Confidence Rises Despite Takeover
HONG KONG HANDOVER
Every Saturday, 150 pages of want ads thud at the doorstep in a resounding sign of confidence in Hong Kong's future.
The English-language South China Morning Post is filled with job postings not because people are fleeing ahead of the colony's return to China, but because businesses are expanding faster than the labor market.
"Continual expansion ... in the Greater China region," begins one advertisement placed by Price Waterhouse on behalf of a client.
Cheung Kong, a real estate giant, needs help "due to the rapid increase of our development projects."
Opening new doors
As the territory's July 1 handover from Britain to China nears, businesses here are expanding, and new ones are opening their doors every day.
"For every company that moves a large operation outside of Hong Kong, there are four or five or six new companies that set up operations," says Michael Enright, co-author of "The Hong Kong Advantage."
In fact, just give an executive here the chance and he'll reel off reasons why Hong Kong's future under Chinese rule should be prosperous.
"There are a number of factors that suggest this is a growing, thriving, maturing economy," says Douglas Henck, chairman of the American Chamber of Commerce and a vice president of Aetna International.
"An awful lot is going to stay the same," he says, "our currency, the fact that Hong Kong is a member of the World Trade Organization, that Hong Kong is going to keep its own taxes and run its own government. There is a big stack of cards, if you will, that provide reasons to be optimistic."
Investors certainly show little hesitancy about the future.
Share prices are far more likely to move on speculation about US interest rates than impending political changes.
Record stock market
Over the past 12 months, the market's main barometer, the Hang Seng Index, has risen about 35 percent to record levels. And when the index recently fell 8 percent, analysts simply called it "healthy profit-taking."
Property prices - another key gauge - are also on the rise. Cheung Kong recently bought a development site 20 percent more than expectations.
As it will take several years before the condominiums and adjacent commercial properties come to market, analysts say the high price indicates developers see little risk of a decline in prices after the handover.
Businesses do have some reservations about the future, though.
One serious concern is that corruption, widespread in China, will creep into Hong Kong after China takes over.
Some of the changes proposed by the incoming government, such as restrictions on public demonstrations and guarantees of civil liberties, have also triggered concern.
But Henck says people need to wait and see how the new administration enforces these laws before making assumptions about their impact.
"When people sit back and analyze it more carefully," Henck says, "I think they believe, as I do, that everyone's interest is for Hong Kong to do just fine and that it will do fine."
Confidence surveys reveal that most executives agree with him. A poll released last month by the British Chamber of Commerce showed that 93 percent of the businesses that responded expect to be operating in Hong Kong in 2000. The other 7 percent said they were unsure.
Many executives also believe that, instead of a threat, Hong Kong's return to China presents new opportunities.
More than 70 percent of the executives polled by the British chamber, for example, expect improved access to China's markets.
And that is one of the main reasons that most firms - just like Price Waterhouse's client - set up shop here in the first place.