RAY SUAREZ: Three years ago, when Hong Kong was transferred to Chinese control after 156 years of British colonial rule, shipping tycoon Tung Chee Hwa became the city's chief executive. The new leader pledged to preserve Hong Kong's freewheeling economy and political liberties. (Speaking Cantonese)
TUNG CHEE HWA, Chief Executive, Hong Kong (translated): Democracy is the hallmark of a new era for Hong Kong.
RAY SUAREZ: Tung Chee Hwa was born in Shanghai, and went to Hong Kong in the late 40's, with his family, when the Communists took over the Mainland. He studied in London, and has also lived in the U.S. (Cheers and applause)
CROWD: Happy New Year!
RAY SUAREZ: He says his mission is to make the city "world class," a commercial center on the model of London or New York. Now part of the People's Republic, Hong Kong is guaranteed by law to have its own economic and legal framework, the policy called "one country, two systems." (Chanting in background) Last December, that same model was adopted on the neighboring island of Macao, which became part of China after four centuries of Portuguese rule. Beijing says Macao and Hong Kong can be examples for the island of Taiwan, which Chinese leaders insist must be reunited with the Mainland. (Speaking Cantonese)
ZHU BANGZAO, Ministry of Foreign Affairs, China (translated): After the return of Hong Kong, Macao has also been smoothly returned to the embrace of the Motherland. Therefore, it is natural that we feel the urge to solve the Taiwan question.
RAY SUAREZ: But for Tung's opponents in Hong Kong, Beijing's relationship with the chief executive is more like a hammerlock than an embrace.
EMILY LAU, Member, Hong Kong Legislature: I said from day one that he is Peking's puppet, and he will do what he's told.
RAY SUAREZ: Criticism came to a head last December, when protesters clashed with police after Beijing, at Tung's behest, overruled Hong Kong's highest court on a high-profile immigration case. There's another controversy over the annual candlelight vigils held in Hong Kong every June to commemorate the 1989 Beijing crackdown at Tiananmen Square. Tung says it's time to "put aside the baggage of June 4," but the opposition Democrats say Tung asked them directly to stop the vigils. On the other hand, criticism of Tung's handling of the economy has abated, as Hong Kong has rebounded from the Asian financial crisis that slammed the city in 1997 and 1998. Trade is expected to double in six years.
TOM DASHALE, SENATE MINORITY LEADER: So nice to see you.
TUNG CHEE HWA: Yes.
RAY SUAREZ: Because U.S.-China trade relations are so vital to Hong Kong's economy, the chief executive has been in Washington, promoting congressional approval of legislation that would help China enter the World Trade Organization, and establish permanent normal trade relations between the U.S. and China, known as PNTR.
And chief executive Tung Chee Hwa joins us now. Welcome to the program.
TUNG CHEE HWA, Chief Executive, Hong Kong: Thank you.
RAY SUAREZ: Tell us about your favoring of China's entry into the World Trade Organization. How were you explaining it to members on Capitol Hill?
TUNG CHEE HWA: Well, China's entry into WTO and the approval of the legislation on PNTR is going to mean a great deal to Hong Kong, where I come from. You know, Hong Kong is now recovering from the financial turmoil that embroiled the whole of Asia, and a positive vote on PNTR and China's entry into WTO will help Hong Kong greatly in terms of its economic recovery. That's my first point. My second point is that obviously, China's entry into WTO and a positive vote on PNTR is also very good for the United States of America. In the first place, trade between the United States and China would be doubled in the next six to eight years. And today United States exports about 21 billion U.S. dollars worth of goods to China, creating estimated 250,000 jobs. And in six, eight years time, this figure will be doubled. And this is enormous. On the other hand, if PNTR is not approved, then the Japanese and European companies will take all the advantages, and there will be job losses here also. So it's good for Hong Kong, good for United States, and I think it's very good for China, too.
RAY SUAREZ: Well, I'm sure, as you know, the opposition to China's entry takes many forms here in the United States. One is concerned over human rights, persecution of religious minorities and such things. Another is strictly economic, and points out that while volumes of trade are large, as you've pointed out, there's a tremendous trade deficit that the United States runs with China. Would it close?
TUNG CHEE HWA: Well, let me answer them one by one, firstly about the human rights issue. China began a process to move towards a market economy and to move towards an open-door policy in 1978. In the last 22 years, China... the people in China living under poverty, as defined by the United Nations, has been reduced from over 300 million people to somewhere around sixty to seventy million people. Now, it's an enormous improvement over the last 22 years. So for those people who care about human rights, care about the well being of people, you know, these events warm our hearts. And I would say that a vote for PNTR actually would encourage the continued process of market economy and it would be helpful to China. Now, insofar as the issue of the trade surplus, you know, what China actually manufacturers and sends to the United States in goods, the United States actually... you yourself do not manufacture them anymore. If you do not buy from China, you will buy from some other countries in the world, because that particular deficit is a structural deficit. Whereas, on the other hand, China has 1.2 billion people, a tremendous market for American goods. So there's every advantage for America for the PNTR to be approved.
RAY SUAREZ: And PNTR, We should note, is "permanent normal trade relations," for those who aren't following the initials at home. Let's talk a little bit about Taiwan. You live in the same neighborhood. They've recently had an election. And also, there's recently been tension between the People's Republic and Taiwan about the future of the island.
TUNG CHEE HWA: Yes. Well, of course, Ray, my responsibility is to be managing the affairs in Hong Kong, looking after Hong Kong. And Hong Kong is moving forward very well under a one-country, two-system concept, where we are really running Hong Kong-- Hong Kong people running Hong Kong -- with a very high degree of autonomy. Now, obviously I'm concerned about the cross-straits tension, because it will affect Hong Kong. I'm also concerned that the cross-straits tension will increase the tension or affect the relationship between the United States and China, and that would also affect us in Hong Kong. So yes, I am very concerned about this issue. And of course, Ray, you know, I lived here, I worked here for ten years, and my children were brought up here. But I am Chinese, and as a Chinese, you know, I'd like to see the country reunited. And you know, reunification of Taiwan would be very important, a peaceful reunification of Taiwan. We all wish this would happen. And I think so long as the Taiwan leadership accept there is one China, which is accepted by all the other countries, the United States and most of the other countries, under one-country principle, I think negotiation can begin, and a peaceful resolution is possible.
RAY SUAREZ: In the run-up to the recent elections in Taiwan, the government in Beijing said some very tough things, almost threatening things. Could it ever come to war?
TUNG CHEE HWA: Well, this is something we all try to avoid, but, Ray, you have to understand, there's very strong feelings in China and amongst the Chinese people that the unification of the entire country, the issue of territorial integrity is important to us.
RAY SUAREZ: So does that mean, yes, well, that it could come to war?
TUNG CHEE HWA: No, I think we all want to try to avoid a war, and it can be avoided. The important thing, you know, I think it can be avoided. And the important thing is the Taiwan leadership accept a one- country principle. And it is one country. And on that basis, I think, you know, reunification will be possible.
RAY SUAREZ: There has been some pressure from time to time since the hand-over from Britain from the Mainland to your administration. Should that raise concerns among Taiwanese who are looking to see if this one nation, two systems idea really works?
TUNG CHEE HWA: Well, let me tell you this: I am in Hong Kong. I'm the chief executive in Hong Kong. I'm in the driver's seat in Hong Kong. I'm not quite sure what pressure you're referring to from the mainland. There is no pressure.
RAY SUAREZ: Well, things like a sedition law, for instance, which really urged you to...
TUNG CHEE HWA: No, because there is a... what we call basic law, which is our constitution, which actually institutionalizes the concept of "one country, two systems." And in that particular basic law, all the details of Hong Kong people running Hong Kong with high degree of autonomy is clearly defined in it. So, for instance, today you will find our press is freer and more critical than before the hand-over. And you will find that the rule of law is being very well upheld. You will find that independence of judiciary is being very strongly protected. And Hong Kong really is moving forward very well, and we are moving forward very well.
RAY SUAREZ: Tung Chee Hwa, good to talk to you, sir.
TUNG CHEE HWA: Thank you very much.