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Cohen Finds 'Business as Usual' in Hong Kong

By Linda D. Kozaryn
American Forces Press Service

HONG KONG, March 13, 2000 – Hong Kong and China seem to have successfully transitioned into "one country, two systems," according to Defense Secretary William S. Cohen.

Cohen arrived March 10 here, the first stop on a 10-day trip to Southeast Asia. He met with American business leaders and local government officials, including Hong Kong's Chief Executive C.H. Tung. His discussions focused on Hong Kong's reversion to Chinese control.

"There were serious apprehensions at the time the transition started, but I think everyone seems reasonably satisfied it has unfolded in a way that they are pleased with," Cohen told reporters traveling with him. He said China has given Hong Kong "virtually the same autonomy that existed before."

Hong Kong, one of the region's leading financial and shipping hubs, was under British control for more than 150 years. In July 1997, Hong Kong became a special administrative region of the People's Republic of China. China established the concept of "one country, two systems," giving Hong Kong a high degree of autonomy in all matters except foreign and defense affairs.

Under the terms of a declaration signed by Great Britain and China, Hong Kong's political, economic and judicial systems and lifestyle will remain unchanged for 50 years after 1997. So far, life in Hong Kong has continued with little disruption since the transition, according to a senior U.S. official here. The People's Liberation Army stationed soldiers in Hong Kong, but in general keeps a low profile, he noted.

Hong Kong government officials say the transition was smoother than anyone expected. Stephen Lam, information coordinator of the Hong Kong Special Administrative Region, called China's "one country, two systems" approach the model for reunification.

"This has worked for Hong Kong; this has worked for Macau," Lam said. He suggested the approach also could be applied to Taiwan, where tensions exist between islanders seeking independence and the Beijing government.

The United States is determined to help preserve Hong Kong's autonomy, prosperity and way of life, according to State Department officials. They said high-level visits such as Cohen's are evidence of the close ties and the importance of Hong Kong to U.S. interests.

Cohen and reporters discussed the Taiwan situation and its effect on the region en route to Hong Kong. He said American business leaders in Hong Kong support his call for Taiwan and China to reduce the escalating tension. "The rhetoric has gotten too heated, he said. "They need to back away from it."

If the Taiwan situation gets out of hand and there is some miscalculation, "there would be a very negative consequence flowing from it should there be military action," Cohen said. "It would not be in China's interest. It would not be in Taiwan's interest. It wouldn't be in anyone's interest."

About 1,100 U.S. firms and 50,000 Americans are based in Hong Kong. U.S. exports to Hong Kong totaled about $13 billion in 1998, making it America's 15th-largest trading partner. By the end of 1998, U.S. direct investment in Hong Kong totaled about $21 billion.

Hong Kong continues to welcome U.S. military ships and aircraft. More than 150 U.S. military aircraft and 100 U.S. warships have visited Hong Kong since the July 1997 transition.

Chinese officials banned port calls temporarily after the accidental bombing of the Chinese embassy in Belgrade, Yugoslavia, in May last year. Ship visits resumed in September and Hong Kong government officials say 19 U.S. vessels have made port calls here since then, including the USS Stennis carrier group.

Nearly 7 million people reside on the 1,092 square kilometers of Hong Kong Island, Kowloon, the New Territories and about 235 outlying islands that comprise Hong Kong. It is one of the most densely populated areas of the world, with about 6,300 people per square kilometer.

Gleaming glass high-rises pack Hong Kong Island's financial, trading and business center. At night the city sky glows from massive neon signs highlighting the corporations based here such as Sony, Nikon, Magnavox, Canon, Toshiba.

More than 16 million cargo containers move through this bustling South China Sea port, one of the largest in Asia. In Kowloon, a 10-minute ferry ride across the harbor from the towering business district, upscale malls gradually give way to side streets and alleys crammed with small shops. Overhead signs in English and Chinese form a canopy of color everywhere.

Asia's economic flu struck Hong Kong's in 1998, sending the economy into recession. Unemployment reached 6 percent for the first half of 1999, a significant jump from 2.2 percent in 1997. Property values fell 50 percent or more. Like the rest of Asia, Hong Kong is recovering from that economic slump, which one senior U.S. official said has impacted Hong Kong even more than the transition to Chinese control.

U.S. officials say Hong Kong is preparing for even greater economic activity. Plans call for an expanded container port and a new international airpower capable of handling 87 million passengers and 9 million tons of cargo annually.

Local officials say Hong Kong also is becoming a major information technology center. There are 20,000 Internet developers here and more than 3 million Internet users.

Hong Kong also will be the site of the next international Disney theme park, scheduled to be completed by 2005. Last year, 10.4 million tourists visited Hong Kong.

From Hong Kong, Cohen was slated to visit Vietnam, Japan and South Korea before returning to Washington March 18.

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Related Sites:
Remarks as Delivered by Secretary of Defense William S. Cohen, Tokyo, Japan, March 17, 2000, at the Japan National Press Club
Remarks as Delivered by Secretary of Defense William S. Cohen, Hanoi, Vietnam, March 14, 2000, at the Vietnamese National Defense Academy
AFPS News Article: Cohen: Deterrence Key to Diplomacy
AFPS News Article: Cohen Again Urges China, Taiwan to End War of Words
AFPS News Article: U.S. Leaders Call for Japan's Support
AFPS News Article: Symbolic Visit Foretells Positive Future
AFPS News Article: Cohen: U.S.-Vietnamese Ties Enhance Regional Security
AFPS News Article: Cohen Reaffirms Full Accounting Promise at Hanoi Dig
AFPS News Article: It's Time for U.S.-Vietnam Military Ties, Cohen Says
AFPS News Article: Cohen Finds 'Business as Usual' in Hong Kong
AFPS News Article: Cohen Calls on China, Taiwan to Reduce Tension
AFPS News Article: Cohen to Visit Vietnam, Asian Allies


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