Media Division, Ministry of Information and The Arts, 36th Storey, PSA Building, 460 Alexandra Road, Singapore 119963. Tel: 3757794/5
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SPEECH BY SENIOR MINISTER MR LEE KUAN YEW
AT THE PACIFIC RIM FORUM, HONG KONG,
27 JUNE 1997
Hong Kong will become an integral part of China in a few days. The challenge for its people is to use the transition arrangements to ease its complete return into China in 50 years.
In 20 to 30 years, if the present pace of economic growth in the region continues, East Asia will be totally transformed, with a GDP that will be 40 % of the world's total GDP in PPP term. In such a regional environment, both China and Hong Kong will grow and flourish. The Chinese are re-educating and re-training themselves, learning the best of the West, taking advantage of scientific and technological advancements, and linking themselves up with the outside world through telecommunications and the internet. In twenty years China can achieve the per capita GDP level of Taiwan or South Korea.
But there is a different path China and the region could take that will lead to tensions and rivalries that will slow down and even disrupt economic growth. The US, Japan and China have not settled their post-Cold War relationships. In 20-25 years, if growth continues at present rates, China's GNP could be the largest in the world. Such a massive change will be cause for discomfort to the existing world order as China will need some room at the top.
President Clinton has decided to pursue a policy of deep engagement with China, but it could be disrupted by domestic politics in America. Clinton's China policy is under pressure from an emerging coalition of disparate groups, who, for their own different reasons, prefer the US to adopt a more confrontational policy. Since time immemorial, the reordering of power relationships has never been easy. And it would be remarkable if there were not several interest groups in America that would like to see China stumble before it becomes powerful.
A strong US presence in the Asia-Pacific Region has provided the basis for stability and growth of East Asia. Without this stability, we would not have developed and thrived. China's decision to allow continued visits by the US Navy to Hong Kong is welcomed by all its neighbours. East Asia will continue to benefit from a US presence. And this presence is more likely to endure if America and China do not clash over Hong Kong or Taiwan. No country in East Asia relishes that prospect because such a locking of horns with China on an issue concerning China's relations with its own Chinese in Hong Kong or Taiwan is not tenable in the longer run and may well shorten the much valued US presence.
Was democracy and human rights in Hong Kong an issue before the collapse of the Soviet Union? I venture to suggest that if the Soviet Union still existed the question would never have been raised. How did Hong Kong become a leading financial centre, one of the world's busiest ports, Asia's second largest stock market, the world's eighth largest trading economy and fifth largest banking centre and foreign exchange market, and home to regional headquarters of over 800 multinational companies? The simple answer is that these were achieved under the colonial rule of a British governor appointed by Britain, who until the 1990's ran it as a colony. As Margaret Thatcher said on 9 December 1992:
"Democracy has not historically been the first concern of Hong Kong people. Their priority has been sound administration and a rule of law with an independent judiciary under which they could concentrate on creating prosperity from their trade and industry."
Hong Kong has inherited valuable legacies from the British colonial period: an efficient civil service, the rule of law, an independent judiciary, and sound business and commercial practices, including the sanctity of contracts, and transparency and accountability in decision-making processes. These factors and an excellent geographic position have made Hong Kong successful.
Until Governor Patten in the last five years, British policy in Hong Kong was consistent, one that understood and respected China's sensitivities. In return, China ensured that turbulence in China, whether the Great Leap Forward or the Cultural Revolution, did not spill over into and damage Hong Kong. Indeed few remember how restrained China had been. In 1961, China could easily have followed India's example of invading Goa on the perfectly legitimate ground that all such vestiges of colonial rule had outlived their time.
In the two decades since China launched its open-door policy, Hong Kong's economy has been integrated into the economy of southern China. This will help to ensure "business as usual" in Hong Kong. China is Hong Kong's largest investor, with over $50 billion in investments. 90% of Chinese companies wanting to list their stocks on overseas exchanges choose Hong Kong. Chinese trading companies in Hong Kong account for 22% of Hong Kong's overall trade. 75% of China's international financing are raised through Hong Kong. Chinese banks are opening branches in Hong Kong and are responsible for a quarter of Hong Kong's total bank transactions.
With so much at stake in Hong Kong, China will be careful to maintain Hong Kong's stability and prosperity.
More important, Hong Kong is a test-bed for China's "one-country, two-systems" formula. Hong Kong will be China's demonstration to the world, including Taiwan, of its commitment to this formula. A successful Hong Kong will be a major plus for China world-wide when it presses Taiwan for peaceful national reunification. On the other hand, if the formula turns out wrong, China will have to contemplate the use of force, which carries damaging consequences.
Hong Kong will be rejoining a China already different from what it was in 1984 when the Sino-British Joint Declaration was signed. When the Hong Kong SAR expires in 50 years, it will be an even more different China - a fully industrialised, if not a high-tech nation. Its system of government and the nature of its leadership will also have evolved and changed. A younger generation of Chinese leaders, educated or trained in the West, exposed to the world and aware of China's position in it, will have a different view of China's future. They are likely to be the children of the young and energetic Chinese leaders who at present are at the level of Mayors.
There are two strikingly different views of the change that will take place at midnight on June 30th. One, the conventional view expressed in the Western media, is that Hong Kong will be gradually overpowered by forces of darkness and this little candle of freedom on the south coast of China will be snuffed out. In their view, we are seeing the end of a bright era. The other view, held by the people of China, is that a bright era is beginning, not ending. The return of Hong Kong (and later of Macau) will finally wipe out the decades of shame and humiliation China has suffered since the Opium Wars.
Hong Kong has to remember that American media and Congress are not as interested in the future of 6.5 million people in Hong Kong as in the 1,200 million in China. The destiny of Hong Kongers will not affect the destiny of America or the world. But the 1,200 million Chinese in China (likely to become 1,500 million by the year 2030) will determine the balance of forces in the world. Americans are joining issue with China over Hong Kong in order to affect and determine the future shape of China, not Hong Kong.
In a similar way, Americans are not criticising Singapore because they are concerned about democracy and human rights enjoyed by three million Singaporeans. Whether Singapore succeeds as a multi-racial community in Southeast Asia or fails makes little difference to the future of America. Their real interest is what Freedom House has stated, that Singapore sets the wrong example for China, showing China that it can maintain social discipline and order with high economic growth but without becoming a full-fledged American style democracy. This is the reason why the American media always attacks Singapore.
So also, it is not Taiwan and 21 million Taiwanese the US is primarily concerned about. Americans have openly stated that the example that Taiwan sets for China is the real value of Taiwan. The American media uses Taiwan democratisation as a reason why undemocratic China should not control Taiwan, and why America should help Taiwan stay separate.
Many US Congressmen and Senators believe and have said that America can bring democracy to China through Hong Kong. Newt Gingrich, the Speaker of the US House of Representatives said in March 1997 to the American Chamber of Commerce in Hong Kong that "ultimately, we believe the transition for Hong Kong will succeed if it leads to broader economic and political freedom for 'both systems'. …… beginning on July 1, Hong Kong has a duty that is historic, because its great economic endeavour can have a moral purpose - the expansion of freedom".
The people of Hong Kong should never be confused over how to safeguard their own interests. They will hear many voices cheering them on to fight China for more democracy. Each time they hear this, they should remember what one of Hong Kong's longest serving Governors, Lord MacLehose, said in 1992 that "the power, reasonable expectations and rights of the Chinese Government can be disregarded only at the peril of Hong Kong".
They should ask themselves this simple question: when the chips are down, where will these media and interest groups be? Will they be in Hong Kong to face the music? Or will they continue to pursue their own agenda which is to contain and punish China, in order to slow down or abort its growth into a big power. Hong Kong is a pawn in their power games.
From 1 July 1997, Hong Kong's destiny is tied to China's. Hong Kong is a part of China and must share China's destiny. If China fails, so will Hong Kong, and there is nothing the US can do except take in tens of thousands of refugees as they did with the South Vietnamese. If Hong Kong fails, China will suffer; if China succeeds, Hong Kong will succeed. It was different before. In the last 155 years since 1842, Hong Kong's sovereignty was separate from China's. China went communist in 1949; Hong Kong did not. China went through the violent throes of the cultural revolution in the 1960s; Hong Kong had minor disturbances from a few in Hong Kong, imitating Red Guard madness in China. Hong Kong had a different system, a different power grid. The one for China was separate from the one for Hong Kong. Now there will be one power grid; if there is a blackout in China, there will be a blackout for Hong Kong - same power grid. Only a different substation.
If I were a Hong Kong person and have decided to stay on permanently in Hong Kong, the options I would consider practical and realistic are, first, carry on with my business in Hong Kong to make a lot of money as China grows uninterruptedly, which will happen if the US does not embargo China. Even if China is embargoed, it will still grow, albeit less fast. I would let my children make up their own minds whether they in turn would want to make their lives in Hong Kong or to leave for some other place. If my children decide to stay, then they should make Hong Kong as successful as possible, which can only be as part of a successful China. If my children decide to go into politics, I would advise them to concentrate not merely on Hong Kong affairs but on Hong Kong as a part of China. In other words, work on the basis of a Hong Kong totally identified with China, and helping China become a stable, modern, open society, with the rule of law to give the Chinese people the kind of life comparable to that in advanced countries. Whether China will be a democracy like the West or will have its own form of pluralism and representative government, I would leave time and circumstance to decide. In short, I would be concerned with the future of China, not just the future of Hong Kong.
Fifty years is not a long time in the history of people, and it does not make sense in the next 50 years to keep Hong Kong as separate and distinct from the mainland as possible. There is no future in that.
The global media interest in the handover ceremony should not cloud the reality that the US and the West are focused on China. Their interest in Hong Kong is incidental. Their interest in China is profound and eternal.
Hong Kong should watch carefully what all China's neighbours in Asia are doing. None of them are about to join the front-line of forces trying to advance democracy and human rights in Hong Kong or China. Instead all are quietly studying developments among the big three in the Asia-Pacific, the US, Japan and China, and carefully adjusting and positioning themselves. The peoples of East Asia are aware that as the situation evolves, they will have to adjust to the powerful trends in economic development with the resultant shifts in the balance of forces between the major countries. Hong Kong should do no less.
The countries of the Asia-Pacific region supports President Clinton's policy of deep engagement with China. They see no other realistic option. But they are troubled that some domestic political forces in America are pulling in the opposite direction.
Finally, let me declare my interest in Hong Kong and in China. As of the end of 1995, Singapore's private sector investments in Hong Kong amounted to US$4.47 billion (S$6.3 billion), and, in China, US$2.1 billion (S$3 billion). The figure for Hong Kong is larger because those investments have been made over a longer period of time. Over and above these, there are investments from Singapore's Government Investment Corporation and statutory boards, in real estate along Hong Kong's new MRT line to the new airport, and in China's main cities - Shanghai, Beijing and a few others. These amounted to another US$2 billion (S$2.8 billion).
If Singapore did not have confidence in the future of China, we would not be investing either in China or in Hong Kong. We expect fair returns on these investments. And I do not believe that relations between China and the United States will deteriorate to a point that the US will embargo China, although there will be problems, difficult problems, from time to time. I expect good sense will eventually prevail on both sides and that there will be no rupture in economic and political relations.
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