Hong Kong's truly horrible year

Clinton In China: Stephen Vines recites a litany of disasters endured by the former British colony since last year's handover to the Chinese government

WHEN they took over control from Britain last summer, the first post-colonial government of Hong Kong could never have imagined there would be so many mishaps in the first year of its rule, the anniversary of which will be "celebrated" on Wednesday.

Hong Kong has been plunged into its worst economic recession for at least two decades. It has also suffered a series of climatic disasters, a mysterious outbreak of deadly viruses and one food poisoning scare after another.

When Britain pulled out of Hong Kong on 30 June 1997, most attention was focused on the incoming Chinese regime's plans to roll back the development of representative government and pass new laws to dilute human rights. As it turned out, the political problems of the new Special Administrative Region have taken second place to a mass of other problems which might be regarded as plain bad luck or, according to public opinion polls, bad management. These polls reflect ever-shrinking confidence in the government and falling ratings for Tung Chee-hwa, the Chief Executive, who heads a government seen as less than sure in handling the crises which have popped up like metal ducks in a shooting gallery.

By far the biggest problem is the economy. The day after the Chinese flag was raised over the new Hong Kong, the Thai government in Bangkok - three hours away by air, but right on Hong Kong's doorstep as far as financial markets are concerned - took the fateful decision to devalue the local currency. This set off the Asian financial crisis.

As the ripples spread across Asia, Hong Kong's new leaders complacently assured the population that they would hardly be affected because the local economy was so much stronger than that of other countries. These assurances are looking a bit sick now: unemployment is at a 15-year high; the economy is contracting and the tourist industry, one of Hong Kong's biggest foreign exchange earners, has fallen into deep recession.

Reflecting this gloom, the stock market has plunged by more than half since the handover. Property values, which underpin share prices, fell some 40 per cent in six months. The Standard Chartered Bank estimates that a combination of stock market and property value losses have cost every household in Hong Kong HK$2m (pounds 159,000).

No wonder people are worried about the economy. Even those still in work have told pollsters that they fear for their jobs. Last week the government produced an economic revival package which was greeted with considerable scepticism and demands for more decisive action.

The first real test of the post-colonial administration, however, was a mysterious and deadly bird flu virus. Its spread was stopped by an unprecedented slaughter of every chicken in Hong Kong but, instead of taking 24 hours, the "quick kill" operation turned into a saga lasting days. Many wondered whether those in charge had had any idea how to plan such an ambitious extermination.

The extermination quickly took chicken, a staple of Cantonese cuisine, off the menu. By the time it was back, there had been a succession of food scares involving vegetables imported from across the border, shellfish, beef and pork - in other words, practically all types of food were seen as suspect.

Just when it looked as if everything was settling down, up popped another ominous development. A "red tide" in the seas around Hong Kong suffocated fish and left the water filled with bloated carcasses. The first response of the authorities was astonishing: they said the public could go ahead and eat the dead fish, as their internal organs appeared not to be affected. Not surprisingly, few shoppers heeded this advice.

Even the weather conspired against Hong Kong's new rulers. From the moment the Union flag was lowered on 30 June last year, the heavens dumped more rain on the territory than ever before. It carried on pouring for about three weeks. Since then, possibly under the influence of El Nino, there have been several more disruptions and further loss of life caused by rain and storms.

Tomorrow Mr Tung will board a plane for Peking and a meeting with President Jiang Zemin, who is expecting to be briefed on the arrangements for the celebration of Hong Kong's first anniversary under Chinese rule. It is a sign of the times that the ceremonies have already been scaled back. Not only is money short, there are fears that the public might be apathetic.

Much of what has happened is bad luck, but the effects have been compounded by mismanagement. Even government officials are sheepish when asked to defend their actions. On a radio discussion show last week, the presenter asked the guests to identify which things had improved over the past year. An embarrassed silence ensued.

Staying On, Section 2