Suen

Immigration from China has always been a touchy issue in Hong Kong since the late 1970s. The reversion of sovereignty to China has heightened concerns about the possibility of opening a floodgate to the flow of immigrants into Hong Kong. Uncertainty about the number of cross-border families only adds to this anxiety. Recently the increase in the number of young children illegally brought into Hong Kong has provoked a very strong response from our political leaders. The Chief Executive and other high level officials have indicated that one of their legislative priorities is to ensure that immigration into Hong Kong will be orderly. However, their attempt at imposing order will only increase confusion in our immigration policy.

The Basic Law, Article 24(3), gives children of permanent Hong Kong residents the right of abode in the Special Administrative Region. Before we panic at the thought of a flood of young children overwhelming the territory, it is important to have a reasonable assessment of the magnitude of this flow before we formulate a policy response. Immigration officials in Hong Kong and in Guangdong have given conflicting estimates of the number of these eligible persons currently residing in China. Although a precise number cannot be obtained, a ballpark figure is not difficult to come by.

According to a special survey conducted in 1991 by the Census and Statistics Department, 95,000 Hong Kong residents had spouses living in China. It was also estimated that there were 310,000 children of Hong Kong residents living in China at the time of the survey. Of these, 32,000 were less than five years old. Table 1 uses immigration records and some additional assumptions to update these estimates. If we assume the number of children born during 1991-1996 is the same as the number of children born during 1986-1991, then the total stock in 1997 will be 342,000. From 1991 to 1996, 112,000 children of local residents entered Hong Kong legally on one-way permits. Thus, there are an estimated 230,000 children of Hong Kong residents currently living in China.

Not all such individuals will choose to settle in Hong Kong. In fact, roughly 42% of them are over thirty years old. They are likely to have their own families in China, and their incentive to come to settle alone in Hong Kong is small. Some of those who are below thirty do not have the right of abode in Hong Kong because their parents are not permanent residents. However, even if we assume that everyone aged below thirty does have the right of abode and will exercise this right, the number of these newcomers to Hong Kong will be about 134,000. Assuming further that they will enter Hong Kong over a period of two years, there will be a flow of about 67,000 persons a year. This is bigger than the current flow of 61,000 legal immigrants from China, but it is much smaller than the flow of more than 200,000 illegal immigrants who came to Hong Kong during the year 1979. The magnitude of the expected flow makes a floodgate scenario rather remote.

Instead of accommodating these individuals with their newfound right of abode in Hong Kong, the government is trying to devise ways to control their flow. One of the proposals is to repatriate all who have arrived without proper authorization, even if they have the legal right of abode. Such a policy, if implemented, certainly violates the spirit--if not the letter--of the Basic Law. It would set a dangerous precedent in an early chapter of the legal tradition of the Special Administrative Region. Moreover, the proposal is likely to be counterproductive.

One of the reasons that many young children were being smuggled into Hong Kong before the Basic Law took effect is that parents were uncertain about whether immigration policies would change. If the Hong Kong government makes it clear that it is committed to accept anyone with right of abode in Hong Kong, the incentive to risk the perils of illegal immigration will be greatly diminished. A muddled piece of legislation that tries to circumvent the provision of the Basic Law will only increase the confusion in our immigration policy, and confusion tends to invite reckless rush.

Hong Kong maintains a very strict quota for legal immigration from China. Before the handover, this quota was set at 150 people per day. A way to accommodate the provision of the Basic Law is to have a two-track immigration system. Persons with right of abode in Hong Kong will be admitted as a matter of course. Meanwhile, other Chinese immigrants will continue to be subject to a numerical quota. It is useful to bear in mind that close to 90% of the Chinese immigrants who entered Hong Kong under the quota system came here for family re-unification. Once a two-track system is in place, the size of the quota can be reduced, say, back to 75 persons a day (as was the case before 1994), or even down to 20 or 30 a day. Given our estimate of the number of Hong Kong residents with children living in China, the combined flow of immigrants from these two tracks will not be unmanageable.

This flow of new immigrants will be beneficial to the economy in the long term. Our population is aging fast, and the fertility rate in Hong Kong is among the lowest in the world. At 1.2 children per woman, the total fertility rate is much below what is needed to keep the population size from falling in a steady state. The proportion of the population aged below 15 has already fallen from 23% in 1986 to 19% in 1995. Even the absolute size of this age group has decreased. Immigration from China would help maintain a young and growing labor force, which is particularly important for providing income security to the elderly.

Research in Hong Kong and elsewhere indicates that immigration has very little adverse effect on the wages and employment of local workers. On the other hand, an additional supply of labor will help employers. As a solution to labor shortage, immigration is preferred to labor importation. Since immigrants have a long-term stake in the economy, their incentive to invest in human capital is greater than imported workers’ incentive to invest in human capital. Not bound by contracts that are linked to their stay in Hong Kong, immigrants are also less susceptible to employer abuse and are more adaptable to changing economic conditions.

Many of the potential newcomers to Hong Kong are at school age. By many accounts, the educational system in Hong Kong is superior to the Chinese school system--not only in terms of resources, but in terms of curriculum and teacher quality as well. According to research by Hon-Kwong Lui and the author, immigrants who received at least part of their education in Hong Kong enjoy a rate of return to schooling which is 2.4 percentage points higher than that of those who had completed their education in China before arriving in Hong Kong. Kit-chun Lam of Baptist University and Pak-wai Liu of the Chinese University have made a similar finding. A policy to delay the entry of these children into Hong Kong will therefore only reduce their chance of assimilating into the local labor market.

For these reasons, an immigration policy in Hong Kong should not be built on fear. It is more important to assist legal Chinese immigrants in their adaptation to Hong Kong than to resist their entry. The Education Department could do more to help immigrant children in finding schools. Special classes could be arranged to ease the transition to the new education system and to the use of Cantonese and English. For adults, the Labor Department could be a particularly useful resource, as immigrants have little knowledge about the local job market. The Employees Retraining Board may also extend its services to new immigrants, who will find such training most valuable. These additional services do not require a huge amount of resources. By helping immigrants help themselves, their payoffs to society can be large.

Hong Kong is one of the very few places in the world where immigration of direct family members of local citizens is subject to stringent quotas. This has exacted a heavy toll on many cross-border families here. Sad stories surface in the press every now and then. But more often the anguish has to be endured silently day in and day out. Unfounded fear of immigration (and sometimes prejudice) has produced a callous indifference to the plight of these separated families. By allowing children to join their parents, the Basic Law will redress some of these problems--but it does not go far enough. While foreign professional workers can bring their dependents into the territory, the spouses of local residents living in China still have no right to join their families in Hong Kong. While a local resident who marries a person in Singapore, say, can easily bring the spouse into Hong Kong, a resident who marries in China will face numerous problems in bringing the spouse home. It is time to change that.

Table 1 suggests that there will only be approximately 19,000 husbands and wives of local residents living in China in 1997, so their overall impact on Hong Kong will not be large. On the other hand, admitting them into Hong Kong will greatly relieve the burden of single-parent families. One does not need to stress the enormous benefits this will bring to their children. Cost-benefit calculations would therefore justify allowing the spouses of Hong Kong residents to come to settle in Hong Kong as well. What is more, people with husbands or wives in China deserve to be treated like everybody else. Why deny them the right to a normal family life?

Dr. Wing Suen is senior lecturer in the School of Economics and Finance, the University of Hong Kong.

Table 1
Estated Number of Relatives of Local Residents Living in China in 1997

	Spouse	Children

(1) Stock in 1991	95,000	310,000
(2) Entry into Hong Kong during 1991-1996	102,000	112,000
(3) Estimated new additions to stock during 1991-1996	26,000	32,000
(4) Estimated stock in 1997 [(1)-(2)+(3)]	19,000	230,000

Note: New additions to stock during 1991-1996(row 3) are assumed to be equal to those in the 1986-1991 period.

Sources: Census and Statisitics Department, Social Data Collected by the General Household.

Survey:Special Topic Report No.VIII, Hong Kong, Government Printer, 1993; and various issues of the Hong Kong Annual Report.


	\| Index \| Research Projects \| HKCER Letters \| \| Speaker Program / Conference \| Index of Economic Freedom \|

	The Hong Kong Centre for Economic Research School of Economics and Finance The University of Hong Kong Phone: (852) 2547-8313 Fax: (852) 2548-6319 email: hkcer@econ.hku.hk