MAPPING THE WAY AHEAD

Go to a look at changes to the electoral law

Go to a report card on Tung's performance so far

Go to a story comparing Hong Kong and Singapore

ENVISION AN INTERNATIONAL CITY where businesses are prosperous; where nearly all citizens own homes and are whizzed to work on efficient public transit systems; where communities are linked by globe-spanning electronic networks and high-tech industry thrives; where the streets are clean and the air breathable; where the people are as caring and friendly to each other as they are to the environment; and where all the children are above average.

Disneyland? Singapore? No, this is the utopian future of Hong Kong, China -- as seen by Tung Chee-hwa. His first 100 days in office following the July 1 handover of Hong Kong to the mainland behind him, the territory's chief executive has crafted a comprehensive agenda for the future detailed in a two-hour speech on October 8. In his inaugural policy address since being named head of the Special Administrative Region (SAR) that is Hong Kong, Tung pledged in Cantonese to maintain open government and a free press. He also promised that progress toward a fully democratic government would proceed "steadily." But Tung has mainly tasked the civil service and legislators with issues closer to the heart of ordinary citizens and of the business community: economic development and competitiveness, affordable housing, education, social welfare.

Hong Kong's manufacturing base has dissipated dramatically in recent years. About 300,000 of a city of 6.5 million are currently engaged in traditional industry. The SAR's high-wage service economy continues to bleed off manufacturing jobs to the mainland and to developing Southeast Asian nations. Tung, following similar initiatives in Singapore and Malaysia, announced an aggressive plan to generate a high-technology industry in Hong Kong. "Only through business that adds high value," he said, "can Hong Kong's people enjoy better lives."

The proactive approach is a break with British laissez-faire economic policies. "It's a manifestation of Tung's political philosophy that maintaining Hong Kong's competitiveness is of prime importance," says Joseph Cheng Yu-shek, a political professor at City University in Hong Kong. The first Chinese ever to lead Hong Kong also launched limited improvements to government programs for the elderly and indigent, including the implementation of a long-mooted mandatory retirement savings system. He vowed to shore up a flagging educational system with huge spending increases. The territory's degraded environment was also served, though not well enough for conservationists. Among the proposals: an experimental project with taxis powered by liquid petroleum gas. Tung leavened his clean air, clean water pitch, pointing out to businesses that an unlivable city could not attract and keep skilled workers.

The former shipping executive released details of his plan to bring Hong Kong's astronomical real estate prices down to earth by increasing supply. A primary goal is to release over the next decade hundreds of hectares of vacant and disused land for public and private home projects. The ambitious program calls for the construction of 85,000 new flats every year. Within eight years, Tung hopes to cut the wait for government rentals from an average of 6.5 years to 3 years. "We will monitor production of the private sector to ensure targets are met," he added.

Tung "wants to depoliticize the society," says Cheng. "His aim is to maintain a stable social environment to facilitate economic development." That aim is wide of the mark for Hong Kong's democratic activists, who have been furious with Tung's handling of electoral affairs. Martin Lee Chu-ming, head of the Democratic Party, complained that Tung hardly dealt with democracy in his speech. "He didn't even mention the word."

Which is unlikely to bother the average Hong Konger. In the SAR's first 100 days, Beijing has touched the free-swinging capitalist entrepot with a light hand. In innumerable ways, life has gone on as before. Far from being curtailed, dissent ranging from protests over immigration policy to the release of mainland dissidents has been very public, noisy -- and uneventful. The SAR contingent of the People's Liberation Army has behaved more like an unobtrusive guest than as a liberation force. Garrison commander Maj.-Gen. Liu Zhenwu says he has not met with Tung since being stationed here: "I've only seen him at public functions." The Hong Kong branch of Xinhua, China's official news agency and its de facto embassy pre-handover, and the Hong Kong and Macau Affairs Office have similarly shrunk from view, though few doubt they continue to monitor proceedings in the territory while keeping in close contact with Tung.

Economically, too, Hong Kong has suffered no major repercussions from what some sections of the Western press tended to portray ominously as a "communist takeover." Just after the handover, tourist arrivals had fallen by 35% compared with the previous year. But experts say the slump is due to high local prices, a situation exacerbated by the currency crisis that has made other Asian destinations much cheaper. The stock market has remained resilient and the Hong Kong dollar stable. "Seeing is believing," Chinese Premier Li Peng told delegates of the annual meetings of the World Bank and International Monetary Fund in Hong Kong last month.

China and Hong Kong officials have arranged a mutually beneficial synergy in dealings with the rest of the world. Tung's recent meeting with U.S. President Bill Clinton in Washington -- a trip that afforded the chief executive frequent opportunities to chant that it was "business as usual" since the handover -- was widely perceived as an effective mine-sweeping operation for Chinese President Jiang Zemin. Jiang will hold landmark talks with Clinton in Washington later this month, and he wants to focus on global economic and trade issues, not China's handling of the SAR. U.S. officials seem for the most part reassured. Said Commerce Secretary William Daley: "It appears Hong Kong is staying the course in terms of remaining a free and open society."

Tung, 60, may be a political novice, but he is proving to be an adroit diplomat. No stranger to the West, his three children were born in the U.S., and he has links to several American think-tanks. At home, his forth-right, worldly speaking style and avuncular demeanor have earned him a large measure of public confidence. After the years of unsettling, market-rattling clashes between China and Britain's last governor, Chris Patten, a period of grace has set in -- a "feel-good factor," says top businessman Vincent Lo Hong-sui.

"Tornado Pang," as Patten was known, has been replaced by "Tung Bahk" -- Uncle Tung. Patten played tennis. Tung's avocation is tai chi, the soft, graceful martial art. Make no mistake, the ex-businessman with the crewcut is no less energetic than his predecessor -- nor is his grasp of authority less sure. Tung, whose office is dubbed "7-11" by the press because of his typical 16-hour workday, runs Hong Kong like his personal boardroom.

Where Patten was content to delegate day-to-day governance to popular Chief (now Administrative) Secretary Anson Chan Fang On-sang and the civil servants in her charge, Tung delves more deeply into the bureaucratic machinery. In the new adminstration, Chan's role, both public and behind the scenes, has diminished. "I have a feeling that when Mr. Tung talks to Mrs. Chan, he is more often informing her of something than seeking her advice," says an official in Chan's office. While underlings say Tung is warm and affable, he nevertheless expects his instructions to be executed. When Tung began lobbying for his policy initiatives and for his target of 85,000 new flats a year, he told legislators that the quota would be met "or someone would be answerable." In other words, heads would roll. Tung "provides us with clear direction," says Housing Secretary Dominic Wong Shing-wah. "If that creates pressure, it is pressure to bring about results."

China's critics in Hong Kong have expressed mild surprise that the mainland appears to be allowing Tung & Co. the "high degree of autonomy" promised in the SAR's constitution, the Basic Law. The concession is far from an endorsement. Democrat Martin Lee calls Tung "a benign dictator" whose allegiance is to big business and to authoritarian Beijing. Business interests are clearly being protected. A set of liberal new labor laws passed by the lame-duck Legislative Council (Legco) in the waning months of British rule was immediately suspended by the China-backed Provision-al Legislature that took over July 1. Laws barring discrimination for union activities and allowing collective bargaining rights have now been scrapped altogether.

On another front, China's imprint is growing in certain ways -- as might be expected. The Beijing-based China Daily newspaper, a mouthpiece for the government, began publishing a Hong Kong edition this month. When Hong Kong high school students returned to classes in September, they were issued revised history textbooks with downgraded references to Taiwan, Tibet and the democracy movements in China in 1979 and '89. And Hong Kong-based Taiwan bodies will not raise the Taiwan flag in public during local October 10 celebrations of the founding of the island's government. "We are under the sovereignty of the People's Republic of China," says Susie Chiang, director of a semi-official Taiwan information and cultural center. "That is the political reality."

Critics maintain that the SAR administration has under Beijing's auspices been systematically installing the means for the repression of civil liberties. "True, I haven't been arrested," says vocal oppositionist Tsang Kin-shing, "but there are lots of undercurrents." Now on the books are laws requiring special permits for most public demonstrations and restrictions on political organizations. Says Lee: "[Tung] has all the draconian powers he needs."

Lee and the Democrats have the most to complain about. Beijing was determined to undo the widening of the vote extended to citizens by Patten in 1992, an act the mainland contends violated earlier agreements between China and Britain to maintain the status quo. While the overall system of election instituted by Britain remains in place, the Provisional Legislature has made crucial changes that include withdrawing the franchise for nearly a million residents. The upshot: the Democrats, the biggest party in the last elected legislature in 1995, will likely win fewer seats in 1998. The Basic Law does set out increasing democracy in coming years, though, and Tung insists that pace will be adhered to. "I have no doubt of a bright future," he says.

Perhaps so, but Hong Kong will have to work for it. The ambitious targets laid out by Tung will not be easy to meet. Says businessman Lo: "Because we've had it so good, our young generation are not experienced with hardship. But there will be hard times." And good times, too, if Tung delivers what he has promised.

-- With reporting by Alejandro Reyes / Hong Kong