But those poor are going to get rich. Just ask them. You can call the old lady selling dried fish on the street on her cell phone.
The bippity-beep of cell phones all but drowns the air-conditioner racket. And each time a cell phone rings, everyone within earshot goes into a self-administered frisk, patting himself down to find the wee gadget. You can go weeks without talking to an answering machine, because you’re not really dialing a telephone, you’re dialing an armpit, purse, shirt pocket, or bikini top.
The cell phone has to be there, or somebody might miss a deal. Everything’s a deal. In a store you ask, “What’s your best price?” then “What’s your Chinese price?” and on from there. I was trying to buy a bottle of cognac in a little restaurant. The owner produced a brand I’d never heard of for $100 and a brand nobody’s ever heard of for $80. I got my friend Annie, who let fly in Cantonese, and we had a bottle of Remy for one dead U.S. Grant. “I didn’t know you were going to bring my sister in here,” said the owner. “Hwa-aaah!”
It’s a Cantonese exclamation halfway between oi vey and fuhged-aboutit. Which is Hong Kong in a nutshell—a completely foreign city that’s utterly comprehensible. It’s a modern place, deaf to charm, dumb in the language of aesthetics, caught up in a wild, romantic passion for the plain utilitarian. The only traditional touches are the catawampus walls and whichaway entrances dictated by feng shui, the art of placing things so as to ensure luck and not disturb spirits. One building in Repulse Bay has an enormous square hole in its middle so that a certain invisible dragon can get from the mountain to the sea. Knowing Hong Kong, it was probably a scam with a paid-off fortune-teller helping architects and construction companies boost their fees. Some of Hong Kong may believe in geomancy, but it was my local bookstore in New Hampshire that had thirteen feng shui titles.
Everything else quaint within reach in Hong Kong has been torn down. Just a few poky colonial government buildings are left. Landfill has pushed the waterfront a thousand feet into Victoria Harbor. Ferry terminals block the water views, and tides are cramped into a raging flume between Central and Kowloon.
The statue in Statue Square is of a business manager, the nineteenth-century chief executive of the Hong Kong and Shanghai Bank. Behind the square, the Hong Kong and Shanghai Bank Building itself rises. Here the local taste for functionalism has been carried to an extreme that arrives at rococo: a massy, looming, steel Tinkertoy of a thing with its whole construction hanging, suspension-bridge fashion, from eight enormous towers. Very functional, indeed, whatever that function is. Maybe to be expensive. It cost a billion dollars to build.
To the west is Jardine House, an aluminum-skinned monolith covered with circular porthole windows—Thousand Assholes, as it’s known. To the east is the I. M. Pei–designed Bank of China Tower—all big diagonals and tricky, skinny angles. Its purpose was to be the tallest building in Asia, which it was for about five minutes before being overtopped by Central Plaza a few miles away, and then by twin towers—the tallest enclosed structures in the world—being built in Kuala Lumpur.
A competitive place, Southeast Asia. And it attracts some types that can compete with anything I’ve seen. I sat at dinner one night between a tough-as-lug-nuts young woman from the mainland who lives in New York and deals in used motor oil—sparkling table talk—and a large and equally adamantine chick from the wrong side of somewhere’s tracks in America. I turned to the suicide blond.
“I’m uh arht cunsultunt,” she said.
“Come again?”
“Uh arht cunsultant.”
“That’s interesting. Who do you art-consult for?”
She named a large Saudi prince.
“What kind of art does the prince like?” I asked.
“Nineteen-cenchury reuhlist—you know, Uhmerican.”
“Any particular artist?”
“Andrew Wyeth.”
I’d been under the impression that Andrew Wyeth was still alive—rare in a nineteenth-century artist. And you’d think Hong Kong would be a strange place to look for one of his paintings. But who knows? They shop hard in Hong Kong. Buy hard. Sell hard.
They drink hard, too. On Friday nights, police are posted in the Lan Kwai Fong bar district because people have actually been crushed to death there during happy hour. Nobody takes it easy in Hong Kong. The only idleness visible is on Sundays, when thousands of the city’s overworked Filipino maids come to Central, spread cloths and plastic sheets up and down the sidewalks, and picnic in the least attractive and most heat-baked part of town.
The Filipino maids are Hong Kongese, too. They’re in Central because it’s practical to get there on the subways, trams, and buses. Hong Kong is a practical place, down to earth, or, rather, down to concrete. The complimentary city guide in my hotel room gave advice on pricing whores and noted, “Some of the conservative hotels don’t allow a man to toddle in with a rent-a-bird in the middle of the night. But as you can imagine there are plenty of ‘cheap guest houses.’”
In the window of an antique shop, I saw an ivory carving of the familiar row of monkeys: SEE NO EVIL, HEAR NO EVIL, SPEAK NO EVIL; but this one had a fourth monkey with his hands over his balls: FUCK NO EVIL.
City of hardheads. City of rough tongues. You’re a gweilo right to your face, meaning a white goblin or foreign ghost or old devil or any number of other things, according to how it’s said (none of the meanings being complimentary). You can give back as good as you get, however (or try to, since gweilos are famously dim). For instance, the Cantonese really can’t distinguish ls from rs. “Ah, you ordered flied lice,” said Annie’s gweilo husband, Hugh. “That’s fried rice, you plick,” said Annie.
I met two women who seemed barely into their twenties but were the publisher and the sales manager of a prominent Hong Kong business magazine.
Publisher: “You’re really well-dressed.”
Sales manager: “For a journalist. We understand you’re a popular writer.”
Publisher: “In Japan.”
City of straight faces. I was looking at some animal figurines representing Chinese astrological signs. The ancient woman behind the shop counter asked, “What year you born?”
“1947.”
“Hwa-aaah. Year of pig! Good luck!”
“Oh, ‘Good luck! Good luck!’” I said. “That’s what Chinese always say to shopping gweilos. Stolen Ming dynasty grave offerings: ‘Good luck!’ Can of tuna fish: ‘Good luck!’ Lacoste shirt: Good luck!’”
“Not so!” she said. “Some years bad luck.”
“Such as?”
“Year of buffalo.”
“Which year is that?”
“This one.”
“This one” being 1997. I had come to Hong Kong to watch the best contemporary example of laissez-faire be surrendered to the biggest remaining example of socialist totalitarianism.
Hong Kong was (and to be fair to its new commie rulers, remains, for the moment) socialism’s perfect opposite. Hong Kong doesn’t have import or export duties, or restrictions on investments coming in, or limits on profits going out. There’s no capital-gains tax, no interest tax, no sales tax, and no tax breaks for muddle-butt companies that can’t make it on their own.
The corporate tax in Hong Kong is 16.5 percent of profits. The individual tax rate is 15 percent of gross income. Hong Kong’s government runs a permanent budget surplus and consumes only 6.9 percent of gross domestic product (compared with the 20.8 percent of GDP spent just by the federal government in the U.S.). The people of Hong Kong have not been paylings of the state. They’ve owned their own. They’ve been able to blow it, Dow Jones it, start a sweater factory, hire, fire, sell, retire, or buy the farm. (And there actually are some little-bitty farms in the New Territories.)
Hong Kong has never had democracy, but its wallet-size liberties, its Rights-of-Man-in-a-purse, have been so important to individualism and self-governance that in 1995 an international group of libertarian think tanks was moved to perhaps overstate the case and cla
im, “Hong Kong is the freest nation in the world.”
Free because there’s been freedom to screw up, too. Hong Kong has no minimum wage, no unemployment benefits, no union-boosting legislation, no Social Security, no national health program, and hardly enough welfare to keep one U.S. trailer park in satellite dishes and Marlboro Lights. Just 1.2 percent of GDP goes in transfers to the helplessly poor or subsidies to the hopelessly profitless.
Living without a safety net, people in Hong Kong have kept a grip on the trapeze. The unemployment rate is below 3 percent. In America, a shooting war is usually needed to get unemployment that low. The “natural rate” of unemployment is considered to be about 5 percent in the U.S., which rate would cause natural death from starvation in Hong Kong. But they aren’t dying. Although smoking is the city’s principal indoor athletic activity, life expectancy in Hong Kong is about seventy-nine years, compared with seventy-six in the States. And the infant-mortality rate is comparable to our own. This from people who consider crushed pearls, dried sea horses, and horns from the dead rhinos of Tanzania to be efficacious medicine. Even the babies are too busy to die.
Economic growth in Hong Kong has averaged 7.5 percent per year for the past twenty years, causing gross domestic product to quadruple since 1975. With barely one-tenth of 1 percent of the world’s population, Hong Kong is the world’s eighth-largest international trader and tenth-largest exporter of services.
I’m not exactly sure what “exporter of services” means, unless it’s fly-by dim sum, but, anyway, it’s a fine statistic and helped make dinky, terrifying Kai Tak Airport the third-busiest passenger terminal in the world and the second-busiest air-cargo center. And Kai Tak’s solitary runway sticks out into a container port that’s the world’s most busy of all.
Hong Kong’s per-capita GDP is $26,000. Average individual wealth is greater than in Japan or Germany. It’s $5,600 greater than what Hong Kong’s ex-colonial masters back in Britain have, and is creeping up on the U.S. per-capita GDP of $28,600. Besides Americans, only the people of Luxembourg and Switzerland are richer than those of Hong Kong. And these are two other places where capital is allowed to move and earn freely.
True, there has been an “Asian crisis” since the above statistics were compiled. The Hong Kong stock market has flopped. Indonesia, Thailand, Malaysia, South Korea, and maybe Japan are experiencing depressions. The entire business world of Asia is supposed to be in ruins. But a mere continent-wide financial collapse is unlikely to faze the people of Hong Kong.
Hong Kong’s economy was destroyed by the Japanese occupation of World War II, destroyed again by the UN embargo on trade with the Communists in 1951, and almost destroyed a third time by worry about the 1997 handover to China. The territory has been squeegeed by typhoons, squished by mudslides, toasted by enormous squatter-camp fires, and mashed by repeated refugee influxes. Hong Kong has no forests, mines, or oil wells, no large-scale agriculture, and definitely no places to park. Hong Kong even has to import water. So in Hong Kong they drink cognac instead, more per person than anywhere else in the world. They own more Rolls-Royces per person, too. So what if there’s no space at the curb? They’ll hire somebody fresh from the mainland to drive around the block all night.
Why did the British allow this marvel of free enterprise? Why did Britain do so little to interfere with Hong Kong’s economic liberty? This is especially hard to answer because, back in London, an ultrainterfering socialist Parliament had taken charge after World War II. This government would bring the U.K.’s own economy to a halt like a hippo dropped on a handcart.
Actually, the British did piss in the colonial soup when they could. The crown government held title to almost all the land in Hong Kong and the New Territories, and dealt it out slowly to keep sales revenues high. Thus the crowding in a place which, in fact, comprises some 402 square miles of dry ground—enough, in theory, to give everybody a bean-sprout garden. Instead, half the population is stuck in claustrophobic government housing. Then in the ’70s, one of Hong Kong’s thicker governors, Sir Murray Maclehose, set aside 40 percent of the colony as parkland—cramped comfort to the fellow living in 300 square feet with his wife, mother, kids, and their Tamagotchi pets.
But the British never tried to install a European-style Pampers-to-June Allyson welfare system in Hong Kong. Maybe the Labour M.P.s were unwilling to invest vast quantities of groundnut scheme–type pinko planning genius in a place that could be gobbled up at any time by the pinko planning geniuses across the border. Maybe the colonial administrators were overwhelmed by the number of refugees from pinko planning jamming into town. Maybe the mother country was too broke from ruining its own economy in the British Isles. Or maybe the Brits just didn’t care about pushing social justice down the throats of people who were, after all, only Chinese.
On the other hand, the British were not irresponsible. The “doing nothing” mentioned at the beginning of this chapter is a relative term. Laissez-faire isn’t Tanzanian administrative sloth or Albanian popular anarchy. Quite a bit of government effort is required to create a system in which government leaves people alone. Hong Kong’s colonial administration provided courts, contract enforcement, laws that applied to everyone, some measure of national defense (although the Red Chinese People’s Liberation Army probably could have lazed its way across the border anytime it wanted), an effective police force (Hong Kong’s crime rate is lower than Tokyo’s), and a bureaucracy that was efficient and uncorrupt but not so hideously uncorrupt that it wouldn’t turn a blind eye on an occasional palm-greasing illegal refugee or unlicensed street vendor.
The Brits built schools and roads. And the kids went to school because they knew if they didn’t, they’d have to hit that road. And the U.K. gave Hong Kong a stable currency, which it did totally by cheating—first pegging the Hong Kong currency to the British pound and then, when everyone got done laughing at that, pegging it to the U.S. dollar at a rate of 7.8:1. Now when there’s any money-supply dirty work to be done, Hong Kong can blame everything on Alan Greenspan.
Hong Kong was also fortunate in having a colonial government which included some real British heroes, men who helped the place stay as good as it was for as long as it did. The most heroic of these was John Cowperthwaite, a young colonial officer sent to Hong Kong in 1945 to oversee the colony’s economic recovery. “Upon arrival, however,” said a Far Eastern Economic Review article about Cowperthwaite, “he found it recovering quite nicely without him.”
Cowperthwaite took the lesson to heart, and while he was in charge, he strictly limited bureaucratic interference in the economy. He wouldn’t even let bureaucrats keep figures on the rate of economic growth or the size of GDP. The Cubans won’t let anyone get those figures, either. But Cowperthwaite forbade it for an opposite reason. He felt that these numbers were nobody’s business and would only be misused by policy fools.
Cowperthwaite has said of his role in Hong Kong’s astounding growth: “I did very little. All I did was to try to prevent some of the things that might undo it.” He served as the colony’s financial secretary from 1961 to 1971. In the debate over the 1961 budget, he spoke words that should be engraved over the portals of every legislature worldwide; no, tattooed on the legislators’ faces:
…in the long run the aggregate of decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is less likely to do harm than the centralized decisions of a government; and certainly the harm is likely to be counteracted faster.
Even Newsweek has been forced into admiration: “While Britain continued to build a welfare state, Cowperthwaite was saying ‘no’: no export subsidies, no tariffs, no personal taxes higher than 15 percent, red tape so thin a one-page form can launch a company.”
During Cowperthwaite’s “nothing doing” tenure, Hong Kong’s exports grew by an average of 13.8 percent a year, industrial wages doubled, and the number of households in extreme poverty shrank from more than half to 16 percent.
“It would be hard to overestimate the debt Hong Kong owes to Cowperthwaite,” said economist Milton Friedman. And it would be hard to overestimate the debt Hong Kong owes to the Chinese people who sanctioned and supported what Cowperthwaite was doing or, rather, doing not. Because Hong Kong didn’t get rich simply as a result of freedom and law. Economics is easier than economists claim, but it’s not as easy as that. Chinese culture was a factor in Hong Kong’s success. And yet, almost by definition, Chinese culture must have been a factor in mainland China’s failure. Culture is complex. Complexities are fun to talk about, but, when it comes to action, simplicities are often more effective. John Cowperthwaite was a master of simplicities.
Yeung Wai Hong, publisher of Hong Kong’s most popular Chinese language magazine, Next, has suggested erecting an heroic-scale statue of John Cowperthwaite. (To be paid for by private subscription, thank you.)
In less than one lifetime, Hong Kong created the environment of comfort and hope that every place on earth has been trying to achieve since the days of homo erectus in the Olduvai Gorge. And Hong Kong’s reward? It has been made a “Special Administrative Region” of the People’s Republic of China.
At midnight on June 30, 1997, the British sold six million five hundred thousand souls. No, gave them away. Nearly a Londonful of individuals, supposed citizens of the realm that invented rights, equity, and the rule of law, got Christmas-goosed in July. Hong Kong was on the cuffo, a gimme, an Annie Oakley for the mainland Communists.
At the stroke of 12, I was watching TV in my Hong Kong hotel room. The handover ceremony was being broadcast from the hideous new convention center three-quarters of a mile away. A British military band wearing hats made from Yogi and Smokey and Poo played “God Save the Queen.” The Union Jack went south. Prince Charles had just given a little speech. “We shall not forget you, and we shall watch with closest interest as you embark on this new era of your remarkable history.” In other words, “Goodbye and bolt the door, bugger you.”