China Strife Unsettles Hong Kong Politics, Market
This crowded territory of 5 million Chinese, famous for forsaking all ideologies except pursuit of financial gain, is so aflame with political passions stimulated by the student demonstrations in Beijing that plans for a smooth reunification with China in 1997 now seem in jeopardy.</br></br>The Hang Seng index, the key barometer of the Hong Kong stock market, plummeted 339 points today, a loss of about 11 percent of total value. It was the sharpest drop in the market since the 1987 world stock panic and a strong indication that continued political instability in Beijing could seriously weaken the Hong Kong economy and force a crippling exodus of investors.</br></br>On Sunday, nearly a half-million Hong Kong residents supporting the Chinese democracy movement jammed streets for hours in the biggest political march ever seen here. Two prominent members of the committee drafting a basic law for the city after the planned reunification have resigned in protest of Beijing's handling of the demonstrations, and other members have threatened to follow suit if there were serious violence against students. A local consultative committee working on the basic law suspended its deliberations late today and canceled a meeting with a mainland drafting group.</br></br>"The latest events in China have made Hong Kong people realize that Hong Kong is closely connected with China, and only when there is democracy in China will Hong Kong have a future," said Tam Yiu-chung, a member of both the law-drafting panel and the city legislative council.</br></br>A major reassessment here of what has been a relatively trouble-free transition from British to Chinese rule would be a devastating blow to Chinese foreign policy goals. The Deng Xiaoping government in Beijing had considered the negotiated return of the territory taken by Britain in 1841 to be one of its crowning achievements and a key first step in persuading the rival Chinese government on Taiwan to resume ties with the mainland.