Hong Kong people’s confidence in the “one country, two systems” principle has plummeted following a series of moves by the central government that were seen as threats to the city’s freedoms.
In a survey by the Public Opinion Programme of the University of Hong Kong in early September, only 38 percent of the respondents said they were confident about the “one country, two systems” policy, compared with 47 percent who expressed such confidence in a similar survey in June.
Such doubts have become more pronounced after Beijing released a white paper on the special administrative region, saying Hong Kong’s high degree of autonomy comes from the authority of the central government.
Then at the end of August, the Standing Committee of the National People’s Congress unveiled its framework for the 2017 chief executive election, which provided for a pro-Beijing nominating committee to vet the prospective candidates, again raising fears that the central government is determined to tighten its grip on the territory.
The police use of tear gas and pepper spray on protesters on Sept. 28 will no doubt worsen public anxiety over Beijing’s intentions.
When President Xi Jinping met with Hong Kong’s business tycoons on Sept. 22, he reiterated that the “one country, two systems” will remain unchanged. But that’s hardly reassuring in the light of recent developments.
Executive Council member Bernard Chan said Hong Kong is better off under “one country, two systems” rather than “one country, one system”. He believes the city must retain its high degree of autonomy rather than be fully integrated with mainland China.
“I think that if Hong Kong as a whole is to survive, it must be under ‘one country, two systems’. ‘One country, one system’ will allow us to access its [mainland] market, but the problem is whether we have the ability to access its market,” Chan told EJ Insight in an interview.
“Say for example, in the financial industry that I am engaged in, how can I compete with enterprises on the mainland? I don’t have any distribution channels and marketing team, and my products are not especially better than theirs.
“I cannot make use of the market even if it is opened to me. ‘One country, one system’ gives us free access to the market, but this doesn’t mean success,” he said.
Under “one country, one systems”, only established local brands that mainlanders have confidence in, such as in the area of food safety, can remain competitive, he said.
But under “one country, two systems”, Hong Kong has the advantage of attracting more non-local companies to come to Hong Kong, such as in the case Wing Lung Bank, which was acquired by China Merchants Bank in 2003. This is especially true now that China is encouraging its enterprises to expand overseas.
Under “one country, two systems”, Hong Kong can attract more investors because of its sound legal framework and transparency.
The city’s legal system is its strength because it gives confidence to investors as well as consumers. Hong Kong cannot be easily overtaken by competitors in this area, Chan said.
Hong Kong, Shanghai and Singapore
Chan said one big difference between Hong Kong and its competitors is that while other governments have assumed a proactive role in assisting various sectors, the Hong Kong government has dared not to do so for fear of being accused of collusion.
“The Hong Kong government has always been accused of collusion with business. I think that many government officials do not want to help anyone deliberately and they tend to assume a passive role,” he said.
“Big or small enterprises, the financial sector, the banking sectors have complained to us. [But] the government will not promote for them purposely. Most of the time the matter will be politicized,” he said.
It is a big contrast with the attitude in Singapore and Shanghai.
Nonetheless, Chan said Hong Kong will still have competitive edge over Singapore and Shanghai in the financial sector, particularly when it comes to the renminbi business.
As an offshore renminbi center, Hong Kong enjoys first-mover advantage and a big enough pool of the currency, he said.
But Chan said movements like “Occupy Central” tend to undermine investor confidence.
“I believe that our competitors are now very happy, saying that our stability is not as high as theirs,” he said.
Chan also said the Shanghai Free Trade Zone is still at its infant stage and facing a lot of restrictions. But in the long run, when it becomes fully liberalized, the FTZ is expected to pose a real threat to Hong Kong.
“We have to be psychologically prepared that Shanghai will not be too far from us one day. We have to accept this, we cannot expect that it will remain like this forever,” he said.
But still the “one country, two systems” principle makes the difference between the two cities.
“No matter how Shanghai chases, it cannot be like Hong Kong under ‘one country, two systems’,” he said.
Chief executive candidate?
Deemed as a more “open” politician in the pro-establishment camp, Chan has often been asked if he has plans to run for the top job in the city.
To this, the answer is a “no” again. Chan said that it is a difficult responsibility as it requires meeting the expectations not only of the Hong Kong people but also the leaders in Beijing.
“The chief executive has to fulfill Hong Kong people… No matter if he is chosen by 1,200 or millions of people, the whole of Hong Kong has demands for him. The chief executive is responsible to the central government as well,” he said.
The chief executive needs to have the trust of the Hong Kong people, and equally, the central government, and this means that he will be under a lot of pressure, Chan said.
“It’s difficult to find this person. I have to take care of my business and it is not possible to give up what I am doing now,” he said.
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