25 October 2016
DAB lawmaker Ann Chiang (inset) has aroused the ire of opposition groups by saying that Hong Kong people should feel "grateful" to China, for things such as water supplies from the mainland. Photos: Xinhua, YouTube
DAB lawmaker Ann Chiang (inset) has aroused the ire of opposition groups by saying that Hong Kong people should feel "grateful" to China, for things such as water supplies from the mainland. Photos: Xinhua, YouTube

Is Beijing giving anything to Hong Kong for free?

With pan-democrats refusing to accept the proposal laid out by the government for the 2017 chief executive election, pro-Beijing lawmakers are stepping up their rhetoric.

The campaign to make opponents “see reason” includes several elements, but there is one old topic that has been stirred up again — how Hong Kong needs to count its blessings and be grateful to the mainland for all that it has done for the city.  

Taking the lead in the latest effort to invoke gratitude toward the central government is Ann Chiang, a lawmaker from the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB).

During a debate in the Legislative Council this week, Chiang bluntly said that Hong Kong people should be grateful to those who provide them basic necessities, including water.

“You drink water from them [China], so you should be grateful,” Chiang said. “I am serious.”

She was echoing the views of other staunch pro-establishment members who argue that Hong Kong needs to acknowledge the economic realities and display a better attitude towards the mainland. 

From Chiang’s perspective, Hongkongers should be deeply thankful to the central government for a host of things, ranging from the appointment of Leung Chun-Ying as the chief executive to all the food, water and other supplies to the city, not to mention the support for the local stock market.

Chiang has a track record of indulging in rhetorical flourishes in a bid to grab media attention. Still, her latest comments on water supplies have aroused the ire of opposition groups, who aver that the mainland is merely fulfilling a business arrangement and that it is not providing the water for free.

The Hong Kong government is believed to have paid HK$4 billion last year for Dongjiang water. The relationship between Hong Kong and China is akin to that between a consumer and vendor, and there is no justification for calls on the city’s residents to feel any special sense of gratitude, critics say.

Hong Kong is buying the Dongjiang water from China through a listed company called Guangdong Investment, an entity controlled by the Guangdong provincial government.

The company’s water business reported a profit of HK$3 billion in 2014. Revenue from water supply to Hong Kong, meanwhile, was said to be HK$4 billion. The figures suggest that the company was making profit without any substantial cost, making the business quite attractive.

In recent times, the Hong Kong government and pro-Beijing politicians have been stressing the importance of several special arrangements that Beijing has accorded to Hong Kong since the 1997 handover.

The efforts are aimed at demonstrating the “kindness” of Beijing and sending a message to locals that it is in their best interests to be friendly with central authorities.

The current rally in the stock market, meanwhile, is also being portrayed as yet another piece of manna from the mainland.

Liquidity flows from China, through the Stock Connect and eased rules for mainland mutual funds, are behind the surging equity prices in Hong Kong and improved trading volumes on the local bourse, pro-Beijing loyalists point out.

Most observers agree that Chinese capital is fueling the Hong Kong market, but some political watchers are seeing hidden motives behind the mainland benevolence.

Beijing is deliberately firing up the Hong Kong stock market as it wants to divert people’s attention away from contentious political issues, they reckon.

In November last year, authorities kicked off the Shanghai-Hong Kong Stock Connect program, opening the gates for more Chinese money to flow into Hong Kong and also enabling international funds to go to China’s A-share market via Hong Kong.

Pro-Beijing politicians stressed that the program was a gift for Hong Kong. But what they don’t care to mention is the fact is that Beijing may need Hong Kong as much as the other way round.

As China seeks to internationalize the renminbi and move toward free convertibility of the unit against other currencies in the future, Hong Kong will be a key offshore springboard.

While the mainland may want to be seen as a savior of the Hong Kong economy, the truth is that Beijing is merely taking care of its own interests.

There’s really no such thing as a free lunch! 

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EJ Insight writer

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