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Asia-PacificNovember 4 2004

Political change proves its worth

China is finding it feet and the right political tone for dealing with Hong Kong as the region’s economic fortunes ascend.
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What a difference a year and a half makes. In the first half of 2003, Hong Kong’s budding economic recovery was snuffed out by SARS while the political situation heated up. Now, the government has revised its GDP growth forecasts for 2004 up to 7.5% while the political scene has cooled down.

Hong Kong’s open economy means it is a barometer of the world economy. With the US and China as its largest trading partners, it is benefiting from their strong growth – China’s slowdown would, after all, be called a boom in any other economy. The measures taken by China to help its Special Administrative Region, including a free trade agreement and allowing individual travel to Hong Kong, have had both a psychological and a real effect. Hong Kong’s high-end retailers and property developers are especially grateful for the big spenders from the mainland.

On the political front, the changes are even more dramatic. A mass protest in July 2003 against the subsequently shelved Article 23 anti-subversion law was followed by a pro-democracy march on January 1, 2004.

But in October this year, campaigners decided to skip a planned New Year’s protest due to an improving political climate. They insist, unconvincingly, that it does not mean their aim of universal suffrage for the 2007/8 elections has been shelved. But dialogue and conciliation – from both sides – has taken over, with Beijing having made a number of overtures to the pro-democracy camp over the last months. Public consultation on constitutional reform is in full flow, while Chief Executive Tung Chee-hwa has told ministers to take the public’s pulse more often and communicate with them more. This was on the back of a meeting of the Communist Party Central Committee in China which called for an improvement in the Hong Kong administration’s governance.

On the surface, businessmen’s 2003 forecasts that the atmosphere of political confrontation would lessen on the back of economic recovery have been proved right. But there is more to it than that. The Chinese authorities have proved they are capable of dealing with democratic pressure and turning it into a positive, turning Hong Kong into a winner.

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Read more about:  Analysis & opinion , Asia-Pacific , China