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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

SINGAPORE VERSUS HONG KONG

Page 2


BUT HONG KONG DID not handle success well. Newly wealthy entrepreneurs found they could turn their first million dollars into $10 million and more by investing in property. Thus has Hong Kong's considerable wealth been too often poured into non-productive assets. Tien Chang-lin, former chancellor of the University of California, Berkeley, and now chairman of Hong Kong's new Commission on Innovation and Technology, cites one example: He says the SAR's spending on research and development has been dismal. Consider the investment in science and technology R&D as a percentage of GDP: Singapore and Taiwan both are now at 2.5% and aim for 3%. The U.S. is at 2.7%; Japan is between 2.7% and 3%. Where is Hong Kong? A lamentable 0.3%.

Tung Chee-hwa, the SAR's first chief executive, has been maligned for his poor communication skills and ineffective Crisis-response strategy, but to his credit he has tried to push for Hong Kong to develop its own technology industry. Critics have said it is too late for Hong Kong. But Tien argues that Hong Kong should not aim to become a technology-products manufacturer. He says the focus should be on creating infrastructure to allow for rapidly catching the next wave - online commerce or bioelectronics or whatever it turns out to be. That means, says Tien, developing education institutions, research organizations and a venture-capital market to encourage investment. "Hong Kong must define its destiny for the next 50 years," says Tien. "Even now, Hong Kong does not have an overall strategy."

Contrast this with Singapore. Last year, the government launched a $1.2- billion "IT master plan" to integrate computers into school curriculums from the very beginning of a child's education. The plan aims to provide one computer for every two students by 2002. The government has begun a public-relations campaign to impress upon people the importance of developing Singapore's "knowledge economy." Said Minister for Information and the Arts George Yeo Yong Boon recently: "This historical evolution toward a knowledge-based economy is not bad for [Singapore]. We are a resource-poor nation. All we have are people, organization and culture."

No such grand vision has been articulated for Hong Kong. To the contrary, many SAR parents see the school system regressing. Last year, Tung announced he was speeding up a switch from English to Cantonese as the primary language of instruction in the SAR - except for a tier of 100 or so top schools. The move had originally been proposed while Hong Kong was under British rule. Tung insists that the change will not result in reduced English proficiency. Indeed, there are many good reasons to embrace mother-tongue education. But there seemed to be little public discussion before the fact and a dismal effort to promote the change after.

The overarching agenda for Tung in this change to mother-tongue education is complicated. A continued emphasis on English education could be a reminder of colonial domination. Adding to the complexity is the fact that Hong Kong's fate is tied closely to China's, and English instruction would relegate the mainland Chinese dialect of Mandarin to a politically incorrect third position of importance in Hong Kong schools.

Hong Kong can hardly neglect to emphasize its single most important economic relationship. More than one-third of Hong Kong's commerce is with China, and 90% of trade moving through the SAR is either coming from or going to the mainland. So far, China has sustained strong growth despite the regional recession, a fact that has undoubtedly helped prevent Hong Kong from enduring an even worse recession than it already has.

In contrast, Singapore's closest neighbors have drags. The Asian Development Bank recently said that the economies of Indonesia and Malaysia will shrink in 1998 by 16% and 6% respectively. Next year is expected to bring additional, smaller losses. "Singapore is pretty close to the bottom while Hong Kong has a long way to go," says Manu Bhaskaran of SG Securities (Singapore), who tends to be relatively optimistic about both economies. He is predicting a 4.5% contraction for Hong Kong next year while Singapore might actually grow as much as 2.5%. Bhaskaran's caveat: "China might become a source of unpleasant surprises. If that happens, Hong Kong will suffer."

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