Hong Kong Government

The Hong Kong government may lend Walt Disney Co. as much as $1 billion and take a majority stake in a new theme park the Burbank-based media and entertainment giant may build in the city, a source said. Hong Kong Chief Executive Tung Chee-hwa hopes to announce the deal in his annual policy address Oct. 6, but it could face opposition from lawmakers because it would be the first such government investment in a private enterprise.

Now, Hong Kong knows where it stands. Thursday marks the second anniversary of the historic occasion when China regained sovereignty over this former British territory. Sadly, it has become clear in the last few days that the guarantees of local autonomy China earlier gave Hong Kong are limited. In 1984, Deng Xiaoping, the Chinese leader who worked out the deal with Britain for Hong Kong's future, came up with the famous formula: "One country, two systems."

The carefully orchestrated but fragile independence of this Asian financial center from mainland China is being threatened by fallout from the U.S.-China espionage scandal, officials fear. A recent congressional report claiming that Hong Kong has become a major transshipment point for Chinese spies and smugglers has triggered calls for a review of U.S. policy that recognizes Hong Kong's unusual status as an independent territory within mainland China.

Walt Disney Co. has agreed in principle to build a small Disneyland-style theme park on Hong Kong's Lantau Island at a site with room to expand, Hong Kong's financial secretary confirmed early today. As now envisioned, the park would initially attract 5 million visitors a year--a fraction of the number that flock to Disney's Magic Kingdom-style parks in Tokyo, Orlando, Paris and Anaheim.

People with one parent from Hong Kong have the right to live in the territory and do not need permission from mainland China to do so, Hong Kong's highest court ruled Friday in a landmark immigration case. The territory's Court of Final Appeal said Beijing was violating the constitutional rights of emigrants with Hong Kong ancestry by insisting on its own screening process. China requires people to gain exit permits before they move out.

For all the tension and excitement, they could have been auctioning off fine works of art or exquisite jewelry. A Monet, perhaps, or a Faberge egg. In the auditorium of a high-rise Hong Kong government building last week, the auctioneer poised with her raised gavel as attendants scanned the audience for bidders. Professional agents consulted clients by cellular phones.

Hong Kong's recessionary economy suffered its worst-ever quarterly contraction Friday, shrinking 7% from the same period last year, as officials gloomily predicted at least two more quarters of negative growth before a rebound is likely. "As for next year, I do not feel optimistic about economic numbers for the first two quarters," said Hong Kong Financial Secretary Donald Tsang. "It is not clear that we have bottomed out or that we are close to bottoming out."

The Hong Kong government should sell the massive shareholdings it acquired during its controversial market foray last August or risk a loss of confidence in the territory's currency, the currency board's architect told legislators. John Greenwood, president of Invesco Asia Ltd. and one of the key economists who drew up Hong Kong currency's fixed exchange rate system, said it was "neither appropriate nor desirable" for the government to hold so many shares of privately held companies.

Before Hong Kong passed from British to mainland Chinese control in July 1997, the big fear was that the considerable political and press freedoms enjoyed here would be endangered under the new regime. There was less concern, even among the most alarmist critics, that Hong Kong's vibrant market--long rated one of the freest in the world--would be compromised.

Nine years after the Chinese government crushed pro-democracy protests around Beijing's Tiananmen Square, the country's leaders would like people to forget what happened there on June 4, 1989. But there is one moment people still can't forget: the heart-stopping seconds when a lone man stood in the path of a column of tanks and forced them to stop. He was the face of moral strength against martial power; for an instant, his side prevailed.