4. why does China
China stand by?
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The social conditions described in the previous section are the responsibility of the Hong Kong and United Kingdom Governments. But they are the lot of over four million Chinese whom the Peking Government regards as com- patriots on Chinese soil. Why then does China stand by and allow such capitalist exploitation to continue? After all, Chinese troops could occupy the territory almost at will. Short of that, nothing would hasten measures for social reform more than if China protested about the current state of affairs to the Hong Kong authorities or to Britain. Nothing would do more to curb the autocratic behaviour of employers than a wholehearted in- volvement in workplace organisation by those trade unions sympathetic to Peking (the strongest group), and a struggle against victimisation and for higher wages. Instead, presumably under orders from Peking, they have actually played a part in smothering workers' grievances during the stringent economic conditions of 1974-5.
China's silence over Hong Kong is usually put down to the economic and political advantages which she derives from the present situation. The economic ad- vantages are easier to document.
economic advantages
Hong Kong provides some 40 per cent of China's foreign exchange earnings through exports to the Colony, re-exports to the outside world, and remittances from the Overseas Chinese. It is this foreign exchange which enables China to buy wheat in times of need and to im- port the high technology plant and equip- ment which the Chinese have decided are vital for economic development. In recent years the Bank of China in Hong Kong has even been arranging credit from the suppliers of foreign goods. Hong Kong is therefore China's main window on the world, a centre for financial deals, and a giant workshop converting unprocessed materials into manufactured products. The result is that through a variety of institutions China is deeply enmeshed in the commercial life of the Colony. The
Peking Government operates a chain of more than fifty department stores, thir- teen banks of which the Bank of China is the most important, the China Travel Service, the China Resources Corpora- tion, two insurance companies, three financial syndicates, and various restaur- ants, transport firms, shoe shops, and publishing companies. The China Re- sources Corporation is Peking's major trading agency. Recently it has taken the unprecedented step of buying land in the Colony for industrial purposes.
Nothing illustrates the commercial character of China's relationship with Hong Kong more than the case of Mr K. C. Wong, former chairman of the communist dominated Chinese Chamber of Commerce in Hong Kong and dele- gate to China's National People's Con- gress. With interests in shipping, depart- ment stores and a restaurant he is a mil- lionaire. (This situation is paralleled in Macao, the Portuguese enclave just along the coast from Hong Kong, where Mr Ho Yin, also a member of the National People's Congress, is again a millionaire and part owner of a race course.)
Ideologically shocking as these facts may be to China's supporters in Britain, they are facts that have to be faced. China's commercial involvement with Hong Kong is substantial, profitable, and beyond dis- pute. Moreover, China has generally taken steps to ensure that business con- ditions are favourable in the Colony. Throughout the 1960s the basic necessi- ties of life-food, water, raw materials-- were exported to Hong Kong by China at prices below the market rate. This made a substantial contribution to miti- gating the Hong Kong rate of inflation and reduced the pressure upon industrial- ists to pay higher wages. The communes were subsidising the capitalists. Since the 1972 detente with the USA, China's policy has changed to one of charging the going rate for food and raw materials. But when the oil crisis hit the Colony China promptly came to the rescue with supplies of her own oil at "friendship prices, and in 1975 was sending supplies to the Colony at the rate of 16 rail de- liveries a month and, typical of the sym-
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