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Hong Kong still worth a gamble

Schizophrenia is setting in. At any rate, this is the diagnosis proffered by some well-meaning friends. They fear that my work for this newspaper and my business interests are moving fast in different directions.

Let me explain: I think I am the only foreign correspondent in Hong Kong to have started a business here. It is a food related business, because I believe in the old maxim that whatever happens, people have to eat.

This year, the year in which China takes over the colony, I and my partners, the majority of whom are Chinese, will be doubling the size of the business and investing a great deal of money to do so.

Meanwhile, I spend my time hunched over a computer keyboard punching out stories about the uncertainties surrounding the return to Chinese rule, the dangers posed by various changes and generally reflecting what may be described as a rather pessimistic outlook.

Surely, therefore, I should be scrambling to liquidate my financial interests and ferret what can be salvaged back to a safe bank account in Blighty. How can I justify casting doubt on what China describes as "the Glorious Return to the Motherland" without acting on the logic of this view?

Believe me, I do think about this. However, I feel that my mindset is now similar to that of most of the Chinese people around me. They, too, must take some significant decisions about where to keep their assets, and, more importantly, where to keep themselves. Many decide that security can only be guaranteed by leaving and starting a new life overseas. The majority stay, including those with the means to quit. They do so not because they believe all the guff about returning to the motherland but because when they do their sums they find they will be better off in Hong Kong than in the low-growth economies of the West.

My partners and I have done our sums and, accordingly, have taken the plunge into new investment. We reckon we will make a good return. None of us is under the illusion that we're not taking a risk, probably greater than the type of risk businessmen would take elsewhere.

Only a fool would ignore the possibility that everything could go horribly wrong, meaning we could literally lose every penny. One of my partners was brought up in China during the Cultural Revolution. Experience the potential madness of the Chinese system is a salutary reminder of what could happen.

However, the upside, contained in the figures predicting what sort of money we could make, seems to indicate that the rewards justify the risk.

Here's the rub. I imagine that our calculations are much the same as those being made by a host of other people here in Hong Kong. We are all balancing risk and reward. Some may confidently assert that the rewards outweigh the risks. I would not go that far, preferring the cautious assessment that the rewards justify the risk.

Once this is understood, it becomes clear why the local stock market is booming, why property prices are rising and why money is not leaving these tiny shores in shiploads. It also explains why survey after survey shows that people are confident about the future. The truth is that we are all ensnared in a conspiracy of confidence. We have taken a gamble by investing in Hong Kong and would be foolish to go around saying that we've taken the gamble on a place with foundations which are about to crumble.

Outsiders might wonder whether these strictures apply just to fat-cat capitalists and aspirant fat-cat capitalists. The question can only be asked by those who do not understand Hong Kong. The reason this place works is that few people believe that they, or at least their children, have no chance of getting rich. The culture of low expectations is non- existent here. Even the poor keep an eye on the stock market and are familiar with the currency markets. They, too, want to take a gamble on the future and will do so, given half a chance.

Letters, page 13