Speeches and Articles by Former Consul General Richard A. Boucher

Pillars of a Successful Transition

U.S. Consul General Richard Boucher
Foreign Correspondents' Club, Hong Kong
December 10, 1996

(As Prepared for Delivery)

Thank you, John. I appreciate your inviting me to be with you today. Having spent several years as a spokesman for the Department of State, I have a great sense of deja-vu up here at a podium looking out on a big group of journalists. Please kick me if I fall into briefing mode or utter a "no comment." I say that knowing that many FCC members have found other ways of making a living, no doubt more lucrative ways than either journalism or diplomacy.

Today is the eve of the announcement of who Hong Kong's first Chief Executive is going to be, so it's natural for all of us to be speculating about Hong Kong's political atmosphere and the changes to come during 1997. Whoever wins we wish him well, knowing that he has a sensitive and unique task before him. With the calendar and the transition on all our minds, this is a speech about politics and the future. It's also a speech about economic prosperity for indeed, nowhere illustrates better than Hong Kong how political openness has underpinned economic success.

Hong Kong's future is obviously the direct concern of Britain, China and above all Hong Kong's people. It is also the concern of many of us who love Hong Kong and for whom Hong Kong's people are important partners in our endeavors. We in the United States, I believe, qualify as interested parties on both counts.

Whenever anyone talks about US interests in Hong Kong, the economic and commercial ties stand out starkly. Today, U.S. companies employ almost ten percent of Hong Kong's work force. They have almost $14 billion US dollars invested here, and last year shipped another $14 billion dollars of US exports to Hong Kong. The closer we come to the handover, the more optimistic American business people seem to become, as reflected in the latest survey of U.S. business confidence by the American Chamber of Commerce. Hong Kong has become an important partner with the U.S. in the opening of world trade, in fora like APEC and the World Trade Organization and simply by virtue of its example as a free trader. Hong Kong has been the key to financial success and improved quality of life for its own people and for many Americans. We naturally want to go on contributing and sharing its prosperity.

Another area of tremendous significance to us is our long-standing cooperation with Hong Kong law enforcement agencies. Hong Kong has been of great assistance in fighting narcotics trafficking, the smuggling of illegal immigrants and goods, and in bringing to justice counterfeiters, credit card fraudsters, and other criminals. Hong Kong's commitment to this effort has made life safe and more secure for Americans as well as Hong Kong people. We very much want this kind of cooperation to continue.

A third area of important US interest lies in what you might simply call exchanges. Exchanges take a myriad of forms. They include institutional programs between Hong Kong and American universities, non-governmental organizations and performing artists. On another level, they encompass the communication of ideas, values and understanding which Hong Kong visitors carry to the United States and American visitors bring here. This may come through structured professional and business contacts, or casually through simple tourism. Among the tourists I would include the tens of thousands of sailors and marines whose ships visit Hong Kong each year, continuing a tradition that goes back to the 1850's. These exchanges have created an immense body of good will towards Hong Kong among Americans of all walks of life. In short, to visit Hong Kong is to fall in love with the city and to care about its people forevermore.

Given this reservoir of goodwill and concrete interaction, Hong Kong as it heads towards the transition has been assuming higher visibility as a factor in U.S. foreign policy in recent months. Americans are gripped by the idea of Hong Kong's reversion to Chinese sovereignty. As the time for handover approaches, Hong Kong shows up more and more on American TV screens, in our newspapers and as a topic of conversation in American homes, schools, offices, and, perhaps most importantly, in our Congress. Hong Kong is also a regular topic in high-level meetings between Chinese and American officials, with the U.S. side emphasizing the importance we attach to a smooth and successful transition. More and more we discuss with Chinese officials the details of the transition. Certainly the transition is one of the key events in Sino-US relations over the next few years. This interest on the part of the American people and the resulting attention to Hong Kong can only intensify as we head to July 1.

Let me emphasize however, our interest is in Hong Kong's smooth transition. We want everything to go well. We want Hong Kong's success to continue. We want to make our constructive contribution to Hong Kong's future under Chinese sovereignty.

To explain how that success can be continued, let me take a moment to comment on the nature of Hong Kong's success. To put it simply, the future is Hong Kong. When we read books about the future, whether they deal with "waves" or with "trends," we hear of service-based societies operating at the speed of modern electronics, succeeding because of the flexibility, customized service and quick response that computers and modern communications can provide. That is Hong Kong. We hear of knowledge based workers whose value is in their brains more than their hands. That is Hong Kong. And we hear of societies whose key component is information, where the free flow of information is as crucial to success as was the flow of water to mills hundreds of years ago. That is Hong Kong. That is the Hong Kong we wish to see preserved, and to prosper.

So what are the pillars of prosperity for this city of the future and the future of this city. What tools will the new chief executive have to protect and develop its essential character? What will allow him to enhance Hong Kong's successful way of life, its autonomy and its freedoms even as Hong Kong reverts to China? I want to cite a few factors. These, I'm sure, are not all of them. But they are each compelling.

First, the rule of law, and in this regard, the Chinese commitments to maintaining Hong Kong's system. Rule of law tops the list of reasons why American firms are here in Hong Kong and what they say they need to stay and expand in the future. The Chinese have, in fact, given a full set of guarantees that in all matters except foreign affairs and defense Hong Kong will be autonomous and nothing will change. Laws previously in force will be maintained after 1997. Common law, rules of equity, ordinances, and subordinate legislation will all continue to be interpreted by an independent court system acting under the common law tradition.

The strength of the rule of law in Hong Kong has been in fact one of the major distinctions with other countries and territories in this region, and accounts for a large measure of its financial success and social tranquillity. Features like predictability, the sanctity of contracts, and the transparency of governmental regulation are vital for business, and will remain so.

Second, and cited as the second in the recent American Chamber survey, is the free flow of information. Freedom of information embodies many aspects, freedom of speech, association and of the press. It's people being able to say what they want to whom they want, or to report what they want when they want. It's not just an abstract concept; in a place like Hong Kong, it's a practical business tool.

This is an area frankly, where the Chinese have recently sent mixed signals. Some might believe that the free flow of information can be restricted without harming output. That's not true of the old water mill, nor of the modern information society. This was recognized in 1984 in the Joint Declaration which not only acknowledged that Hong Kong should remain an international financial center, but also pledged: "Rights and freedoms, including those of the person, of speech, of the press, of assembly, of association, of travel, of movement, of correspondence, of strike, of choice of occupation, of academic research and of religious belief will be ensured by law in the Hong Kong Special Administrative Region." That is a sweeping, vital and unrestricted pledge.

An information based economy needs information, whatever can be had, whether the information is true or, frankly, whether it's not. I know from my years as spokesman how often stories -- of the health of leaders, of coups or of nuclear accidents -- would circulate and move markets. In many cases, it wasn't until these stories appeared in the media that they could be shown to be false. Similarly, we've just had a case where stories about the tragedy of TWA 800 circulated on the Internet. It wasn't until they appeared in the media that they were thoroughly discredited. We all know of closed societies where truly pernicious stories circulate, and are believed because they are never exposed and never knocked down.

Markets work best when everything -- both what is true and what isn't -- is known. As a city of markets, the unrestricted flow of information is an essential factor in Hong Kong's present and future prosperity. Free flow of information makes it impossible to get away with political or monetary manipulation of markets and deals -- distortions of markets which ruin confidence and corrupt the economic process. Access to information creates a pervasive atmosphere of confidence among people in all walks of life. It enables people to stay involved in the world, with the rest of mankind. It allows them to weigh all the factors, spot trends and seize opportunities, and make judgments.

A third factor, is an active legislature, responsible to the voters, which guards against abuse of power by executive agencies and guarantees the people's oversight of the use of their taxes. Like a free press, an active legislature prevents anyone from getting away with political or monetary interference in free markets, in the level playing field, or in allocating government benefits. This too was recognized in the Joint Declaration which promised that "Hong Kong's legislature will be constituted by elections," and that the ultimate aim is direct election of the legislators by universal suffrage.

A fourth factor which has been crucial to Hong Kong's existing success has been its public servants. Hong Kong's civil service, its law enforcement agents, and the Independent Commission against Corruption have made the territory a model of efficient and clean government in the region. They are committed to the policies which made Hong Kong a success. The Basic Law pledges continuation of a civil service based on merit, not personal connections or ideology. The Commission against Corruption will remain as a vital bulwark against misuse of the public treasury and the public trust.

The final factor I want to mention today is also recognized in the Joint Declaration and the Basic Law: Hong Kong's separate participation in international organizations and its separate adherence to international agreements, standards and practices. The Chinese have guaranteed that Hong Kong's autonomy in all areas but foreign affairs and defense will be matched by Hong Kong's participation as its own customs territory in international organizations such as the World Trade Organization, the Asia Pacific Economic Cooperation forum, the Bank of International Settlements, and many others. By its participation, Hong Kong not only makes an important contribution to international agreements, but adheres to international standards of reporting and of behavior which help make it a reliable and predictable place to do business. These memberships give credence to commitments such as that Hong Kong will maintain its own currency and monetary authority, that it will remain a free port, international financial center, and separate customs territory.

These factors which have made Hong Kong a success -- a commitment to the rule of law, the free flow of information, an active legislature, a clean civil service and strong Commission against Corruption, and international standards -- will, it has been promised, continue into the future. If they do remain as promised, then the Chief Executive will carry out his policies in an environment supported by the same factors which brought Hong Kong people the success they enjoy today.

Secretary of State Christopher said recently in Shanghai: "As July 1, 1997 approaches, the world will look on with great interest and watch as China, we all hope, will respect its commitments to Hong Kong and to these important principles that will guide Hong Kong in the future." These guarantees are crucial to Hong Kong's continued dynamism -- and to the prosperity of China as a whole. We want both these historic tasks -- the return of Hong Kong to China and the emergence of China into a modern nation to go well.

Promises don't ensure success. Only time will tell. But, the pillars of success have been recognized. The commitments have been made. Hong Kong people are going to govern Hong Kong. How they govern Hong Kong and whether they allow any of the pillars of their success to be undermined is up to them. I believe that it is how well these factors are upheld that will determine the long run prospects for Hong Kong.

I'm not a Confucian scholar, but here is a story about Confucius that I think is apt to share with you today. One of Confucius students came to him and asked him, how can we tell if a nation is well-ruled? Confucius' reply is said to have been: "A nation is well-ruled when its subjects are content, and foreigners are attracted." That is the situation in Hong Kong today. I believe it is a description of the Hong Kong of the future because I believe that Hong Kong people have now in hand all the factors they need to ensure their future success. And, in the end, I believe that Hong Kong's people will indeed ensure their own success. We will be here with them. Interested, contributing, and participating in the future of Hong Kong.

Thank you.

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