China has been the scenario of political, social and economic turmoil during the past decade. The handover of Hong Kong to China on June 1997, after over a century and a half of British colonial rule, as well as China's recent accession to the World Trade Organization are milestones in our era. They have also been subject of much polemic and controversy; authors and experts from multiple disciplines have rushed to make pessimistic predictions. The transition proved to be a smooth one (Tang, 1999), against all predictions; now, the question is whether the WTO membership will bring any surprises. There is still anxiety over Hong Kong's future under the Chinese rule; a world audience follows closely the island's events with concern.
Contrary to most predictions, Hong Kong's most serious post-handover problems have been economic and social rather than political (Tang, 1999). Both the pre-handover doomsayers" prediction of lost freedom under Beijing's repression and the optimal forecast of post-1997 economic prosperity have been wide off the mark (Hsiung, 2000). Since the reversion, Hong Kong has been confronting economic recession, rising unemployment, the collapse of the real estate and stock markets and serious disruption to air cargo traffic following the chaos during the opening of the new airport at Chek Lap Kok. Now, Hong Kong seems to be recovering from the Asian crisis turbulence and another major shock is expected in the context of China's recent WTO membership. Once again, negative predictions on the subject abound; opinions are many and varied and the effects of this major event are still mere speculation.
The purpose of this part of the essay is to briefly analyze the economic impact of China's recent accession to the WTO on Hong Kong; is it mainly an opportunity or a threat to Hong Kong's economy? Although there is a brief reference to the Asian Crisis that shook Hong Kong's economy in the post-handover period, the main emphasis is on China's WTO membership; this analysis is timely, given its novelty and the impact it is expected to have on both the Mainland and Hong Kong.