HONG KONG: Trouble in the Hongs

Hong Kong's traditions of complete laissez-faire and growth without ruinous inflation have given it a reputation as one of the world's most lucrative—and safest—havens for investment. Now that reputation is being tarnished: for the first time in memory, one of the colony's fabled hongs (trading companies) is struggling to avert financial collapse. The endangered hong is Hutchison International, Ltd., a conglomerate with a labyrinthine network of more than 350 subsidiaries and affiliates, including diamond merchants, earth movers, fashion boutiques and a mailorder business that deals in food, fowl and live animals.

Hutchison was built in taipan (big boss) style by...

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