THE FIFTH ANNIVERSARY OF HONG KONG'S REVERSION TO CHINA:
How It Sheds Light On The Wrongheaded Debate About China

On July 1, Hong Kong celebrates the fifth anniversary of its reversion to China. Five years ago, the reversion was covered by the Western media as a major event. Today, this anniversary has been of marginal interest to the same media. Why?

The dramatic contrast probably stems from the disappointment over Hong Kong's uneventful handover in 1997. At that time, many were fascinated by the handover, considering it to stand for the clash of East and West, and the battle between capitalism and communism. Because of its symbolic meaning, Hong Kong's reversion was used as the background plot for many novels, movies and television episodes.

Within a few months after the handover, however, most people realized that the event had been more hype than drama. There was no clash, no battle, and no major confrontation. Rather, the transition resulted in a myriad of complex problems that were only of primary interest to local residents.

The overexaggeration of China matters is nothing new. Due to cultural differences and limited awareness of the country, commentators and policymakers often fail to make accurate assessments of China. Indeed, the disillusionment from the 1997 handover provides insight into our current wrongheaded debate about the China threat, the country's relationship with the United States, and its recent entry into the WTO.

Hong Kong's Reversion to China: "One Country, Two Systems"

Prior to 1997, Hong Kong was a British Crown colony, as a result of three unequal treaties China had been forced to sign at gunpoint in the nineteenth century. In 1842, under the Treaty of Nanking, China ceded Hong Kong Island to Britain upon its defeat in the Opium War. In 1860, China ceded the Kowloon peninsula, and in 1898, it leased the New Territories to Britain for 99 years.

To provide stability and prosperity, Britain and China agreed to adopt the "one country, two systems" framework as the transitional model for Hong Kong. Despite major differences between the region and its motherland, Hong Kong was allowed to retain its autonomy, capitalist "way of life," rule of law, and democratic freedoms for fifty years after the handover. The Beijing government is only responsible for the region's defense and foreign affairs.

Hong Kong's Problems in the Past Five Years: Not the Ones the Western Media Have Predicted

Since the handover, Hong Kong has experienced a myriad of domestic problems. They include a depressed economy, a mediocre tourism industry, drastically declined property values, widespread unemployment, a stagnant stock market, endemic deflation, increasing bankruptcies, the lack of consumer confidence, and growing social discontent.

Significantly, however, none of these problems were the ones the Western media predicted before the 1997 handover - those that, it was said, would involve interference by the Communist government or the clash of Eastern and Western cultures.

As a result, media coverage of Hong Kong has generally been limited to occasional reports about self-censorship, the gradual erosion of judicial independence and civil and political liberties, and the slowdown of democratic reforms in the region. The international spotlight that was so closely focused on Hong Kong before the 1997 handover has only rarely returned - and, most of the time, in the business section.

The "China Threat" and the United States's Relationship with China

Most recently, commentators, journalists and policymakers have widely publicized the "China threat." This threat ranges from thefts of nuclear secrets and military technologies to aggression toward Taiwan and China's neighbors in South East Asia.

Coupled with the heightened nationalism displayed by the Chinese people in the aftermath of the bombing of the Chinese embassy in Belgrade and the spy plane incident, the China threat is understandably alarming. But it is not as simple as what the Western media has portrayed.

Similarly, the United States' relationship with China is more complicated than the simple adversarial one the media has suggested.

However, the media reported China's reaction as "surprising." I was shocked initially, but soon learnt that it does not matter to the media what the concerns of the Chinese government are, and whether it faces similar threats from terrorism. China's reaction was "surprising" because, in the public imagination and in the media's opinion, it is the United States's enemy, not its friend. In the current public debate, there is only black or white. If China is not a friend, it must be an enemy. It cannot be both.

China's Entry into the WTO

This black-and-white mentality has become even more disturbing in light of China's recent entry into the WTO. Today, China has become a major player in the international economy. If China is willing to assume leadership in the WTO, it might very well become the rallying point for less developed countries in their challenge to the positions taken by the industrialized countries.

As I pointed out in an earlier column, there are both pessimistic and optimistic assessments of China's entry into the WTO. Pessimistic observers believe China's entry will lead to concessions and noncompliance that eventually will ruin the international trading system. By contrast, their optimistic counterparts believe China's entry will promote China's modernization efforts and help foster a rule-based system in the long run.

Although these assessments are thought-provoking and have provided valuable insight into post-WTO China, they fail to reflect the complete picture of China's future in the global economy. In particular, they ignore the Chinese people's ambivalence toward the West and the dilemma in the U.S.-China foreign policy.

The China Paradox

Since their encounter with Westerners in the nineteenth century, the Chinese have always entertained a paradox of admiration and skepticism. They admire Western technologies and institutions, but they are also very concerned about the impact of these technologies and institutions on their culture, tradition and society.

Likewise, with respect to China, the United States has always been caught in a dilemma. Apparently, the United States does not want China to be strong, for fear of aggression toward its less powerful neighbors in South East Asia. However, it does not want China to be weak either, for a weak China might lead to chaos and instability that would harm U.S. business interests.

Undeniably, it is more pleasing to focus on the brighter aspects of China's future, but the reality is that the gloomier aspects are also part of the equation. Until we understand these paradoxes, and discard the black-and-white logic in our debate about China, we will not be able to understand this complex country.