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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: RealMuLan who wrote (36744)7/30/2003 11:56:52 AM
From: RealMuLan  Read Replies (2) of 74559
 
Realism finds new champions
By Henry C K Liu

The Hong Kong Standard ran an eye-catching headline this week: "Law puts HK on world map". One would have expected the report to be another on Hong Kong's tireless mantra about its alleged rule of law inherited from British colonial rule. But the report turned out to be about Law Hiu-fung, who made history by becoming the first Hong Kong rower to win a world-championship medal.

Under the heading "Britain's odd last gift to Hong Kong: Bad laws", Keith Bradsher of the New York Times wrote on Sunday:

Throughout most of 156 years of British rule, colonial administrators imposed repressive and often racist regulations. Not only did they block the development of democratic institutions, but they censored Chinese-language publications and movies for many years. Mail was opened and wiretapping was widespread. Only in the 1980s was the dreaded Public Order Ordinance revised, after many years of allowing the police to break up gatherings of as few as three people, especially public protests.
The article went on to quote William Overholt, who was an investment banker in Hong Kong in the 1980s and now holds the Asia policy chair at the RAND Corp research institute: "There is a kind of myth that everything was free and wonderful under the British, but they had a very tough colonial administration. It didn't start loosening up until it was clear it was going back to China."

The article pointed out that the British discriminated heavily against the 98 percent of the population that was Chinese, creating a lasting resentment that still finds expression in "a fiercely anti-European, pro-Beijing" segment of the population here.

Why is the New York Times, the crusader of democracy worldwide, suddenly exhibiting such a neutral respect for historical facts about Hong Kong?

The answer may lie in rapidly changing international geopolitics. Beginning with the administration of president Ronald Reagan, a new breed of US policy planners were beginning to advance the view that geopolitically, China needed the US more than the US needed China. These planners, led by Paul Wolfowitz (who now plays a defining role in George W Bush's Defense Department and its "war on terrorism" and its invasion and occupation of Iraq), argued that US policy of the previous decade under presidents Richard Nixon, Gerald Ford and Jimmy Carter had exaggerated the significance of China in global geopolitics and that China's importance was limited to Asia in the foreseeable future.

Reagan's military buildup in the early '80s, particularly the Strategic Defense Initiative, was beginning to bolster US confidence in facing Soviet threats technologically without any help from China or Western Europe. This was the beginning of US unilateralism.

George Shultz (who introduced George W Bush's first foreign-policy campaign speech in November 1999), in replacing Alexander Haig as US secretary of state in 1982, embraced this new thinking about China with cool determination. Shultz reversed the Richard Nixon/Henry Kissinger world view and replaced China with Japan as the primary focus of US policy in Asia. He saw friction between the United States and China as inevitable in the long run, not because of historical conditions relating to Taiwan, but because of fundamental differences between the two social systems and their national interests. Aaron L Friedberg of Princeton University, who recently joined US Vice President Dick Cheney's staff as a deputy national-security adviser and director of policy planning, holds the same view.

In the Shultz vision, the newly prosperous Asian Tigers, including Taiwan and Hong Kong, led by a Japan that was "democratic" (notwithstanding that scholars had pointed out Japan's one-party rule through the Liberal Democratic Party), capitalistic (notwithstanding Japanese state capitalism), and above all docile, should no longer be treated as US client states in the Cold War but as important Asian elements in the new US world order of neo-liberal globalization.

In 1982, British prime minister Margaret Thatcher's ill-fated attempt on the heels of victory in the Falkland Islands to perpetuate British colonial rule over Hong Kong ended with Deng Xiaoping applying the "one country, two systems" (OCTS) formula to a Sino-British Joint Declaration for the return of Hong Kong to Chinese sovereignty on July 1, 1997. That formula had been originally fashioned as a solution to the Taiwan problem as a Chinese internal affair. Subsequently, Deng directly approached Washington for acceptance of the same formula for solving the Taiwan problem. The Reagan administration summarily turned the idea down as a non-starter. Nevertheless, the OCTS formula became official Chinese policy for the reunification of Taiwan, with wholesale Chinese political compromise on Hong Kong in deference to its implication on Taiwan.

More ominous, Beijing's overture opened the way for US interference on the future of Hong Kong. Up to that point, Washington had been officially neutral in a bilateral problem between China and Britain involving the redress of historical colonialism. The issue of Hong Kong was thus transformed from one of righteous termination of British colonialism to official Chinese acceptance of colonial institutions as democracy and capitalism for 50 more years. Moreover, the issue of Hong Kong prompted the US Congress to adopt the Hong Kong Policy Act, which provides a legal basis in US law for self-righteous US monitoring on Chinese acceptance of Western democracy and capitalism in Hong Kong and, by extension, within Chinese territory.

Thus from 1982 onward, the propaganda machine of neo-imperialism has been running full-throttle in painting colonial Hong Kong as a fantasy model of capitalistic democracy and rule of law. A "democracy" movement has been nurtured in Hong Kong with open US support. The so-called Democratic Party was advised by Ellen Bork, a deputy director of the Project for the New American Century, a US neo-conservative group with an ultra-hawkish posture on China.

In his first Campaign 2000 speech on foreign policy, George W Bush declared in November 1999: "We must show American power and purpose and strong support for our Asian friends and allies; for democratic South Korea across the Yellow Sea; for democratic Japan and the Philippines across the China Seas; for democratic Thailand and Australia. This means keeping our pledge to deter aggression against the Republic of Korea and strengthening security ties with Japan. This means expanding theater missile defenses among our allies. And this means honoring our promises to the people of Taiwan. We do not deny there is one China, but we deny the right of Beijing to impose their [sic] rule on a free people. As I have said before, we will help Taiwan defend itself."

By implication, the United States would also not tolerate the right of Beijing to impose its rule on a "free" people in Hong Kong.

Since the terrorist attacks of September 11, 2001, US attempts to derail rising Chinese national capabilities through its support for separatist forces have come under control. Such separatists forces, each with its own specific characteristics, exist in Tibet, Xinjiang, Taiwan and Hong Kong. The US "war on terrorism" requires the cooperation if not support of China. The United States is also hoping for Chinese help in defusing the mounting crisis in Korea. When Taiwanese President Chen Shui-bian tied the July 1 march in Hong Kong with his plans to hold referendums on the future of Taiwan, in a not too subtly disguised move toward Taiwan independence, Washington began to realize that the political tempest in a teapot in Hong Kong might cause more trouble for US geopolitical interests than the quiet satisfaction of putting China through a public-relations grinder was worth.

Taiwanese Premier Yu Shyi-kun was quoted by cabinet spokesman Lin Chia-lung as having said on July 2, one day after the Hong Kong demonstration: "The protest in Hong Kong against the special administration's planned anti-subversion law on Tuesday highlighted that the 'one country, two systems' policy is unfeasible and that it is necessary and urgent for Taiwan to enact a referendum law."

While expressing support for Hong Kong in "defending its freedoms and fundamental rights", President Chen, in a written keynote statement delivered by Presidential Office secretary general Chiou I-jen, also called on the Taiwanese public to "cherish the fruits of democracy they now enjoy".

Via a videoconferencing system, Emily Lau, a member of the Hong Kong Legislative Council, and Richard Tsoi Yiu-cheong, spokesman for the Civil Human Rights Front, expressed their gratitude for Taiwan's support in their fight against their government's proposed anti-subversion legislation.

In a Wall Street Journal interview published on July 18, Chen hit out at Beijing's moves to impose new security laws in Hong Kong, which he said violated promises and stood as a warning against reuniting Taiwan and China.

Chiou was in Washington last week to discuss with high-ranking US officials "issues of mutual concern, possibly including referendums". Chiou was accompanied by Vice Minister of Foreign Affairs Michael Kau, National Security Council deputy secretary general Ko Cheng-heng and Democratic Progressive Party (DPP) legislators Hsiao Bi-khim and Chen Chung-hsin. They met with White House Deputy National Security Adviser Stephen Hadley, Deputy Secretary of State Richard Armitage and Deputy Secretary of Defense Paul Wolfowitz.

Although the US government has made it clear that Taiwan has to make the decision on whether to hold referendums, some officials have reportedly expressed their reservations about the plan. China has also sent a high official from the State Council Taiwan Affairs Office to meet with Armitage to express Beijing's objection.

On July 11, Zhang Lihong, an associate professor with the Taiwan Institute of the China Academy of Social Sciences, wrote in the People's Daily:

Despite strong dissent from both inside and outside of the island, Taiwan is persistent in making the topic a focal point for international attention. It is not difficult to see the true intentions of promoting Taiwanese independence and using it as an election ploy. On top of the agenda is "gradual independence", which the Democratic Progressive Party (DPP) has always advocated. Since it came into power, the DPP has relentlessly played up this policy on all fronts, and a referendum is a crucial step in the whole scheme. Referendums as a so-called public policy and "a constitutional proposition" are only a precursor for future voting on Taiwan's independence or unification with the mainland. It can also be used as an opportunity to make a legal precedent for passing a "referendum law", whereby "revisions of national titles, flags or anthems" as well as the vote itself can be made into provisions. Then, it can be used to spark cross-Strait tensions, reinforce public enmity towards the mainland, and sow the seeds of self-determination surrounding Taiwan's future. And finally, it can be a means of expressing so-called "public opinion" to the international community, creating an impression that both sides of the Taiwan Straits are independent sovereign nations.
The article was titled "Taiwan referendum plays with fire". Playing with fire means war.

This Monday, speaking at the launch of his new book, James Lilley, former Central Intelligence Agency director, former US ambassador to China under president George Bush Sr, and former American Institute in Taiwan director, said disputes between Taiwan and China are better solved through greater business interactions.

"Make business, not war," said Lilley, who was born in the seaport town of Qingdao in northeastern China. Lilley also said there should be a peaceful resolution between the two sides of Taiwan Strait. Lilley urged Taiwan to keep a low profile while focusing on economic development. "Don't go too far to provoke China. China may provoke you, but don't get on the wrong side of this one," Lilley said. "What does the referendum do for you? What does it clarify? It's very important to examine oneself as to why it's being done."

Lilley mapped out a future scenario for East Asia in which three important hubs exist - two in China and one in Taiwan. Lilley said the Yangtze Delta and the combination of Hong Kong and Shenzhen would play an important role in the economic development of East Asia.

"Half a million Taiwanese businessmen live in Shanghai now," said Lilley, quoting John Chang, the illegitimate son of late Taiwanese president Chiang Ching-kuo. But Lilley also said he was worried a referendum might prevent Taiwan's economy from developing further.

"Referendums are not a good way to do business," said Lilley, when asked how Taiwan should resolve the Fourth Nuclear Power Plant dispute. "This is a very complex decision that doesn't lend itself to a simple answer," he said. "There is a lot of noise being made [on the nuclear power issue]. It's time for the pragmatist to come out, not the idealist."

This new view from Lilley is surprising, given that he has claimed to be the tutor of Lee Teng-hui, who engineered the election of Chen by splitting the Kuomintang in the last election. Lilley was also the brain behind the East-West Germany model for the reunification of Taiwan with China, with Taiwan as West Germany. Lilley's hand can also be seen in Lee's fantasy of splitting China into five minor states. Someone in Washington has given Lilley the word to sing a new tune.

With the situation in Iraq looking more precarious by the week, and a new Korean crisis on the horizon, the United States does not need to take on China over Taiwan at this moment. Hong Kong is a side show of a side show. Thus a word is passed down for a little balance. Of course, the so-called Democrats in Hong Kong are always the last to get the message, but they will soon get the message that their bogus democracy push is not appreciated by their new masters.

Henry C K Liu is chairman of the New York-based Liu Investment Group.
atimes.com
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