China 
will have to find jobs for an estimated 216 million new or displaced 
workers. Reason would argue that China simply cannot afford to 
substantially tamper with the economic growth engine that is Hong Kong.
  In addition to the negative economic consequences of mishandling the 
Hong Kong reversion, China has other incentives to try hard to make 
things work. China has advertised the Hong Kong one country-two systems 
principle as a model for any potential future discussions on 
reunification of Taiwan with the mainland. While it's still unclear 
whether or not this is even a feasible proposition, you can be sure if 
things do not go well in Hong Kong, any possibility of talks with 
Taiwan on reunification will continue to remain remote for the 
foreseeable future. Finally, the success or failure of the Hong Kong 
transition will have a substantial impact on United States-Chinese 
bilateral relations, as well as on the worldwide perception of China.
  Having outlined the reasons for my optimism, I must now explain why I 
temper that optimism with a healthy dose of caution. I am not sure, Mr. 
President, that the leadership in Beijing understands what it takes to 
nurture the robust and thriving socioeconomic system of Hong Kong, 
particularly the relationship between the political and economic 
spheres. I am not sure that the Chinese leadership will necessarily 
favor their economic interests over political or perceived security 
interests, if the two sets of interests collide.
  The record of the period of preparation for reversion is mixed. Hong 
Kong continues to thrive economically and business confidence remains 
high. China has agreed to Hong Kong's continued membership in 
international institutions as a separate entity and to the continuation 
of Hong Kong's experienced and professional civil service. On the other 
hand, China's decision to replace the elected legislature, Legco, with 
an appointed provisional legislature and certain statements by Chinese 
officials concerning definition of freedom of the press have caused 
considerable unease among Hong Kong's democratic political 
organizations, in the United States and in Britain.
  The great unanswered question is whether the Chinese leadership will 
be willing and able to effectively implement the one country-two 
systems model, preserving Hong Kong's economic prosperity as well as 
the political freedoms the people began to enjoy under British rule. If 
alternatively, they begin to roll back the political freedoms and 
individual liberties, in my view, the economy will not be immune, and 
they may well end up sacrificing that fabled golden goose.
  We may not know the answer to that question for several years. As I 
said earlier, the eyes of the world will be on Hong Kong next week. 
But, those eyes will not be taken off Hong Kong on July 2. You can be 
sure the world will continue to watch China's stewardship of Hong Kong 
with intense interest for many years.
  And, we shouldn't just watch. The United States should do everything 
it can to support the people of Hong Kong. The United States should 
encourage China to see and understand that its own interests are best 
served by maintaining true autonomy for Hong Kong. Anything less would 
be a failure.

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