in GDP of 5% in 1992, and the 1991 agreement with Beijing for construction of a new Hong Kong Airport has further boosted confidence, though the Hong Kong Government had to agree to consultative mechanisms it had previously resisted. Most of these developments have improved confidence to some extent.
Turning to the evolution of the political situation in the
Territory, developments have been mixed. The Legislative Council
(LEGCO) seated its first directly-elected members (18, out of a
total of 60) in late-1991, all of whom were reform-minded
individuals. In the wake of the election, LEGCO has been playing
a more vigorous role, expressing its views forcefully on the
structure of the judicial system in Hong Kong and the budget.
Nonetheless, the percentage of directly elected members in LEGCO
is still widely considered too small and that body's ability to
decisively affect policy remains to be demonstrated--Beijing has
not yet indicated a willingness to view the legislative body in
Hong Kong as an authoritative voice of the population. In short,
there has been progress toward more participatory governance, but
it has been slow and there are many people in Hong Kong who would
like to push well beyond the limits set by Beijing and London.
Given Beijing's previous warning to Hong Kong that it not become
a base for "subversion," there is great uncertainty and anxiety
concerning the point at which democratic evolution may trigger a
vigorous response from Beijing.
The context in which America considers its policy toward
Hong Kong, therefore, is complex. The confidence of residents of
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