Since 1841, Hong Kong, on the south coast of China, has been a British colony. At the end of June 1997 it is to be handed back to China. Its 6.2 million people will cease to be British subjects and overnight will become citizens of the communist People's Republic of China. The 4,000 British troops presently stationed there will be replaced by 15,000 troops of the PLA (People's Liberation Army). Some 10,000 of those troops are to symbolically march from the Chinese border through the streets of the colony on July 1, 1997, the very day the territory reverts to China.

Empire dismantled

Symbolism abounds in this transfer of sovereignty. Fifty years ago, after victory in the Pacific, the United States and Great Britain were the dominant powers in the region. The British returned to all their former colonies after the Allied defeat of Japan. But things were not to be the same. Early Japanese victories over Western powers had shown they were vulnerable, and nationalist movements were to grow throughout the colonies, demanding independence. The Dutch, British, French and Portuguese all dismantled their colonial empires, leaving behind a radically different Asia.

Now, almost 50 years to the day since divesting itself of its Indian Empire, the British will hand over control of Hong Kong, the last major possession of the British Crown. It's not just the end of an era for Hong Kong. It's the end of an era for Asia and Europe.

At the turn of the century, the European powers dominated the globe, and Asia was no exception. The British had the largest empire, controlling the second-greatest population mass, India, along with what are now Pakistan, Bangladesh, Burma and Sri Lanka. They also ruled Malaya, Singapore and Borneo, Hong Kong and a string of islands throughout the Pacific.

The French possessed Indochina (Vietnam, Laos and Cambodia); the Dutch owned Indonesia; the Portuguese controlled Goa, East Timor and Macao (the latter also to revert to China on Dec. 31, 1999).

The century began with the colonial empires at the height of their power and influence; it will end with all of them dismantled and Western influence throughout the world continuing to wane. It is not only the Europeans who have lost power and influence throughout Asia; the United States is also on the decline as a power in the region.

Shifting balance of power

A major shift in the world's balance of economic, political and military power has taken place this century and will continue into the next. Hong Kong is symbolic of that change. China today is a quite a different country from the Imperial China that ceded Hong Kong island "in perpetuity" to the United Kingdom more than 150 years ago.

The Chinese had fought and lost a brief war with militarily superior Great Britain over a problem that today still results in countless deaths: drugs. The Chinese, with an increasingly drug-addicted population, objected to Britain's selling opium there and confiscated a shipment. The resultant conflict left China humiliated. Further humiliations were to follow at the hands of Western powers and Japan, which conquered much of China in the 1930s.

Near the end of the 19th century Hong Kong had become so prosperous it needed room to grow. The Chinese were asked if they would lease Britain some territory, which they did for 99 years. The lease expires at midnight on June 30, 1997, when the territory reverts to China. Although Hong Kong Island had been given to Britain forever, it is now felt that the original treaty ceding the island to Great Britain was unfair and no longer applies.

Thriving against the odds

Hong Kong today is one of the most valuable pieces of real estate on earth. Sun Yat Sen, the founder of the precommunist Chinese Republic that overthrew the emperors in 1911, said of Hong Kong: "I began to wonder how it was that Englishmen could do such things as they have done with the barren rock of Hong Kong within 70 or 80 years, while in 4,000 years China had achieved nothing like it."

Everything is stacked against Hong Kong. It depends on China for water and food and has no raw materials of its own, and it has one of the greatest population densities in the world. Yet it has a high standard of living and was recently ranked the third most competitive economy in the world (after the United States and Singapore, replacing Japan, which slipped to fourth place). Its real estate is among the most expensive on earth; a 1,100-square-foot apartment sells for $1 million (in U.S. dollars) or rents for $10,000 per month.

Hong Kong has benefited greatly from British rule. As a British colony it enjoyed more than a century of stability while China suffered unprecedented turmoil as it was forced to adjust to the modern world. The Boxer Rebellion of 1900, the revolution of 1911 and the civil war between nationalists and communists weakened China before the Japanese invasion and occupation in the 1930s.

After Japan's defeat, more suffering was to follow. The civil war resumed, with the communists gaining the victory. Then, in the late 1960s, came the Cultural Revolution, which left an estimated 25 million people dead.

In the late 1970s, after the death of Mao Tse-tung, the founder of the People's Republic, came economic reform. Realizing the inadequacies of the communist system but fearing more change would result in more chaos, the Chinese leadership began experimenting with the free market. The southeast province of Canton became a "special enterprise zone." Its capital city, Guangzhou, is now the richest city in China. Its industrial workers take home U.S. $100 per month, considerably more than the national average.

Canton borders Hong Kong. Much of the economic development in Canton is the result of investment channeled through Hong Kong. Canton's capitalist system within a communist country ("One country, two systems" is the official slogan ) has given China one of the highest growth rates in the world.

With a growing free market, calls for political reform grew, culminating in the disastrous events in Beijing's Tiananmen Square in 1989, the year that saw many communist regimes overthrown in Europe. China's leaders sent a clear message to its citizens and the world: Reform goes only so far. Economic reform is ostensibly acceptable, but other freedoms are not.

Who will change whom?

China's century of instability and its avowed communist system worry the people of Hong Kong, who fear for their way of life and financial stability. Over the last 10 years, many Hong Kong citizens have left the country to establish businesses and gain citizenship in other nations, but many are now returning (with foreign passports) to cash in on what they see as a bonanza. Many feel that, rather than China taking over Hong Kong, the latter will radically change China.

The potential is enormous. If all goes well after China takes over Hong Kong, the hope in Beijing is that Taiwan will voluntarily reunite with the mainland. Taiwan's vast holdings of foreign currency would give China yet another big economic boost.

Asia is the burgeoning giant of the planet. Growth rates in Asian countries are far higher than in Europe or North America. Those nations in Asia that practice free enterprise are unencumbered by some of the excess baggage long-time industrial nations must contend with. Businesses and employees in Western countries are paid high wages, which makes their products uncompetitive; they pay high taxes, which discourages investment and hard work; their governments waste billions of dollars sustaining self-perpetuating bureaucracies that stifle business, discourage individual initiative and encourage a welfare mentality.

Although many Asian nations are supposedly democracies, the ordinary voters does not have the power to vote themselves expensive benefits as in the West.

Today some of the richest countries in the world are in Asia. Japan and Taiwan are the world's leading creditor (surplus) countries, while the United States has greater debts than any nation in history. Unless this problem is resolved, the United States will inevitably decline as a major power, while others fill the vacuum. Economic decline equals political decline equals military decline. Each follows the other.

U.S. influence declining

Politically and militarily, the United States is on the decline in the region. American handed Okinawa back to Japan more than two decades ago. Pressure to close bases on the island is mounting following the rape of a 12-year-old Japanese girl by three American soldiers in September 1995. On the mainland of Japan, the public is nervous of China's growing strength and perceives the United States as an unreliable ally. Earlier this decade, American bases in the Philippines were closed at the request of Manila. Talk of reunification between the two Koreas could lead to a U.S. withdrawal because American troops are unpopular there.

Other Western nations have already pulled out of Asia, and it appears to be only a matter of time until the United States follows.

In Australia the government of Prime Minister Paul Keating is determined to break its one last remaining link with Britain, its allegiance to the British crown. Many view this as a move intended to signal Australia's commitment to Asia at the expense of its ties to other regions of the world.

The French are experiencing opposition to their continued presence in Asia as a result of their unpopular nuclear tests in the South Pacific.

Asia has experienced a century of great turmoil. At the end of the 20th century, after 100 years of political instability, colonial occupation and debilitating poverty, the continent is coming into its own. Power is passing from the West to the East. That doesn't mean that the West is finished, but it does mean that the West needs to make some major changes if it is to compete with the rising power of the new Asian economic giants.

Rise and fall of nations

The history of mankind has been the story of the rise and fall of nations, much of it prophesied in the Bible. Daniel 2:21 says that God "removes kings and sets up kings."

The peoples of Asia want free enterprise and Western technology, but want nothing to do with the West's values. They still cling tenaciously to their strong family values and the traditions they have held for thousands of years.

When China enters Hong Kong a few months from now, it will mark the end of a century that has seen the West decline and the East rise: the end of one age and the dawn of another. GN

Editor's note: In the January issue, our article entitled "Symbolism abounds in transfer of Hong Kong," referred to the alleged rape by three U.S. servicemen against a Japanese civilian on Okinawa as though the charges of rape had been proven. In fact, the guilt or innocence of the three servicemen has not been determined in a court of law. We regret any confusion or misunderstanding caused by our inadvertent omission of the word "alleged" in connection with the involvement of the U.S. servicemen in this incident.