DESPITE a new outbreak of public bickering between British and Chinese officials over details, prominent business members of the territory's business community remain bullish about the prospects for continued growth after Hong Kong reverts to Chinese sovereignty next June 30th. One prominent Hong Kong businessman, Mr Brian O'Connor, chairman of Allied Group Ltd, said that, far from a flight of capital, he detected an inflow of British companies.
"They are suddenly realising that after June 30th, 1997, they will be in China, and more and more British companies are coming here to establish Hong Kong as their base for the future," he said. The chairman of the British Chamber of Commerce, Mr Patrick Paul, also dismisses doomsday speculations. Chamber members were concerned about increased bureaucracy and corruption after 1997, he said recently, but business would remain "outstandingly good".
He played down reports that major locally based British companies, like the Jardine Matheson group, are putting off making new investments in the territory. The resumption of Chinese sovereignty over Hong Kong has led to some eases of capital flight. The London based merchant bank Guinness Mahon was reported recently to be aiming at Hong Kong companies looking for investment opportunities in England to dilute their profile in the territory.
But there are few signs that big business has got the jitters. Mr O'Connor, whose publicly listed company has interests in finance, property and industry, said he was bullish because "I believe it is in everybody's interests, China's and Hong Kong's, to make sure the transition is smooth, and to make sure that Hong Kong is permitted the freedom to continue in its capitalist ways, which have proved very successful.
"China itself has been one of the biggest investors in Hong Kong, particularly in the property market," said Belfast born Mr O'Connor, whose business associates are almost exclusively Chinese. The tycoons of Hong Kong who have made their fortunes here continue to invest in a massive way in Hong Kong and I don't believe these people are stupid. They see continued growth."
He had heard anecdotal evidence about companies moving assets or personnel or headquarters, but everything I hear says it is very small. One would assume that the British population of Hong Kong, given all the scare stories, would have fallen dramatically in thee last couple of years, with people fleeing the territory.
"Some people did leave and some will leave, particularly civil servants because of the localisation policy, but from a British perspective Hong Kong has traditionally been the best gateway into China. You don't build more and more container terminals and direct road and rail links into China from Hong Kong if you expect traffic to drop.
Asia had "the most exciting growth economy in the world", he said. "No one could afford to ignore it. The European Union, "big as it is it, fades into insignificance in terms of the growth of the economies in Asia."
The Governor, Mr Chris Patten, last week expressed concerns about China's intentions after Hong Kong is transferred to Beijing rule next year, mainly in the political and legal sphere. At the weekend Beijing confirmed it would establish a 400 member provisional legislature, with which the governor said he would not co operate. It will dissolve the existing elected legislature.
Beijing also announced that the territory's chief executive who would have to be a Chinese citizen who does not have the right to live elsewhere - would be elected by a 400 strong committee of Hong Kong representatives before the end of the year. A senior British official acknowledged that if it wasn't for the row over the legislature "things would have been pretty good now." One of the outstanding issues is whether the incoming Chinese garrison will be subject to Hong Kong law in civil and criminal cases, as is the case with British forces.