Origins: Hong Kong - #120

Every place in the world has a series of things that give that spot a special character... and make it different from every other place.  When you look at the ORIGINS of these things, you often end up with a better appreciation of the territory -- and that makes it a lot more interesting to visit.  And sometimes, these ORIGINS help us understand why we live the way we do.

For hundreds of years, Canton has been the capital city of southern China.  It sits on the banks of the Pearl River, which empties out into the South China Sea.  At the mouth of the river, about eighty miles from Canton, is the little island of Hong Kong.  People have been living on Hong Kong for over six thousand years, and until the middle of the 1800s it was a quiet place with a small population that made a living from the sea.

But that is no longer the case.  These days Hong Kong is one of the busiest and most modern cities in the world.  And perhaps because it is physically so small -- only seventeen square miles -- it loves the idea of being big in every other way.

It has the busiest container port in the world.  It is the world’s largest exporter of clothing, watches and fashion jewelry.  It is one of the world’s largest banking centers.  It is building the world’s largest airport.  It has the world’s largest Chinese restaurant, which you might expect, but it also has the world’s busiest McDonald’s.  It has constructed the world’s longest outdoor escalator.

Hong Kong is also one of the world’s top centers for trade.  Which is only fitting, since Hong Kong’s growth began as the result of a trade war between England and China in the middle of the 1800s.  And trade has been the source of Hong Kong’s growth ever since.

BURT WOLF (ON CAMERA):  During the 1700s and 1800s the English were buying teas, silks and porcelains from the Chinese and paying for them with silver... with so much silver that they began to run out of reserves.  They needed to find something to sell to the Chinese to get their silver back.  And what they found was opium.  They found it in India which was a British colony at the time and they forced it on the Chinese.  They centered their opium dealings in the Chinese city of Canton.  The Emperor of China hated the drug trade and declared it illegal.  He even tried to have it stopped by sending a letter to Queen Victoria.  Listen to this: “I am told that in your country opium smoking is forbidden under severe penalties.  This means you are aware of how harmful it long as you do not take it yourselves, but continue to make and tempt the people of China to buy it, you will be showing yourself careful of your own life, but careless of the lives of other people, indifferent in your greed for gain to the harm you do to others; such conduct is repugnant to human feelings and at variance with the Way of Heaven.”  And what did Queen Victoria do in response to this letter?  Zip.  Nothing at all.  Her drug trade continued as before.

So the Emperor ordered a blockade of the port of Canton.  He cut off their food and water and demanded that the English hand over their opium stores.  After six weeks, Captain Charles Elliot of the Royal Navy surrendered 20,283 chests, with 150 pounds of opium in each -- altogether over three million pounds of narcotics.  The British withdrew from Canton and took refuge at the mouth of the Pearl River on the island of Hong Kong.  The British government in London responded to the Chinese by sending in the marines.  The English attacked China in what has become known as the Opium Wars.

BURT WOLF (ON CAMERA):  The Chinese were no match for the English.  And they very soon agreed to give Hong Kong to the English and to open up their ports to the opium traders.  Nice little business for the British as long as you skip over the fact that they  were inventing the international drug trade.  Ah, but those were the bad old days, and now Hong Kong is living in the good old days.  Days in which Hong Kong is a global financial center, and the collective high comes from economic success.  Opium is out. Adrenaline is in.

But where does all this economic success come from?  What are the origins of Hong Kong’s wealth and power?

Hong Kong has no vast agricultural areas.  Hong Kong has no wealth of raw materials.  Hong Kong has no reserve of valuable minerals.  It would seem that Hong Kong has none of the things that traditionally make a community wealthy.  But Hong Kong does have two things that make up for everything that’s missing.  The first is a unique geographic position.  Hong Kong is at the crossroads of Asia and it is the commercial entrance gate to the Chinese mainland.  To take advantage of its geography, Hong Kong has built itself one of the most modern ports in the world.  It handles over ten million containers each year, which makes it the busiest container port in the world.

BURT WOLF (ON CAMERA):  The second thing that Hong Kong has is a population with a cultural tradition that loves “efficiency.”  Efficiency is basic to the Chinese character and it comes out in everything that is a basic part of Chinese life.

For thousands of years the Chinese have cooked in woks.  A wok is easy to make. Easy to store.  Easy to use, and most important, it is very efficient in terms of fuel.  Most Chinese recipes are masterpieces of gastronomic efficiency.  Lots of well-balanced nutrients for the least cost.

The Chinese junk is an amazing example of efficient nautical design.  Easy to build, it carries a large amount of cargo space and makes almost perfect use of the local winds.  The Chinese also invented the magnetic compass, which was certainly a great step toward more efficient travel.

And with all due respect to Mr. Gutenberg and his bible, the Chinese had movable type centuries before the Europeans.  They also invented paper, which gave them the original prize for efficient information storage.  And next time you open up your wallet, please bear in mind that it was the Chinese who came up with the idea of paper money.

BURT WOLF (ON CAMERA):  So, Hong Kong has a harbor that’s ideally placed for trade and a population with a five thousand year old history of efficiency.  What do you make with those two ingredients?  Well, you end up with an economy based on bringing something into Hong Kong, efficiently changing it to make it more valuable and then shipping it out of Hong Kong at a price that makes money.

Made-to-measure clothing is an important part of Hong Kong’s tourist economy.  A shirt or suit made to your own precise measurements is at the top of the shopping list for many tourists.  And there are over four thousand tailors in Hong Kong ready to meet the demand.

The most famous tailor in Hong Kong is Sam’s.  He certainly has the most famous clientele.  Sam feels that a good tailor must never talk about his clients.  For Sam, inside leg length is a privileged communication and I agree.  But if you look around the walls of his shop you can get a pretty good idea of the people Sam keeps in stitches.

BURT WOLF:  Now, when I’m looking for a suit and I want to be able to tell a really good suit from a not so good suit, what do I look for?

MANU “SAM” MELWANI:  Well, you look at the first -- you look at the quality of the fabric you buy from.  After buying the quality of fabric, you look at then, the stitching.

BURT WOLF:  The stitching... how can I tell good stitching?

MANU “SAM” MELWANI:  Well, before you go for the quality, you look at it, right, if it doesn’t fit you, it’s not worth at all to look at it...


BURT WOLF:  Okay, it has to fit right when I first put it on...

MANU “SAM” MELWANI:  First look at it according to your shoulder, according to your neck, if the suit is away  from the collar it’s just not worth it at all.  Once the suit fits you...

BURT WOLF:  Right...

MANU “SAM” MELWANI:  ...then you go for the hand stitching, buttonholes, all these, like this...

BURT WOLF:  Real buttonholes...

MANU “SAM” MELWANI:  That’s right...

BURT WOLF:  Okay, hand stitching...

MANU “SAM” MELWANI:  All the way....

BURT WOLF:  Oh, stitching all the way down in here....

MANU “SAM” MELWANI:  To hold the shape of the lapels so it doesn’t go off...

BURT WOLF:  I never noticed that.  So there’s stitching in here to hold the shape of the lapel.

MANU “SAM” MELWANI:  So that it doesn’t wear out.

BURT WOLF:  Oh, that’s very nice...the jacket is perfect.  I will try on the pants now, but I’ll do that privately.

Perhaps most important these days in terms of Hong Kong’s economy are the financial services.  In most cases these are Western commercial concepts that the people of Hong Kong have adapted for the needs of an Asian population.  Information services, investment banking, insurance, accounting.  And they are constantly developing new and more efficient ways of doing business.

The Chinese words Hong Kong mean “Fragrant Harbor,” which is a perfect description of the place.  No matter what happens to it, it always comes up smelling like a rose.  Hong Kong has also been described as being like a rubber ball -- the harder you throw it, the higher it bounces.  And it appears that at the heart of Hong Kong’s ability to bounce back are two things: a population that can easily adapt to change and a government that supports business as the world changes.

BURT WOLF (ON CAMERA):  The government believes that if someone wants to start a business he’ll probably  know enough about that business to make the venture a modest success.  And it is their job to do everything they can to help that person become successful.  They also believe that everybody is going to pay their taxes and they believe that for two reasons.  First of all, they feel that people are basically honest.  And second, they feel that they’ve kept the taxes here in Hong Kong so low, that it costs more to cheat them than to pay them.

Because Hong Kong has been faced with an extraordinary level of change, it has mastered the techniques of transition.  The key word is flexibility.  They know when it’s time to make a shift.  If you have a small factory that is making typewriter keyboards and typewriters are no longer a growing business, but computers are, it’s time to shift to computer keyboards.  No problem.  No rigidity.  They’ll make the change tonight.

BURT WOLF (ON CAMERA):  During the 1970s when China introduced the series of economic reforms, Hong Kong money started moving into the mainland, and Hong Kong itself began to lose some of its manufacturing jobs.  Now, in most parts of the world that would have led to a recession.  But not here.  Hong Kong just shifted gears and went from an economy based primarily on manufacturing to an economy  based primarily on services.  Particularly services in banking and insurance.  Hong Kong also became a point of entry for foreign corporations who wanted to do business in China.

The whole town is constantly involved in finding a dynamic state of balance, literally from minute to minute.

BURT WOLF (ON CAMERA):  Everyone has come to realize that change by itself is really nothing to fear, and that more often than not change just creates new opportunities for profit.

For over one hundred and fifty years Hong Kong was a commercial outpost of England.  A center for entrepreneurial operations.  A hotbed of capitalist activity.  And since the middle of the twentieth century, all this free enterprise has been going on right in front of the world’s largest communist government.

BURT WOLF (ON CAMERA):  On the surface, it would appear that mainland China and Hong Kong were in conflict -- capitalism versus communism.  But that is a western view, and Hong Kong and China are in the east.  The world of the Taoist.  The masters of flexibility and integration -- the combiners of opposites.

Hong Kong has become the commercial window on the world for the mainland, and Beijing likes to keep that window open with the money blowing in.  Hong Kong is Beijing’s banker.  The Hong Kong investment community is China’s main source of foreign currency, currency that is very much needed.  On the other side of the coin, the Bank of China in Hong Kong is the second largest bank in the city and one of the three banks that issue Hong Kong’s money.  A capitalist city bringing money to a communist country and a bank owned by the communist country issuing currency for the capitalists.

BURT WOLF (ON CAMERA):  Inscrutable -- like so many marriages that work.  And Hong Kong works for the mainland in other ways.  Hong Kong is Beijing’s communications center, source of investor funds and technical know-how, gateway for tourism, and trade base from which the mainland deals with the rest of the world.  It is the school where Beijing is learning about free enterprise and putting those lessons to practice in the provinces that are nearest to Hong Kong.

BURT WOLF (ON CAMERA):  The majority of the business community in Hong Kong believe that China and a number of other Asian countries are developing in ways that will transfer the economic centers of the world from Europe and America to Asia.  They also believe that Hong Kong will become the transfer agent.

In 1841, England took Hong Kong from the Chinese Emperor by force.  In 1982 British Prime Minister Margaret Thatcher went to Beijing to discuss transferring control of Hong Kong back to China.  Suddenly the residents of Hong Kong were confronted with a future in which Hong Kong would lose its status as a British colony and be handed over to a communist government.

And a lot of people got very nervous.  The stock market took a dive.  Highly inflated property values dropped.  Capital flew out of town.  Large corporations began thinking about moving their headquarters.  And thousands of people decided that they were going to immigrate to some other country.  At one point, Hong Kong was losing over 40,000 people a year.  But that has all changed.  Hong Kong, as it has done for decades, quickly lost interest in panic and settled down for a closer look at what was really happening.

The Buddhists believe that in every event there is a Teaching, and if you understand the Teaching, the event, no matter how negative it may look on the surface, will eventually produce something good for you.  So the question for Hong Kong became... what is the Teaching?

Guy Lam is a mechanical engineer.  But he is also one of the most respected attorneys in Hong Kong.  His specialty is international law.  Guy was born in China and raised in Hong Kong, but when he wanted an education, he left.

GUY LAM:  Well, I was eighteen, and I was at an age of going to university.  And going to school in the colonial system, any higher education is a very difficult task.  The British make sure there are only so few spaces at the university level.  So it is quite common for people between the age of eighteen after secondary school to go to university elsewhere, such as U.K., U.S., and Canada.  And I went in Canada.

BURT WOLF:  During the early ‘80s when it became apparent that Hong Kong was going to be given back to the Chinese Communists, lots of people left.  Why did they do that?

GUY LAM:  The fear of Communism.  It was a nightmare in China, I would say, in the last century or so.  So, with that as a background, it’s understandable many Hong Kong Chinese would not want to be part of nightmare; and therefore, they left.

BURT WOLF:  You came back.  Why?

GUY LAM:  We realized the nightmare was not so much of a nightmare after all.  It was actually an opportunity.  With China opening up -- which was never expected -- with Hong Kong prospering from the opening up of China, I would say Hong Kong is more like California during eighteenth century, nineteenth century when it first joined the U.S.  The “Wild West”?  Now this is the “Wild East.”  The land of opportunities.

BURT WOLF:  What role do you think Hong Kong is going to play in the future?

GUY LAM:  Well, I think Hong Kong will inevitably be the widow to the world for China, and in fact is has been, even though it’s not part of China yet, it has served as such purpose.  If you compare the industrialization of China in the last ten, twenty years to that of the U.S.S.R., China prospered, and U.S.S.R. -- the former U.S.S.R., now Russia -- went down the pipes.  The difference, one major difference, is Hong Kong.  China has Hong Kong to bring to it the finance expertise, legal expertise, the capital, whereas Russia has none.

BURT WOLF (ON CAMERA):  Over ten percent of the people who left Hong Kong have returned, and each year there is a net inflow of over 100,000 people a year.  In the end it was a pretty traditional teaching for the people of Hong Kong -- in this case, change was merely a shifting of the earth that allowed people to find gold in a new place.

In spite of being part of China, Hong Kong looks very western, and in many ways it is.  But when you get up close it becomes quite clear... this is a Chinese culture, outside and in.  And everything that is traditionally Chinese is very important to the people of Hong Kong.

Take for example the practice of fung shui.  Fung shui is a Chinese Buddhist art that adjusts a building so it stands in proper relationship to the spirit force of life called the Ch’i.  The man in charge of making the adjustment is called a geomancer.  This is Raymond Lo, who’s one of the master geomancers of Hong Kong.

RAYMOND LO:  Geomancy is a study of how the environment is affecting the well-being of people.  So, basically, we talk about how the landscape will generate a kind of prosperous energy and then we have to measure directions and we also have to measure time.  So, in fact, it’s a science which talks about how you can prosper at a particular time and space dimension. 

BURT WOLF:  How do you do it?

RAYMOND LO:  Basically, you have to use a very important tool.  So this is the ancient Chinese compass.  So because we need to measure direction accurately we have to apply this instrument.  So it’s not much different from an ordinary compass.  You see that it’s a magnetic needle pointing north / south.  But it has got a lot of information which tells you the implication of different directions or you can say what kind of Ch’i, the word Ch’i is very fashionable, so all the information there tells us that if you measure a building facing this direction, what are the implications?  What is the implication of that tree in relation to that building, the implication of that road, in relation to that building.

The Bank of China Tower has been a controversial subject in the fung shui circles in Hong Kong mainly because it was built with a lot of sharp edges.  Pointing, one of the sharp edges is believed to be pointing to the back of the Hong Kong governor’s house.  So, in Chinese fung shui principles basically we prefer very harmonious kind of shape.  Like we prefer circles, we prefer regular rectangles, and sharp edge is usually considered as a source of hostility and horror.  So there are people who consider this to be responsible for the conflicting relationship between the British government and the Chinese government since the building was there in about 1985.

BURT WOLF:  I’m going to watch out for all the pointed buildings near my house, that’s for sure.

BURT WOLF (ON CAMERA):  Hong Kong’s Regent Hotel has excellent fung shui. Very early in the planning stage a geomancer was consulted.  And he pointed out that the great dragons of Kowloon who lived just up the road from here, would pass through this spot each day on the way to their bath in the harbor.  The very spot where they entered the water was where the Regent was about to be built.  And that would have been bad fung shui.  Actually, very bad fung shui.

The solution: glass.  It appears that dragons don’t mind going through glass.  They come in straight through the front doors.  There’s one door for each dragon.  Then they cross the lobby and enter the bay through forty-foot-high windows.  The geomancer also pointed out that dragons often control the flow of wealth and it would be a good idea to place the check-in area and the cashier alongside the dragons’ path.  The owners of the hotel did just that and the hotel has been successful ever since.

BURT WOLF (ON CAMERA):  And the geomancers do pretty well too.  They get paid about two dollars per square foot when they’re working on a private apartment and a major commercial building can bring in a fee of well over one-hundred thousand dollars.  The moral of the story is clear -- a clean dragon is a happy dragon.  And good fung shui can help you clean up.

And if you would like to clean up your plate, the Regent Hong Kong can help you with that, too.  Their Shanghai Club restaurant is one of the most well-respected and romantic spots in town.  Today, Chef Cheung Kam Chuen is going to prepare a dish of Fish with Eggplant.

The wok is heated; in go two cups’ worth of eggplant, cut into strips.  Thirty seconds of cooking and the eggplant is drained.  Fresh oil goes in, then a filet of grouper that has been cut into sticks that are an inch square and about three inches long.  They were dipped in beaten egg and then rolled in cornstarch prior to their arrival in the wok.  They stir-fry for a minute; the wok is cleaned and reheated.  Then in goes some garlic, ginger, red chili pepper and chili sauce.  Hot stuff!  The fish comes back, the eggplant returns, a half-tablespoon of sesame oil goes in, plus a half-tablespoon of soy sauce.  A little stirring, followed by a teaspoon of cornstarch that has been dissolved in water.  Then it’s into a serving bowl with a garnish of cilantro and scallions.

BURT WOLF (ON CAMERA):  That’s a brief look at some of the stories that make Hong Kong the unique place that it is.  But what happened to Captain Charles Elliot of the British Navy, where this story began?  The man who took Hong Kong from the Chinese emperor in 1841 and had the original vision of this place as a commercial center?  What happened to Captain Charles?  Well... the Lords in London didn’t think that he had made such a good deal with the Chinese.  They wanted more.  And so they banished him to the most insignificant political post they could think of.  They made him British Consul to Texas.  Yeah, I know, it’s hard to find people who appreciate your work.  And yet,  you have stood with me during this program and that makes me feel appreciated.  And I hope you will stand with me again during our next program as we travel around the world.  I’m Burt Wolf.