RTHK "Letter to Hong Kong"

by Martin Lee

Notes for taping on 13 March 1997

China's recent appointment of the provisional legislature, decision to repeal a number of Hong Kong laws and water down the Bill of Rights, and determination to reinstate colonial laws on demonstration and societies have led to a great deal of concern and uncertainty in Hong Kong and around the world.

The international community is deeply troubled about these developments and worried whether Hong Kong will keep our freedoms and way of life. On my recent trip to Europe, business leaders expressed the same concerns as parliamentarians and members of the public about our ability to preserve our rule of law in the face of such radical changes to our political system.

In Hong Kong, our future Chief Executive, Mr. Tung, business leaders and members of China's appointed legislature reassure the world that although there will be changes to our political system, it will not affect our economic success. The most common justification is that "China will not kill the goose which lays the golden eggs" -- in other words, while Beijing is adopting a "hands on" policy in political matters, it will adopt a "hands off" policy in economic ones.

We mustn't be naive to think that only political freedoms will be restricted. Economic freedom in Hong Kong depends directly on political freedoms: on the rule of law, on the free flow of economic information, on the level playing field.

There are a number of recent examples of how even now our economic freedoms are not continuing unchanged.

1. Financial analysts pulling their punches. A recent front page report in the SCMP business Post detailed how financial analysts and researchers are censoring their criticism of Chinese companies and being discouraged from writing unfavourable reports on China-backed enterprises. Several analysts even lost their jobs after writing reports criticising mainland companies. There must be the freedom to report truthfully on financial matters or the international business community will distrust investment information from Hong Kong.

2. Publisher Jimmy Lai's case. The refusal of investment banks and brokers not to sponsor the listing of Next Magazine, one of Hong Kong's most popular magazines, is a second case in point. A large investment group contracted to underwrite Next's public listing, but pulled out at the last minute as a result of unspecified pressure. This is a clear example of politics affecting what should be a purely economic matter.

3. Corruption. Importation of mainland business practices. There are two possibilities: either we import our rule of law to the mainland or China's corruption seeps into Hong Kong.

4. Jailed businessmen. Already there are a number of Hong Kong business executives arrested and held hostage in China as a result of contract or commercial disputes. These people were certainly given economic freedom, but when their contracts went sour, what they needed most was political freedoms and the guarantees of due process and the rule of law.

Businesses -- not just in Hong Kong, but around the world -- are caving in to pressure, rather than defending Hong Kong's transparent system, free market and level playing field. This tendency will have devastating effects on Hong Kong's ability to continue as a first class international financial center. Every capitulation only encourages further Chinese interference in our economic system for political reasons.

The bottom line is that you cannot separate economic and political freedom. If China is allowed to interfere in Hong Kong's political system, it is inevitable that Beijing begins interfering in our economic system as well.

But today, the business leaders who have benefitted most from Hong Kong's freedoms are the ones who are taking part in the dismantling of our freedoms. The tycoons on the Preparatory Committee and the Provisional Legislature are not telling China the grave damage it will do to Hong Kong to roll back civil liberties. Indeed, some are publicly defending China's actions.

The business community -- both international and local must begin to defend Hong Kong. If not as a matter of principle, then as a matter of self interest.

If Hong Kong loses our elected legislature, if our rule of law is eroded, it will affect everyone -- not just members of the legislative council or people who demonstrate. If any one of us in Hong Kong loses our freedoms, we all will ultimately suffer.

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