The Williamsburg Conference 1997

Foreword

It is rare to know in advance when history will be made. As a result the Williamsburg Conference normally focuses its discussions on developments in Asia and U.S.-Asian relations during the past year. In 1997, however, participants looked ahead to a major turning point in the region: the reversion of Hong Kong to Chinese sovereignty. Hong Kong provided the appropriate and dramatic setting for our talks. The end of British rule has meaning not only for Hong Kong, but also for China and the rest of Asia. With Macao's reversion slated for 1999, centuries of colonialism in the region will end, setting the stage for a new era in Asian affairs.

The return of Hong Kong will take place against the backdrop of continued rapid change in China. Maintaining high levels of growth without further widening economic disparities among its population and confirming the succession to Deng Xiaoping are just two of the challenges facing Beijing's leadership. How such problems are dealt with will have an impact on the future of the Hong Kong Special Administrative Region. But we should also keep in mind, as Chief Secretary Anson Chan noted in her keynote address at the conference, that Hong Kong's success will depend upon the determination of this community to maintain its way of life. Differing agendas aside, the close interrelationship between the economies of Hong Kong and China led to a consensus among participants on the importance of the United States renewing most-favored-nation status for China.

The informal atmosphere at the Williamsburg Conference allowed participants to be equally candid in treating other issues of the day, including the potential for reconciliation in South Asia, responses to the famine in North Korea, political tensions resulting from the pressures of globalization on the economies of Southeast Asia, and Japanese economic reform. China's evolving role as a world power led participants to call once again for firm U.S. presidential leadership on U.S.-China relations.

In the absence of Cy Vance, it was my privilege and pleasure to co-convene this year's conference with Tommy Koh and Yoshio Okawara. They guided the discussions with their usual fairness and insight, borne along on flows of lively and informed commentary from a particularly talented roster of participants. I join them in thanking Marshall Bouton, executive vice president of the Asia Society, and Kate Simpson, program associate, for their superb organization of the meeting. Mary-Hart Bartley and Jennifer Martin provided first-rate administrative assistance. Kevin Quigley, newly appointed vice president for Contemporary Affairs and Corporate Programs, lent key support on the ground. Asia Society regional center director Richard Mueller, assistant director Dede Huang, and the able staff of the Society's Hong Kong Center were important contributors to the success of the conference. We sincerely thank the conference funders, whose names appear at the end of this report. With their support the Williamsburg tradition continues, as does the quality and relevance of this oldest of trans-Pacific dialogues.

Nicholas Platt
President, Asia Society

Keynote Address

Hong Kong: A City of Opportunity

The Honorable Mrs. Anson Chan, CBE, JP

I am delighted to be here this evening and wish to warmly congratulate you on two accounts. Firstly, on your excellent choice of venue and secondly, on the Conference attaining its silver anniversary.

I am very honored indeed to have this opportunity to address such a distinguished and influential audience at this important juncture in Hong Kong's history. And I am also very pleased that you will have an opportunity to see for yourselves how we are preparing for the change in sovereignty in just 45 days from now.

Before I embark on my speech proper, I should like to pay a personal tribute to the group of Asian and American leaders who first launched this Conference. As you know, they met way back in 1971 in Williamsburg, Virginia to discuss and promote the Asian/American relationship. Since then, discussions have continued to thrive and have generated much interest in the two communities. The active encouragement to develop fresh thinking, taking due account of the many different views and perspectives, has greatly enhanced the value of the Conference, and I trust that this valuable process will continue in Hong Kong over the next few days.

You come to Hong Kong at a fascinating and significant time in our history. In a little over six weeks, China will resume sovereignty over Hong Kong. What does that mean? In simplistic terms, the Hong Kong flag will change alongside that signifying our sovereign power. Some of the more obvious changes have already taken place. For example, new coins and definitive stamps have already been issued, although you might for the time being still find a coin picturing the Queen's head in your pocket. But on a more serious note, we will for the first time in modern history have a Hong Kong person in charge of our affairs, Mr. Tung Chee-hwa. He is a well-respected figure in the community and is totally committed to implementing the unique concept of "one country, two systems" on which our future is based.

What is Hong Kong today? Well, we are rated by the U.S. Heritage Foundation as the freest economy in the world. In fact, we have proudly held this position for the past three years. The World Economic Forum has ranked Hong Kong as the second most competitive economy in the world. Our GDP per capita stands at US$24,500, amongst the highest in Asia. Hong Kong is small but global. Let me quote a few examples. We have a population of 6.3 million people, a tiny 0.1 percent of the world's total, and yet we generate 3.6 percent of total world trade, and we are the eighth-largest trading entity in the world. Our total GDP is US$155 billion, a mere 0.5 percent of the world's total, and yet the external transactions of our banking sector are the fifth largest in the world; the average daily turnover of our foreign exchange market is the fifth largest in the world; and the market capitalization of our stock market is the seventh highest in the world.

These impressive facts demonstrate that Hong Kong is a modern, dynamic, and successful community. Asia is generally seen by most commentators as the economic powerhouse for the global economy in the next century. The World Bank has estimated that taken together Asian economies can be expected to surpass those of Europe or North America by 2010. Hong Kong, as a leading city in Asia, is well positioned to take advantage of and contribute to the realization of this goal.

As Michael Enright and his co-authors make clear in their recent book, The Hong Kong Advantage<D>, Hong Kong provides a wide range of business-related services, not just for China but for the entire Asian region. As a result, it has earned a well-justified reputation as the premier center for intra-Asian trade and investment.

Our buoyant economy, which has seen average real annual growth in GDP of 6 percent between 196575, 8.5 percent in the following decade, and 6.5 percent since 1985, has enabled us to divert substantial resources into improving our social environment. Education now accounts for a large portion of the government's total budget. In 199798, our total expenditure on education will exceed HK$45 billion, up 7.7 percent in real terms over last year. Over 21 percent of recurrent public expenditure goes to education. I believe this is money well spent, for if Hong Kong is to continue to be successful then we need a well-educated workforce. A similarly impressive story can be told on the welfare front. Expenditure on welfare has increased by 88 percent in real terms over the past five years and will rise by a further 9 percent this year to HK$21.2 billion. We are also proud of our medical and health services. We enjoy one of the lowest infant mortality rates and longest life expectancy rates anywhere in the world.

Despite all these successes, we realize that we cannot stand still. We have to continue to invest in our future, not only by providing resources for our human infrastructure but also by developing our physical infrastructure. A few examples: we are building a new airport which is initially designed to handle up to 35 million passengers and 3 million tons of cargo a year. This will open in April next year, and I very much hope that when you next travel to Hong Kong you will be able to enjoy the new facilities. Many of the projects associated with the airport have already come on stream, and you may have seen media reports on the opening of the Lantau Link, the world's largest suspension road and rail bridge, last month. We are also embarking on a series of comprehensive improvements under the Railway Development Strategy, massive reclamation schemes to form new land for development, expansion of the container port to meet future demands, and expenditures in excess of HK$3 billion on major environmental projects. So in the sense of looking forward and continuing to make economic and social progress, 1997 is not a factor.

On July 1, 1997, Hong Kong will become a Special Administrative Region of the People's Republic of China. This is the result of the Joint Declaration signed between Britain and China in 1984. In reality, we have had 13 years in which to prepare for the transition. In 1990, another milestone was reached when the National People's Congress of China passed the Basic Law, which will be Hong Kong's future constitution. Many in Hong Kong provided detailed input to the drafting of this law, which essentially provides for the continuation of Hong Kong's capitalist system and way of life for at least the next 50 years. Hong Kong will continue to enjoy a high degree of autonomy with China's direct responsibility limited to defense and foreign affairs.

Under the Basic Law

  • the people of Hong Kong will run Hong Kong;
  • the English common law system and independence of the judiciary will be retained;
  • fundamental human rights will continue to be protected by law;
  • the Hong Kong dollar will remain the sole legal tender, separate from the Chinese currency and backed by separate reserves;
  • Hong Kong will continue to determine its own monetary, fiscal, and financial policies;
  • our tax system will remain simple and predictable (the present low tax rates will be maintained and no taxes will be paid to China);
  • Hong Kong's free-trade philosophy will continue;
  • Hong Kong's civil servants (including non-Chinese) will continue to work and serve the community; and
  • Hong Kong will continue to have autonomy in the conduct of its external commercial relations. This means, for example, that we shall continue to sit as a separate contracting party in the World Trade Organization and as a full member of the APEC forum.

I shall spare you the details of all 160 articles in the Basic Law. But suffice to say that the ingredients for Hong Kong's continued prosperity and success have been clearly laid out and essentially reflect maintenance of the existing situation, or "business as usual."

The question that everyone asks is, "Will it all work?" Will the provisions of the Joint Declaration and the Basic Law be honored? Ultimately the only honest answer one can give to that is, "Wait and see." But there are several powerful reasons to be confident. First, it is in no one's interests, least of all China's, that Hong Kong should fail. For China, it is a matter of honor that Hong Kong thrive under Chinese sovereignty as it has under the British. It is also a matter in which China has a huge economic and commercial investment. Second, we have now had nearly 15 years of solid negotiations about our future, beginning with the Joint Declaration and subsequently agreeing in detail how its provisions should be implemented. It is hard to believe that hundreds of people on both sides should have dedicated themselves to this work if they had not been serious about honoring the agreements that resulted from it. Third, the people who will be running Hong Kong under the chief executive's leadership are the people who are running it now. The civil service which I lead, my senior secretaries, the police commissioner, the commissioner against corruption, all of us will remain at our posts when the flags change. We have been part of the negotiations, we know what has been agreed and why; we know how to make it work and we know that it can work. If I did not believe that I would not be here now. Fourth, our economy is strong, and there are formal constitutional guarantees that Hong Kong will remain committed to a capitalist system, free trade, and competitive markets. Hong Kong has enjoyed 35 years of unbroken increases in real GDP. Our GDP is expected to rise by 5.5 percent in real terms in 1997-98, with a forecast budget surplus of US$4 billion. The Special Administrative Region will start life with total government reserves equivalent to US$42 billion, excluding foreign exchange reserves of over US$65 billion.

This is not to say there are no problems. It will be obvious to you from what you have read over the past months and what you may have heard while you have been here that confidence in the future is mixed. Broadly speaking, confidence about the economic future is stronger than confidence about the political future.

The first point to make is that this is not surprising. This was always going to be the period of maximum uncertainty, and let us not forget that "one country, two systems" is an extraordinary concept. It is not easy for anyone who has not lived with the idea for years to believe that it will work. And even for those in Hong Kong who have been preparing since 1984, it is still a very significant change that will occur in six weeks' time.

On top of this general concern there are specific worries, for example about the future shape of our civil liberties legislation. The Chinese National People's Congress has struck down certain elements of our existing legislation effective July 1. The chief executive's office has completed a public consultation exercise on the question of how to replace that legislation. This whole episode has given rise to considerable criticism in the overseas press and dire predictions about our future. But it is important to note that here in Hong Kong virtually every newspaper, numerous professional and political groups, and many individual commentators spoke out in defense of our civil liberties. It is very clear that the Hong Kong community values its liberties and does not wish them to be curtailed. That, to me, is a cause for optimism about the future, because Hong Kong's success will depend upon the determination of this community to maintain its way of life.

As a result of the strong views expressed by the public, the chief executive's office has just announced modifications to the original proposals to amend our civil liberties laws. These go some way toward addressing public concerns and are a welcome move. The debate over civil liberties will undoubtedly continue in the days and years ahead. I am sure the chief executive's office and the future SAR government will continue to take into account public views on this sensitive issue. It is important to bear in mind that like so many places in this region the Hong Kong community has handled massive changes in recent yearseconomic and social transformation as well as democratic political development. It has done so remarkably smoothly, avoiding many of the more extreme problems that so often accompany such transformationsocial and economic dislocation, labor unrest, student unrest, political extremism, and so on. We have a society in which debate and behavior, though lively, are quite moderate. Our law and order situation compares well with anywhere in the world.

On July 1 the present Legislative Council will be replaced by the Provisional Legislature, which will exist for no longer than one year until fresh elections can be conducted. New electoral laws are currently being drawn up. The community expects that the new laws will provide for open and fair elections for a new legislature as soon as possible after the handover. We need a credible legislature that enjoys the support of the community and to whom the executive can be held accountable.

The community also values its large and lively press. There have been many reports about self-censorship by the press. That may well be happening in some areas, but those who practice it are doing themselves a serious disservice in a place with 65 daily newspapers and numerous other sources of information. Whatever self-censorship may or may not have taken place, Hong Kong gets all the news there is out there and gets it quickly. We are a place that needs and uses information as an integral part of our business scene. We know that if we become a sterile news environment we will become a sterile environment for business services, which are our bread and butter.

Those who count Hong Kong out reckon without the Hong Kong community. Hong Kong people are a lively lot wedded to a dynamic way of life. We in the civil service, our colleagues in the police, all of us who help run Hong Kong today, believe strongly in the open, clean, and efficient business and administrative environment.

But ultimatelyas I said beforethe answer to all the questions is "wait and see." Or, for those of you visiting, come back and see whether Hong Kong is as great a place as ever in 1998 and beyond.

Before closing, I should also like to briefly touch on the Hong KongUnited States relationship, which is of particular relevance to this gathering. America has a significant and long-term interest in Hong Kong's continuing success. A few facts:

  • Over 1,200 American firms operate from here, with more than 450 running regional headquarters from Hong Kong;
  • American firms have almost US$14 billion invested here;
  • Hong Kong is the home of the largest overseas American Chamber of Commerce anywhere in the world;
  • Hong Kong is a strong market for U.S. exports (US$14 billion last year);
  • 37,000 American citizens live in Hong Kong;
  • Hong Kong has the largest U.S. Consulate General in the world; and
  • over 750,000 Americans travelled to Hong Kong last year.

All of these factors lend credence to the notion that we have an exceedingly close relationship. We also like to think that we share certain key philosophies such as free trade and open markets, the basic freedoms enjoyed in civilized societies, the rule of law, and so forth.

But despite this there is, as always at this time of year, a large black cloud on the horizon associated with the annual debate on renewal of China's most-favored-nation status. As I, and many of my colleagues in the civil service and indeed friends in the private sector, have emphasized, withdrawal of China's MFN trading status would be a telling blow to Hong Kong's future economic prosperity and stability. We estimate that up to 86,000 jobs would be lost in Hong Kong and our GDP growth rate halved if this unfortunate scenario were to materialize. This assessment excludes the impact of any retaliatory action China might take. Clearly, all of this would be very damaging indeed, especially coming at such a critical time for Hong Kong. The general morale and resilience of the community would be hurt, and our capacity to respond effectively to challenges in other areas would be curtailed.

Naturally, we are concerned about any suggestions of extending China's MFN status with conditions directly or implicitly linked to what may or may not happen in Hong Kong after next month. We value the continued demonstration of U.S. interest in our transition. But basing China's MFN status upon Hong Kong's transition would jeopardize rather than reinforce our way of life. It would create uncertainty at exactly a time when we need stability more than ever, and weaken us when we need to be strong.

The people of Hong Kong, who have the most stake in China's benign behavior toward Hong Kong, unanimously support the unconditional renewal of China's MFN status. We hope any actions or decisions taken by the United States will serve to strengthen and not to undermine Hong Kong's stability. Because of the importance of this decision to Hong Kong, the governor, the financial secretary, and I have written to President Clinton, Secretary of State Albright, and U.S. congressional leaders to emphasize the importance of a full-year MFN extension to us. We will continue to drive home Hong Kong's concerns until the issue is settled.

Our transition is a long-term enterprise, and we need the United States to stay engaged. The U.S.Hong Kong partnership has developed over a long period of time and will, I believe, continue to strengthen. I look forward to groups such as the Williamsburg Conference and the Asia Society contributing to this process.

To conclude, the one country, two systems concept which will be applied to Hong Kong is unparalleled in history. There are no signposts to follow. Nevertheless, I remain confident that it can be made to work if the people of Hong Kong are so minded. We shall no doubt encounter some difficulties along the way but such is the resilience and determination (the can-do factor) of the Hong Kong people that I'm sure Hong Kong will continue to thrive into the next millennium. The motto on Williamsburg's Coat of Arms, "states flourish through virtue and toil," is a useful reminder of what we must do in the months and years ahead.

I sincerely hope that you will all return to our city and see for yourself how well we will fare under Chinese sovereignty. But please do not wait another 20 years before returning the Conference to Hong Kong!

I wish you all a productive and enjoyable stay in Hong Kong.

1997 Williamsburg Statement

Managing Change in Asia

This is a year of historic changes in Asia, perhaps the most dramatic being Hong Kong's reversion to China. Other momentous shifts are also under way in the region as it experiences slower economic growth and grapples with a new set of social, political, and security challenges.

To contribute to understanding of these changes and their implications, the Asia Society brought together leaders in government, business, academia, and journalism from 19 countries and economies on both sides of the Pacific for the twenty-fifth Williamsburg Conference. Held in Hong Kong on May 1619, 1997, the conference was convened by Tommy Koh of Singapore, Yoshio Okawara of Japan, and Nicholas Platt of the United States. Participants examined five principal issues: Hong Kong and its relationship with China, regional security, prospects for reconciliation and growth in South Asia, Asia's economic outlook, and U.S. policy toward Asia.

Conference participants were generally positive about Hong Kong's prospects, provided the transition period is handled with sensitivity by China, Hong Kong, and the international community. There was a consensus that everyone involved wants the "one country, two systems" policy to succeed: China, which wants to show the worldincluding Taiwanthat the concept works; Hong Kong, whose people are deeply attached to their way of life; and other countries, which share strong interests in the maintenance of Hong Kong's freedoms and prosperity. Nonetheless, concerns are understandable; this formula has never been implemented, and risks are inherent in a change this momentous. Participants expressed hope that Hong Kong would be allowed time to test the concept. In this context, the renewal of China's most-favored-nation trade status was seen as vital.

Participants heard that India and Pakistan now have what may be their best opportunity since Partition to make genuine progress toward peace. As demonstrated by the May 1997 summit in the Maldives, both countries have new prime ministers who are committed to reducing tensions. More important, the peoples of both countriesinspired in part by East Asian economic successare starting to demand a redirection of massive military resources into economic development and social programs.

The conference concluded that Southeast Asia is entering a new, more complex phase of economic growth, as the basis of growth shifts from increased inputs to improved productivity. In this stage of economic development, emphasis needs to be placed on economic and political management, with greater investment in infrastructure and education, including worker retraining. Competitive pressures require that countries maintain their commitment to economic liberalization, but governments have a role to play in economic restructuring and in addressing the human costs of economic globalization.

Conference participants reaffirmed their strong support for the Asia-Pacific Economic Cooperation (APEC) forum, which has a major role in promoting a rules-based, free-market system. APEC's advocacy of "open regionalism" and its commitment to liberalized trade and investment were also endorsed. The conference called for the United States to maintain its commitment to APEC and acknowledged that it is an invaluable forum for informal talks among regional leaders. To fulfill its role in driving regional cooperation, APEC must make concrete progress, involve business in its policy making process, and mobilize public support. It was noted that North America and Europe remain the final destinations for the bulk of Asian exports, despite a rise in intra-Asian trade.

Throughout the region, the rise of the middle class is creating increasing pressure for governments to become more open and responsive to their citizens. The conference concluded that there is a growing urgency to ensure government accountability and significantly reduce the gap between rich and poor, a major concern across the region. Discussion of human rights by nongovernmental organizations has encouraged positive changes in the region. Some participants stressed the usefulness of quiet diplomacy and a multilateral approach.

Critical developments are under way on the Korean peninsula. The food crisis in North Korea has implications for the survival of the Pyongyang regime, but it also gives the international community an opportunity to engage the North and encourage movement toward peace talks. The efforts of the Korean Peninsula Energy Development Organization (KEDO) and the development of other practical approaches were endorsed. Of the possible scenarios for North Korea, the best may be gradual integration with the South. Successfully managing this reunion would require significant involvement of the international community.

Participants stressed the need for the United States to remain engaged with the region, including the maintenance of a credible military presence. This applies even if reunification of the Korean peninsula is achieved. Concern was also voiced over friction in U.S.-China relations. There was a consensus on the need for President Bill Clinton to show strong leadership on Asia policy. China could also do more to address American concerns, for example, in managing human rights issues and promoting military transparency.

Successful management of the momentous changes taking place in Asia will require deft leadership buttressed by strong popular support. The participants of the Williamsburg Conference believe that their discussions revealed both the complexity of these changes and the necessity of artfully managing them, in Hong Kong, South Asia, the Korean peninsula, and elsewhere.

Hong Kong and China
Hong Kong's Transition

As this report is published, Hong Kong will be returning to Chinese sovereignty. The ceremonies and celebrations of July 1, 1997, are only part of the picture, though. Participants at the twenty-fifth Williamsburg Conference stressed that Hong Kong's transition is a process, not an event. It should be underscored that in this process the handover and its immediate result (while foreign journalists are in town) is only one chapter. With sensitive handling and careful support, there are very good prospects that the process will be a success.

The generally positive outlook of the participants contrasted with the often gloomy predictions about Hong Kong's future that have appeared in the international media. Yet they had reasons to be optimistic: the key players in the process have a stake in making the Hong Kong Special Administrative Region (SAR) a success. It was China that coined the concept of "one country, two systems" under which Hong Kong is to be governed for the next 50 years. That may have been in response to political and economic reality, yet China has much to gain from making the idea work. At issue is not only preserving Hong Kong's prosperity, though that will benefit China. China also hopes a successfully reintegrated Hong Kong can serve as a model for reunification with Taiwan, as the chief executive of the SAR, Tung Chee-hwa, told the Asia Society's annual dinner audience on the eve of the conference.

For their part, the people of Hong Kong are deeply attached to their way of lifeincluding their civil liberties, rule of law, and independent judiciary. There is some apprehension about the continuation of these institutions in the minds of most Hong Kong residents. No one should underestimate their role in preserving the economic and political freedoms guaranteed by the Joint Declaration and Basic Law and essential to Hong Kong's continued success.

Other countries and economies also have a strong stake in a stable transition and Hong Kong's continued prosperity. Taiwan has extensive economic interests in Hong Kong and southern China. These interests will remain a considerable force in preserving a pragmatic attitude toward Hong Kong, even if Taiwan's pro-independence Democratic Progressive Party (DPP) comes to power. The United States has a significant, long-term interest in the success of Hong Kong, which is home to 37,000 American expatriates. More than 1,200 U.S. firms operate in Hong Kong, including 450 that use it as their regional headquarters. The American people are keenly interested in seeing Hong Kong's freedoms preserved.

The "one country, two systems" formula has never been tested, and uncertainty is intrinsic in such a historic transition. Most risks were seen to be on the political front. Hong Kong's economic integration with China has already been largely accomplished over the past decade, and its role as provider of financial services and management expertise for China is expected to keep growing along with the Chinese economy, even with the increasing importance of Shanghai. With the seventh-largest stock market in the world, Hong Kong is a logical place to list the increasing number of Chinese state-owned enterprises expected to be brought to market as part of China's economic reforms. Hong Kong continues to make substantial investments in infrastructure and education that should encourage long-term growth. The rise of the service sectorwhich now represents 80 percent of the economyled to discussion of whether Hong Kong needs an industrial policy. Certainly, Hong Kong needs to continue broadening its already considerable global economic presence to compete in an increasingly global economy, but it appears well placed to do so.

Nonetheless, worries about the transition are understandable. Participants stressed the importance of preserving the rule of law in Hong Kong and expressed concern over the continued free flow of information amid reports of press self-censorship. Academic freedom is also a concern. China has said it will not tolerate advocacy of Taiwan or Tibet independencewould this rule out exploration of these topics in scholarly papers or debate? (Chinese participants rejected the idea that the "one country two systems" concept could be applied in Tibet or Xinjiang, saying the historical context was different.) And though Beijing pledges not to interfere in Hong Kong's affairs, can it prevent lower-level interference and resist pressure from Chinese citizens or interests to allow more access to Hong Kong or divert Hong Kong revenues or reserves to the mainland?

The new SAR government will also have to act sensitively. Participants expressed concern over Tung's failure to emphasize the unique international dimensions of Hong Kong, which transcend Chinese and Western ways, during his speech on amendments to the colony's Public Order and Societies Ordinance. Despite the pride of Hong Kong's 98 percent Chinese population in its cultural heritage, not all are comfortable with the political implications of the term "Chinese." The SAR government will also have some bread-and-butter issues to address, such as the widening gap between rich and poor and property prices that put home ownership increasingly out of the reach of the middle class. Will mainland "red chip" companies have to play by the same rules as everyone else?

The intense attention being given to Hong Kong's transition heightens some of the risks. Participants expressed concern that the U.S. Congress, influenced by the current wave of anti-China sentiment and reacting to often superficial media coverage of Hong Kong, could take precipitous and counterproductive action. In this context, the unconditional renewal of China's most-favored-nation trading status was strongly supported. At the same time, Chinese overreaction to events on the ground in Hong Kong was also seen as a risk. Participants urged all parties to handle the transition with sensitivity, and give the people of Hong Kong and their new administration a chance to prove that they can make the SAR work.

China and the United States

The relationship between China and the United States is of vital importance, not only to Hong Kong but to the entire Asia-Pacific region and to the economies of both countries. Participants expressed concern over the apparently troubled nature of the relationship. They recognized that while there were some underlying reasons for concern on both sides, strong U.S. presidential leadership on China could help create a better atmosphere for improving relations.

With the cold war over and the domestic economy booming, the American public is probably less interested in foreign affairs now than at any time since the end of World War II. Congress reflects this inward focus. The administration, tainted by the controversy over Asian donations to the Democratic Party, appears reluctant to speak out too loudly about the importance of good relations with China. As a result, U.S. China policy is being shaped, on one hand, by those who fear China's emergence as a new superpower, and on the other, by those who want to make China's human rights performance the center of Sino-American relations.

The international community has some legitimate concerns about China, which China itself could do more to address. It is a rising power, not a status quo power, and just how it is going to fit into the international system is not yet clear. In the past few years, incidents in the South China Sea have raised concerns about China's regional ambitions. Chinese officials say the country has no expansionist plans and that the country's armed forces are much weaker than outsiders estimate, but they have not shown any of the transparency that could build confidence. Alleged Chinese weapons sales to Iran and Pakistan, among other factors, have also disturbed the United States.

China's Future

Domestic developments in China, more than international ones, will probably be key in determining the country's future directionand by extension the future of Hong Kong. The conference heard that among those developments will be the way China addresses growing economic disparities, both among social classes and between the coastal and interior provinces. With central-government revenues having slipped to as low as 3 percent of gross domestic product (GDP), one academic estimated, decentralization may have gone too far. High politics will also play a role, with China facing another succession a few years down the road. Whereas late patriarch Deng Xiaoping had the stature to designate Communist Party General Secretary Jiang Zemin as the core of the new leadership, Jiang will not have that same authority when his term as president expires.

China's impressive economic growth continues at 910 percent a year, and from official figures at least, inflation appears to be under control. There is concern, though, about the massive debts of state-owned enterprises to state banks and other state-owned enterprises, which by one estimate total as much as $600 billion. China seems to be moving in the right direction on state-owned-enterprise reform: it plans to preserve the 1,000 largest and turn over the others to market forces, a step that will lead many to close, consolidate, or merge. But the behemoths still in state hands will continue to create a heavy drain on state resources for the foreseeable future. Participants recognized, though, that without a nationwide socioeconomic safety net it would be hard for China to move too much faster in its state-owned-enterprise reform. Developing such a safety net would also help limit the destabilizing effect of China's growing "floating population" of some 110 million migrant workers.

Security and Political Stability
South Asia: An Opportunity for Peace

In one of the most striking aspects of the conference, participants heard that India and Pakistan have what may be their best chance since Partition to make substantial progress toward peace. New political leadership, a changing geostrategic context, and most important an evolution of public opinion provided a window of opportunity for a dramatic reduction of tension.

Some participants had arrived in Hong Kong directly from the South Asian Association for Regional Cooperation summit in the Maldives, and they brought an optimistic message. In Male, the new premiers of India and Pakistan, Inder Kumar Gujral and Nawaz Sharif, respectively, demonstrated sincere willingness to make progress. Key is the seeming acknowledgment by the two governments that the Kashmir issuethough it must remain on the agendawill not be solved overnight. As a result, the two countries are looking for ways to make progress on other fronts, progress that could produce economic benefits and build confidence. Participants welcomed this approach, though they expressed hope that Pakistan would nonetheless step up its efforts to curb incursions by militants into Kashmir, and India draw down its troop presence.

Gujral may not have received as big an electoral mandate as Sharif, but peace has an increasingly powerful domestic constituency. After 50 years of independence, citizens of India and Pakistan are asking why they lag so far behind Singapore, Malaysia, and other East Asian countries. Indeed, many statistics indicate that South Asia, with 500 million people living below the poverty line, is even worse off than sub-Saharan Africa. The arrival of satellite television, as well as increased foreign travel, has helped drive home to South Asians the message that they are lagging behind not only the West, but also the East.

There is a growing recognition in South Asia that three wars and massive military expenditures are largely to blame for the situation. Indians and Pakistanis are starting to demand that the money being spent on tanks and fighter-bombers be channeled instead into education and social programs. Leading figures also see economic benefits to be reaped from jointly piping natural gas from Central Asia, and from building highway and rail links to open up trade. They would like to see investment from East Asia in these projects. This fledgling, positive trend needs to be reinforced by regular meetings of top leaders, as well as unofficial exchanges between groups and individuals.

The end of the cold war, which diminished tensions between India's and Pakistan's respective allies, helped open the door to progress. South Asian governments would like to see the United States and others encourage the peace process, but with gentle, behind-the-scenes diplomacy rather than public pressure. The conference heard that there is a growing consensus in Washington that South Asia policy should no longer be driven exclusively by the nuclear nonproliferation issue but should also support other ways to reduce tension.

North Korea: Handle with Care

North Korea has been called the powder keg of Asia. The food crisis and the defection of party ideologue Hwang Jang Yop have highlighted the regime's weaknesses, and the situation remains volatile. The international community needs to engage North Korea but must act with care to encourage those involved to move in the right direction.

The conference heard five possible scenarios for North Korea, with the most likely thought to involve change: either the Pyongyang regime eases its hard-line policies, or it collapses. Collapse could be violent, possibly involving military action against the South. The most desirable scenario was seen as gradual internal reform and integration with the South, a process that would demand engagement and support from the international community.

A look at North Korean television illustrates the dilemma facing the international community. One broadcast shows scenes of flood-stricken farmland and hungry peasants, whereas the next conveys images of missiles and well-fed troops on parade. There was a consensus at the conference that the food crisis was real, though estimates of its severity vary. Responding to it gives the West one of its few ways to engage North Korea. Denying it could mean the rejection of humanitarian concerns. Furthermore, China might be compelled to intervene as a result of the collapse and instability that may come of famine. But concerns remain about aid, particularly fuel, being channeled to the armed forces and thus propping up the regime. Participants did not reach a consensus on the best approach, but the United States favors making aid incremental and using it to encourage Pyongyang to join peace talks with South Korea, the United States, and China.

Participants noted the success of the Korean Peninsula Energy Development Organization, the Japan-South Korea-U.S.-led mechanism in which the European Union is a full partner and to which several other countries give substantial support. KEDO is providing North Korea with fuel and light-water nuclear reactorsless susceptible to use in bomb makingin return for a freeze in North Korea's existing nuclear program. There was even a proposal to set up a similar multilateral initiative to channel food aid to the North.

The defection of Hwang Jang Yop, the architect of North Korea's guiding juche (self-reliance) philosophy, was described as a serious psychological blow to Pyongyang but not necessarily a sign of the regime's imminent demise. Hwang was an ideologue and not one of the top figures in the power apparatus. The motives for his sensational defection were still being examined in Seoul. On the South Korean side, the economic slowdown has focused attention on the massive costs that would be associated with reunification, but South Koreans' fundamental desire for reunification has not changed.

The Role of the United States

Even if peaceful reunification of the Korean peninsula is eventually achieved, it will be important for the United States to continue to be the strong military presence in Asia that has helped safeguard the region's prosperity, many participants said. It was recognized that reunification could spur calls from some segments of the public in Korea and Japanparticularly on Okinawafor American troops to be withdrawn. Yet the United States remains firmly committed to the maintenance of a credible military presence in Asia, currently around the 100,000-troops level. Reunification would allow some redeployment of troops out of Korea and possibly reductions in Japan, but the situation at the timeincluding the comportment of Chinawould determine whether those countries wanted a drawdown.

It is common to hear that "the United States doesn't have an Asia policy." But supporters of the Clinton administration say it does indeed have a clear policy, and one that differs markedly from the approach of the Bush administration. Instead of focusing exclusively on bilateral security treaties, the United States is encouraging the building of what it calls a "Pacific Community," underpinned by multilateral ties. To this end, it is encouraging the development of regional organizations such as the ASEAN Regional Forum (ARF), which provides a mechanism for talking about security issues, and the Asia-Pacific Economic Cooperation (APEC) forum.

The U.S.-Japan relationship was not discussed nearly as extensively as in previous years, which reflects the relatively good state of this crucial bilateral relationship. In the past two years, in part because of Japan's economic problems, American concerns over the trade imbalance have diminished. At the same time, the two countries reinforced their security relationship with the April 1996 security communiqué. Nonetheless, a warning was issued against complacency, with tensions over trade liable to reemerge unless progress continues to be made.

Pressures for Change in Southeast Asia

The rapid economic growth that has transformed much of East and Southeast Asia has also spawned some political trends that cut across national boundaries. Political and economic trends can be contradictory, explaining tensions seen today in these countries.

For the most part, the rapid growth of the 1970s and 80s was produced by capitalism led by the military, the bureaucracy, and ruling party elites. Such growth greatly strengthened these economies, and imbued the leaders of these states with the confidence to assert the rightness of their views on the world stage, giving rise to the "Asian values" debate.

Economic growth has also produced societies that are far more complex, characterized in particular by a rising middle class. The intelligentsia, the press, student groupsall are clamoring for a greater role in society, and for more open, responsive governments. Generally better educated than their parents, the new middle class is not willing to simply trade political freedoms for economic benefits. Though they tend to be nationalistic, the Asian middle classes are closer than their governments to the political values of the West. Businesspeople, also, are more independent than before, and more skeptical of bureaucrats' ability to guide them in a global economy. With these growing trends, change or conflict is inevitable.

South Korea and Taiwan have accepted change and adopted democratic systems. But in much of Southeast Asia, participatory government is still a work-in-progress. The conference discussed the notable situation in Indonesia, where large numbers of political and ethnic clashes have occurred in the past year. While this may be attributable in part to greater opennessIndonesian soldiers no longer shoot demonstratorsother factors are clearly in play. Official corruption is a mounting source of popular anger. Some conference participants said they believe that corruption in Indonesia, which used to mainly consist of skimming off the top, is now occurring on a scale that produces some serious economic inefficiencies and distorts the distribution of resources. But outlets for public expression of dissatisfaction are limited: the most prominent opposition figure, Megawati Sukarnoputri, daughter of the late President Sukarno, was ousted as head of her political party in 1996. Public dissatisfaction has also fueled the rise of Islamic movements that some participants described as "fundamentalist," though others stressed that Islam in Southeast Asia is generally very tolerant. These sources of tension and instability are of serious concern because Asia's longest-serving ruler, President Suharto, is now 76, and the issue of who or even what system will succeed him remains a big question mark.

Some participants, pointing to the perceived political turmoil in Taiwan and South Korea, suggested that democracy is a luxury that developing and industrializing countries cannot afford. Others disagreed, describing democracy as the glue that holds together a country as diverse as India by giving disparate groups a say in government. Similarly, democratization in Taiwan has helped defuse tension between ethnic Taiwanese and the mainland immigrants who dominate the ruling Kuomintang, thus enhancing stability. Indeed, wider participation by the citizenry could be an effective tool to ensure open, accountable governments in Southeast Asia and to minimize corruption. It could also push governments to redress the income disparities that are of growing concern.

The attention given to human rights and environmental issues by nongovernmental organizations and Western governments was seen as useful in encouraging progress on those fronts. Many Asian participants said that quiet diplomacy was much more effective than public hectoring and sanctions, which tend to produce a nationalist backlash. Western activists also supported quiet diplomacy, but said it was most efficient if backed by the possibility of stronger action.

In some ways, Beijing and Taipei appear to be on a collision course. But careful handling can make that collision less likely. With its sovereignty over Hong Kong restored, Beijing will be focusing on reunification with Taiwan. At the same time, the political reforms in Taiwan, which were highlighted by the direct election of President Lee Teng-hui last year, may also have paved the way for the Kuomintang, which has ruled Taiwan for half a century, to lose power to the pro-independence Democratic Progressive Party when President Lee's term expires in 2001. Widening economic exchanges between China and Taiwan have encouraged the development of a powerful constituency for stable cross-strait relationsincluding many businesspeople who support the DPP. They could encourage the DPP to take a pragmatic approach to relations with Beijing, although, as one participant said, Beijing's hostility toward Lee, who has skillfully skirted the independence issue, could discourage a pragmatic approach.

   
The United States, ASEAN, and Burma: Agreeing to Disagree

A divide was audible on this topic: many American participants said "Burma" and most Asians, "Myanmar." ASEAN states for the most part remain committed to "constructive engagement" with Burma. The Americans have imposed sanctions, saying that engagement is not workingBurma's ruling junta has only intensified its crackdown on Aung San Suu Kyi's opposition National League for Democracy. (American oil companies, in contrast, tend to take the view that sanctions do not work). But Americans and Asians agreed that neither side should treat the issue of Burma's admission to ASEAN in July as a litmus test of U.S.-ASEAN relations. They should continue to build their relationship on other fronts.

Cambodia, which will also gain entrance to ASEAN this year, was also discussed. Its neighbors are not the only ones who would like to see a stable and open Cambodiathe situation in Cambodia is also a test of the effectiveness of United Nations peacekeeping. The $2 billion, 19921994 UN peace effort in Cambodia was by no means an unqualified success, the conference heard. The UN did not force the other armies to disarm after the Khmer Rouge refused to lay down their arms, and as a result much of the apparatus of the formerly communist Cambodian People's Party (CPP) government remained in place. Thus the royalist Funcinpec Party, despite its election victory, had little choice but to form a coalition government with the CPP. This coalition has been fraught with dangerous tensions between the two prime ministers, as well as between Phnom Penh and the provinces, which are largely controlled by the CPP. Of most concern, CPP dominance of the state security apparatus raises the question of whether the next elections can be free and fair.

Asian Economies: The Next Step
Management, Not Miracles

Is the East Asian "economic miracle" over? The answer participants got was "yes and no." Yes, because the region is entering a new and more challenging phase of development; no, because the factors are present for growth to continue. As the region moves on to this next stage sound economic and political management will be critical.

The first stage of East Asia's rapid economic growth was built largely on cheap labor. With that advantage shrinking, and globalization exposing the region to greater competition, the next stage requires economic restructuring. Growth needs to be based on improved productivity, not just on increased inputs such as labor and capital.

The free-market system has been highly efficient in allocating resources in economies such as Hong Kong. Even for countries such as South Korea with a record of successful state-led capitalism, continued economic liberalization is seen as vital. As the world economy becomes more global, the rigors of the free market drive economies to adapt and become more competitive. Nonetheless, conference participants felt that governments also had a role to play in enhancing economic competitiveness and addressing the human costs of economic change.

As they move to the next stage of development, Asian economies need to make massive investments in infrastructure. Governments can guide this process, but participants were interested in ways to keep increasing the involvement of the private sector in major infrastructure projects. Governments also need to promote, in partnership with the private sector, education and job training, including the difficult task of retraining workers who lose their jobs because of economic restructuring. Political management of the changes associated with growthincluding ethnic and regional economic disparities, the increasing cost of urban housing and other essentials, and the rising expectations of the populationwas seen as important to maintaining momentum.

Globalization poses some concrete challenges to Asia. For example, in the early 1990s, 19 percent of North American textile goods came from the countries that now form the North American Free Trade Area (NAFTA). Last year that number had risen to 40 percent. Electronic goods look likely to follow the same pattern. Protectionism was not seen as a viable alternative, however, as it would just result in countries being left behind economically.

Participants were very positive about the region's economic prospects. Already, a number of non-Japanese, Asian multinational companies have emerged, such as Samsung and Daewoo in South Korea and the C.P. Group in Thailand, demonstrating the region's ability to compete in the international economic arena. Many of the factors that spurred rapid growth in the 1970s and 80s, including high savings rates, remain in place. Businesspeople continue to remain focused on striking the kinds of deals that promote rapid growth. Levels of management and technological expertise continue to rise. Participants agreed that it was important for Asian economies to keep increasing their investment in research and development, though some stressed that goals should be appropriate: Hong Kong, for example, with an economy built largely on small and mid-sized trading companies, might be better off refining "process technology"the science of getting goods to marketrather than making massive investments in product technology.

Japan's Turning Point

The Japanese economy, which accounts for two-thirds of Asia's economic output, is a matter of intense interest to the rest of the region. Conference participants were pleased to hear their Japanese colleagues say that psychologically, at least, Japanese believe that their country's economy has hit bottom and is starting to rise. Some statistics support that optimistic outlook: household income is rising, stock prices of key corporations are high, unemployment is starting to drop. GDP grew 3.6 percent in 1996.

This time, participants heard, Japan really is serious about economic reform. The burst of the 1980s bubble economy and the subsequent rise of the U.S. economy convinced many Japanese that the "Japan, Inc." model, with its tight interaction between government bureaucrats and giant corporations, was no longer the best model to compete in the globalized world economy. Broad popular support for reform was demonstrated by the October 1996 parliamentary elections, which brought Prime Minister Ryutaro Hashimoto to power.

Hashimoto announced plans for reform in six broad areas: bureaucracy, national budget, economic structure, financial industry, social welfare, and education system. That he will be able to deliver substantial reform on all fronts is unlikely: bureaucratic resistance is inevitable. But, the conference heard, prospects were good for the area of reform that might have the biggest impact on the world economy: Hashimoto's "Big Bang" package of financial deregulation.

Due to be implemented progressively by 2001, measures include liberalization of international financial transactions; lowering of the barriers among long-term-credit banks, commercial banks, securities firms, and insurance companies; liberalization of pension fund and investment fund management; and a restructuring of the Bank of Japan to make it more independent from the powerful Ministry of Finance. This last step was described as likely to have a positive impact on the stability of international financial markets.

Nonetheless, pitfalls remain. A spate of major bankruptcies would give the Ministry of Finance an excuse to stonewall on market deregulation. If reforms were perceived as a failure, voters could react strongly against the government in the next election. And before that, there lurks the danger that Hashimoto's coalition could fracture over another issue, such as the U.S. troop presence on Okinawa, which has been criticized by Hashimoto's Socialist partners.

Certainly, no one should write off Japan. The Japanese management model is still impressive, as was demonstrated late last year when Toyota Motor Corp. bounced back to full production only three days after a disastrous fire at one of its key subsidiary suppliers. A number of major companies are well into restructuringgenerally without layoffs. The weakness of the yen has been helping to boost exports, aiding the recovery. What will the final product look like, after Japan has reinvented its economy? It is hard to say, but one participant predicted that it would be neither traditionally Japanese nor fully Western, but something uniquely in-between. Whatever the result, participants heard, trade between Japan and the rest of Asia should continue to increase. Japan does not favor closed regionalism.

APEC's Vital Role

The conference reaffirmed its strong support for the Asia-Pacific Economic Cooperation forum, which plays a major role in encouraging a rules-based, open-market system in the region. It is proving to be instrumental in liberalizing trade and investment in the Asia-Pacific region, and heads of state and government have come to value it highly for the opportunity it provides for direct, often informal, contacts. Nonetheless, a participant from the business community stressed that in order for APEC to maintain credibility, it was important for it to demonstrate some concrete successes each year. One such success would be the creation of an APEC business visa, to allow freer movement of businesspeople among APEC countries, said a business participant. The momentum of liberalization should be maintained, he added, by moving beyond trade into sectoral reforms. Another view expressed was that future hosts of APEC need not be expected to produce stunts or spectacles. The group has matured to the point that its implementations are as important as its innovations.

In fact, debate about APEC focused on whether its role should be expanded beyond working on trade and investment liberalization, and if so, how. A few participants saw "community building" measures as the logical next step. In order to push intellectual and societal structures to support trade liberalization, it is important to encourage exchanges of ideas, technology, and so forth across national borders, these participants said. But more participants voiced the view that expanding APEC's role, or for that matter its numbers, could stall progress. They said that keeping APEC firmly focused on trade and investment liberalization is the most effective way to achieve its goal of promoting economic cooperation among the member countries. It is also a useful, neutral forum for discussions among leaders.

Generally, there was broad agreement on the usefulness of APEC, and the conference called for the United States to maintain its commitment to the grouping. It was noted that the rise in intra-Asian trade does not signal a diminution of the importance of exchanges with the West. Expanded regional operations by Japanese and other Asian companies have meant an increase in the shipping of raw materials, components, and semi-manufactured goods among Asian countries, but North America and Europe remain the leading destinations for the finished products.

Conclusion

In the half-century between the British decolonization of India and the final lowering of the Union Jack in Hong Kong, Asia has transformed itself from an economic backwater to one of the world's most dynamic regions. Now it is beginning to translate that role into a more prominent place on the world stage. As the events of 1997 demonstrate, though, Asia's future is still taking shape. This is a time of tremendous promise, but change also entails risk.

The future direction of China will be a major determining force. Though that direction will be determined largely be internal developments, the international community should do what it can to promote a stable and prosperous China that is soundly integrated into the international community, participants said. Both the United States and China should work at improving Sino-U.S. relations, seen as important to the stability and prosperity of the wider region. The return of Hong Kong to Chinese sovereignty underscores the reemergence of China, powered by its awakened economy, as an international player. By handling that transition well, it could do much to reassure the international community of its good faith, and to overcome the legacy of Tiananmen Square.

Change of governmentsand attitudesin South Asia may also present the opportunity for a dramatic reduction of tension. The conference hoped that India and Pakistan would seize the opportunity to make a peace that would benefit the entire region. In North Korea, a tragic food crisis has prompted one of the world's most reclusive regimes to reach out. It has given the international community a rare chance to engage Pyongyang and possibly help steer the Korean crisis toward a peaceful solution. In Southeast Asia, pressures for political change present potential instability, but if skillfully handled they can translate into stronger, more broadly based, civil societies in the long run.

Economically, Southeast Asia is maturing, and it has the ways and means to move to the next stage of growth. If the Japanese economy really is turning around, it will provide an important boost. Asian governments and businesses nonetheless need to be able to make some hard choices to restructure economies to be competitive. Continued economic liberalization will benefit the region as a whole, but it is also important to ensure that the benefits of economic globalization are spread widely and not permitted to contribute to the growing gap between rich and poor, a concern that came up again and again among conference participants.

With the region largely peaceful, markets surging in size and trade and investment opening up, one participant said, business is entering a "golden era" in Asia. Now is the time to move beyond unbridled, single-minded pursuit of growth, toward an emphasis on "institutional economics." Governments must work increasingly on issues such as maintaining social cohesion and creating strong societal institutions. It is up to policymakers to ensure, through sensitive management of change, that the golden era lasts.

Participants

AUSTRALIA
Hugh Morgan, Chief Executive Officer, Western Mining Corporation Ltd.

CAMBODIA
Pok Marina, Undersecretary of State, Ministry of Foreign Affairs and International Cooperation

CANADA
Howard Balloch, Ambassador to the People's Republic of China
Paul Evans, Professor of Political Science, University of TorontoYork University

CHINA
Shen Dingli, Professor of International Relations, Fudan University
Wang Shaoguang, Associate Professor of Political Science, Yale University
Zhang Wenpu, Vice President, Chinese People's Institute of Foreign Affairs
Zhang Yunling, Director, Institute of Asia-Pacific Studies, Institute of Japan Studies, Chinese Academy of Social Sciences

HONG KONG
Ronnie Chan, Chairman, Hang Lung Development Company Ltd.
Nayan Chanda, Editor, Far Eastern Economic Review
Frank Ching, Senior Editor, Far Eastern Economic Review
Victor Fung, Chairman, Prudential Asia, Prudential Asia Capital Limited
Yi-zheng Lian, Editor in Chief, Hong Kong Economic Journal

INDIA
Isher Judge Ahluwalia, Research Professor, Centre for Policy Research
Shekhar Gupta, Chief Editor, Indian Express

INDONESIA
Dewi Fortuna Anwar, Head, Regional and International Affairs Division, Center for Political and Regional Studies, Indonesian Institute of Sciences (LIPI)
Adi Sasono, Chairman, Center for Information and Development Studies

JAPAN
Yoichi Funabashi, Columnist and Chief Diplomatic Correspondent, Asahi Shimbun
Toyoo Gyohten, President, Institute for International Monetary Affairs
Kazutoshi Hasegawa, Advisor, Itochu Corporation
Kiyoaki Kikuchi, Senior Advisor, Matsushita Electric Industrial Company
Yoshio Okawara, Executive Advisor, Keidanren

KOREA
Bang Sang-Hoon, Publisher, President and CEO, Chosun Ilbo
Han Sung-Joo, Professor of Political Science and Director, Ilmin International Relations Institute, Korea University
Hyun Hong-Choo, Senior Partner, Kim and Chang

MALAYSIA
Hishammuddin Tun Hussein, Parliamentary Secretary, Ministry of International Trade and Industry

NEW ZEALAND
Philip Burdon, Former Minister for Trade Negotiations
Phillip Gibson, Executive Director, Asia 2000 Foundation of New Zealand
Richard Nottage, Secretary of Foreign Affairs and Trade

PAKISTAN
Shaharyar Khan, Special Representative of the UN Secretary-General for Rwanda

PHILIPPINES
Jesus Estanislao, President, University of Asia and the Pacific
Washington SyCip, Founder and Chairman, The SGV Group

RUSSIA
Igor Rogachev, Ambassador to the People's Republic of China

SINGAPORE
S.R. Nathan, Director, Institute of Strategic Studies
Tommy T.B. Koh, Executive Director, Asia-Europe Foundation
Lee Tsao Yuan, Director, Institute of Policy Studies
Zainul Abidin Rasheed, General Manager, NTUC (International) Fairprice, NTUC Cooperative (Pte) Ltd.

TAIWAN
Douglas Tong Hsu, Chairman and CEO, Far Eastern Textile Ltd.
Hung-mao Tien, President, Institute for National Policy Research

THAILAND
Surin Pitsuwan, Member of Parliament
Vichit Suraphongchai, Member of and Advisor to the Board of Directors, Bangkok Bank Public Company, Ltd.

UNITED STATES
Morton Abramowitz, President, Carnegie Endowment for International Peace
Julia Chang Bloch, President, U.S.-Japan Foundation
Marshall M. Bouton, Executive Vice President, Asia Society
Janet Clayton, Vice President, Los Angeles Times
John F. Imle, Jr., President, Unocal Corporation
Stuart Janney III, Chairman, Bessemer Trust Company
Sidney Jones, Executive Director, Human Rights WatchAsia
Robert Oxnam, President Emeritus, Asia Society
Maynard Parker, Editor, Newsweek
Nicholas Platt, President, Asia Society
Stanley Roth, Director of Research and Studies, United States Institute of Peace
Robert C. Timpson, President, IBM Asia Pacific, IBM World Trade Asia Corporation

VIETNAM
Dao Huy Ngoc, Director General, Institute for International Relations

Conference Observers
John Brown, President, John Brown Ltd.
Ann Calkins, Vice President, External Relations, Asia Society
M. Rickcliffe Choate II, Managing Director, Interval International
Hahm Young Joon, Hong Kong Bureau Chief, Chosun Ilbo
Mikio Kato, Executive Director, International House of Japan
Vyacheslav Lukyanchuk, Consul, Consulate General of Russia
William McKeever, Director, Regional Center Coordination and Asian Activities, Asia Society
Richard W. Mueller, Director, Asia Society Hong Kong Center
Cynthia Hazen Polsky
Leon Polsky, Judge, New York Court of Claims, Ret.
Kevin F.F. Quigley, Vice President, Contemporary Affairs and Corporate Programs, Asia Society
Mohammad Karim Mohammad Raslan, Partner, M/s Raslan Loong, Advocates and Solicitors
T.W. Shu, Chairman, The Ka Wah Bank Ltd.
Steven Strasser, Asia Editor, Newsweek
Song Yihan, President and CEO, The Ka Wah Bank Ltd.
Susy Wadsworth
Freda Wang, Chief Representative, Dow Jones and Co., Inc., Shanghai

Rapporteur
Andrew J. Sherry, Correspondent, Far Eastern Economic Review

Asia Society Staff
Mary-Hart Bartley, Executive Associate (New York)
Steve Chin, Intern (Hong Kong)
Catherine Han, Intern (Hong Kong)
Dede Huang, Assistant Director (Hong Kong)
Cai Jing, Membership Assistant (Hong Kong)
Stephanie Lawkins, Program and Membership Associate (Hong Kong)
Li Ping Lo, Program Associate (Hong Kong)
Jennifer Martin, Administrative Associate (New York)
Kate Simpson, Program Associate (New York)

FINANCIAL CONTRIBUTORS
Bessemer Trust, NA
Dah Sing Financial Holdings Ltd.
Hang Lung Development Company Limited
IBM International Foundation
ITOCHU Corporation
Kansai Electric Power Company, Inc.
The Lee Foundation of Singapore
Matsushita Electric Industrial Co., Ltd.
Mitsubishi Corporation
New World Development Company, Ltd.
The Ogasawara Foundation for the Promotion of Science and Engineering
C.P. Pokphand Co., Ltd.
Sun Hung Kai Properties Limited
Tokyo Electric Power Company, Inc.
Unocal Corporation
Hong Kong Trade Development Council
The Better Hong Kong Foundation
Vision 2047 Foundation