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Where are the tourists? Hong Kong asks

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Suddenly, unneeded and - until now - never-asked question is, like a summer storm gathering on the horizon, hovering on many lips here: In the wake of China's resumption of sovereignty on July 1, has Hong Kong died as one of Asia's premier tourist destinations?

The torrent of tourists that usually inundates Hong Kong in the summer has been evaporating since May, and has now shrunk to a rivulet that barely wets the edges of this newest of Chinese territories.Once-packed hotels echo emptily. Sales assistants at the high-fashion boutiques, antique shops and popular tourist markets have plenty of time to help browsers. And the local airline, Cathay Pacific, is really hurting. In a letter to his 16,000 employees, David Turnbull, the managing director of Cathay, spoke of a dramatic downturn in tourism, especially from Japan. For the airline, this has meant a savage drop in passengers from Japan - in July scarcely one-third of the passengers of July 1996.

"At the moment, there is little sign of recovery, said Kwan Chuk Fai, the manager of Cathay's corporate communications. "Some of the Japan routes are actually starting to lose money."

For the past two decades Hong Kong has been the principal gateway for North American, European and Japanese tourists heading into China or around the region. Yet Hong Kong had its own allure: a quaintness of being the last British colony in Asia, a place where the royal insignia topped silver emblems on police hats, the queen's initials were welded onto mailboxes and roundish and suspendered Englishmen, like ancient aunts, could be spied waddling around town.

Beyond this, the larger fabric of Hong Kong for tourists was woven of temples and bird markets, street-stall food and a funicular up Victoria Peak, fashion from Europe and Japan, cuisine from every corner of China and antiques that belong in museums.

Yet somehow the gleam on the Hong Kong tourist juggernaut has tarnished; the territory is struggling to find out what it is exactly, and why tourists should come here. Is Hong Kong now just another Chinese city, or is it just another Asian city, or is it still something unique, a place internationally vibrant and culturally diverse?

One thing is certain: it remains one of the most expensive destinations in Asia.

Even senior Chinese officials like Zhu Rongji, the man everyone is betting on to become the country's next prime minister, pointed to the territory's high costs during a recent gathering of world financiers here. "Tourism in Hong Kong is affected," he said bluntly in a speech to international bankers.

Rooms in good hotels start at about $300 a night, dinner for two people in a neighborhood restaurant runs between $50 and $60, and a draft beer in a local pub is $6.

It used to be that Hong Kong was thought of as a shoppers' paradise, where clothes and electronics were a bargain, where the determined could uncover that special antique wedding box or Qing Dynasty horseshoe-back chairs for a reasonable price.

Those days are over. New York, expensive by American standards, is a positive steal by Hong Kong gauges.

"This is not a cheap place," conceded Peter Randall, a spokesman for the Hong Kong Tourist Association, the quasi-official body that promotes Hong Kong around the world. "We have to market Hong Kong as it is, as not a cheap place. It hasn't been for 20 years. But it has unique qualities that make people want to come here and keep on coming back."

At the moment, though, a lot fewer people are coming. In July this year, 35.2 percent fewer people arrived here than last July; in August there was a 24.4 percent downturn. And while the data are not yet in, Randall said that tourists are staying a shorter time and spending less.

If there is a single villain in the piece, from Randall's point of view, it is the CBS News anchorman Dan Rather, who, the tourist executive said, portrayed Hong Kong as being overrun by soldiers of the People's Liberation Army on July 1, the day China resumed sovereignty here after 156 years of British rule.

"It was the TV shots that day that were shown during the handover," Randall said, "and the lasting memory of the PLA coming across the border, particularly with Dan Rather's playing it very heavy with cutaway shots to Tiananmen," a reference to the Chinese army's massacre of students and Beijing residents in 1989. "I don't know whether he has said `I was wrong."'

Dan Rather, reached in New York, responds: "Any intelligent person, and Hong Kong is filled with them, would know and understand how ill-advised, untrue and outrageous Randall's outburst is."

In fact, it would take considerable persistence to find a Chinese soldier in Hong Kong.

At the JW Marriott Hotel on Hong Kong Island, the general manager, Tuni Kyi, pinned a good deal of the slump in tourism on the Japanese. "Last year they came in droves," he said. "People wanted to see Hong Kong before it was handed over." Now Japan's economy is bad, he said, and there's a wait-and-see attitude.