Hong Kong Reflections; M. Walker

It is a warning to the bureaucrats and their legislating friends that not everyone has been lulled asleep by the idea that, after 1980 and 1984, the day of regimentation is over. Wishing will not make it so. For freedom is always both difficult and expensive. Submis sion seems more convenient, at least until we know it by experience and are frightened into such resistance as should have been our prac tice from the beginning. D Hong Kong Reflections by Michael Walker T he citizens of Hong Kong have ex pressed a great deal of concern about what will happen once the tiny British colony falls under the control of the People's Republic of China in 1997. As I discovered during a recent visit to Hong Kong, the fear is not that the Chinese have malicious intentions, but that they will not know how to manage Hong Kong's affairs so as to avoid interfering with its highly successful economy. For one thing, despite recent moves toward openness and more freedom in China, deeply conservative forces within the bureaucratic structure are impeding the process. While un doubtedly some of the impediments have been put up by bureaucrats who do not wish to relin quish their power, many of the problems are caused by the fact that Chinese bureaucrats simply do not know how to encourage and asDr. Walker is Director of the Fraser Institute, Vancouver, Canada.

sist the economic process - how to practice laissez faire. They do not yet know how to be creatively inactive. The consequence is that on the Chinese side of the border the average income is $250 per year whereas on the Hong Kong side it is $8,000. It is not surprising that the residents of Hong Kong look upon the prospect of more "help" from China with some dismay. But they are even more concerned about their civil freedoms. Hong Kong has enjoyed a large measure of freedom of the press, freedom to own or lease property, freedom of travel and communica tion, and so on, despite its lack of political freedom. Its government is appointed by the British, and there are no real elections, al though there is now a council with representa tives from sectional and professional groups. The impending replacement of the British as the dominant outside force already has begun to 278 THE FREEMAN. JULY 1988 Hong Kong Harbor.

have its effects. Hong Kong is beginning to transform itself into a colony of China and is shedding British colonial attitudes. This is evi dent in the travel patterns of business people, scholars, and officials who instead of going to London increasingly are Beijing bound. It is also evident in the increasing guardedness of those who make public statements and who have a public profile in institutions that will re main when the British Governor leaves. With few exceptions, people who speak out try to avoid irritating Chinese officials. Ac cordingly, while there is no censorship, there is increasing conformity to the Chinese line. It is easy to understand why this is so. The citizens of Hong Kong will not be able to vote with their feet if they do not wish to remain when British colonial status ends in 1997. Most do not have citizenship in other countries nor can they expect easily to obtain it.

While Chinese officials have assured the people of Hong Kong that the existing laws, regulations, and freedoms will be retained under the new regime, one does not have to dig far into the existing structure to find some very disconcerting things. For example, there are laws which provide for censorship of the press in the event of a serious threat to the colony. In the hands of the existing administration, moni tored at a distance by the British Parliament, this has meant no censorship in practice. Under the administration of a Chinese· bureaucracy which has known only censorship, quite an other situation is probable. The same is true of other seemingly innocent laws and regulations which in different application could produce a radically altered political and economic cli mate. There is' hope, however, in that there is a great thirst in China for knowledge about how free enterprise economies operate. One of the most hopeful signs in this regard is the recent birth in Hong Kong of a new institute called The Hong Kong Centre for Economic Re search. One of the functions of this new group will be to translate into Chinese and make available to Chinese policy makers and intellec tuals books and studies that will show them how a free economy works and what the appro priate role of government is in a free society. In the end, of course, it is ideas that will deter mine the fate of Hong Kong and China. 0 279 Government Regulation of Business: The Moral Arguments by Tibor R. Machan T hroughout the world, governments en .• . gage in social and economic regulation of their citizens' lives. Economic regu lation, in particular, has come into focus during the past decade, mainly because such regula tion has been associated with falling produc-· tivity rates in many industrialized countries.