On the eve of June 30, Hong Kong was officially passed back to China. This event will mark what Willem van Kemenade sees as the start of an increasingly problematic -- and even dangerous -- reintegration of the old Chinese empire into a new world superpower. Since the early 1980s, investment money has been pouring into China from Hong Kong and trade has escalated at a rocket's pace. A few years later, the same pattern began between China and Taiwan. The combination of Hong Kong/Taiwan management, financial and export know-how with China's inexhaustible pool of cheap labor and land has enabled China in one decade to leap from an impoverished revolutionary state to a major international trading power. This economic boom, in conjunction with the violation of intellectual property rights, systematic tax fraud, and the corruption of the police force, has helped shape the "socialist market economy," China's third way -- and a new mix of old-fashioned Soviet Communism and East Asian...

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