Fear of the needle? The future of Hong Kong business

Business Horizons, Jan-Feb, 1996 by H.L. Chan

Respondents rarely attributed the Tiananmen Square massacre to the repressive nature of the political system and even less to the leaders' lack of morality or integrity. Rather, it was often attributed to "errors" in judgment, along with a belief that the Chinese leadership had learned from the mistakes and would not repeat them again in the future. As one respondent said, "I'm sure Deng Xiaoping had no intention of killing the students. Things just happened to get out of control." Another said, "Chinese leaders were in shock themselves after the Tiananmen incident. They had not expected such a disaster to happen." As Weinstein points out, earthquake victims have been found to expect decreased risk on the theory that because an earthquake has already occurred, there is unlikely to another. Similarly, these attributions, like the belief that lightning doesn't strike twice in the same place, have led to reduced risk perception among the Hong Kong respondents.

Interestingly, although corruption is accepted as unpleasant and immoral in Hong Kong, these respondents seemed to adopt a different moral standard for China. Corruption was seen as an inevitable by-product of economic progress there, and was tolerated as part of the "system" to which Hong Kong firms had to adapt in doing business with China. In one respondent's words, "Corruption in China is 'constructive.' You can get things done by paying extra. In some Southeast Asian countries, even when you are willing to bribe, there is no guarantee of getting what you want." Some respondents argued that corruption practices reflected the change from a political to an economic orientation, indicating that the Chinese government was becoming more "rational." And as long as Chinese officials could be bought off, Hong Kong would be safe. With plenty of opportunities to profit though graft and corruption, China would most likely not agree to close the door again.

In a way, China's backwardness was perceived to be beneficial to Hong Kong. The latter would be valued as long as other cities in China could not replace it. At the very least, to preserve Hong Kong's current system would be beneficial to China, so there was no reason why China would wish to ruin it. With such continued reliance on Hong Kong, the Chinese government was expected to have a strong stake in maintaining its prosperity after 1997.

Self-Confidence

According to Vaughan and Nordenstam (1991), individuals' confidence in their own ability to control the severity of consequences of political risks is an important factor influencing their risk perception. It has been widely accepted that risk-taking is an important entrepreneurial function. There was a sense of pride among the respondents, who, although they often maintained they were conservative and did not like to take risks, nevertheless valued risk-taking as a mission and a duty for entrepreneurs. They also believed that because they had suffered adversities and survived, they should have no problem with living in any difficult situation in the future.