By Anthony Paul
June 29, 2007
The Straits Times

JULY 1, 2007 marks 10 years since Hong Kong was returned to China after 155 years of British rule. For many Chinese residents, the last years of British rule were often moments of rising anxiety. The controversial publisher, Mr Jimmy Lai, recently recalled the nights when he woke up in a cold sweat, terrified of the future.

In the wake of the 1989 Tiananmen Incident, the flamboyant, self-made entrepreneur (publishing and clothing) had incurred Beijing's wrath by selling T-shirts printed with photos of the student leaders. Later he memorably denounced former Chinese premier Li Peng as 'the son of a turtle's egg with zero IQ'.

Hong Kong buzzed with rumours that the moment the People's Liberation Army (PLA) entered the city, China would arrest counter-revolutionaries.

'Someone said 3,000 arrests,' Mr Lai recalls. 'Yet someone else said 100 plus. I was thinking: Even if only 20 or 30 persons are arrested, I must be on that list.'

To prepare himself spiritually, he became a Catholic and even picked the books he wanted to read in prison.

In a letter to the South China Morning Post, an English member of the establishment Hong Kong Club wrote: 'Hong Kong's present problems are little dissimilar to those of Shanghai a few years ago.' He had apparently been in Shanghai when communist forces arrived in 1949, and some executions of Chinese and arrests of foreigners had followed.

I seldom write to newspaper letter columns but felt obliged to rebut the fellow. I still have the clipping. 'China in the grip of a civil war, the first fevers of a revolutionary victory and a war with the United States is a very different country from the one now wishing to have a bigger say in Hong Kong's affairs,' I wrote. The letter writer, who signed himself off as 'Ancient Gweilo' (Cantonese for 'foreign devil'), was spouting 'uninformed, unhelpful nonsense'.

But for most British, the mood was more irritable than anxious. By the early 1980s, as China began to experiment with paramount leader Deng Xiaoping's 'market socialism', Hong Kong was finding its long-standing role as a capitalist entrepot generating ever-greater profits.

Its last colonial administration helped hype the economy by spending more than US$20 billion (S$30.7 billion) on the new Chek Lap Kok airport, a striking gateway to the Hong Kong Special Administrative Region.

Many British found talk of China's wish to assume sovereignty puzzling and annoying. I can recall an English diplomat friend asking me rhetorically: 'Do you really want a badly dressed Chinese Customs officer or one of those thuggish PLA chappies inspecting passports at Chek Lap Kok?'

Among many resident expatriates, the attitude was: This place runs so well, why experiment with a new system?

Mrs Margaret Thatcher, then-Britain's prime minister, told the BBC earlier this month: 'What I wanted was a continuation of British administration.'

The idea of some kind of extension to Britain's lease on its colony was not without appeal to the non-Chinese, but to anyone who had spoken to Chinese officials (as Mrs Thatcher soon learnt first-hand during talks in Beijing) this was a non-starter.

Close observers of the territory could see the more perceptive old China Coast hands beginning to make the most of Hong Kong's remaining opportunities, especially before any new regime could threaten real-estate investments, the standard route to billion-dollar windfalls.

The legendary Kadourie family announced plans to replace their Repulse Bay Hotel with a massive apartment block, calculated to bring in better returns in the years ahead of communism's advent.

The family hired the last major British army unit based in the colony to perform a Beating of the Retreat in the hotel's ballroom the night before it closed its doors. This was a 16th-century military ceremony to recall patrolling units to their castle. The event carried a message that went far beyond a hotel closing. The ceremony's central (Anglican) hymn, Abide With Me, has these words:

Swift to its close ebbs out life's little day;

Earth's joys grow dim; its glories pass away;

Change and decay in all around I see;

O Thou who changest not, abide with me.

As the notion that the British were indeed leaving sank in, panic all but ruined the Hong Kong dollar. To protect it from communism's advance, the colonial finance secretary pegged its value to the US dollar, a currency-board arrangement guaranteed by the territory's abundant reserves.

Talk of filling a vacuum surfaced. British withdrawal from the China Coast had been occurring since 1915, when World War I attrition forced transfer back to Britain of naval and military units based in Shanghai and other Chinese ports. American and Japanese business interests in China expanded in lockstep.

In Hong Kong some 70 years later, the process was revived. The Japan Club's membership expanded. The US business community, spurred on by the US Chamber of Commerce and what was then the world's largest US consulate-general, found the funds for the downtown American Club to be moved to more impressive quarters on the harbour's edge.

Many millions more were invested in sparkling new country club premises on Hong Kong Island's south coast. There was no problem finding new members to fill this weekend Western paradise's pool, tennis courts and other facilities: Wealthy Hong Kong Chinese planning to evacuate to California ahead of the PLA's arrival rushed to join.

Many Hong Kong Chinese, especially those whose families had fled to the colony from Chairman Mao Zedong's civil war and his lunatic purges, were already emigrating en masse. By the late 1980s, this exodus was well under way. My Cantonese secretary came to me one morning to announce apologetically that her father-in-law had decided that three family generations would be moving to Sydney soon.

She spoke of eeriness in the Cantonese community. 'You suddenly discover that friends you've known since school days have disappeared. It's considered somewhat shameful to leave - you're abandoning friends to the unknown - so many just pull up stakes, go to Australia or North America, and announce their departures with postcards listing their new foreign address.'

These emigrants were often affluent beneficiaries of Hong Kong's quarter-century of boom times. Ethnic Chinese communities appeared in Sydney, Melbourne, Brisbane, Canberra and other Australian cities, lifting immeasurably many suburbs' restaurant standards.

So many Chinese turned up in Vancouver that Canadians started calling the place Hongcouver. In many American port cities, multiple Chinatowns appeared, those founded by 19th-century immigrants and newer versions populated by immigrants from the 1970s through 1990s.

With so many residents leaving and a lack of future clarity, one might have expected the cost of apartments and rents to fall. Not so. The influx of engineers and other professionals who had to be lured to Hong Kong for the Chek Lap Kok airport project created a landlord's dream market.

My Indian landlord demanded a 75 per cent increase in what was already high rent. In self-defence, my wife and I in 1985 scraped together the mortgage payment for our own smaller apartment.

As July 1997 grew ever closer and the Chek Lap Kok contingents, having fulfilled their airport contracts, returned home, one might have again expected real-estate values to fall. Again, not so.

Hong Kong (along with Macau, as casino interests are aware) can be a marvellous money laundry. By the early 1990s, as People's Republic of China citizens began finding it a bit easier to visit Hong Kong, a flood of real estate investment money had arrived. Apartment prices soared again: In less than six years, our apartment's value had more than tripled.

The handover came on the very wet midnight of June 30, 1997. The royal yacht, Britannia, steamed out of Hong Kong harbour, carrying Prince Charles and the last British governor, Mr Chris (now Lord) Patten.

Two days after, the Thai baht collapsed, triggering the Asian economic crisis. Because the pegged Hong Kong dollar's value held while most of the region's other currencies were falling, the Special Administrative Region suddenly became a too-expensive place for a factory investment or a tourist's visit. For a time, the local economy reeled - but it has since returned to boom levels.

When the PLA marched in, there was no purge. Mr Lai is still at large, still publishing. There was really only one major hiccough and that was ironically capitalist in origin - the market's punishment of the local currency.

Communism has many charges to answer for, but post-handover Hong Kong is not one of them. Not yet, anyway.

The writer, a Hong Kong resident during 1972-1988 and 1991-1997, was twice president of the Foreign Correspondents' Club of Hong Kong.

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