TNAG-1235-FCO40-1548-Future-of-Hong-Kong-1983 — Page 40

+

a with

lerably

in the

avoid

large past, nostly ulting

he de-

argest rnings

kless quip-

ations to in-

h in-

hten- in be

often

sand

flort

ition

rrent

China

'.

rob-

two

the

ten-

dan-

and

long

ged hent

re-

the

arly

Jese

the

orts

K. B. Bucknall 115

in the statistics. The percentage fell further to lie in the range of 19-24 per cent in every year 1962-77. In 1979 they rose to 26.4 per cent and reached 30.6 per cent in 1980, the highest figure recorded in the trade statistics.

A more minor reason for the movement towards entrepot trading is the increase in authority to the provinces of Guangdong and Fujian to conduct more of their own trade, which appears to flow largely through Hong Kong. The increasing dovetailing of the Hong Kong and Guangdong economies also plays a part.

HONG KONG'S UNCERTAIN FUTURE

The future is unknown; all that is done here is to present various alternatives, discuss what may be involved, and suggest what the likelihood may be. As each page of the future is turned, what is written there may change likelihoods. One point seems clear: the uncertainty about the future does not so far appear to have shaken hard private industry and commerce. People are well aware of the termination of the lease in 1997 but somehow manage to put it to the back of their minds. It is probable that any entrepreneur of ability can earn such a rate of return that 1997 still seems to be a long way off, but additionally there is a Micawber-like feeling that something will turn up and the future will be acceptable, or per- haps a fatalistic view that nothing can be done about it anyway. It is very different for the authorities in Hong Kong and the uncertainty falls heavily upon them. It is the governor and the administration that must worry about the future and consider ques- tions like: will Hong Kong last until 1997? will that year simply pass without incident with little change? what is to be done about the wording of new leases? what should happen to old ones that are scheduled to run out on June 27, 1997? what will be the status of loans to firms that are not repaid by that date?-and so on. A clear legal situation seems at the very least to be highly desirable and possibly absolutely essential for the transition period which is anticipated.

An independent Hong Kong offers so much economic benefit to China, along the lines discussed above, that it might seem folly. not to allow the status quo to continue. Yet it is possible to imagine situations when China just might consider reassuming authority over Hong Kong either in 1997 or before. It must be emphasized that they do not represent a view about what is most likely to occur, but merely set out some situation when China might feel