Hong Kong is Taiwan's third largest trading partner and second largest export market. For Taiwanese businesses, it is an indispensable stepping stone into mainland China. As the final countdown to the 1997 handover begins, is this stepping stone moving closer to the other shore? What changes will take place after 1997? And how should Taiwanese businesses respond?
As dusk falls, crowds gather on the promenade by the Star Ferry pier at Tsimshatsui on the tip of the Kowloon peninsula. There are refined old German couples arm on arm, young Indian women with their plump bellies peeping out from their silk saris, and many local students playing guitars and singing loudly in Cantonese, Mandarin and English. In the gathering darkness, the neon signs on top of the tower blocks on the opposite shore light up one after another, and the tourists look and point: going up on newly reclaimed land in front of Central Plaza in Wanchai, adorned by glittering lines of golden lights, is Phase II of the Hong Kong Convention and Exhibition Centre; the red and white Swire logo on Pacific Place, a symbol of British economic power, is none too prominent amid the jostling skyscrapers; what catches the eye most is the Bank of China building, which juts into the sky like a knife from the heart of Central, and which represents the infinite might of China.
Walking on Hong Kong's crowded streets, one's eye is also caught by the slogans fes-tooned everywhere along the metal railings beside main roads: "Support Political Reform," "Smooth Transition," and "Hong Kong's Tomorrow Will be Even Better." However, not everyone is as sure as the slogan writers. One businessman from Taiwan reveals with a slightly self-mocking laugh that a few years ago he worried for a time about whether to look for another place to invest before 1997. Unable to decide, he consoled himself by saying: "It's early days yet. 1996 will be soon enough to worry about that." But in the blink of an eye, 1996 is half gone already. The great shadow of Hong Kong's new masters is drawing ever nearer, and with the prospects for the future of Hong Kong-Taiwan relations uncertain, the worries of Taiwanese business people in Hong Kong are growing more and more acute.
Too dependent?
Hong Kong and Taiwan are both part of the capitalist overseas Chinese world, and both rank among Asia's four "little tiger" economies. But the importance of Hong Kong for Taiwan's economy and trade has only come to the fore in the last few years.
Looking at the statistics, in recent years trade between Taiwan and Hong Kong has set record after record, growing substantially every year. Last year it reached almost US$28 billion, making Hong Kong Taiwan's third largest trading partner, behind only the USA and Japan. Surprisingly, the vast majority of this US$28 bn worth of trade was a one-way traffic of exports from Taiwan to Hong Kong: last year's trade imbalance between the two was more than US$24 bn. Over the course of the year, the volume of exports to Hong Kong surpassed that to the USA several times, and in the end the USA led by only US$300 million. Had it not been for the downturn in cross-strait relations which caused a stagnation in Taiwan-Hong Kong trade, Hong Kong would probably have gone into first place as the ROC's biggest export market.
"Our foreign trade surplus last year was only US$8 bn. In other words, without Hong Kong, Taiwan's international trade performance would have been miserable--we would have been in the red by over US$10 bn," says Thomas Chuang, director of the Fifth Department at the Ministry of Economic Affairs' Board of Foreign Trade, unable to hide his concern. "Our economic growth would have been way down too!"
Not only that, last year ROC citizens made more than 1.9 million visits to Hong Kong, almost twice the number of visits to the USA and Japan combined. In terms of sea transport, well over half of all container shipments from Taiwan pass through Hong Kong to be transhipped to mainland China or other parts of the world.
Our third largest trading partner, our second largest export market, our largest source of export surplus, our largest air and sea transport link . . . Taiwan's level of economic dependence on Hong Kong is enough to give anyone a sense of unease. Worries about excessive dependence on Hong Kong are not without foundation, for less than 365 days from now Hong Kong will undergo a "change of dynasty": the red, white and blue Union Jack will come down, to be replaced by the five-starred red flag of the People's Republic of China, and flying alongside it, the flag of the Hong Kong Special Administrative Region (a red flag bearing a white bauhinia flower with five star-tipped stamens); the Hong Kong Dollar will continue to circulate, but the days of the picture of Queen Elizabeth on its face will be numbered; and the previous colonial government will be replaced by a Special Administrative Region (SAR) government, to be "appointed by the Central People's Government" (in Beijing). This change in political and legal status will inevitably affect the pulse of trade. Countries around the world are watching to see how things will develop, but Taiwan, which itself is at loggerheads with Hong Kong's new masters, has extra reasons for concern.
But just how would the "loss" of Hong Kong damage Taiwan's economy?
A means to an end
"In fact, Hong Kong's intrinsic importance for Taiwan's economy is not absolute." C. J. Lee, director of the First Institute of the Chung-Hua Institution for Economic Research, points out that Hong Kong's own manufacturing industry has almost all moved north, and naturally Taiwanese companies will not choose to set up factories in Hong Kong. Hong Kong is not a production base, and there are no key raw materials or components which can only be obtained from the colony. Furthermore, although Hong Kong's market is an attractive one, it is extremely competitive, and among the famous brands from all over the world to be found on Hong Kong's shopping streets, products from Taiwan are few and far between.
To analyze the situation further, Hong Kong and Taiwan's economies are at the same stage of development, and are very similar in structure: both have invested heavily in factories in mainland China while keeping their operational departments in Hong Kong or Taiwan; both have their main export markets in mainland China and the USA; and both are striving to restructure their economies. Hong Kong is pushing to upgrade in the high-tech areas where it is weakest, and is currently strengthening R&D in major industries such as multimedia, telecommunications and application software, while Taiwan is striving to catch up with Hong Kong as a regional financial, operational and transhipment center. There is much similarity between Hong Kong's and Taiwan's economies, and they are more competitive than complementary: apart from joint ventures in mainland China and Southeast Asia or investment in each other's service industries such as catering and retailing, there are actually few points of intersection between them.
"Taiwanese firms' primary interest is not actually in Hong Kong itself. Hong Kong's importance is almost entirely as an intermediary," says Thomas Chuang. Analyzing the statistics more closely, some 70% of Taiwan's exports to Hong Kong are in fact shipped onward into mainland China; of the 1.9 million ROC visitors to Hong Kong, the vast majority were bound for mainland destinations; and most Taiwanese companies active in Hong Kong are mainly engaged in cross-straits business.
A gradually changing stepping stone
C. J. Lee points out that the lion's share of the figures for so-called Hong Kong-Taiwan trade is amassed by Taiwanese firms moving goods from Taiwan to mainland China via Hong Kong. These firms' "left hand sells to their right hand" as they ship materials and machinery to the mainland to be processed for export to the USA, Japan and other countries, or for domestic sale in the mainland market.
"Because there are currently no direct trade links between mainland China and Taiwan, Taiwanese firms going into the mainland still have to invest 'indirectly' by setting up a company in a third territory," says Kenneth Lai, managing director of Taipei Trade Centre Hong Kong.
To comply with the requirement for indirect investment, some 70% of Taiwanese companies investing in the mainland have chosen to set up companies in Hong Kong, which is the closest location to the Special Economic Zones of southern China. Most of them simply register their companies through company formation agents: they appoint a Hong Kong accountant or lawyer to act as company secretary, pay a company registration fee, and in return receive a certificate of incorporation which hangs in the lawyer's office. In this way they have set up a "paper company." When the mainland factory comes onstream, all the operations such as receiving orders, financial transactions and management are handled in Taiwan, while goods are produced and shipped on the mainland. The paper company in Hong Kong has little to do with these operations, and is purely a strange product of the ROC's current trade policy.
Hong Kong may be just a waystation, but as long as the restrictions on direct links between Taiwan and mainland China remain in force, the territory's status as an international operational and transhipment center and gateway to the mainland, along with the bonds of a shared language, culture and ethnic background, endow it with irreplaceable advantages for most Taiwanese firms investing in the mainland. Furthermore, as the breadth and scope of Taiwan's mainland investments has expanded, Hong Kong's importance as an intermediary has grown commensurately.
After 1997, will Taiwanese firms still be able to carry on their activities in this halfway house? The variable factor is cross-strait relations.
No answers in the Basic Law
Looking at Beijing's policies, in order to maintain the highly international and liberal capitalist nature of the Pearl of the Orient so that it can "make the greatest contribution to the national economy," Beijing states in black and white in Hong Kong's Basic Law, which it proclaims embodies the spirit of "one country, two systems," the principle that "the socialist system and policies shall not be practised in the Hong Kong Special Administrative Region, and the previous capitalist system and way of life shall remain unchanged for 50 years."
The Basic Law clearly stipulates that Hong Kong is to have a completely independent financial and fiscal system, will not be subject to exchange controls, and will continue to apply a free trade policy, and that the free movement of goods and capital will be guaranteed. Under the name of "Hong Kong, China," Hong Kong will also be able to retain its status as a separate customs territory, and to participate in its own right in all kinds of international organizations. Apart from the areas of defense and foreign affairs, which are matters of sovereignty, the future SAR government will retain a large measure of autonomy. It can even keep English as an official language, as under British rule.
Thus it would appear that Hong Kong's free market and international policies can continue unchanged. But strangely enough, the Basic Law only regulates the future mutual relationships of the SAR government with the Beijing central government, with the residents of Hong Kong and with other countries. It does not make the least mention of the people of Taiwan, who are neither PRC citizens nor Hong Kong residents, but who do not have the status of foreign citizens either. This implies that after 1997, relations between Taiwan and Hong Kong will be entirely directed by Beijing, and the SAR government will have nothing to say in the matter.
Although the Basic Law is unclear on this point, Citi Hung, managing chairman of HK Polling and Business Research Consulting Co., takes the view that it is almost certain that after 1997, Taiwanese firms in Hong Kong will lose their present status as foreign companies, and will be treated as "special domestic investors," as they are on the mainland today. As "domestic" investors, Taiwanese firms' only protectors are the PRC authorities--they cannot seek protection from other countries. If they are involved in disputes or legal proceedings to do with investment or trade, their only recourse is to the mainland courts, where they have to proceed according to mainland law. One constantly hears reports of Taiwanese companies losing out on the mainland in such situations, and it would appear that in future they are likely to face the same problems in Hong Kong.
How will the chips fall?
Something Taiwanese business people find even more worrisome is the question whether, after the mainland takes back Hong Kong and the territory loses its intermediary status, the PRC will take the opportunity to force Taiwan to acknowledge that trade with Hong Kong is "direct trade" with mainland China. If Taipei does not accept this, will the mainland vent its anger on Taiwanese companies by expelling them from Hong Kong?
No-one can guarantee that such a scenario is beyond the realm of possibility. One Taiwanese furniture manufacturer who is working hard to develop the Hong Kong market, comments: "The communist rulers aren't rational--who knows what they are capable of?"
However, many academics and government officials are not so pessimistic: "With such intense trade activity between Taiwan, Hong Kong and the mainland, if Beijing were to prevent Taiwan from investing in the mainland via Hong Kong, the Hong Kong and mainland economies would suffer no less than Taiwan's," says Wu Chieh-min, director of the Hong Kong office of Taipei's Far East Trade Service.
An official at the Mainland Affairs Council's Department of Hong Kong and Macao Affairs also observes that the most fundamental strategy behind Beijing's "united front" policy towards Taiwan is to counter any tendency towards Taiwanese independence. Whether it be "promoting unification through direct links," "using commerce to outflank politics," or "pressuring the government through the people," Beijing's tactics basically all apply the principle of "pinning Taiwan down economically." For Beijing to suddenly cut the links between Taiwan and Hong Kong would only serve to further alienate Taiwanese business people. This would be the worst of policies from Beijing's point of view.
The same official backs up his argument by citing the seven-point speech on Hong Kong and Taiwan relations after 1997 which PRC vice-premier and foreign minister Qian Qichen delivered after ROC President Lee's visit to the USA in May of last year. Although cross-strait relations were already strained, Qian clearly stated that Taiwanese firms will be welcome to invest in Hong Kong and Macao. In March of this year, on the eve of the ROC presidential elections, despite wave after wave of mainland missile tests and live-fire military exercises in the Taiwan Straits, many organizations in the PRC took pains to calm the fears of Taiwanese companies with mainland factories, showing that the mainland was keeping to its long-established two-edged policy of a political stick combined with an economic carrot.
However, after a moment's hesitation, the official still added a rider: if cross-strait relations really were to deteriorate to the point of an economic blockade or open hostilities, or if there were a large-scale reversal in the mainland's internal political and economic climate, the situation would get out of control. But if that were to happen, the stability of the entire Asia-Pacific region would be undermined, and the damage to the Taiwanese economy and Taiwanese businesses could only be endured with resignation.
Wu Chieh-min, on the other hand, looks at things from the perspective that "the international community will be watching the PRC's handling of Hong Kong very closely." Hong Kong is already a member of the World Trade Organization (WTO), having been admitted a step ahead of both mainland China and Taiwan, and the PRC, Hong Kong and Taiwan are all members of APEC. Thus whatever the mainland's own definition of Taiwanese firms' status, it will have to abide by the operating procedures of these international trade organizations and by its obligations as a member, and will not be able to unilaterally subject Taiwanese companies to different or discriminatory treatment.
Will Hong Kong still be a "third territory"?
Because relations between the mainland, Hong Kong and Taiwan could end up anywhere on a scale from "mutual coexistence and prosperity" to "mutual destruction," no-one can be sure just how things will turn out. This enormous uncertainty is clearly a great source of difficulty for Taiwan, which is largely at the mercy of future developments, in defining its post-1997 economic policy towards Hong Kong and Macao.
The ROC's new law on relations with Hong Kong and Macao, which is currently in committee in the Legislative Yuan, has been drafted in response to the new situation between Hong Kong and Taiwan after 1997. But it still focuses on the guarantees announced by the Beijing government about self-rule for Hong Kong and its 50-year status as a Special Administrative Region. The draft legislation continues to treat Hong Kong and Macao as "third-country" type areas different from the mainland, so that there is little difference from their currently defined status.
In other words, Taiwanese firms which invest in the mainland via Hong Kong subsidiaries will still be regarded by the ROC as indirect investors, and movement of goods, people and capital between Taiwan and Hong Kong will not violate the ban on direct cross-strait links. This definition contains an element of wishful thinking. It had been planned to put post-1997 Taiwan-Hong Kong relations on the agenda of the second round of Koo-Wang Talks, but these talks are still on hold. Thus under present conditions the ROC authorities are unable to discuss such matters face to face with Beijing, the British colonial government in Hong Kong or the future Hong Kong SAR government, and the law could only be devised according to Taiwan's own best interests and the smallest degree of change.
The draft law has another special feature: a so-called "changed situation" clause. "In the event of a change in the situation in Hong Kong or Macao or in cross-strait relations, the executive can impose an 'emergency suspension' of the law, and everything would revert to the stricter rules of the Statute Governing the Relations Between People of the Taiwan Area and the Mainland Area," says Chang Liang-jen, formerly director of the Department of Hong Kong and Macao Affairs at the Mainland Affairs Council and now vice secretary-general of the Straits Exchange Foundation.
Thus it would appear that relations between Taiwan and Hong Kong are inevitably constrained within the larger framework of relations across the Taiwan Strait. "The best situation would of course be cross-strait reconciliation, so that Taiwan could enter the middle phase of its national unification plan, and establish trade, transport and financial links on the basis of equal and friendly relations," says C. J. Lee. At that point Taiwanese firms could base decisions as to whether to set up a center of operations directly in, say, Shanghai, or to go through Hong Kong, purely on commercial considerations, and would not have to shoulder an additional political burden. This is what Taiwanese business people most hope for. Several plans proposed recently by the ROC government, such as offshore transhipment and financial centers and special economic zones, seem to already be paving the way for direct links. But the key to whether they can come to fruition lies in Beijing's attitude towards Taiwan.
The next best thing, if the relationship between Taiwan and Hong Kong continues unchanged after 1997, would be for Taiwan's businesses to continue as now to enjoy Hong Kong's free and open operating environment. At a social gathering, one Taiwanese businessman described his post-1997 dream: after the British colonial government withdraws, leaving mainland China, Hong Kong and Taiwan all masters of their own houses, perhaps Taiwanese firms could be given some special privileges, as in the early days after the ROC began to permit investment in the mainland. On hearing these words, another Taiwanese businessman could not resist butting in to say: "We don't want any special privileges--everything will be just fine if Chinese, Hong Kong, Taiwanese and foreign companies can compete fairly and be treated equally!"
Keeping an escape route open
However, to try to ensure that Taiwanese businesses do not suffer interference from the mainland authorities after 1997, the ROC government's financial and economic authorities have been tirelessly reminding Taiwanese firms of a number of ways to hedge against risk. For instance, they can set up a Hong Kong company as a joint venture with a foreign or Hong Kong partner, or conduct their business activities in Hong Kong in the name of a foreign-registered company, preferably one established in a country which has signed a formal bilateral investment guarantee agreement with the PRC, such as Singapore, the USA or Japan. Also, Taiwanese firms active in Hong Kong can use trust or mandate arrangements, placing their assets in the hands of reliable local persons in Hong Kong, they can deposit their capital with international or foreign banks, and they can take active steps to seek protection under the rules of the international trade organizations of which both Taiwan and Hong Kong are members.
These suggestions are well-intentioned, but for Taiwanese firms they still leave a number of gaps. Finding foreign partners for joint ventures is not difficult for medium to large-sized companies with substantial financial and technological resources, but "most Taiwanese medium or small businesses have few opportunities to find foreign partners except by becoming satellite companies of Japanese firms," says Kenneth Lai. If the joint venture partner is a Hong Kong firm of the same small size, sometimes the arrangement may not only fail to reduce risk for the Taiwanese firm, but may bring perils of its own: there have been numerous cases of disputes in which Taiwanese companies claim to have been defrauded or bled dry by their partners. Unable to find large partners and unwilling to work with small ones, it is hardly surprising if most Taiwanese firms in Hong Kong operate with just their own capital.
Caught between their unwillingness to pass up present opportunities to earn money and the wish to keep some kind of escape route open, not only Taiwanese but also many Hong Kong and foreign companies have set up companies in tax havens and free ports such as the British Virgin Islands (BVI), Bermuda or the Cayman Islands. Many companies listed on the Hong Kong stock exchange now have the letters BVI after their name like a protective umbrella, and this really does seem to be quite effective in attracting Hong Kong investors and putting shareholders' minds at ease.
Because there are so many uncertainties, Taiwanese business people still appear at a loss when asked about 1997. "We're still watching, we don't yet know what we will do," seems to have become the standard answer. One company even replied: "There's no policy, so how can we have a strategy? For the moment we're just biding our time and waiting until both sides' policies are a bit clearer!"
Interestingly, the moment some large companies are asked about 1997 they nervously stress: "We'll do whatever the government regulations require." As for medium and small enterprises, they are taking things one step at a time and take the view that as they don't have factories or offices in Hong Kong, they won't lose too much by pulling out.
However, whether large or small, for a company to really switch to using Singapore or Tokyo as a third-country location via which to invest indirectly in mainland China, or for them to ship goods via Southeast Asia or Ishigaki Island in the Japanese Ryukyu chain, would involve a lot of extra trouble. Would such companies eventually be forced to give up their mainland investments and look for production bases and markets elsewhere? Although for firms to pull out of the PRC would help achieve the ROC government's policy ideal of spreading investment locations and reducing economic dependence on the mainland, is it possible for medium and small enterprises to return to Taiwan, with its constantly rising wages and the difficulty of acquiring land here? How much of a blow would a forced exodus from Hong Kong be to Taiwan's economy? At the moment, no-one even dares imagine.
Although the governments on both sides of the Taiwan Strait currently say they intend to maintain economic activity between Taiwan and Hong Kong after 1997, many Taiwanese companies in Hong Kong are taking a rather reserved position in their operations.
Football diplomacy
Andrew Wu, general manager of Hua Nan Commercial Bank's Hong Kong branch, says the bank really has "drawn a line" at 1997. For instance, it only grants Taiwanese firms in Hong Kong short-term loans to assist cash flow, not long-term loans, and its assets in Hong Kong are all held in US dollars as the best hedge against loss of value. Hua Nan's conservative stance in Hong Kong springs partly from ROC policy restrictions: at present, Taiwan's various banks in Hong Kong are not permitted to accept mainland-invested companies (defined as companies with more than 50% mainland Chinese capital) as customers without prior individual authorization from the ROC Ministry of Economic Affairs. At a time when the proportion of mainland-invested companies in Hong Kong is burgeoning, the Hong Kong branches of Taiwan's various banks can do little more than stand and watch as their biggest and most important potential clients walk past their door. Meanwhile Taiwanese firms have long been assiduously wooed by Chinese banks and have good relationships with them, so that the Taiwanese banks have to compete with Chinese-owned banks for these companies' business.
With the relationship between China, Hong Kong and Taiwan unclear, and with the ROC government unable to intervene, Taiwanese firms are left to find their own way forward. Some have integrated into Hong Kong society, while others are working closely with mainland or Hong Kong-owned companies, in the hope that through these efforts they can help keep business relations between Hong Kong and Taiwan alive.
Golden Atom Holdings Ltd., which went into Hong Kong seven years ago as a 100% Taiwanese-owned company and which is now the mainland China and Hong Kong marketing agent for electronic dictionaries made by Taiwan's Inventec Corporation, recently made quite a stir in Hong Kong: at enormous expense the company's first-division football team Golden invited the England national team to Hong Kong for an exhibition match. The contest was advertised widely in newspapers and in MTR stations, and even Hong Kong governor Chris Patten came to watch.
"Hong Kong people's favorite sports are first horse racing, and second football," says Golden Atom spokesperson Nancy Tien. "To cater to Hong Kong people's likes," Golden Atom spends HK$8 million a year to support the Golden team, firstly to build its image and brand awareness, and secondly in the hope of winning a place in Hong Kong consumers' hearts.
Spending so heavily in Hong Kong, does the company have no worries about 1997? Golden Atom has sales outlets in mainland China in Beijing, Shanghai and Wuhan, and Nancy Tien says with a laugh: "If we're not afraid to go into the lion's den on the mainland, why would we be afraid of 1997 in Hong Kong? However great the risk, it can't be greater than on the mainland, can it?" However, this hasn't kept Golden Atom from thinking about setting up a company in the British Virgin Islands or elsewhere. On the one hand such a move would save taxes, and on the other it might also come in useful in a time of political risk.
Looking at the big picture after 1997
As well as integrating with the local economy, building a wide range of social and business "connections" is also a must. When Hong Kong-born Alfred Chen, chairman of Taiwan's Namchow Group, initiated the Chinese Taipei-Hong Kong Business Cooperation Committee under the Chinese National Federation of Industries five years ago, the goal was to promote understanding and friendship between business circles in both locations, in the hope of finding as many friends as possible who would "speak up for Taiwan." Regrettably, however, since the Qiandao Lake incident, cross-strait relations have gone through a series of setbacks and have been in a state of deadlock more often than not, so that these hopes have largely come to nothing.
Alfred Chen observes that for instance the USA has repeatedly hoisted such banners as ending China's Most Favored Nation status, "Section 301," and intellectual property rights, threatening to impose trade sanctions and retaliation against the PRC. In fact, it is actually Taiwanese investors who would be hit hardest by export restrictions against the PRC. But when Hong Kong business people called on their Taiwanese counterparts to join them in lobbying Washington to protest against such sanctions, they did not receive a positive response from most of the Taiwanese business community. Hong Kong-Taiwan trade is built on real mutual benefit, but also on the national sentiment of a shared ethnicity. Hence Hong Kong business people, who have never denied that they are "Chinese," naturally had little sympathy for Taiwanese business people's unwillingness to stand up and be counted.
Taiwanese businessman Alexander Pann, chairman of Union Asia Pacific Holding Ltd. and vice chairman of the Taiwan Businessmen's Association (Hong Kong), who spent his childhood in Hong Kong, shifted the center of his operations there in 1989. In his view, to look on the bright side, China--especially the south China economic region--is one of the places on which the future economic hopes of the whole world rest. What the great watershed of 1997 may bring with it may very well be unlimited business opportunities for China, Hong Kong and Taiwan. Especially at a time when foreign businesses are rushing to set up shop in Hong Kong to be ready to seize these opportunities as they arise, if Taiwan's economy is to shift up a gear, how can we lightly withdraw?
"The world won't come to a stop in 1997. We shouldn't just look at the risks of 1997--we should look at the bigger picture afterwards," stresses Alexander Pann.
Does 1997 mark the end for trade between Taiwan and Hong Kong, or a new beginning? The Taiwanese firms on whom this question centers have no answer, though their fortunes rest on it. So in just whose hands does the answer lie? For the moment, Taiwan's business community can only watch and wait.
[Picture Caption]
Hong Kong's double-decker trams ply a route through the city's richest commercial districts. The shops around Central District abound with famous-brand goods from all over the world.
As a large international city, Hong Kong has commercial partners worldwide. If Taiwan wishes to seek a new status and market itself to the world, it still has some work to do.
Apart from exclusive counters in a few department stores, Taiwan brands have little presence in the Hong Kong market. But the Taiwanese food products on sale next to many MTR stations attract plenty of buyers.
1997 has not yet arrived, but mainland China's Renminbi currency is easily available in Hong Kong--even from cash dispensers--for the convenience of residents traveling to Shenzhen.
In Hong Kong, where the main languages have been English and Cantonese, one can now also get by in Mandarin. Mandarin teachers are much in demand, but most ordinary citizens still have trouble with the language.
Since the Sino-British Joint Declaration was signed in 1984, Chinese influence has infiltrated every stratum of Hong Kong's economy. Behind the Hong Kong Exhibition Centre, where many Chinese products are on sale, towers the China Resources Building, known as a flagship of Chinese-invested companies.
Taipei Trade Centre Hong Kong, which commands a view over the whole of Victoria Harbour, is where 30 Taiwanese companies do business.
The Chung Hwa Travel Service in Hong Kong, which processes ROC visa applications, often has long queues in front of its counters. Many applicants speak with strong mainland accents, and are hoping to visit family in Taiwan.
The Taiwanese business people who shuttle back and forth between Taiwan, Hong Kong and the mainland are responsible for the bulk of the trade recorded between Taiwan and Hong Kong. Pictured here is the Chunghsing Textiles factory on the outskirts of Shanghai. (Sinorama file photo)
Dim sum, bird fancying. . . life in Hong Kong still offers traditional relaxations. Pictured is the famous Bird Market in Mong Kok.
To make itself a part of Hong Kong society, the Taiwanese company Golden Atom Holdings caters to local people's likes by sponsoring its own first-division football team, Golden. The picture shows an exhibition match Golden played against the England national team in late May this year at Hong Kong Stadium.
(right) Three hundred and sixty-five days from now, the Union Jack will come down from this outpost of the British Empire. Hong Kong's future after the transfer of power will be closely watched around the world; hotels in Hong Kong are already fully booked for the occasion. (Sinorama file photo)
In April this year, on the last day for applications to emigrate to the UK, the queue of applicants stretched for miles. Will everything change in Hong kong after 1997? Many people want to keep an escape route open. (photo by Yeh Ching-fang)
Apart from exclusive counters in a few department stores, Taiwan brands have little presence in the Hong Kong market. But the Taiwanese food products on sale next to many MTR stations attract plenty of buyers.
1997 has not yet arrived, but mainland China's Renminbi currency is easily available in Hong Kong--even from cash dispensers--for the convenience of residents traveling to Shenzhen.
In Hong Kong, where the main languages have been English and Cantonese, one can now also get by in Mandarin. Mandarin teachers are much in demand, but most ordinary citizens still have trouble with the language.
Since the Sino-British Joint Declaration was signed in 1984, Chinese influence has infiltrated every stratum of Hong Kong's economy. Behind the Hong Kong Exhibition Centre, where many Chinese products are on sale, towers the China Resources Building, known as a flagship of Chinese-invested companies.
Taipei Trade Centre Hong Kong, which commands a view over the whole of Victoria Harbour, is where 30 Taiwanese companies do business.
The Chung Hwa Travel Service in Hong Kong, which processes ROC visa applications, often has long queues in front of its counters. Many applicants speak with strong mainland accents, and are hoping to visit family in Taiwan.
The Taiwanese business people who shuttle back and forth between Taiwan, Hong Kong and the mainland are responsible for the bulk of the trade recorded between Taiwan and Hong Kong. Pictured here is the Chunghsing Textiles factory on the outskirts of Shanghai. （Sinorama file photo）
Dim sum, bird fancying. . . life in Hong Kong still offers traditional relaxations. Pictured is the famous Bird Market in Mong Kok.
To make itself a part of Hong Kong society, the Taiwanese company Golden Atom Holdings caters to local people's likes by sponsoring its own first-division football team, Golden. The picture shows an exhibition match Golden played against the England national team in late May this year at Hong Kong Stadium.
（right） Three hundred and sixty-five days from now, the Union Jack will come down from this outpost of the British Empire. Hong Kong's future after the transfer of power will be closely watched around the world; hotels in Hong Kong are already fully booked for the occasion. （Sinorama file photo）
In April this year, on the last day for applications to emigrate to the UK, the queue of applicants stretched for miles. Will everything change in Hong kong after 1997? Many people want to keep an escape route open. （photo by Yeh Ching-fang）
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