Chapter One MAPPING THE TERRITORY Emerging as a newly industrialized city-state, Hong Kong, a former Asian tiger, has become a leading finance-capital center of the world and functions as a commercial center for Southeast Asia and southern China. A postmodern city with an international airport, skyscrapers, traffic jams, and cellular phones, Hong Kong has been at the forefront of neo-liberal free-trade policies. The former British colony, now Special Administrative Region (SAR) of China, has the world's freest market economy, the world's most service-oriented economy, and Asia's highest per capita income in terms of domestic buying power. Hong Kong has the world's second most competitive economy and the world's seventh largest trading economy. It is the world's second largest per capita holding of foreign currency, the world's fourth largest source of direct foreign investment, and the world's ninth leading exporter of services. Today successful businesspeople thrive in what has become one of the world's capitalist showcases. A mapping of Hong Kong reveals high-walled private homes, neon signs advertising designer goods from every continent, and blocks of luxury hotels and indoor malls. Another dimension of this landscape, however, is its sweatshops, storefronts, urban pollution, and shantytowns of unrelieved squalor, with too many people for too little land. Poor laborers, sole proprietors, and street people inhabit this terrain. Hong Kong, with an approximate population of 6.5 million people, encompasses but 414 square miles on one principal island (Hong Kong), a peninsula (Kowloon) and former hinterlands (the New Territories) that extend to the Shenzhen river, the territory's border with China. Numerous islands, with the exceptions of Lamma and Lantau, remain mostly uninhabited. Hong Kong Island proper, heart of commerce and finance and home to almost 1.3 million residents, is only about thirty square miles. Kowloon, today a shopping hub, houses 2.1 million on just 16.5 square miles. Over 2.25 million inhabitants now reside in the 355 square mile New Territories, most of which were still farm and swamp land into the 1970s. The fact of limited land is exacerbated by that of restricted utility because much of the area is hilly and mountainous. As might be expected, differences exist between colonizer and colonized opinion as to the state of Hong Kong before the 1841 British occupation, an armed intervention brought on by English traders' illegal opium importation into China. While the British claim that the territory was a fishing village and a shelter for pirates operating in the South China Sea, the Chinese maintain that it functioned as a trading port and was well developed in population density and local government control. China ceded Hong Kong Island's commercial and territorial rights to Britain in 1842. The Treaty of Nanking brought an end to the first Opium War and satisfied British merchants on the China coast who sought both a trading station and unfettered access to the Mainland. Hong Kong, as it appears on a map today, took shape when Britain wrested Kowloon from China through the 1860 Treaty of Peking, following the military capture of that city during the Second Opium War, and then acquired the New Territories from the Mainland under terms of a 99-year lease in 1898. The latter region offered the colony tillable lands, but not before the Chinese population residing there was subjugated by force of arms. From its beginnings, Hong Kong was a place of commerce. The British, in distributing land to private interests on the basis of their ability to pay and declaring the port free, initiated economic relations that dominate to this day. Speculation, fueled by the inherent scarcity of land, ran rampant. Expatriate merchants and colonial governors quarreled for years over the housing of the military on valuable `downtown' property as well as over the local tax burden necessary to maintain an army garrison and a naval dockyard. The traders' early success in keeping tax levies to a minimum allowed lawlessness to abound as gamblers, gangs, pimps, and racketeers overwhelmed a small and incompetent police force. Opium trading was important to Hong Kong's economy for decades after British annexation, accounting for as much as 45 per cent of the total value of China's imports in some years. By the early twentieth century, amidst fluctuating periods of boom and bust, economic development took the form of an entrepôt port and made Hong Kong a warehousing hub for goods shipped to Southern China, Southeast Asia, and the West. Expanding shipping produced local industries: boat building and repair, dry docking, rope-making, and ship chandlering, among them. Business-sector service firms in banking and insurance emerged shortly thereafter. However, infrastructural development and provision of public services were hindered by limited tax revenues. Drainage and sewage disposal, hospital infectious disease wards, and a potable water supply all went lacking due to inattention and insufficient funding. Social class polarization was evidenced by the contrast between the more than five hundred people per acre living in the central district of Victoria at the turn of the century and a wealthy residential district (off-limits to affluent Chinese until the mid-twentieth century) that arose on Victoria Peak following the opening of a tramway in 1888 that provided quick transit to and from places of business. Early-twentieth-century Hong Kong experienced nascent modernization: trams, automobiles, and electrification were introduced in the years prior to World War I. Handicraft industries making carvings, cabinets, furniture, jewelry, and tailored clothing emerged during the same period. While manufacturing was still insignificant in the territory, textiles expanded in the 1920s and 1930s. Non-profit-making public services, however, did not keep pace. Education developed haphazardly; public subsidies were minimal as the colony remained virtually tax-free. Some Chinese children attended crude primary schools for a few years before being tossed into the colony's competitive, low-skilled, low-wage labor market. The University of Hong Kong granted its first degrees in 1916, but there were only about five hundred regular students enrolled more than two decades later. On the eve of World War II, outbreaks of beri-beri, cholera, and dysentery spoke volumes about the financially strapped colonial government's inability and unwillingess to address basic public health issues. Governability was a problem from the moment that the British government officially declared Hong Kong to be a colony in 1843. The formal political state consisted of a British-appointed governor with broad-based policymaking authority, a detachment of the British Foreign Office charged with administrative responsibilities, and hand-picked executive and legislative councils with limited advisory powers. Parliament in London frowned upon proposals to grant Hong Kong some measure of home rule, while the acumen of colonial governors varied and their turnover was frequent. Thus did the civil service come actually to govern Hong Kong. As a free port, there were no customs duties to collect. An initial property tax caused such a firestorm among the expatriate merchant class that the governor was forced to reduce it to an insignificant level. Government revenue was generated through the one-time sale of certain trading rights, including ostensibly illegal opium, through the leasing of public lands, and from license fees that shopkeepers paid to engage in business. In 1869, almost three decades after colonization, the British foreign minister at Peking noted that Hong Kong was `little more than an immense smuggling depot.' Much like any frontier outpost, piracy and general lawlessness were met by impromptu governance and inadequate policing. The expatriate merchant class was unswerving in its opposition to every governor's attempt to levy taxes aimed at regularizing refuse collection, building hospital baths and infectious disease facilities, or alleviating overcrowded and filthy prison conditions. Meanwhile, poorly remunerated British civil servants found ways to augment their incomes in a society devoted to personal aggrandizement through networks of graft. Exacerbating such potentially explosive circumstances was social segregation based on the tiny European population's sense of itself as racially and culturally superior. The British government's complicity in promoting the export of opium to the Mainland provoked anger in many of the twelve thousand or so Chinese living in Hong Kong at the time it was colonized. That anger became enmity when this largely laborer and proprietor population was required to register with the colonial government a few years later. The expatriate British ruling class, comprising the heads of government departments, directors of large business concerns, and military commanders, met the Chinese working class only as oppressors. Chinese residents were subjected to unequal tax rates; they were tried in alien courts of law when charged with crimes; and, when convicted, they were sentenced under a separate penal code allowing for both branding and flogging. A Chinese elite emerged in nineteenth-century Hong Kong despite the discriminatory and unjust conditions of life. Among the thousands of people who fled the Mainland during the Taiping Rebellion of the 1850s were individuals with the requisite knowledge and skills, regional connections, and financial means to do business. Economic growth offered opportunities for some to establish themselves as successful merchants and for others to serve as compradors for Western `hongs' (firms) operating in the colony. By the 1880s, all but one of Hong Kong's eighteen largest property owners, according to government assessments, were Chinese. A Chinese member was appointed to the Legislative Council in the decade as well; no Chinese would be seated on the Executive Council until the 1920s. Life for the Chinese majority living on below subsistence wages, however, often consisted of ramshackle housing and inadequate food. The mortality rate for Chinese infants was almost six times that of the children of Europeans. Charitable hospitals and schools, most of them endowed by a few wealthy Chinese residents, did little to ameliorate conditions wrought by colonial capitalism. The fact of the matter was that Hong Kong capital, whether European or Chinese (the latter was increasingly visible by the early 1900s), needed cheap Chinese labor. Colonial overseers faced the persistent dilemma of governing the colony `on the cheap' in the interests of competing merchants, generally united only in their desire for limited government, and guaranteeing that protests by the majority population of exploited wage laborers would be managed and contained. British and Chinese elites began to work towards a rapprochement on the basis of their class interests and their mutual dependence upon the colonial government. While workers established trade unions, their potential was undermined by a continual flow of surplus labor arriving from the Mainland. Despite the importance of Chinese capital, labor strikes and work stoppages often assumed a nationalist rather than a class character by taking aim at the British presence. Neither a seamen's strike in 1922 nor a general strike and boycott of British goods in 1925-26 lifted wage rates in Hong Kong's perpetually overcrowded labor market. In the years preceding Japan's 1941 invasion, the highest paid manual workers earned 80 cents a day. Hong Kong has always been a place to which Mainland Chinese migrated. The colony was regarded primarily as a place of refuge before 1949, with people crossing the border when circumstances were bad in China, always expecting to return when they improved. While settlement of the colony was gradual, fortune-seeking, commercial progress, and increasing socio-political unrest on the Mainland produced a growing population: from 32,983 (31,463 Chinese) persons in 1851 to 878,947 (859,425 Chinese) in 1931. The numbers swelled particularly after the Chinese Republic was established in 1912, and did so again (by about 750,000) during the Sino-Japan War in the late 1930s when Hong Kong's population increased to 1.6 million. The estimated one million residents who fled the Japanese occupation of the territory during World War II began to return in late 1945 at the rate of almost 100,000 per month. The impending success of the communist-led Chinese Revolution initiated a mass exodus (approximately 750,000) in 1948 from the Mainland to Hong Kong that continued unabated until the border was closed in 1951 to prohibit further undocumented travel. Later, an estimated 100,000 persons crossed the border in the midst of a 1962 famine associated with Mao Tse-tung's `Great Leap Forward' policies and almost 500,000 legal and illegal immigrants streamed into Hong Kong between 1976 and 1981, the years immediately following Chairman Mao's death and the fall from power of the Gang of Four. An adequate understanding of present-day Hong Kong's `economic miracle' begins with the Chinese -- mainly from Guandong province, Shanghai and other commercial centers -- who began leaving the Mainland in 1948 with the Nationalist government facing defeat at the hands of the communists. The colony was then still reeling from the economic collapse and outmigration of an estimated one million persons during the Japanese occupation of World War II. The economy experienced further disruption when first the United States, and then the United Nations, imposed trade sanctions against China, the territory's most important trading partner. Forced to develop internal industries, Hong Kong took advantage of a cheap labor pool, local and regional capital input, and government tax policies favorable to entrepreneurs. Constant influx of both people and capital from the Mainland led to the establishment of light manufacturing throughout the territory in the 1950s. Britain's return to Hong Kong meant no serious institutional changes in prewar colonial governance as the bureaucracy reclaimed control over an essentially administrative state. Denial of basic rights for the Chinese population assured continuance of the political status quo. Chinese residents recognized the worthlessness of a restricted franchise granted for elections to an advisory Urban Council in 1952. The government, meanwhile, saw a low turnout among the ten thousand or so eligible voters as an indication of political apathy. Some measure of substantive reform -- including an expanded right to vote, a lower voting age, more directly elected members of the Legislative Council, and a diminution in the Executive Council's function -- would have to wait forty years, until the eve of Britain's handover of the colony to the People's Republic of China (PRC). The colonial government's economic role, however, changed dramatically in mid-century. Virtually tax-free, but faced with immediate shortages in basic needs (food, fuel, housing), reconstruction and revitalization tasks, and future growth and development concerns, Hong Kong began to assess both business profits and salaries and wages earned within the colony at an effective rate of 15 per cent. The government adopted more interventionist policies, ranging from emergency rationing of rice and temporary trade controls following British reoccupation to subsequent public housing projects, land reclamation, and education and health services in the decades that followed. Moreover, from the colony's inception, all land was owned by the Crown and leased to private interests through auction or tender. Thus those such as Milton Friedman who have routinely sung paeans to Hong Kong laissez faire ignore the political state's contribution to the area's succeess. Hong Kong's tax policies began to attract foreign investment in the 1960s, fostering export-led economic growth. Textiles, electronics, toys, and many other low-priced goods stamped `Made in Hong Kong' flowed from the territory in ever-increasing quantities. Today, Hong Kong is the world's largest exporter of clocks, toys, calculators, radios, electric hair and hand dryers, imitation jewelry, travel goods and handbags, umbrellas and sunshades, and artificial flowers. The territory is the world's second largest exporter of clothing, furs, watches, telephones, electric kitchen appliances, and shoes. And Hong Kong is the third largest exporter of textiles and fourth largest exporter of precious jewelry. The colony experienced social turmoil in 1967 when the Cultural Revolution created a flood of refugees that was to continue unabated into the early 1970s. Eyewitness accounts of vandalism and youthful malignity on the Mainland served further to alienate overseas Chinese from the People's Republic. However, local labor demonstrations and student confrontations with the Royal Hong Kong Police raised the specter of class struggle. As always in the colony, national and racial issues were prominent, due to the British expatriates' `sahib' mentality. Disturbances went on for seven months, resulting in scores of deaths, material destruction, and random violence, while discrediting Maoism among the population. The Mainland government made no move to intervene despite the violent riots in the colony and the presence of Red Guards just across the border. While offering Hong Kong Communists verbal support, Beijing apparently did not wish to have the territory's trade disrupted for long. By the mid-1970s, Hong Kong's economy was moving towards service-sector activities. Networks of wholesalers and retailers developed to cater to the consumption patterns of a growing middle class. Department stores, shopping malls, and fast-food restaurants underline the change from a production-oriented economy. Entrepôt (warehouse) trade, which all but ended in mid-century due to the UN trade embargo against China during the Korean War, re-emerged in the 1970s (facilitated by the PRC's neo-'Open Door' policy), paving the way for diversification into finance, insurance, and real estate (FIRE) markets. Hong Kong has Asia's highest concentration of fund managers and largest number of insurance companies. It is Asia's second largest venture capital center and second largest loan syndication center. Hong Kong has the world's fourth largest gold bullion market, fifth largest foreign exchange market, and seventh largest stock market. It is the world's fifth largest banking center for external financial transactions and seventh largest center for financial derivatives. Today, the banking industry has become Hong Kong's most important enterprise, with manufacturing more likely to occur across the border. Nevertheless, export-import activities remain vital to Hong Kong's wellbeing because the territory has few natural resources and is dependent upon international trade for virtually all its needs. The former colony is entirely dependent on imports for all its energy needs, purchasing electricity and coal from China and oil from several Southeast Asian countries. Staple food imports from the Mainland include 71 per cent of Hong Kong's vegetables, 78 per cent of its poultry, and 92 per cent of its pigs. Furthermore, 70 per cent of Hong Kong's water supply is imported from Guandong province in southern China. Hong Kong's struggle to provide itself with clean and plentiful water, dating almost from its origins as a British colony, is illuminating. Only artists' renderings remain of a waterfall at what is now home to thousands of boat people, the port of Aberdeen on Hong Kong Island. Early population growth led the colonial government to construct the first of many reservoirs, which is still in use. Hong Kong's governors were lamenting an inadequate water supply half a century after colonization. According to one, neither `the proposed works, nor works many times larger, would satisfy the wants of the city.' Rainfall shortages, leaving the territory with too little fresh water, contributed to the bubonic plague that wracked the colony for several years in the 1890s. The epidemic forced an otherwise reluctant government to commit public monies to construction of a new reservoir. The government built more reservoirs when the flood of Mainlanders in the aftermath of the 1911 revolution and the beginnings of industrialization in the 1920s again raised the issue of water. Hong Kong's growing dependence on the PRC for water, resulting, somewhat ironically, from the surging numbers of people who fled China following the 1949 revolution, began in the early 1960s. This arrangement reveals Hong Kong as a source of trade surplus for the Mainland and points to Hong Kong's role in financing China's modernization. Hong Kong is a land of immigrants, 98 per cent of whom are Chinese. Having fled political instability and social unrest, much of the population is apolitical, trading activism for materialism. Minimal interference from the British state, along with Western commercial and cultural influences, have contributed to the development of a pervasive entrepreneurial spirit. And while upward mobility was historically circumscribed, a combination of hard work, luck, and education nevertheless made it possible for some non-British citizens. The generation of Hong Kongers fortunate to have grown up during economic boom times in the 1970s and 1980s numbers many who have moved up the social ladder through schooling. However, social advancement has not come for working-class people (including many newer immigrants from the Mainland), who labor long hours (ten-hour shifts, six or seven days a week) at low pay in 3-D jobs -- dangerous, dirty, and dead-end. In contrast, the territory has more millionaires and billionaires per capita than anywhere else in the world. The distribution of income and wealth in Hong Kong is thus highly unequal. Classified as a high-income economy, Hong Kong ranks thirteenth among 133 countries surveyed by the United Nations. According to 1996 government figures, the median income from main employment of the working population was US$9,500 per year and the median income of domestic households was US$17,500 per year. A World Bank report from the same year indicated that the lowest 20 per cent of households received 5.4 per cent of the national income and the highest 20 per cent of households received 47 per cent of the aggregate. Declining income inequality in the 1960s and 1970s, the result of higher labor force participation and a movement of workers into the manufacturing sector, was reversed in the 1980s by the influx of Chinese and Vietnamese refugees and the growth of the service sector. Meanwhile, the median annual salary for a British expatriate manager was US$185,000 in the early 1990s. According to Forbes magazine, the colony had three of the planet's ten wealthiest people in 1997: real estate magnates Lee Shau Lee (US$14.7 thousand million) and the Kwok Brothers (US$12.3 thousand million) as well as Nina Wang, the world's second richest woman, whose net worth of US$7 thousand million came from running the Chinachem real-estate empire. Nowhere is social class polarity in Hong Kong more evident than in residential patterns. Much of the population lives on less than 5 per cent of the land in the crowded towns of Victoria and Kowloon. Despite government efforts to eradicate hovel dwellings, each wave of immigration in this century has resulted in refugees erecting squalid shantytowns on the hillsides for shelter. In the mid-1990s, over 200,000 people were cramped into squatter camps, more than 100,000 individuals were living in what the government calls `temporary housing,' and another 80,000 `resided' on boats in the harbor. Overall, almost 450,000 Hong Kong households, comprising more than 1.2 million people, suffered from inadequate housing in 1994. Hong Kong's population density, one of the world's highest, is most graphically revealed in the 150,000 thousand people per square kilometer living in the Mongkok district. Hong Kong's government began building public housing units following a Christmas Day fire in 1953 that left 50,000 people on the streets. Yet the unprecedented numbers of people arriving in the colony between 1946 and 1951 had already created intolerable conditions. About one million persons were living in makeshift huts on the steep hillsides throughout Hong Kong. Once again, overcrowding meant filth and disease and the toll of human misery rose amidst expanding urban squalor. The fire, then, was a catalyst for action, much as previous social crises had been. By the early 1960s, the government had initiated the so-called `new town movement,' a massive city planning project intended to link the alleviation of housing shortages to industrial development. Today, almost 50 per cent of the population lives in subsidized housing, much of it in dense, high-rise dwellings that sit alongside production sites and commercial facilities in the New Territories. Apartment size is generally limited to one or two rooms, with running water, electricity, and private bath facilities. It is not unusual for a family of six to share a 10 ft by 12 ft space for eating, sleeping, socializing, and working. Long lists for existing as well as future units means that the wait may be years. Meanwhile the wealthy, far removed from the hurry and scurry of life in the crowded metropolis below, live in lavish homes along the road leading to Victoria Peak and in high-rise penthouses on the `far side' of Hong Kong Island or along Clearwater Bay in the New Territories. Some of the super-rich `even have pools, which in a land with no fresh water supply is a true extravanganza.' Life for most people in Hong Kong is organized around family structure; and for the upwardly mobile, pooled family resources may be the only source of startup capital to open a business. The rising middle stratum exhibits characteristics of both lower and upper class. While labourers are subjected to tedious low-skilled work and the rich relentlessly pursue moneymaking, middle-stratum proprietors operate their stores seven days a week, sixteen hours a day. Child labor laws are circumvented by working and middle class alike as children help their families by doing `cottage industry' labor or working without pay in their parents' businesses. The Hong Kong middle class expects its children to succeed in school because education offers opportunities for advancement, so competition for grades is fierce. Children often feel enormous parental pressure; an increase in school-age suicide is testimony to this condition. Indicators of middle-class success include the emulation of elites, who hire domestic help to cook, garden, and chauffeur, and the sending of children to Canada, Europe, and the United States for higher education training in business management, finance, and engineering. Upon their return the young help family firms expand operations, upgrade technologies, and deal with the intricacies of international markets. Unlike Western nations, contemporary Hong Kong has experienced features of early and late capital accumulation simultaneously, and its development has been rapid. In the early period, force separates capital from labor, exchange-value in the market from immediate social use-value, and owner from worker. The structure of the accumulation process in this era is based on proprietary organization, pre-industrial machinery, proletarianized labor, competition buffered by a precapitalist sector, and repressive discipline through market measures. The history of eighteenth- and nineteenth-century capitalism reveals patterns of ruthless competition that created unstable social relations; conquest, enslavement, robbery and murder, and gangsterism characterized this initial phase. As Karl Marx wrote, 'Capital comes [into the world] dripping from head to foot, from every pore, with blood and dirt.' Hong Kong's early capitalist economy is akin to that described by Adam Smith. More than 98 per cent of the 280,000 registered firms doing business in 1996 were small enterprises, and the average number of employees in companies in manufacturing industries declined from twenty persons in 1980 to thirteen in 1993. Large local concerns include banks, diversified conglomerates, real-estate holding and development companies, and public utilities. Yet storefronts, restaurants, and light assembly plants constitute the economic infrastructure for the majority of people. Once found everywhere, `home factories,' where both parents and children work into the small hours assembling toys and clocks, artificial flowers and umbrellas, handbags and imitation jewelry are now less prevalent. At the bottom are street hawkers, who daily set up temporary stalls from which to sell their wares. This environment of small firms and proprietorships remains inhospitable to union organizing. Coupled with an unfavorable legal framework, it produces few labor leaders but much political fragmentation in a labor movement that comprises less than 20 per cent of all workers. Surplus labor pools, which once migrated to the colony from the Mainland, are now either selectively imported (often women from Indonesia and the Philippines) or are employed by Hong Kong manufacturing capital in the cheap labor havens of Guangdong Province in southern China. There has never been a minimum wage; the government sets no official poverty line; full employment policies do not exist; and social `safety net' policies are minimal. Their absence continues, in part, because many among the Chinese population still rely on family support rather than government assistance. In Hong Kong, gangs known as Triads (their symbol is a triangle uniting man, earth, and heaven) established themselves and spread quickly through the Chinese community prior to mid-century. With origins in secret criminal societies founded on the Mainland in the eighteenth and nineteenth centuries, these groups soon controlled illicit activities such as drugs, gambling, and prostitution. Upon Britain's return after World War II, Triads turned their street connections into extortion and bribery of the colony's police force; both English and Chinese. Law-enforcement corruption settled into an accepted and comfortable pattern whereby officers -- euphemistically called `caterers' -- organized their colleagues into syndicates that liaised with gang members for purposes of permitting criminal operations to flourish without fear of official interference. In return, Triad bosses undertook to settle their own inevitable differences through gang fights, intimidation and physical assaults, and murder. Though illegal, at least fifty such organizations exist in Hong Kong today, with an estimated 100,000 members (the Sun Yee On Triad is believed to have 45,000 members alone on its home turf in Tsimshatsui). Recently, Triad activity has expanded into the black-market sale of imitation luxury goods, money laundering and computer card fraud, pirating of computer software, and smuggling of illegal immigrants. The term `late capitalism' refers to more recent social and economic conditions of globalization, with its accompanying commodification of almost everything. Even the production of cultural goods succumbs gradually to `money-making as an organized business.' The structure of the accumulation process is increasingly based upon finance capital, global markets, capital-intensive production, dual labor markets, and the integration of science, capital, and technology. As Robert Heilbroner notes, the label "'Made in Hong Kong" stamped on commodities that embody the most remarkable capabilities of scientific production becomes a symbol of the ability of capital to move wherever low labor costs or strategic sites for distribution offer competitive advantages.' In this respect, Hong Kong's emergence as an economic player has occurred relatively late in the game. The city's highly competitive industries -- land speculation, real estate construction, electronics, apparel and textile manufacture, finance, and tourism -- maneuver between two worlds, a local proprietary sector and a transnational corporate one. Foreign direct investment has grown more rapidly than trade as the territory has expanded its role as a base from which more than two thousand transnational corporations (TNCs) conduct regional operations. Credit card issuers, life insurance companies, engineering and manufacturing consultancies, fast-food franchisers, and courier services are among the accumulated overseas concerns that invested US$99.7 thousand million in Hong's Kong's economy in 1995. The largest investor was Japan (25 per cent), followed by the UK (21 per cent), China (19 per cent), and the USA (12 per cent). Banks constituted the largest share of investment (47 per cent) in the non-manufacturing sector, while electronics drew the largest share (31 per cent) in the manufacturing sector. Schumpeter's `creative destruction' is on display everywhere in Hong Kong as industrial factories give way to opulent hotels, which in turn give way to office towers in only a few years. The most massive dredging project ever undertaken anywhere (reclaiming land from the sea in Hong Kong dates from 1851) made possible the construction of a new US$20 thousand million airport, Chek Lap Kok, which is connected to the city's business district by the world's longest road and rail suspension bridge. If, as Raymond Williams suggests, culture is essentially a `way of life,' then Hong Kong's late capitalist milieu is quintessentially postmodern, as materialistic consumption runs rampant. Mobile phones and pagers are commonplace, used by business people, professionals, and teenagers alike. There are probably few places in the world that can boast of such a concentration of luxury automobiles in such small geographical confines. Hong Kongers are very style-conscious; evidence of this can be seen not only in the designer label attire that accords the wearer enhanced social status, but in the popularity of television programs on clothing and fashion. Public advertising displays clothes, electronics, gourmet foods, and myriad other consumer items that residents and tourists can purchase at the many malls. The population's apparent acceptance of its colonial status, as well as its much noted political apathy, belie the fact that the most important issues revolving around the `Hong Kong question' have become increasingly political. The PRC, in rejecting a `three-legged stool' relationship between China, Britain, and Hong Kong in the 1970s, held fast to the view that discussions about 1997 (the date of expiration of the New Territories lease) did not include residents of the colony. Bilateral negotiations, culminating in the 1984 Sino-British Joint Declaration, established a `one country, two systems' arrangement under which the British would hand over the territory to the Mainland. Public opinion was mixed from the outset. One source of anger and anxiety was the fact that Hong Kong representatives were not a part of the diplomatic discussions. The estimated 50,000 people per year emigrating from the territory after 1984, many from the professional-managerial stratum, reflected an unease about the future. On the heels of the signing, six times as many political officials and representative organization leaders (business associations, mutual aid committees, trade unions, and voluntary organizations) believed that the agreement would facilitate continued economic growth as those who did not. The ratio of those believing that post-1997 Hong Kong would retain political autonomy to those who didn't was four to one. In contrast, these former individuals split down the middle on the likelihood of future representative government and on the issue of protecting civil liberties. Surveys from the mid-1980s onwards registering growing political pessimism did not significantly modify a general sense of economic optimism about the future SAR. While 65 per cent of those polled in 1988 expected living standards to decline in the short term following the handover, 80 per cent believed that the socio-economic status of their children would be better than their own. The 1989 Tiananmen tragedy magnified fears, encouraging 1.5 million people to participate in street demonstrations against the Beijing government's human rights violations. By July 1995, only 23 per cent and 18.5 per cent of the colony's general public expressed trust in the British and Chinese governments, respectively. And while confidence in local government fell from 76.4 per cent in 1986 to 47.8 per cent nine years later, 61 per cent remained upbeat about the future of Hong Kong's economy. While the looming 1997 handover was of greatest concern and received the most attention, other matters forced their way onto the political radar screen. The local population scapegoated thousands of Vietnamese `boat people' who began fleeing their war-ravaged country for Hong Kong in the late 1970s. By 1982, the colonial government had established closed-camp detention centers for Vietnamese refugees, and it initiated a forcible repatriation policy soon afterwards. On another front, women, who have long dominated Hong Kong's most poorly paid labor markets, complain of unsafe working conditions, inadequate childcare services, lack of employment protection, and a shortage of affordable housing. While the autonomous grassroots women's groups that emerged in the 1980s successfully pressed for sex discrimination legislation in 1995 and disabilities discrimination legislation in 1996, certain issues, ranging from increasing instances of violence against women to disenfranchised housewives, will continue to exist in the SAR. Moreover, discrimination against gays and lesbians is not illegal in Hong Kong, despite the fact that in 1991 the colony abolished a statute prohibiting homosexual acts. Although the social climate is still not liberal, gay culture made its presence known in the arts and nightlife prior to the handover, and members of the gay community now view themselves as part of a movement for human and political rights. Politics, such as it existed in colonial Hong Kong, only rarely exhibited working-class features. But the transition to a service economy eliminated 400,000 manufacturing jobs in the 1980s and 1990s. Other sectors of the working class risked being abandoned by footloose industries looking elsewhere for ever cheaper labor. As public housing construction slowed, numbers of low-income people found themselves in danger of being priced out of affordable housing by rent inflation following the elimination of rate controls for all old private buildings. One of the consequences of the 1992 `Patten Reform' (after the last British colonial governor, Chris Patten) providing for elected members to the Legislative Council was that pro-democracy, grassroots, and trade-union councillors held a majority of seats in the final session to convene under British colonial rule. Responding to widening income polarization and growing poverty among single-parent families and the working poor, the assembly increased welfare spending and passed legislation favoring labor, including the right to bargain collectively on wage and benefit issues and protection against job discrimination. So Hong Kong experienced a foretaste of working-class politics in the years leading up to the 1997 handover. Whether such developments signaled a new territorial mapping would remain to be seen. Copyright © 1999 Lisa Odham Stokes and Michael Hoover. All rights reserved.
