TNAG-2599-FCO40-3787-Appointment-of-Chris-Patten-as-new-Governor-of-Hong-Kong--Ap-1992 — Page 106

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Hong Kong cannot afford faddish approaches to China. Hong Kong has to

deal with China as it is, day in and day out. Hong Kong must view China

realistically. And, realistically speaking, what do these economic

developments amount to?

Without doubt, they mean that Hong Kong is of immense value to China, and

vice versa. China is unlikely to want to kill the goose that lays the

golden egg.

And the people of China, especially of southern China, who

are experiencing a rapidly rising standard of living, are unlikely to want

to see a reversal of the open door policy. It is unlikely, therefore,

that China will retreat into isolationism.

But economic prosperity in itself does not guarantee a liberal political

regime. It is possible for the Communist leadership to move towards a

more free market economy without moving towards a more liberal system of

government. That, in fact, is what is happening right now. By raising

the standard of living of the people, the Chinese leadership is lowering

the level of discontent and relieving pressure for change. The Chinese

Government's goal is to consolidate its power by bringing about major

economic reforms without having to institute fundamental political

changes.

This pattern is already evident. The Chinese Government is allowing stock

markets to develop in Shanghai and Shenzhen. Public flotations and the

issue of "B" shares have been a great success. Even horse racing is being

revived with horses being supplied by the Royal Hong Kong Jockey Club.