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with an expiry date. This will push many of Hong Kong's best and brightest-and richest to depart before the 1997 deadline. And that suits China's purpose: it does not want anyone living in Hong Kong it cannot control, even those who contribute most to the city-state.
The hemorrhage of managers, technicians, and professionals is well under way. The Hong Kong government's latest, upwardly revised estimate is that 62,000 will emigrate in 1990 alone, and that estimate ignores the thousands who are entering Western countries on student and other temporary visas with no intention of ever returning. The result is that Hong Kong is rapidly losing its reputation as one of the world's most efficient places to do business. Costs are rising and quality is declining as jobs are filled by people with little experience and poor skills who are demanding, and receiving, artificially inflated salaries. To get rich quick was always considered a respectable goal in Hong Kong, but now the pursuit of money has taken on a nasty and frantic edge. Hong Kong's surgeons charge the highest fees in the world because nearly all of them plan to emigrate to Western countries where they are not licensed to practice. "Increased corruption" has found its way into business forecasts; swindles and frauds are on the rise. Violent crime, too, is on the rise; armed robbery increased 40 percent from last spring to this.
Even more troubling than the increase in crime is the possibility of a general breakdown of law and order before 1997. Hong Kong witnessed serious and widespread rioting with political over- tones in the 1950's and 1960's, but at that time a respected British administration could rely on the police to stand up to the rioters. Today the police are seriously under strength, their morale is low, and their willingness to follow orders in a crisis from lame-duck British administrators cannot be taken for granted.
C
VII
*URRENT trends, combined with the certainty of the 1997 takeover, have prompted many to predict the death of Hong Kong or the collapse of its economy. Neither is very likely. Hong Kong is on its way to becoming a mean and dispirited place, but economically and
WHO LOST HONG KONG?/39
physically it will survive. Its business elite, and the PRC leadership, still expect to make a lot of money together in future years, and they probably will. True to their word, the Communists will almost certainly refrain from seizing businesses or private property. Instead, they are already working hand in glove with major corporations in Hong Kong to establish a system of authoritarian cap- italism in which profits are assured by adopting the mainland Communists' neo-feudal ways of doing business-nepotism, connections, and payoffs. Because of Hong Kong's superb location and its free-port status, multinational corpora- tions, international banks, and the regional pub- lishing industry will try to stay despite rising. costs, corruption, and diminishing freedoms.
Meanwhile, real wages will be driven down by importing workers from the mainland, something PRC officials are already promoting. Even now they can hardly disguise their eagerness for the day when hundreds of thousands of contract workers-political eunuchs who can be sent home the moment they become assertive-will be re- mitting most of their foreign-exchange earnings to the mainland. Emigrating professionals will be replaced by English-speaking Filipinos and Indi- ans willing to work for less. Neither the newly arrived Asians nor the mainlanders will have any long-term commitment to the Hong Kong com- munity.
Plans to import cheap labor help illustrate how. even in its narrowest economic sense, the golden- goose argument was wrong. For at least several years after 1997, the Chinese, no matter how badly they treat the place, will be able to squeeze more foreign-exchange profits out of Hong Kong than ever before. The PRC can allow Hong Kong's superb infrastructure to deteriorate for several dec- ades, just as it did in Shanghai, before paying a high price.
In the long term, one can imagine a political convulsion in China that will decimate the central government's power or lead to a genuinely dem- ocratic capitalist regime. Either could set the stage for a gradual recovery of Hong Kong's freedom and vitality. But in the short term, any such convulsion would just accelerate the exodus. For the 1990's, at least, the Hong Kong catastrophe is essentially irreversible. It is a great tragedy, and one that could have been avoided.
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