China, Hong Kong, Taiwan, Inc., The Dynamics of a New Empire

On the eve of June 30, Hong Kong was officially passed back to China. This event will mark what Willem van Kemenade sees as the start of an increasingly problematic -- and even dangerous -- reintegration of the old Chinese empire into a new world superpower. Since the early 1980s, investment money has been pouring into China from Hong Kong and trade has escalated at a rocket's pace. A few years later, the same pattern began between China and Taiwan. The combination of Hong Kong/Taiwan management, financial and export know-how with China's inexhaustible pool of cheap labor and land has enabled China in one decade to leap from an impoverished revolutionary state to a major international trading power. This economic boom, in conjunction with the violation of intellectual property rights, systematic tax fraud, and the corruption of the police force, has helped shape the "socialist market economy," China's third way -- and a new mix of old-fashioned Soviet Communism and East Asian capitalism.

The formal addition of Hong Kong will add to this mixture the democratic structures set in place by the British. And, as China moves to reclaim Taiwan (the process has already begun), it will be incorporating a rival Chinese sub-nation with a fully election-based political system and a powerful independence movement. Can such a reunified China resist the "spiritual pollution" of democratic values, human rights, and political freedom? Will it become the first depoliticized "corporatist superpower"? What are the prospects that reunification will be peaceful?

Van Kemenade's portrait of the true internal power structures of the three Chinas provides our clearest look yet at the fastest-rising new empire in the world today.