(FORTUNE Magazine) – THE FATE OF HONG KONG

Re "The Death of Hong Kong" (June 26): It comes as a surprise to those of us who live in this most dynamic and vibrant of Asian cities that Hong Kong is "indisputably dying." Look at the vital statistics. We remain on course for real growth in 1995 of around 5.5%. Our foreign exchange reserves, at $49.3 billion, are the second-highest per capita in the world, after Singapore. Our domestic exports for the first five months of this year are up 10% over last year. We are at the heart of the fastest-growing region in the world.

In short, we have quite a lot going for us, and six months ago, FORTUNE agreed--you voted Hong Kong the world's best city for business (November 14). Has it all gone disastrously wrong since then? Do the 17,400 domestic companies and the 221 international companies (including 47 American ones) that have established offices here strangely signal the end of Hong Kong? I don't think so, nor, presumably, do they.

And what of Hong Kong's rule of law, which you rightly identify as Hong Kong's most precious asset? Since your article was published, we have reached agreement with China on the establishment of a proper Court of Final Appeal in Hong Kong. It will replicate the role and remit of London's Privy Council-Hong Kong's current Court of Final Appeal--and will be up and running July 1, 1997, if the Legislative Council passes the necessary legislation by the end of this month. The agreement lays to rest many of the concerns you raise.

Of course there are anxieties about 1997. But there are two ways of dealing with them: We can wring our hands and give up now, or we can put our case, clearly but constructively, and argue tenaciously for what is right for Hong Kong. It was because Hong Kong put its case that China decided that the "one country, two systems concept" was the only way to preserve its interests here. If that was true in 1984, it is true in spades today. The fact that we can now look forward to a genuine Court of Final Appeal shows that our case was understood in Peking. That is why we will go on putting Hong Kong's case, and why I for one expect to see Hong Kong remain near the top of your business league table for years to come.

GOVERNOR CHRIS PATTEN Hong Kong

Our story contrasts Hong Kong's thriving economy today with its far less certain fate after China takes over in mid-1997. We agree Hong Kong will remain a profitable gateway to fast-growing South China; what we say is indisputably dying is Hong Kong's role as a vibrant global commercial and financial hub. As for China's agreement with Britain on establishing a Court of Final Appeal in Hong Kong, that deal is filled with loopholes that do not reassure many of Hong Kong's own legislators.

The attitudes and quotations attributed to some of the Hong Kong Chinese, and their belief that their value to the PRC will make them safe from any retribution for their years of living and working in a capitalist society, are chillingly reminiscent of the feelings of many German Jews immediately prior to World War II, who also felt that they were Germans first, and that the Nazis would recognize their value to the Reich. Despite having the resources to flee, they stayed and died in concentration camps, unlike their co-religionists who left Germany and survived.

I fear that the Hong Kong Chinese you describe will soon discover that their masters in the PRC regard them primarily as Hong Kong citizens, and thus not real Chinese. They have not shared in the history or endured the privations of their new countrymen. Those who do not learn from history . I mourn them in anticipation of their inevitable fate.

MARVIN E. JAFFE Huntingdon Valley, Pennsylvania

DUE CREDIT

Thank you for depicting Open Market as a progressive and successful company ("FORTUNE Visits 25 Cool Companies" (July 10). I would like to point out, however, that while Banc One and Open Market are working together to allow libraries to order and pay for books over the Internet, RoweCom, which helped design the service, is an equal partner in the deal.

SHIKHAR GHOSH President and CEO, Open Market Cambridge, Massachusetts

CORRECTIONS

In "FORTUNE Visits 25 Cool Companies" (July 10), SAP America was described as a private company. In fact, it is a division of SAP AG, a public German company whose stock is traded on the Frankfurt exchange. A limited number of ADRs (American depositary receipts), whose share price reflects the performance of SAP AG, are traded in the U.S., on the American stock exchange.

Also, in "Making Generational Marketing Come of Age" (June 26), FORTUNE published material (contained in boxes accompanying the main story) that describes six demographic groups, or "cohorts." The descriptions of the cohorts were written by Geoffrey Meredith, president of Lifestage Matrix Marketing, and Charles Schewe, professor of marketing at the University of Massachusetts, for an article they co-authored in the December 1994 issue of American Demographics. The previously published material was included by mistake in FORTUNE's article without credit to the authors or to American Demographics.

FORTUNE regrets the errors.