12/23/96 'WE ARE GOING TO BE A COMMUNITY OF THE RULE OF LAW' (int'l edition)

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'WE ARE GOING TO BE A COMMUNITY OF THE RULE OF LAW' (int'l edition)

In a wide-ranging interview held at his modestly furnished, book-lined Hong Kong office, C.H. Tung offered Asia Regional Editor Joyce Barnathan his views on democracy, relations with China, and the economy. He believes that Hong Kong must remain free of corruption and that the territory's democrats must tone down their criticisms and give the transition a chance to work. How strong a leader Tung will be remains unknown, but it's obvious he is quickly learning the finer points of politics.
Q: Why do you want this job?
A: One reason is that I'm very proud of Hong Kong and I want Hong Kong to continue to be successful. Another reason is that my late father always said: ''Do something useful in life. Be proud of the fact that you are Chinese.''
Q: How do you think Hong Kong will be different when it's run by Chinese?
A: I think there are some very good traditional Chinese values that, through thousands of years, have been with us. We have benefited from Western culture, but I think it is important to emphasize these Chinese values. I think other than that, there shouldn't be much difference. We are going to be a community of the rule of law.
Q: So basically, Hong Kong wouldn't be what it is today without the Western system the British brought here.
A: Absolutely. But because 98% of our people are Chinese, we need to redefine some of the values.
Q: You have been cited as saying that advocates of Tibetan and Taiwan independence advocates wouldn't be welcome here.
A: I think on issues such as Tibetan independence and Taiwan independence, what I ask my friends to bear in mind is the feelings of the Chinese people. You know, 50 years ago--how many Asian countries were not colonies? So when it comes to issues of sovereignty, I hope you can understand the feelings.
Q: There are so many differences between China and Hong Kong. There are things here that are sensitive in China. Religious freedom, press freedom...
A: The success of Hong Kong is the freedoms we enjoy. Freedom of every nature--freedom of thought, freedom of movement, freedom of the press, freedom of information, freedom to be creative. They will all be preserved. I cannot emphasize this more.
Q: There are some people even in the business community who note that you are not a confrontational person and that you won't stand up to China. What are the issues where you think the leader of Hong Kong should stand up to China?
A: Everything that protects the Hong Kong people's interests. As I have said many, many times, there are many ways to achieve an objective. There are many ways to say no. We don't need to be demonstrating on the streets to get [our] objective. Those people who are demonstrating I think must realize this is not the better way to do it. You must hold to your principles. And then if there is a disagreement, negotiate it, because an agreement reached through negotiation will be a long-lasting
agreement.

Q: Ultimately, you believe democracy is good for Hong Kong?
A: Ultimately, democracy is good for everywhere. It is the speed [of achieving it] and the type of democracy that [give rise to] disagreement. When you talk about democracy, [the main thing is] that government is accountable to the people.
Q: Yet over the next six months, Hong Kong is going to have two legislatures running in parallel: the provisional legislature established by Beijing and the Legislative Council [Legco] established by the British. That seems very confusing and potentially destabilizing for Hong Kong.
A: It is very unfortunate Britain and China could not agree on a through train. But as there was no agreement, there is no alternative but to have a provisional legislature. With the transfer of sovereignty, a new legislature becomes necessary.
Q: Then Legco is illegitimate in your view?
A: It's not illegitimate. It's legitimate up to June 30, 1997.

Q: When do you think legislative elections will take place?
A: I think the first half of 1998, as early as we can.

Q: There are hundreds of Chinese companies here and lots more that will probably set up base here. Is there any way to ensure that Chinese companies won't get preferential treatment?
A: Every one of them will be welcome. But they have to play by the rules. There will be no favoritism. It is very important in the very first year that we establish that.
Q: How do you do that?
A: By saying: No, no, no! The government has machinery, highly transparent.
Q: Do you think people are more worried about the future than they should be?
A: The perception is that there is capital flight from Hong Kong. The fact is that, over the last five years, deposits have been growing at 12% per annum compounded. The perception is that nobody is investing in Hong Kong anymore. The reality is that fixed-asset formation is increasing at 18% every year. The perception is that people are leaving Hong Kong. The reality is that the population increased by 120,000 last year.
Q: Are there any issues you want to focus on when you first assume this post?
A: Apart from quickly establishing the authority--the confidence level--of Hong Kong, I want to concentrate on five issues: housing, education, care for the elderly, the economy, and making industry more competitive.
Q: Are you worried at all about Chinese officials based in Hong Kong undermining your ability to govern?
A: No, because it's one country, two systems. It's clearly stated. It's really the defense and foreign policy issues that are being dealt with by Beijing.
Q: Immediately after your selection, you're going to set the tone for the next few years.
A: Not quite. I'm going to get some sleep first.

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