Taiwan should heed Hong Kong's example

Chow Kwok-wai (周國偉), a former senior magazine journalist who was born and grew up in Hong Kong but lives in Taiwan, is not happy about the way things are going in the former British colony.

Chow became a Taiwanese citizen after he graduated from college and stayed to pursue his career. His wife is Taiwanese and they visit his relatives in Hong Kong occasionally.

"Nothing good has happened since Hong Kong returned to China. The stock market continues to go down and real estate values are plummeting. Residents of Hong Kong just feel terrible now," he said.

Indeed, Hong Kong had a bustling economy when it was under British rule. However, after the 1997 handover to China, a financial crisis developed, and Hong Kong plunged into a recession.

"We have enjoyed many wonderful days. Residents of Hong Kong just can't adjust themselves to the current situation. Compared to other cities in the world, Hong Kong's economy is still good," said Timothy Wong (王家英), a research officer of the Hong Kong Institute of Asia-Pacific Studies.

Hong Kong serves as an example of how the Chinese authorities have implemented the "one country, two systems" model and Taiwan should reflect on how Hong Kong's autonomy is gradually disappearing.

"The stock market keeps falling, the price of real estate in Hong Kong has dropped more than 60 percent. No direct elections are held ? residents of Hong Kong just can't trust what the government says about the city's future," Chow said.

Despite media criticism in Hong Kong and the public's disappointment with Chief Executive Tung Chee-hwa's (董建華) government, Hong Kong's Financial Secretary Antony Leung (梁錦松) said he is optimistic about the city's future when he spoke to a delegation of Taiwanese reporters last week.

"The Hong Kong government and I all believe that the free market system is the best solution for the depression. Though we are experiencing a decreased growth rate, Hong Kong still has the advantage of being able to attract foreign capital," Leung said.

Trade volume between Taiwan and Hong Kong has exceeded US$26 billion a year over the past five years.

Hong Kong is the second largest export destination for Taiwan after the US.

After Taiwan relaxed restrictions for Taiwanese citizens to visit their relatives in China in 1987, Hong Kong has become an important stopover for Taiwanese visitors before they head to China, because direct links between Taiwan and China have yet to be established.

Since then, the number of trips that Taiwanese make to Hong Kong has grown from 60,000 in 1987 to more than 2 million last year, according to government statistics.

Many academics said, Hong Kong's economy relies heavily on this intermediary role. And Taiwanese visitors have contributed much to the city's economy.

That may be affecting Hong Kong's economy

Superficially, trade and tourism between Taiwan and Hong Kong has not been affected by the 1997 handover to China, but some say there has been a gradual change since the Hong Kong Special Administrative Region Government (HKSARG) was established.

"The increasing number of visitors actually reflects visitors who wish to go to China via Hong Kong, but not visitors who stay in Hong Kong to consume. Products there are too expensive. Taiwanese no longer like to shop there," Chow said.

Hong Kong's unemployment rate has increased from 5 percent to 7.8 percent within two years, and is expected to reach 8 percent in the future.