Countdown In Hong Kong

BUSINESS WEEK has been chronicling the spectacular rise of Hong Kong for more than three decades. We have tracked this small city-state's ascent from a low-wage manufacturing center to its current status as the cosmopolitan corporate hub for Asia. We were there when Hong Kong stumbled hard after the Tiananmen Square massacre and when it rebounded to become the world's most expensive business capital. In the past eight months, as new leaders jockeyed for position, we did two Cover Stories on what was ahead, including an exclusive interview with Hong Kong Chief Executive C.H. Tung, plus one on how some multinationals really do make money in China--a treacherous but vital course for Hong Kong's future.

Now, as Hong Kong prepares to return to Chinese rule on July 1, we've devoted this Special Issue to examining what's really important for global business readers. What could happen to Hong Kong's celebrated laissez-faire economy under China? How much intervention is likely from the new government? What kind of pressure will be exerted on the courts, on the media, in financial markets, and in social policy? Will business continue to be dictated by market decisions, or through connections and payoffs? Will Hong Kong's chronically second-rate schools really be fixed up? What's the future for relations with Taiwan?

As a global business magazine, we're accustomed to covering the collision of emerging economies with highly sophisticated nations nearby, as we did recently with a Cover Story on another hot zone, the dynamic U.S.-Mexico border (BW--May 12). "But it's never been the case," says Senior Editor Frank Comes, "that we've seen such an avowedly free-market bastion join the world's largest Communist state."

Our Asian-based specialists spent two months digging out this story. Led by Regional Editor Joyce Barnathan, a team of six journalists from Hong Kong, Beijing, and Taipei interviewed hundreds of top officials, tycoons, and working people to explore the outlines of this emerging economy. Finance specialist Mark Clifford assesses what the Hong Kong handover means for Chinese conglomerate stocks, the so-called red chips. Correspondent Bruce Einhorn reveals the weak British legacy in welfare and education--it wasn't all a success--and suggests what might be done to correct the situation. Senior News Editor Pete Engardio, just back from six years in Hong Kong, returned to some of his old haunts to meet entrepreneurs who are creating the world's most important manufacturing zone in coastal China. In New York, Comes and Asian Edition Editor Christopher Power crafted the stories. The rich photos, commissioned by Picture Editor Michael Hirsch, are from photojournalists David Burnett and Greg Girard. Jay Petrow, the art director for our international editions, relied on his own Hong Kong experiences in designing this Special Issue. We hope you enjoy their work.