Speeches and Articles by Consul General Richard W. Mueller

News Release
May 30, 1996
Thursday

The Speech of U.S. Consul General Richard W. Mueller
American Chamber of Commerce Hong Kong Conference:
"Business in Hong Kong: 2000 and Beyond"
May 30, 1996

Thank you very much, Mark, for your very kind introduction. And as I have said before, when you look into the long list of assignments I've had over those 30 years, you can tell I have a difficult time trying to hold one job for very long. Mark, I would like very much, first of all, to thank you, Frank Martin and all your colleagues at the American Chamber for the dedication, the vision and the hard work which you have devoted over many years to the strong and productive relationships which exist -- and which I think will continue to exist -- between the United States and Hong Kong and between the United States and China. I think that this conference, like the recent Washington doorknock which you hosted, is yet another example of the active role which the American business community here in Hong Kong plays in letting people know that Hong Kong and Hong Kong's future are matters of profound importance to the United States and the future prosperity of the Asia-Pacific region.

It is obligatory, I suppose, in a conference which has a subtitle: the year "2000 and Beyond" to engage in a little prognostication. But you won't be surprised that diplomats, like stockbrokers, recognize that predictions of the future, particularly on the record, are risky business. Winston Churchill perhaps put it best when he said:

"I always avoid prophesying beforehand because it is much better policy to prophesy after things have already taken place."

The unpredictable events of recent years -- and what better example is there than the dissolution of the Soviet Union? -- should give one a healthy skepticism of our ability to peer into the future. Looking at Hong Kong, no one in the 1950s or perhaps even as late as the mid-1970's could have predicted Hong Kong's explosive economic growth. The constraints

on the territory were daunting: a lack of natural resources, waves of immigration of destitute refugees, political uncertainty tied to events in China, and the unavoidable tensions and frictions involved in being a colony in a world in which colonies were rapidly disappearing. Risk analysts have always had many reasons to be pessimistic about Hong Kong's future.

Nevertheless, I rashly intend to engage in a prognostication despite Winston Churchill's advice. But first, also in line with his dictum "to prophesy an event after it has taken place," I'd like to describe five key reasons why I believe Hong Kong is the success story that it is today. These factors are particularly important because with the addition of one other, which I will mention in a moment, they will have an important impact on Hong Kong's future prospects after the year 2000.

First, I believe the most important reason in Hong Kong's success by far is people, most importantly Hong Kongers themselves, but also the Chinese, the British, and the members of the international business community. It is the energy, hard work and genius of Hong Kongers, in particular, which has fueled Hong Kong's economic expansion. I venture to say that no group of people anywhere in the world has done more with such limited resources and risen to the challenge of economic opportunity and freedom with more vigor and creativity than have the people of Hong Kong.

Second, Britain's and China's contributions to Hong Kong's growth have been crucial in creating the political space in which Hong Kong has existed. We all know the two countries have had their differences, but if one takes a longer view as I'd like to do, it is the sensitivity and skill with which both sides have handled Hong Kong over the years which have allowed Hong Kong to have a separate existence during periods of turmoil in China and to develop along a different path than that of China. The same sensitivity and skill were evident in the Joint Declaration of 1984, which calmed fears in Hong Kong about the future, which guaranteed Hong Kong's autonomy and social systems, and ushered in a decade of rapid growth.

Third, the skillful administration of Hong Kong by both Britain and by Hong Kong citizens, the guarantee of the rule of law and an independent judiciary, and the encouragement of the growth of open, civil society based on the protection of civil liberties, created the framework that allowed Hong Kong people to determine their own economic future and drew international business to Hong Kong.

Fourth, Deng Xiaoping's policy of reform and opening combined with China's large investments in Hong Kong accelerated Hong Kong's growth and made Hong Kong the commercial bridge with China and made Hong Kong a key center for the Chinese economy, in addition to its role as an international entrepot and manufacturing center.

Fifth, the international business community, including, I am proud to say, tens of thousands of Americans, has helped make Hong Kong an increasingly important center of world trade, finance, and business. Drawn by the energy of Hong Kong's people, by Hong Kong's open society, by the ability to get things done quickly and efficiently, and by the guarantees of the legal system, the international community's investment and business activity were major factors in Hong Kong's economic success.

I promised you a prediction for the year 2000 and beyond, not just a prophesy of what has already taken place. First, my instincts tell me that Hong Kong people will continue to bring the same energy and talent to bear on the challenges of the next 20 years as they have on the last 20. They will find ways to cope with the coming changes -- the inevitable changes -- and they will find ways to work these changes to their own advantage. Therefore, I am bullish on Hong Kong's people and on Hong Kong. I'm bullish that Hong Kong -- fueled by a wealth of Hong Kong talent, by people who have learned to cope with rapid change and even adversity -- will continue to prosper and grow as part of this dynamic Asian region. You might ask me what it is that I think in the future will be important to maintain this energy and this dynamism. I think it is vital for Hong Kong's continued growth into the 21st century that the factors I mentioned earlier remain in place and that the commitment in the Joint Declaration and the Basic Law to allow Hong Kong people to govern Hong Kong be effectively implemented. Hong Kong and China must work closely together, but Hong Kong people must also be allowed and encouraged to exercise their promised high degree of autonomy.

Of particular importance, there must be exceptional skill and sensitivity in the handling of Hong Kong affairs and transition issues in the coming months. This applies as much to Britain, China and Hong Kong as it does to the international community. The spotlight will be on Hong Kong, and any particular problems will be highlighted. If all parties to the transition rise to the challenge, prospects for business in Hong Kong beyond the year 2000 can be even better than in the past, as Hong Kong continues to expand its comparative advantage as a premier entrepot providing high value-added services and manufacturing facilities.

The United States has stated consistently that because of China's guarantee that Hong Kong will enjoy a high degree of autonomy -- other than in foreign affairs and national defense -- the United States will be able to accord Hong Kong a special status distinct from the rest of China after 1997. We, and other countries, and the international business community also look to the Hong Kong SAR government and to China to maintain the legal system and Hong Kong's open and civil society. Both are crucial elements in maintaining the confidence of local people and the international community and in ensuring a bright future for Hong Kong after 1997. As the U.S. Secretary of State Warren Christopher said this month in New York: "Beijing's commitment to maintain Hong Kong's open economy, democratic government, distinct legal system, and civil liberties is critical to Hong Kong's future prosperity -- and to China's."

Hong Kong post-2000 also will depend upon an increasingly prosperous China continuing on the path of reform and the establishment of trade, investment, and other ties with the rest of the world. Taking a longer term view, and based on the changes which I have seen in China over the last 20 years, my instinct tells me that China will continue on this path, albeit with undoubted twists and turns, and that Hong Kong will be a fortunate beneficiary of China's economic and social transformation.

In closing, let me highlight one additional factor which I believe will profoundly affect Hong Kong's prospects in the future, namely, the need for a pluralistic and inclusive society. Hong Kong today is very different from the place it was during most of the century and a half of British administration. Hong Kong people are among the best-educated, best-informed, and most articulate groups of people in the world. They have moved rapidly in the last 10 years to incorporate more open civil institutions, including more open, more accountable forms of government into the life of this city.

Hong Kong will need the full talents and contributions of all of its citizens in order to respond to the challenges of the next century. So for Hong Kong's economic, political and social well-being, I strongly hope that ways will be found, over the coming months and years, to ensure that all voices will continue to be heard in Hong Kong both in a free and open media and in the elections and representative bodies of the Hong Kong Special Administrative Region.

In this regard, I was pleased with Director Lu Ping's recent remarks to ABC News that all Hong Kong political parties could be able to participate in elections and political activity after 1997. His statement is a welcome reassurance to Hong Kong and to the international community.

Again, let me welcome all of you to the conference, thank you for coming, and I look forward to exchanging thoughts with you over the rest of today.

Thank you very much.

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