Will the Hong Kong agreement work?

IN February the Hong Kong government issued its white paper on the future course of democratic government in the colony. The paper was issued in response to demands from citizens in Hong Kong for a greater liberalization of the political system before the People's Republic of China takes over the colony in 1997. The proposal calls for the direct election of 10 members of the 56-member Legislative Council, but not until Peking completes the preparation of the basic law for Hong Kong, expected in 1991. The paper satisfied few of those in the colony seeking a more representative government. Undoubtedly, in drafting the new proposal the British authorities had in mind Chinese opposition to any major change in the current Hong Kong political system. Colonial governments are basically authoritarian; Peking clearly believes that its own centralized system will fit more easily with the status quo than with a democratically elected executive.

China wishes to recover Hong Kong for nationalistic and strategic reasons. At the same time, the leaders of China expect to continue to benefit from the access to capital and markets afforded by Hong Kong's free and dynamic economic system. The current tussle over the future constitution may well presage similar conflicts over other differences in organization and philosophy.

The economic successes of South Korea and Taiwan suggest that democracy is not essential to dynamic economic growth. But the philosophies of leadership in both countries have enthusiastically supported a capitalist economy. Will the same be true of the leadership in Peking.

Communist systems are essentially bureaucratic. The rules, the procedures, and the rigidity of a bureaucracy do not produce the climate for enterprise. Will the Chinese officials who are transferred to rule in Hong Kong after 1997 resist the impulse to impose more regulations in the name of order upon today's very open system? Will those watching from Peking be concerned that the freer practices in the former British territory might influence others in China to demand a similar relaxation of the constraints of a centralized and regimented system?

And what of commerce? Will the Chinese permit the same open access to markets, without regard to political orientation, that Hong Kong has permitted, or will trade with South Africa, or Israel, or Taiwan suddenly become more difficult?

And what of the life style? Hong Kong today is a glamorous city in which a few, at least, are able to amass great fortunes. In China itself, even the modest economic liberalization and possibility of profits under the reforms of Deng Xiao Ping have brought criticisms of a return to ``bourgeoisieism.'' Will the profit motive be permitted to work unrestrained in Hong Kong without creating similar pressures in Shanghai or Tientsin?

Hong Kong's press has, in recent years, exercised some self-restraint in its coverage of the mainland republic, but Hong Kong's bookstores and movie theaters have been open to the products of all the world. Will authorities from Peking be comfortable with the circulation and presentation of material antipathetical to communism?

The Chinese have, to a greater extent than other communist systems, demonstrated a pragmatic approach to many problems. The pressures for socialist conformity from Communist Party officials and bureaucrats will be great. Doctrinaire Chinese officials may not see that the free economic style of the colony creates economic and financial benefits for China. By the time they do, the current value of Hong Kong as a window on the capitalist world could be lost.

The transfer of power in Hong Kong from Britain to China, now in its beginning stages, will be the first direct effort to meld a communist system with one of free capitalism. The results will be watched closely within communist systems in Eastern Europe and Asia as well as in Taiwan, weighing its ultimate relationship with the Chinese mainland.

To visitors who have seen the contrast between the acquisitive society of Hong Kong and the restrained life of China, a smooth and successful marriage is hard to envision. The Chinese efforts to retain the authoritarian political system may be but the first indication of difficulty. Many others may lie ahead. If the marriage does succeed, it will be a most remarkable tribute to the realism and pragmatism of China's communist leadership.

David D. Newsom is associate dean and director of the Institute for the Study of diplomacy at Georgetown University.