Meet Lee, a successful Hong Kong fund manager known for his outspoken views. Willing to bad-mouth China and its shaggy corporations, he has been a darling of the Hong Kong press. Until recently, that is. Early this year, he went silent, saying that friends in the industry had warned him that speaking out could cause trouble. They pointed to the sacking of one Hong Kong analyst who had written a critical report on China Eastern Airlines before its initial public offering on the New York Stock Exchange. An Internet-adept news junkie, Lee fears Hong Kong could be headed for Singapore-like controls on information. "Chinese leaders are control freaks," he says. "If, as some have suggested, economic growth numbers are state secrets, who among us will have the courage to make predictions?"
There is a nagging unease in Hong Kong these days among the media and those who deal in information. Journalists and editors are exercising self-censorship, putting stories about Chinese dissidents and Hong Kong opposition politicians on inside pages or not running them at all. Hong Kong media tycoons seem too cozy with Chinese politicians, and journalists from the mainland are suddenly showing up among the senior staff of Hong Kong newspapers and television stations. It's a big change for Hong Kong, long the most open media territory in Asia. If the trend continues, there's a danger that the territory's status as Asia's media hub--perhaps even its larger role as Asia's financial center--could be in jeopardy.
Officially, China has promised no change in the way information circulates in Hong Kong. The Basic Law, which becomes Hong Kong's "constitution" on July 1, promises freedom of the press. Hong Kong people are so accustomed to relatively unfiltered news that many believe they would never accept the outright media control found in Singapore.
But China has often used a heavy hand when handling the press, and it may find Hong Kong's media uncomfortably threatening. Foreign Minister Qian Qichen has warned Hong Kong papers that they won't be allowed to criticize Chinese leaders, advocate Taiwan or Tibetan independence, or publish what have yet to be defined as "rumors." If anyone doubts how seriously Beijing will respond to violations of these edicts, consider the case of Ming Pao Daily News reporter Xi Yang. Beijing's leaders threw him in jail for 2 1/2 years for stealing "state secrets" after he merely reported on interest-rate fluctuations.
Hong Kong's media tycoons play a central role in the drama. Real estate billionaires such as Robert Kuok and movie and TV mogul Sir Run Run Shaw own big stakes in the press and TV. Like Kuok, with his Shangri-La Hotels chain, many of these tycoons also have big investments in China and warm relations with important mainland politicians. Beijing has lavished attention on these media barons, appointing most of them to prominent Hong Kong political bodies.
BIG SPENDERS. Hong Kong's pro-Beijing business Establishment seems willing to use advertising as a lever. Publications that have a softer line toward China and Hong Kong's new leadership are seeing financial benefits. Oriental Daily News, once considered by Beijing to be pro-Taiwan, recently said it had been made the official publication for running advertisements praising the handover. Companies seeking to please China with big ads linking themselves to the "glorious return of Hong Kong to the motherland" will spend lavish sums to be seen in China-friendly print and electronic media.
Meanwhile, newspapers from the prestigious Chinese-language Ming Pao to the main English-language daily, the South China Morning Post, are hiring new editors from the mainland. That has led to fears that Hong Kong's publishers may be adopting the Chinese system of having party cadres sitting at the elbow of their top editors.
China may go into takeover mode, too. Hong Kong media analysts think Beijing might try to take a stake in one or both of Hong Kong's two local television stations. With both market leader TVB's and competitor ATV's licenses up for renewal in just over two years, it would be easy for China to arrange to have a state entity "invited" to buy a piece of either company at a bargain price.
The result of all this? A sense that China coverage has been toned down. Beijing opposition politician Martin Lee says TV reporters told him they have been restricted from mentioning his Democratic party on air. "The coverage of Tung Chee-hwa is almost reverential," says John Schidlovsky, head of the Hong Kong office of the Freedom Forum. "Where are the features on human rights in China?"
The feel-good factor is beginning to worry some business people. Ian Perkin, chief economist with the Hong Kong General Chamber of Commerce, says financial decisions are at risk. "Look at all the positive talk about Hong Kong's economy and Chinese companies in Hong Kong," he says. "It's so positive that it's created a moral hazard--a perception that has driven up the property market and the stock market."
For global financial players, the free flow of information is the chief safeguard against the corruption and influence peddling that characterizes China's economy. As more mainland companies list on the Hong Kong stock exchange, the likelihood of financial abuse increases.
Curbing the circulation of rumors is another worry among Hong Kong brokers and analysts. Beijing has ordered the Shanghai financial press not to print unsubstantiated information about listed companies. That includes rumors about spin-offs by state companies, the kind of stories on which Hong Kong's stock market thrives. A similar policy in Hong Kong would put a chill on a wide variety of speculative financial reports.
Global media players are looking at these developments with concern. The British regime's hands-off approach has made Hong Kong regional headquarters for CNN, CNBC, McGraw-Hill, Dow Jones, Time, and others. They all have bureaus, studios, satellite technology, and uplink facilities. Most say they trust China will not interfere with their operations, and that things would have to get pretty bad before they move. But with so many of the world's watchdogs watching, it won't take much Beijing meddling to set off alarms.