WHEN a European drops in to have a chat with Tung Chee-hwa these days, the Chief Executive prefers to start the conversation with questions before outlining his own policies and visions.
Europe and European fiscal and monetary policies are very much on Mr Tung's mind these days. Mr Tung, like Singapore's Senior Minister Lee Kuan Yew, will go to Europe in January to attend the Davos World Economic Forum. Both politicians want to know the answer to the $64 million question: how strong will the euro be? Mr Tung is not the only one in Hong Kong asking this question. On the fifth floor of a nearby government building, Financial Secretary Donald Tsang Yam-kuen, talked openly on the subject.
While Mr Tung prefers to give only a background briefing, Mr Tsang goes on the record: 'Who can tell me how Europe will perform in February next year, two months after the change over to the euro? 'These things impact on Hong Kong's performance because we are the most externally orientated economy in the world.' Remarks by Mr Tung and Mr Tsang in Hong Kong are echoed in Beijing. Zhu Min, director of the Institute of International Finance of the Bank of China (BOC) surprised Europeans at a recent conference by voicing some critical questions about the euro and pointing to political risks it raises.
A Beijing-based diplomat said: 'Europeans have debated the pros and cons of the euro for many years and many serious doubts have been expressed. But as the euro becomes a reality the discussion has stopped. But now the Chinese are expressing the same kind of doubts about the euro which made many Europeans hesitate in the past.' The Chinese world - including the mainland, Taiwan, Hong Kong and Singapore - has reason to ask hard questions about the euro.
Together they have about US$400 billion in reserves. Central bankers in Beijing and Hong Kong have about 30 per cent of their reserves in European currencies.
Mr Zhu said: 'What central bankers in Asia do will be decisive for the euro.' And their investment strategy will be a guideline for business, bankers and private investors who also have to decide which currency to keep their money in.