Hong Kong nervous about economic, political future

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HONG KONG (AP) – Rock bands and dancing dragons celebrated the 10th anniversary Sunday of Hong Kong’s handover to China, but there were also protests to demand democracy and anxiety about the future of the ex-British colony.

After a bumpy decade of recession followed by a robust recovery with help from the booming mainland, its ports are losing dominance to Shanghai and Singapore, and impatience for full democracy is growing – a source of friction with the city’s Communist overlords in Beijing.

Many Hong Kongers agree the next 10 years will be full of tough challenges for the 7 million people living in this global business center on China’s muggy southern coast.

They fear rivals like Singapore and Shanghai will seize a bigger chunk of the city’s key businesses, such as shipping and financial services. And pollution is a severe problem.

As he began a new term Sunday, Hong Kong leader Donald Tsang reminded the public the city faces “fierce” competition and must transform itself. Tsang wants Hong Kong to be a financial capital on par with New York and London.

“Hong Kong is not the biggest city in China, but it can be the best,” said Tsang, a bow tie-wearing veteran civil servant.

But Rusli Lie, a 60-year-old clerk who lives in the city, fears Singapore and Shanghai might eclipse Hong Kong because their leaders are more decisive and better planners.

“They are really running after Hong Kong,” he said while watching a flag-raising ceremony.

After 156 years of British rule, Hong Kong was handed back to China on July 1, 1997, with the promise that the city would enjoy a wide degree of autonomy from the Communist mainland. The territory was allowed to keep its capitalist economy, British-style legal system and civil liberties that mainlanders can only dream about.

For the most part, China has honored its hands-off promise. Gloomy predictions that Hong Kong would be slowly strangled by Beijing’s repressive grip have proven false. But many people are unhappy that they still cannot directly elect their leaders.

On Sunday, thousands marched through the canyons of office towers and skyscrapers, calling for full democracy. Hong Kong’s leader is now picked by an 800-seat committee loyal to Beijing. Only half of the 60-seat legislature is elected by the public, while the rest are chosen by special interest groups.

“Hong Kong has to fight for universal suffrage,” said Vivian Ma, a secretary who joined the march with her husband and two young daughters.

But Chinese President Hu Jintao, who attended the handover celebration, said only democracy should grow in an “orderly way” and that “social harmony and stability” were essential for good business.

It will probably be a long time before Beijing allows full democracy in Hong Kong, said Steve Tsang, an expert on Chinese politics at Oxford University in Britain. The Communist leadership still fears it would lose control of Hong Kong if the people picked their leaders.

“They aren’t reassured that in the chaos of democracy, there is a semblance of sanity,” Tsang said.

Although China has throttled Hong Kong’s political reforms, the motherland has helped boost the city’s economy. Hong Kong plunged into recession during the Asian financial crisis in 1997 and then again during the 2003 outbreak of SARS, or severe acute respiratory syndrome.

But the economy is humming again, partly because of Hong Kong’s close links to the booming mainland. Local companies have invested in factories that employ more than 10 million workers across the border in the prosperous Pearl River Delta region.

Big-spending tourists from the mainland have also been flooding into Hong Kong. Last month, 1.2 million came, accounting for 55 percent of the total arrivals, the Tourism Board said.

Hong Kong’s busy ports have also made a fortune shipping goods in and out of the mainland. But their dominance is fading. Singapore surpassed Hong Kong in 2005 to become the world’s busiest port, and Shanghai overtook Hong Kong this year. The port in China’s southern boomtown of Shenzhen was expected to move ahead of this city next year.

The red-hot stock market in Shanghai is also competing with Hong Kong’s bourse, which has been wildly successful in getting mainland companies to list here. More than $200 billion has been raised from mainland firms, which make up about half of the total market capitalization.

But more mainland firms are opting to list in Shanghai and Shenzhen, and Hong Kong officials are talking more about how their market has to become less reliant on China and do more to attract listings from America, Europe and other places.

AP-ES-07-01-07 1621EDT

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