When China takes control of Hong Kong in 11 days, few in the U.S. banking community will be cheering the changing of the guard.

Although bankers are confident that little will change in the near term to alter the business climate of this Asian trade center, several express concerns about the long run.

Even if Hong Kong retains its preeminence as a financial capital, they say, sky-high prices for housing and office space, competition from other Asian financial centers, and regulatory uncertainty could erode the attractions of the former British colony.

At the same time, bankers are doing their best to give a positive spin to a development they have no control over.

"Over the long term there will be changes, but those changes will be evolutionary," said Hugh Durden, president of Wachovia Corp.'s corporate banking unit. "We are not pessimistic."

"Nobody's bailing out," added Stephen Nichols, the Hong Kong manager for CoreStates Financial Corp., Philadelphia. "People are going into this hoping for the best, and signs are there that the best is yet to come."

Regardless of who is heading the government, Hong Kong is expected to continue serving as a regional finance center for companies doing business throughout southeast Asia.

For that reason, it doesn't appear that any of the 17 U.S. banking institutions with operations in Hong Kong are heading for the exits. To the contrary, a number of U.S. banks have only recently opened offices, and more are on the way.

BankAmerica Corp., San Francisco, plans to expand in retail banking as well as capital markets activities. Wachovia Corp., Winston-Salem, N.C., will open a representative office this month after entering into a joint corporate banking alliance with HSBC Holdings PLC earlier this year.

Cleveland-based KeyCorp has struck a similar deal with Standard Chartered PLC as did Huntington Bancshares with HSBC Holdings and First Union Corp. with Hongkong Chinese Bank Ltd.

Los Angeles-based Imperial Bancorp opened a trade finance subsidiary in April, while CoreStates intends to use Hong Kong as a platform for expanding trade finance, correspondent banking, and global processing operations.

British bankers with a long-standing presence in Hong Kong sounded a similarly optimistic note.

"We're not expecting any vast change," said Malcolm Williamson, group chief executive at Standard Chartered Bank PLC, one of the biggest and oldest banks in Hong Kong. "Hong Kong is the natural financial center for doing business in Asia, and it will take 20 years to create the kind of infrastructure it has."

Sir William Purves, chairman of London-based HSBC Holdings, said, "I see more opportunities than threats."

But bankers and analysts do have concerns. Among them: the rising cost of doing business, a shift in banking business to other cities like Singapore and Shanghai, and the potential for corruption practiced by Hong Kong's new rulers.

""We are worried about corruption because China is riddled with corruption," said one U.S. banker who requested anonymity.

Of Hong Kong's escalating prices, Mr. Williamson said, "Hong Kong is no longer a cheap place to do your shopping."

Added Mr. Nichols: "You have to be very focused about what you're doing. The ones who don't have a focus find this place is very unforgiving when it comes to ill-conceived strategies."

Then, there is the issue of rising competition from other regional centers.

Hongkong and Shanghai Banking Corp., the HSBC subsidiary that is Hong Kong's largest bank, said this month it will increasingly move staff into its new Shanghai headquarters from Hong Kong.

"The Chinese are working hard to make Shanghai a credible place for doing business, and Singapore is a lot cheaper," said Andre Cappon, a banking analyst with the CBM Group in New York.

That, he added, means that even if Hong Kong remains the main trade center for China "it will fade as a financial center" for Asia.

But others doubt that Hong Kong's decline will occur for many years. Given the enormous demands for capital in China, they predict Shanghai and Hong Kong will grow in tandem, with Shanghai serving as the main domestic financial center for China and Hong Kong as the international center. It would take other places years, they say, to duplicate Hong Kong's infrastructure.

"Hong Kong is far more sophisticated (than Shanghai) and will remain the gateway into China for foreign capital, asset management, and investment and investment banking," said S.L. Chen, chairman of S.L. Chen & Associates, a New York-based investment bank. "I don't see any change in the status quo for the next 10 years."

Bankers added that the single most important guarantee of Hong Kong's future is China's own self-interest in maintaining the city as a viable financial center.

Given estimates that China will need as much as $800 billion in infrastructure financing over the next five years, they doubt China will do anything to jeopardize Hong Kong's role as a capital pipeline.

"All the doomsday stuff aside, China has a lot at stake here," Mr. Nichols observed.

"China has gone through the biggest change in its history over the last 18 to 19 years," added Ronnie C. Chan, a member of the board of directors of Standard Chartered Bank and chairman of Hang Lung Development Group Ltd. "China is the most capitalist place in the world today, and it is capitalism in its crudest form."

Mr. Chan added, "If you don't invest now in Hong Kong, the good news is that you'll still live. The bad news is that you'll live to regret it."

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