As every schoolboy would once have known, traditionally the Chinese
have believed that a dynasty reigns because it has been vouchsafed
divine approval--the Mandate of Heaven. According to this belief,
extensive natural or man-made catastrophes demonstrate that the
Mandate has been revoked, and that the reigning dynasty will soon
fall. Natural catastrophes began in Hong Kong the instant the regime
appointed by Beijing to succeed British rule took office in July 1997.

It rained continually for months. Landslides swept away buildings and
imperiled lives. The people slipped into dejection under the
seemingly endless rain pelting down day after day. The business slump
had already begun and was soon to dip--and then plunge--further. But
initially it was the weather, not the economy, that depressed the
people of the new Special Administrative Region (SAR) of the People's
Republic of China.

That was not a good start. Neither was it the end.

A few weeks later, Hong Kong was afflicted by a virulent influenza
carried by a virus that could leap from its normal habitat in
chickens or ducks to human beings. Naturally fearful, the government
ordered millions of fowl destroyed. The mass slaughter, which all but
impoverished poultry breeders and traders, was not carried out
adeptly. Stray dogs and cats gnawed and clawed at black refuse sacks
containing dead chickens, as well as some that were not quite dead.
Highly efficient under British control, the Hong Kong Civil Service
made a mess of that essential execution under Tung Chee-hwa's aegis.

Still another natural disaster struck early in 1998. Hong Kong's
inshore fishing had already been curtailed by noisome pollution and
by competition from Japanese, Taiwanese, and Korean boats.
Nonetheless, Hong Kong's trawlers and motorized junks were still
finding good catches not too far away. Then came the "red tide", a
flood of scarlet algae that poisoned innumerable fish and imperiled
the industry. Within two months fifty to sixty people were struck by
the virulent enterovirus called Taiwan flu.

A man-made catastrophe, however, was to all but eclipse nature's
malign deeds. A new airport some twenty miles away was built at great
speed to replace the dangerous and inadequate old airport at the
center of the city. Costing more than $20 billion, it is, after
Japan's Kansai Airport, the most expensive in the world. Originally
scheduled to begin operations in mid-July, it was prematurely
commissioned so that President Jiang Zemin could be the first
traveler to set down--and thus mark the first anniversary of Hong
Kong's acquisition by China. Opened to normal traffic on July 6, it
was so spectacularly incompetent that air cargo to and from Hong Kong
had to be suspended for more than a week, at a cost of around half a
billion U.S. dollars. Even more gravely, given the nearly
simultaneous opening of competing new airports nearby in Macao and
Guangzhou, the dismal spectacle severely undermined Hong Kong's
reputation for brisk efficiency.

What, then, Hong Kong's people asked, of the Mandate of Heaven? What
indeed. To see ahead, let us start by looking back.

In the fifth decade of the nineteenth century, Britain took the
island called Hong Kong from China at gunpoint. In the last decade of
the twentieth century, China took back from Britain, by force majeure
if not directly at gunpoint, not only Hong Kong Island but the small
Kowloon Peninsula, which had been seized later, and the broad New
Territories, which had been leased for ninety-nine years in 1898. In
none of these exchanges was the indigenous population asked its view.
Nor were its interests seriously considered. In each case, too, the
transfer of sovereignty ran counter to the wishes of the majority of
the inhabitants.

The few thousand part-time fishermen part-time pirates using the
island in 1840 preferred the nominal rule of the Manchu Dynasty in
far distant Beijing to the meddling British. In 1898 the tens of
thousands in the farming villages of the New Territories were not
eager to exchange ineffectual Chinese rule for British intrusiveness.
In 1997 the well over six million Chinese living in the Crown Colony
of Hong Kong were happy with the highly effective and low taxing
British administration that had made Hong Kong prosperous even by the
standards of economically buoyant Asia. They also cherished civil
order based upon general consent rather than coercion, as well as a
degree of intellectual freedom and expression rare in authoritarian
Asia. Opinion polls, and the belated introduction of a measure of
democracy by the Colony's last British governor, affirmed as much. In
1995 the people of Hong Kong elected legislators sworn to resist
communist tyranny. Three years later they humiliated Beijing's
candidates in the first legislative election under China's
sovereignty, indeed the first free election on mainland Chinese soil
since the communists established the People's Republic in 1949.

Most communist leaders would have preferred a Hong Kong that
continued to serve their economic interests by providing financial
services and large sums of foreign money. But, above all, they wanted
a Hong Kong that would not imperil their hold on power through its
constant example of a more relaxed, more free, and much happier
political entity next door to the mainland they ruled so harshly.
Still another imperative impelled Beijing to demand the return of all
Hong Kong when the lease on the New Territories expired on June 30,
1997. The sting of the humiliation and depredation inflicted on China
by foreign powers from the early nineteenth century onward could only
be salved by reclaiming every inch of territory that had once been
Chinese. Aside from Hong Kong, minuscule Portuguese Macau was the
only other foreign enclave remaining. Since it was effectively under
Chinese rule already, formal reversion was less pressing. Taiwan
presented a different kind of challenge--already under Chinese rule
but not Beijing's suzerainty.

Hong Kong, the very first and the most conspicuous of the territories
Britain had stolen from China, had to be reclaimed to expunge the
shame of the past. And it had to be reclaimed no later than July 1,
1997, lest it appear that Beijing was truckling to London.

A very senior and very influential British diplomat assured me years
ago that Hong Kong would not suffer as a result of the disorder he
correctly foresaw in China, but would remain prosperous and happy
after it came under Chinese rule. He was wrong. The mood in Hong Kong
is now sour and pessimistic.

Such diplomats--and many in the business community--still insist that
such dejection is largely the fault of Chris Patten, the last British
governor, who was not one of them but a politician. Patten, they say,
aroused false expectations by introducing a measure of democracy.
But, they contend, the autocratic rule of previous London-appointed
governors had nurtured a populace that was contented, docile, and
"not interested in politics." If Patten had not interfered, the
argument continues, Hong Kong would today still be a happy land. The
discontent and political demonstrations that regularly test the
authority of the Beijing-appointed government of the SAR would never
have arisen.

Besides, this school of thought would add, the depressed state of
Hong Kong today is due not to Beijing's rule, but to the fiscal
crisis that has shaken all of East Asia from South Korea to
Indonesia. Hong Kong's blues are economic, nothing more. That
contention, however, is only half of a half-truth.

The Hong Kong economy was depressed even before the Asian downslide.
The proprietor of a shop selling linen and embroidered garments
replied glumly when I asked how his business was doing, "I haven't
made the smallest profit since July 1st '97. Just losses all the
way--and getting worse. I can't even cover the rent." A campaign to
reduce greatly inflated business rents by 40 percent has been
overtaken by events. But he added, "Forty percent reduction wouldn't
be enough. I'd still go broke."

The old Pedder Building houses factory outlets and other cut-rate
shops. All now display signs offering even greater bargains,which
literally translated from the Chinese is "Great Price Cutting." By
changing one of the three words, one shop has made its come-on read
"Great Bloodletting! Eighty percent off!"

For the beginning of Hong Kong's economic stagnation the fall in
tourism is largely to blame. The number of visitors has fallen by
more than 50 percent since July 1, 1997, a slump caused by both the
change in Hong Kong's political status--as witness the many empty
hotel rooms the week of the handover--and by the Asian recession,
which is keeping many Asian tourists at home.

But general dejection also reflects a peculiar Hong Kong psychology.
Most people still repose greater confidence in Great Britain--now a
small, far away, third-rate power entangled with the European
Union--than they do in their presumed motherland, a colossal
resurgent power on their doorstep. A majority of Hong Kong's people
are either themselves refugees from People's China or descendants of
refugees. During the decades I lived in the Crown Colony I found it
hard to discuss China with them. They automatically disbelieved
Beijing's every statement and discounted its every achievement. Their
fixed conviction: "The communists only know how to lie!"