One year on: spot the difference

In the year since the end of British rule in Hong Kong, the post- colonial spring-cleaners have been thorough in their work. Most signs of the former colonial administration have been expunged. Crown insignia have been banished, letterboxes painted a lurid green to obscure the red associated with the old masters. The Queen's head no longer graces coins and postage stamps.

As always with spring-cleaning, some things have been overlooked. In the bushes outside Government House, the former home and office of the Governor, there is a small stone post which bears the words "Governor's Residence". No doubt someone will get round to removing it. In the meantime, the building itself has been abandoned as a place of residence and is used only for the occasional official function.

The obsession with the removal of symbols is entirely typical of all changes of sovereignty, and so it is hardly surprising that Hong Kong's new order has been brisk in its work. Yet the extraordinary reality of what has become the Special Administrative Region of Hong Kong (SAR) is that the new order, so keen to remove symbols of the past, has been equally keen to restore the past in the shape of recreating an abandoned form of colonial government.

The suggestion that Hong Kong has become a colony of China is quite unpalatable to the new rulers and will, no doubt, be greeted with shrieks of derision by their supporters.

However, what has become increasingly clear is that China's guiding principle in devising a new system for Hong Kong was to preserve the colonial form of rule. The new regime has brought back some of the worst colonial practices, designed to ensure that what the leaders in Peking call "the glorious reunification of the motherland" was in fact a means of keeping the new possession under the control of the Chinese Communist Party.

The new Hong Kong is run by a small group of business people, only one of whom, Tung Chee-hwa, actually occupies an official position. Mr Tung, a squat figure with a distinctive crew cut, is a Shanghai- born shipping tycoon whose Orient Overseas shipping empire was tottering on the edge of collapse before being rescued by the Chinese government in the 1980s. His cronies are people such as Henry Fok, the man who brokered his company's rescue deal. He is China's oldest and best friend in the business community. Equally important is Li Ka-shing, a one-time big league donor to the Conservative Party, but more importantly, the richest and most powerful businessman in Hong Kong.

Billionaires like Mr Fok and Mr Li have Mr Tung's close attention. He trusts them more than the civil servants who used to run the colony, or even the members of his Executive Council or cabinet who are supposed to be his closest advisors. Last week, when Mr Tung unveiled his emergency economic revival package, he did so without even consulting the cabinet members, who were simply summoned to a meeting to be told of its contents.

In running the government in this autocratic fashion, Mr Tung is turning the clock back to the old days when the great imperial Governors, such as Sir Hercules Robinson, would huddle together with a group of cheroot- chewing businessmen to decide the fate of the colony. Sir Hercules surrendered his governorship in 1865; Mr Tung assumed office last year.

Like the governors of a bygone era, Mr Tung sees little point in explaining his policies to the great unwashed, nor does he appreciate the idea that they may have something to contribute in formulating policy. In a recent impromptu address to a group of foreign correspondents he spoke of how people were always keen to change him and his ideas. Mr Tung was proud that they always failed. Those who have worked closely with him say he is impervious to those who wish to push him in directions he prefers not to travel.

Yet, in reality, the head of the Hong Kong Special Administrative Region can hardly be described as free of pressure from above. The Chinese government is not famous for tolerating such laissez-faire arrangements and, given the high degree of interest shown in Hong Kong by the upper echelons of the Peking leadership, it is difficult to believe that they are simply standing back and giving Mr Tung a totally free hand.

So, how does he relate to the bosses in Peking? The simple answer is that no one knows outside the tiny circle of those involved in the relationship. The whole matter is shrouded in an extraordinary degree of secrecy.

When some British correspondents asked Mr Tung to whom he reports in Peking, he replied, "I report to the central government". Yes, but to whom in the central government? "A number of people," he said. Who are they? If, for example, he is reporting direct to the central leadership, through government rather than Communist Party channels, this suggests that he is in a very powerful position. Indeed, insiders believe that Mr Tung literally has a direct line into Jiang Zemin's private office. This means that in the highly secretive, suspicious and faction-ridden world of the Chinese leadership, Mr Tung has essentially placed all his cards in the hands of the Jiang faction. As long as Mr Jiang remains at the helm, this is not a problem. Should power slide in another direction, Mr Tung will be left dangerously exposed. Meanwhile, the ambiguity of Mr Tung's position serves both sides well. It gives Mr Tung the highest possible access to the leaders of Hong Kong's new sovereign state without there being anything laid down about how this relationship should operate. Moreover, he derives strength from an arrangement based on his personal ties, rather than institutional ones which could simply be picked up by someone else.

As for the leaders in Peking, they need not feel constrained by cumbersome arrangements for dealing with their man in Hong Kong. They have a good personal relationship with Mr Tung, who is thoroughly on their wavelength. Most importantly, they can do everything behind closed doors because all executive power is concentrated in Mr Tung's hands, just as it was in the hands of the colonial governors who were loath to give a share of the action to their minions.

The new style of government is also very imperial. On Monday, Mr Tung will travel up to Peking to brief President Jiang on the arrangements for Wednesday's first- anniversary celebrations. He will then accompany the president back to Hong Kong, in the style of the provincial rulers in imperial China who would scuttle to the capital to be by the Emperor's side as he made his way to their provinces.

The difference between the relationship Mr Tung has with Peking, and those of the Victorian colonial governors, is that Peking is just a phone call away from Hong Kong whereas London was a clipper's journey away, which left the governor and his bosses out of touch for long periods of time. However, the substantive relationship has been restored in as much as the only people who really matter are the boss in Hong Kong and his bosses in Peking, just like the days when all that mattered was the governor and his bosses in the Colonial Office.

Yet Hong Kong has become an infinitely more complicated and sophisticated society over the past century and a half. This makes it a place which does not really lend it-self to such simplistic governing arrangements. Moreover, it certainly falls far short of the expectations of the people in Hong Kong who stubbornly vote overwhelmingly for pro-democracy candidates, and join monster rallies in support of China's democracy movement.

As a result of this, Mr Tung's popularity, as measured in numerous opinion polls, has steadily fallen since the handover. The more in- depth studies show that the public is not so much disillusioned by Mr Tung the man, but by his style of government.

That style has quickly percolated down to every level of the civil service, which has, by and large, retreated back into its shell after having been forced out by the last governor, Chris Patten. Mr Patten greatly annoyed most civil servants by harping on a theme of open and accountable government. Having been accustomed to a system of largely closed and non-accountable government, they disliked having to explain their every action and regarded the increasingly assertive legislature as little more than a time- wasting obstacle.

The new boss is hardly breathing down their necks to create a more open civil service, and so it has gratefully retreated to its old ways, occasionally emerging into the light of day when there is no option but to explain itself.

Had it been the case that the first year of post-colonial rule was one of continued prosperity, the government would have faced less criticism. However, by an extraordinary coincidence, the day after China resumed control in Hong Kong, the Thai government took the fateful decision to devalue its currency. This move triggered the Asian financial crisis which quickly enveloped Hong Kong after leaving a trail of destruction elsewhere in the region.

Hong Kong's economy is now in recession, unemployment has soared to levels not seen for almost two decades, property prices have slumped by more than 40 per cent in just six months, and the stock market, that great bell-wether of Hong Kong's prosperity, is now trading at half the level it reached at the time of the handover. Such is the level of dissatisfaction with the way the government is handling the crisis that a public-opinion poll, taken this month, showed that almost half those questioned thought that Mr Tung was handling affairs worse than the last governor. Only 14 per cent thought he was doing better.

This is a truly remarkable state of affairs. In nearly all post-colonial situations, the first incoming government enjoys a considerable honeymoon of public approval in which it is compared favourably with its predecessors.

The new regime began life inauspiciously. On day one, the elected legislature was kicked out of office and replaced by an unelected provisional body, human-rights laws had their teeth drawn, and the old colonial public-order regulations were reintroduced.

Despite this, Hong Kong has not turned into a police state or anything of the kind. Representative government is as limited as it was under the colonial regime, but free speech flourishes and the government shows no sign of rounding up its critics.

The new regime proudly proclaims that it is conducting business as usual. Speaking to Australian businessmen, Mr Tung said, "If people ask me: `What has been the biggest change since 1 July' I would have to say: `There has been no change. It is business as usual'"

The Chief Executive and his colleagues appear unable to point to achievements initiated by themselves; instead, they insist that their real achievement is to have left the system intact. This is truly astonishing. Not least because the new order set itself a higher standard. It was laid out by China's former premier, Li Peng, on the first day of Chinese rule. He said, "Hong Kong has now entered a new historical era. Its future will be even more splendid".

Things have not quite turned out that way. Hong Kong is in the doldrums. Not only that, but the clock has truly been turned back. It has reverted to the old days of imperial rule when Britain controlled its colony through an all- powerful governor who kept a careful eye on London's interests. Now Hong Kong is run by a proconsul who keeps a careful eye on Peking's interests. After a century and a half of British colonial rule, China has acquired a new colony.

`Hong Kong: China's New Colony' by Stephen Vines will be published by the Aurum Press in September at pounds 18.95.