Asia Watch / Tigers by the Tail
Pont, Pete du
Tigers by the Tail by Pete du Pont A. CIF value B. Tariff C. Special Excise Tax (SET) D. Education tax on SET E. Banking, Customs Base A x tariff (A + B) x 25% C x 30% A x 3% 16,000...
...Obsessive regulation comes naturally to Communists, and the honey pot is temptingly sweet...
...recognize but one China, and Taiwan—although enjoying de facto independence—is a part of it...
...New World Order wisdom holds that China is going capitalist and that North Korea will temper The American Spectator September 1992 41 its ways with the eventual death of 80year-old ruler Kim II-Sung...
...Discussion during the 1991 election campaign of formalizing that independence prompted the Peking People's Daily to warn that China "would not sit idly by" if that thought were pursued...
...Surely the PRC and Hong Kong are "unequal countries": one a sleeping giant of a billion poor, under-skilled people spread over 4 million square miles, the other an island of 6 million highly educated entrepreneurs...
...In this case the facts include Yugoslavia, Tibet, and the recent Danish referendum that threatens to scuttle the "new Europe...
...Even if the PRC army does not move across the border in 1997, does not destroy the buildings, and does not disrupt trade, the golden goose of capitalism can be starved as well as strangled...
...William McGurn defines Hong Kong optimists as those who have foreign passports...
...Tigers by the Tail by Pete du Pont A. CIF value B. Tariff C. Special Excise Tax (SET) D. Education tax on SET E. Banking, Customs Base A x tariff (A + B) x 25% C x 30% A x 3% 16,000 3,200* 4,800 1,440 480 Hong Kong he Washington foreign policy establishment and the press speak warmly of moving from the Cold War into a New World Order—from COMECON, the Warsaw Pact, and SALT to Rio, the G-7, and the EC...
...According to Gerard A. Postiglione of the University of Hong Kong, the colony's schools—indigenous, British, and missionary—were originally all private...
...Taiwan has needed only forty-three years to grow from a militarized agrarian society into a politically pluralistic economic power with the largest foreign reserves of any nation in the world, some $83 billion...
...McGurn, whose book Perfidious Albion charts the betrayal of Hong Kong, Suggests that the same thing could happen in the colony...
...Each time the entrepreneurial coast opens a window to the West, the poorer, more authoritarian capital decides it can tolerate it no longer and steps in...
...American soldiers report they are still hailed by name, invited to dinner, and promised a better life in North Korea...
...Taiwanese leaders, on the other hand, recognize that protectionism hurts their economy...
...For example, between import and point of sale $25,600 in taxes and tariffs is added to the $16,000 base price of a typical American automobile (see table below...
...Sold out in an uncharacteristic episode of weakness on Mrs...
...Maybe...
...And the government's own statistics show that about one percent of Hong Kong's population emigrates annually...
...But Peking and the U.N...
...More pragmatic observers hold that the PRC wouldn't undermine Hong Kong because they need the foreign exchange, the access to the West, the capital structure...
...Taiwan still depends on government industrial policies to direct development...
...Wouldn't it be wise to begin reprivatizing them right now...
...A few Hong Kong Chinese, like Legislative Council member Martin Lee, keep demanding freedom and insisting on democracy...
...Riot police had to be called in recently when DPP members of parliament began throwing chairs, bottles, and fists at the prime minister as he gave his annual address to the legislature...
...Although there are plans to lower tariffs in coming years, there is no sign that the South Korean government perceives unfree trade as a problem...
...In thirty years, South Korea's GNP has gone from $2 billion to $28 billion, and the number of cars on its roads from 2,500 to 2.5 million...
...Women who have the means often go abroad to bear children, in order to assure their children a foreign passport...
...South Korea is perversely dominated by chaebols, big conglomerates that compete for government financial assistance in a kind of upsidedown welfare state...
...Taiwan's new Democratic Progressive party is flexing its legislative muscle—quite literally...
...According to William McGurn, Washington bureau chief of National Review and an old China hand, this is exactly what happened in Shanghai...
...Two days before our arrival, three North Korean infiltrators were shot trying to bring plastic explosives across the border into South Korea...
...This hasn't stopped Hong Kong from having the most successful economy of the three nations...
...And in dozens of small matters the PRC is gently shutting the door—in obstructing the privatization of a government radio station, for instance...
...True believers assure us, however, that two of them count for little and the third is mellowing...
...the American Chamber of Commerce and other business groups in Hong Kong, I heard a distressingly familiar refrain...
...with the quiet expropriation of a billion here, a billion there, Hong Kong's economy could die...
...4,680 1,404 480 668 2,002 6,675 J. Acquisition Tax / x 2% 684 K. Registration Tax / x 6% 2,053 L. Subway Bonds / x 20% 6,843 Cost factor Formula 1991 1992 I. Retail Price F+G+H 34,214 33,375 TOTAL CUSTOMER COST I+J+K+L 43,794 42,720 G. Distribution Markup F x 20% 5,184 5,057 H. Value Added Tax (F + G) x 10% 3,110 3,034 *20...
...South Korea and Taiwan have blossomed under hard work and capitalism...
...Automobile six-year plan calls for the practice to continue...
...Construction of Hong Kong's new airport was blocked by the PRC until it received political and economic concessions...
...It sounds good if you say it fast, but a tour of Panmunjom, in the demilitarized zone an hour north of Seoul, leaves little doubt that North Korean Communism is still firmly in place and aggressively focused on South Korea...
...And a visit to three of the "Asian Tigers"—South Korea, Taiwan, and Hong Kong—is enough to convince one that the conventional wisdom on a New World Order, even regarding some of the era's resounding success stories, is shaky indeed...
...Chamber of Commerce in Korea F. Distributor cost A+B+C+D+E 25,920 25,284 A nd if there is a common thread linking the three countries in the 1990s it is Communism—as a practical issue, as a defining ideology, as an imminent threat...
...The PRC's position in negotiations with Britain was that the original Hong Kong treaties were unequal treaties, and thus not binding...
...Although recent elections for the legislative council provided a whiff of pluralism, Hong Kong will still be a functioning crown colony when it is handed over lock, stock, and barrel to Peking in 1997...
...Alarmingly, that is the same line President Bush used in Kiev, trying to hold togetherthe Soviet Union for Mikhail Gorbachev...
...Even after Tiananmen Square, after the brutalization of Tibet, after the recent test of a 1,000-kiloton nuclear weapon, the line is the same: We don't want to upset the PRC...
...Thatcher's part, Hong Kong returns to the PRC in 1997, presenting a test of the proposition that a Communist nation can democratize...
...Taiwan has an easier time of it...
...It is the same green light Secretary of State Baker gave the Serbs in Yugoslavia...
...For it is in Hong Kong that the conventional wisdom of the New World Order comes face-to-face with the future of Communism...
...They are already expressing their opinion on the New World Order—with their feet...
...Elsie Tu is probably wrong that a democratic Lilliput can coexist with a totalitarian Gulliver...
...By contrast, Hong Kong, as a British colony, has had a completely closed political system for the last century...
...CI 42 The American Spectator September 1992...
...There will be no plebiscite, no steps taken to ensure majority rule in the Legislative Council...
...North Korea, Vietnam, and the PRC defy the New World Order...
...The trouble is that, like the Keynesian economists before them, New World Order advocates have trouble fitting the facts into 'their theory...
...The treaties are signed...
...Even though the Joint Declaration gives Britain the right to run Hong Kong until 1997, there are already signs that the British position is untenable...
...It is unlikely that Korea will continue to prosper under protectionism: as impressive as the country's export performance has been, the tariffs exact a damaging toll on its consumer economy, and one suspects the problem will grow worse as international communications show the Koreans lower-priced consumer goods in other nations...
...Given the past record of Communist governments in honoring their treaties, isn't now the best moment for the Hong Kong Chinese to make their case, while there is still time and still some measure of de jure power...
...dollars...
...the next two decades...
...Yet the government still controls the major industries—shipping, steel, chemicals, sugar—and its 1991 Korea: Taxing a U.S...
...Loudspeakers from propaganda villages still blare music across the demarcation line...
...Taiwan certainly feels the heat, and is nervously watching Hong Kong, the domino in line ahead of it...
...The British have left Hong Kong residents very little maneuvering room...
...But to anyone looking north from Hong Kong Island, China's ideology seems less an anachronism than a clear and present danger...
...Isn't now the time for Hong Kong's natural allies—the United States, Australia, and Canada—to move to strengthen the colony's position through Radio Free Asia broadcasts to the PRC, for example, or conditional MFN extension or expanded immigration opportunities for Hong Kong Chinese...
...The pragmatists note that the government has permitted markets to flourish in the southern provinces of Guangzhou(Canton) and Fujian...
...Perhaps, but Chinese history shows a cyclical tension between capital and coast that erupts every few decades...
...t17...
...Absolutely not, says Elsie Tu, a white-haired elder on the Legislative Council...
...What do you suppose they'll be teaching in 1997...
...The country is also among the world's most protectionist...
...Communism's last three redoubts outside of Cuba now define the Western edge of the Pacific rim...
...More directly, PRC president Yang Shangkun warned the Taiwanese, "Those who play with fire will be burned...
...Source: U.S...
...economic relationships with the PRC are expanding, and Taiwanese businessmen visit the mainland to supervise factories they own there...
...they seem to have missed it...
...All prices in U.S...
...In South Korea, Chung Ju Yung, a wealthy industrialist, is making a vigorous third-party run for the presidency...
...Buildings are going up, traffic clogs the highways, and new business investment is at an all-time high...
...For Hong Kong to seek American assistance "would be like waving a red flag at Peking...
...A dozen sets of binoculars were constantly trained on us, and no doubt we were photographed as well...
...But in my meetings with...
...But over the years, the government has increased its subsidies to schools, and now controls virtually all of them...
...As for privatization, what will happen to Hong Kong's schools in 1997...
...Yet both countries are burdened by relics of statism that will pose a significant challenge to modernization over Pete du Pont, governor of Delaware from 1977 to 1985, is chairman of the Committee for Republican Leadership...
...Both countries have moved away from the closed politics that marked their early years...
...It has the world's largest port, its third largest financial center, and an unemployment rate of just 2 percent, despite having absorbed millions of 16,000 refugees from Commu2,720-1- nism over the years...
...The Korea Herald quoted a local official as saying that under PRC control Hong Kong would become the "mother of all 'dragons.'" In a burst of naïveté, an Exxon official proclaimed that the PRC would never expropriate Hong Kong because that would violate its commitments...
...Each day in Asia, I read rosy prognoses for 1997...
Vol. 25 • September 1992 • No. 9
