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to the Communist regime. In Hong Kong taxes were low, the government was efficient, the common law system was perceived as just, incomes were 40 to 50 times higher than on the mainland, the police were not corrupt, even the colonists were now less arrogant than in the past. All this would be threatened when the Communists came to power, and Hong Kong people saw everything the Communists did as evil and malicious. London was seen as appeasing China and selling out Hong Kong. Such mutually hostile feelings would very likely lead to political confrontation. This was Hong Kong's dilemma. China and Hong Kong needed closer economic cooperation for their mutual benefit, but their mutual distrust would lead to quarrels.
4. After 1997 there would be little the people of Hong Kong could do apart form vote with their feet. Even here the majority had no choice but to remain. He saw no basic change in China in the next few years, because of the likelihood of good economic performance. China would continue to suffer feudal totalitarian rule but the people would put up with it because they were being fed and clothed. The Chinese communists were alert to the necessity to preserve their power. They were threatened by
';peaceful evolution", the two main sources of which were the United States and Hong Kong. For most ordinary people, and business people, 1997 would not bring much change. The free economy of Hong Kong serves China's and the Communist Party's best interests (and those of the high level officials and their children). But political activists (Westernised intellectual, lawyers, journalists, scholars and the like) would not fare so well. The Chinese authorities would not be as tolerant as the present ones; they would see the activities of such people as potentially threatening their power (especially if they spread to the mainland). China had already tried to quarantine Hong Kong off politically form the rest of China. On the other hand China has made progress towards a more market form of economy which cannot really be turned back. More and more economic power is going to the private sector and to the provinces.
This opens up possibilities for the reconciliation of the political grievances and distrust between Hong Kong and China. So long as both sides could mind their own business there would be no very serious problem. If Peking could be pragmatic, Hong Kong might accept its own responsibility and economic forces would be allowed to run their natural course in both China and Hong Kong. These were in the end more significant than political forces.
R F Wye
Far Eastern Section
Research and Analysis Department
OAB 2/125 210 6219 24 February 1992
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