When Hong Kong reverted to the Chinese on July 1, 1997, speculation about a bleak future ran rampant. Raymond Ch'ien, Gr'78, was delighted. Even as a lifelong resident of Hong Kong and a "player" in the prosperity that developed under British rule, Ch'ien viewed the British colony as a temporary situation--a short-term option until things changed in China. Last July, as the Western media lamented the loss of the past, Ch'ien was focused on a positive future full of enormous potential. One year into that future, he came to campus and talked to us about the new Hong Kong.

Ch'ien is one of the forces that will craft the future of Hong Kong. A member of the Executive Council of the Hong Kong Special Administrative Region of the People's Republic of China, he is one of only two members who served on both the British Council and its Chinese successor. His family came to Hong Kong when he was five and then sent him to the States for his higher education. Ch'ien's first job, after receiving his Ph.D. in economics from Penn, was as a regional economist for Chase Manhattan Bank. Chase sent him all over Asia. As he traveled, Ch'ien observed first hand the launching of many Asian economies and the subsequent success or failure of particular economic policies. Then in the early 1980s, he joined Spencer Stuart and Associates, an international firm that pioneered management consulting in Asia.

These experiences prepared Ch'ien to become group managing director of the Lam Soon Hong Kong Group in 1984. Lam Soon is a food, drinks, and packaging company with operations in China, Hong Kong, Malaysia, Singapore, Taiwan, and Thailand. Last year, when Ch'ien left the company to become chair of Inchcape Pacific, Lam Soon had sales of U.S.$500 million. Inchcape Pacific Limited is a U.S.$1 billion plus subsidiary of Inchcape plc, a diversified distribution company active in automotive and industrial products, branded consumer products, office equipment, and logistics services sectors of the greater China market. Ch'ien is also active in developing interests in private equity and venture capital investments. He is cofounder of a company that has developed a social security information-management system, and he has a broad range of public service responsibilities.

While many are surprised to find a staunch capitalist working to bring Hong Kong back into the Chinese domain, Ch'ien explains that most Hong Kong residents were just waiting for the opportunity. "Many Hong Kong people left China in 1949, when the communists took over. After the Second World War," Ch'ien reminds us, "Hong Kong did very well economically. But culturally we were a refugee community. Our business outlook was in sync with this: let's maximize for the short term and, for the long run, we'll wait to see what happens in China."

The change that the Chinese community was waiting for has arrived, and Ch'ien is optimistic about the city's future and its relationship with China. He admits that China's track record up until the late 1970s left much to be desired. From 1978 onward, however, much progress has been made. "There is a growing confidence in the institutional authority of China to be able to do right by the people and by the country as a whole," Ch'ien explains. "This is enhanced by our sense of finally feeling safe to be Chinese, not only in the cultural sense but also in the political sense."

In the year before the handover, there was much speculation in the press, both within Hong Kong and in the West, about the changes Beijing would impose. With the British and the U.S. promoting their type of democracy, many feared Hong Kong would lose its freedom and be consumed by communist China. As a result, Ch'ien told us, the community began to see some sycophantic behavior toward the Chinese government. Now that the sovereign has turned out to be "enlightened, benevolent, and allowing a lot of freedom," Ch'ien adds, "you can see another adjustment in behavior because sycophantic behavior is 'totally not cool.' One is really able to be oneself and people can talk quite honestly to the government, not just the Hong Kong government but the Chinese government, and this has definitely caught people by surprise."

Now that Hong Kong's relationship with China is moving toward resolution, Ch'ien sees some kinks in the economy and cultural life. "We are turning our focus on ourselves and finding places where we can improve. We have to enhance our competitiveness, both in the economic and business arena and in our cultural sphere, so we can maintain our position of leadership in China's modernization drive."

One of the first issues will be to see how Hong Kong's three tier structure of government can be made more efficient. A quality-of-life issue was brought into sharp relief by the epidemic of avian flu. Hong Kong has a per capita income of over U.S.$25,000 per year, but the public hygiene system is Third World quality. "Why is this so?" Ch'ien asks. "Is it because of a lack of government regulations, or is it because of something innate in our culture that we really like to trash the environment? We need a period of self-examination and soul searching--something akin to America in the 1980s when people were starting to ask questions like, Are we indeed still number one or is it Japan? That process in the U.S. was very impressive because it changed the country's mentality and way of looking at things. That's why the American economy is so robust today."

Ch'ien believes that the Asian financial crisis is, in some ways, fortuitous. It highlights some of the structural weaknesses in the economy. For more than 20 years, the Hong Kong government has adopted a high land-price policy that made it one of the most expensive places in the world for housing. This policy has discouraged companies whose products take years to develop from coming to Hong Kong. They cannot afford the high rentals. The asset price adjustment resulting from the financial crisis will allow new businesses like software development to gain a foothold. This in turn will help bring long-term investment to Hong Kong and China.

Another issue in the new Hong Kong that needs to be addressed is language ability. For years, English has been the medium of instruction, but Ch'ien believes that many teachers in Hong Kong are not competent to teach in English. Some have suggested going back to the mother tongue, Cantonese, but Mandarin is the national language of China. "This is not a debate about language," explains Ch'ien, "it's really a question of the quality of teaching, and Hong Kong needs to invest in good teachers. We see young people in Shanghai and Beijing speaking English fluently and also being quite strong in math and the sciences, and yet they command incomes that are only one-tenth to one-fifth of Hong Kong's young people. This won't go unnoticed for very long."

"The Chinese system," Ch'ien points out, "is actually improving faster than the Hong Kong system, and within 15 to 20 years the two systems are going to be quite similar. Hong Kong asset prices currently demand a high premium over mainland asset prices due to the systemic superiority. But, when Hong Kong's systemic superiority diminishes, what will happen to our asset prices? The only way to maintain some kind of premium is for the people to be smarter. That's what we have to do."

Raymond Ch'ien's visit to Penn included a campus tour with his daughter, Kay, who is a member of the class of 2002. (Hwee Leng Ch'ien, G'75, his wife, is also a Penn alumna.) After his conversation with us, the Ch'iens, at home on Penn's campus as in Hong Kong, shifted their focus from international to campus issues and went off to join in the activities on the green on a sunny and warm spring afternoon.