The Investment Opportunity of a Lifetime: Hong Kong 1997 and Beyond.

• Author: Franklin, Barbara Hackman

The MCConnells, counselors to Western investors on investment in the East, have written a worthwhile book for anyone who wants to get a quick handle on what is going on in Hong Kong and China. However, I must observe that it lays out an unabashedly optimistic future scenario for both Hong Kong and China.

This book is a fast, easy read, and is logically organized. The initial chapter makes the case that the reversion of Hong Kong to China on June 30, 1997, will be a non-event. Three pages are in a Q and A format, asking the key questions about reversion and giving clear answers. For example: "Q - What about paying taxes? Will they go to China? A - No. Hong Kong's finances will be independent."

The authors also make the point that China is in transition. "At the economic level, the government has adopted the tenets of capitalism to spur economic growth; at the political level, it applies Communist disciplines to maintain authoritarian control. These two incongruous philosophies of government operate side by side." This is a pretty good statement about China today. The authors contend - rightly, I believe - that many Western commentators don't understand this and have been churning out China-bashing stories at a great rate, raising the frightening specter of what will happen to Hong Kong after China takes over.

A chapter entitled, "One Country - Two Systems: The Joint Agreement" is especially useful. It goes into the Joint Declaration signed in 1984 by Prime Minister Margaret Thatcher and Chinese leader Deng Xiaoping, actually reproducing various passages. The authors emphasize the great specificity of this document, which spells out exactly how China has agreed to maintain Hong Kong's autonomy for 50 years. Noted are various aspects of the economy, the law, and the judicial system.

Another chapter I particularly liked is the one entitled, "Worlds Apart: China is Very Different." The discussion puts the current economic changes in China in the context of the Asian economic miracle, which began with Japan after World War II. The authors call China a "disciplined" rather than a "repressive" society. They note that the Japanese rebuilt their country by "being a disciplined society, and the West applauded and looked on with awe." However, they argue that we are not treating China in the same way. I agree, and since this book was written the politics surrounding China in the U.S. have become more complicated. Some view China as the next "evil...