Leading Article: Hong Kong's best hope

IT TAKES quite a lot to wrong-foot the Chinese; but the two weeks since Hong Kong's new Governor, Chris Patten, announced his proposals for the colony's remaining five years under British rule have confirmed that he did just that. So it is hardly surprising that his first visit to Peking is, as we report today, proving a sticky and unproductive affair.

In his inaugural speech on 7 October, Mr Patten announced a cleverly devised package of proposals that included a widening of the franchise for the legislative council, a more open approach to government and higher spending on health, education and the environment. The plan was warmly welcomed in Hong Kong, and repeatedly attacked by various mouthpieces of the Peking government, which said that the constitutional elements were in breach of the Basic Law, or mini-constitution, agreed by the British and Chinese for the handover of Hong Kong in 1997. Yet the Chinese failed to back up these accusations by pointing to significant items in Mr Patten's proposals, let alone suggesting

alternatives.

So far, Mr Patten has emerged well ahead on points. No one doubts that Peking will continue to snipe at his programme as the necessary legislation goes through. But the cost of any move that damages the island's prosperity goes up as Hong Kong's economy becomes more closely intertwined with that of the booming enterprise zone of Shenzhen on the nearby Chinese mainland, and as

Peking's direct investments in Hong Kong

multiply.

Last week's 14th Communist Party congress in Peking in effect gave its blessing to the integration of the two economies by heavily endorsing economic reform and canonising its supreme advocate, Deng Xiaoping. That, of course, is not the way the party's leaders would see it. To them, Hong Kong is a peripheral matter. The main aim of backing capitalist experimentation in China itself is to keep the party in power. Taking over Hong Kong is a matter more of emotional than of economic significance. Above all, it is part of the reunification of the

motherland.

In Hong Kong, Mr Patten's actions and resistance to pressure will be important, because they will shape Peking's reactions as well as life in Hong Kong. But what will ultimately matter most is how the apparent contradiction between economic reform and political sclerosis in China itself is resolved.

The economic changes that Mr Deng initiated after becoming the country's undisputed leader in 1978 raised expectations of political reform and so led to Tiananmen Square. Fears of inflation broadened the doomed students' support. The same pressures are likely to be created by the newly endorsed move towards free enterprise, coupled as it is with a determination to maintain the political status quo. This time, however, the leadership is determined to avoid inflation, and is judiciously loosening its grip on culture.

The best hope for Hong Kong is that successful economic development on the mainland will persuade China's leaders that they can afford to be less paranoid about a degree of democracy in Hong Kong. After all, what its people will be leaving behind in 1997 is not (even after Mr Patten's reforms) full-blown democracy, but that polite form of dictatorship called colonialism.