World watching Asia's last stronghold

PUBLISHED : Monday, 31 August, 1998, 12:00am
UPDATED : Monday, 31 August, 1998, 12:00am

After the crushing defeat of communism in the Soviet block, the Americans proclaimed a 'new world order'.

We Asians now know what that means - US capitalism, literally in the form of capital, engulfing our depleted assets.

Without the rhetoric of Malaysia's Prime Minister Dr Mahathir Mohamad, that is a fact. Our stocks and currencies are cases in point, after those in Thailand, Indonesia, and Malaysia, among others.

In the 19th century, the British empire dominated the world with battleships fuelled by Britain's industrial know-how. Now, the American capitalists are seeking to dominate the world, fuelled by their vast capital, through market mechanisms.

The use of military force was an accepted means to settle rivalries between nations, hence the Treaty of Nanking and the secession of Hong Kong.

Now, we are faced with the use of financial force and the possible meltdown of the Hong Kong economy. We support the action taken by the Government to intervene in the currency, stocks, and futures markets.

'Positive non-intervention' works when there is no monopoly in the market. A handful of US hedge funds are trying to monopolise, or manipulate, our markets and we have nobody except the Government to battle this invasion.

The objective is not to punish or discourage foreign investors, but to maintain a competitive and orderly marketplace. Even the US Government takes action against attempts to monopolise the market, Microsoft being a recent example.

All governments, whether in the US, Hong Kong, or elsewhere, must serve their most important mandate - to protect the well-being of their citizens. Perhaps the Hong Kong Government should study a financial version of the US type of anti-dumping and anti-trust legislation in order to ensure an orderly and competitive marketplace.

We must not allow the few foreign funds to ignite our fear in our currency and stocks, as was orchestrated in the fall of other Asian economies. This is the last stronghold in Asia and the world is watching. Unlike other fallen economies, we have, by and large, clean government, a healthy banking system and little foreign debt. So the system would not fall due to any deficiency of its own, as long as we are not to be swayed by the so-called 'market forces' engineered from outside.

In the last episodes of the cold war struggle, capitalism swept across the Soviet block from Warsaw to Moscow, but the domino effect did not penetrate China, largely because of the will of its government. We are now part of China and it remains to be seen whether or not the dominoes will fall this time.

GUY LAM Chairman Hong Kong Alliance of Chinese and Expatriates