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Hong Kong Develops American Flavor as British Power Wanes

March 23, 1987|JIM MANN | Times Staff Writer

The number of Britons has been dropping as British civil servants have been retiring or returning home and their jobs have been taken over by Hong Kong Chinese. And the ranks of the Americans have been growing because of the U.S. business interest in China and East Asia in general.

'Four Tigers'

Those who want an East Asian headquarters say they choose Hong Kong because of its banking, shipping and communications facilities, its pro-business climate and central location.

"Before coming here, we looked at all of the 'four tigers' (Hong Kong, Taiwan, South Korea and Singapore, which have been, besides Japan, the four fastest-growing economies in Asia,)" said John P. Hertsgaard, director of Far East operations for Amphenol Products. Based in Lisle, Ill., Amphenol, a subsidiary of Allied-Signal, began manufacturing electrical components in Hong Kong two years ago, and now has a factory with 200 employees.

Amphenol also decided to expand its operations in Taiwan and South Korea and is still exploring the possibilities in China. But Hertsgaard said the firm concluded that "Hong Kong will be our hub."

"Hong Kong offers so many American businessmen the opportunity to do so many things that they cannot do in Tokyo or Singapore or Manila," an American diplomat said. "It's hard for an American lawyer to get a permit to work in Japan. It's hard to operate without a joint venture in Malaysia. Here you can do all those things, you can set yourself up as a consultant, you can franchise your McDonald's or your Mrs. Fields' Cookies."

Meanwhile, Americans who want to do business with China are finding that it is easier, and even less expensive, to do so from Hong Kong than from Beijing, where rent can run to $7,000 a month, new cars cost well over $30,000 with customs duty, where the night life is bleak and English-language high schools are non-existent.

"Some companies originally started here in Hong Kong, moved into China and are now moving back here, keeping a small presence in Beijing," U.S. Consul General Donald Anderson said in an interview. "Hong Kong has become arguably cheaper to do business in than Beijing."

Major Trading Partner

The American Chamber of Commerce counts 907 U.S. firms in Hong Kong. The 142 manufacturing companies alone employ more than 39,000 workers and represent $810 million in investment. So strong is the American presence here that there has even been some discussion of creating an American seat on Hong Kong's Legislative Council, a partly elected, partly appointed body that has limited legislative powers.

Hong Kong, which has 5.5 million people, is also the United States' 10th-largest trading partner in the world.

All this is a far cry from the era two decades ago when Hong Kong was a quintessentially British colony and Americans made their presence known mostly through the ships of the U.S. 7th Fleet and troops on rest-and-recreation excursions from Vietnam into the bars of Hong Kong's Wanchai district.

Ray Stark, the American producer who made the 1960 movie "The World of Suzie Wong" around a Hong Kong prostitute, returned here last year for the first time since making the movie and was amazed by the city's transformation. "The place looks like San Diego," he said.

Alex A. Blum, the American president of a Hong Kong textile firm, recalled: "When I came to Hong Kong 25 years ago, we Americans were definitely second-class citizens and, back then, those foreigners such as myself who were doing business with China were few and were treated with a great deal of distance."

These days, by contrast, it seems as though there are even more people in Hong Kong working on business deals with China than there are residents of Los Angeles writing screenplays.

"Someone told me that there are more than 5 million consultants for me to compete with in Hong Kong, because everyone here has a brother-in-law working in some important position in China," Hendryx said.

The opening of China to Western business has helped to fuel a dramatic change in the Hong Kong economy.

While manufacturing produced Hong Kong's spectacular growth of the past quarter of a century, the service sector--transportation, communications, law, banking, insurance, retail trade, tourism--is now taking up an ever-increasing share of the economy.

Two years ago, for the first time, total employment in Hong Kong's service sector, 877,000 people, surpassed that in manufacturing (848,000).

Alongside the economic boom is growing unease about what may happen to Hong Kong once Britain leaves and China takes over on July 1, 1997.

Every political development in Beijing these days sets off tremors in Hong Kong. In January, for example, Hong Kong's stock market suffered its biggest one-day drop in nearly two years after Chinese Communist Party General Secretary Hu Yaobang was forced to resign.

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