Hong Kong on the verge of death or more lustrous than ever?

Frank Ching February 08, 2022 09:20

Is Hong Kong dying, again?

In June 1995, two years before Britain handed Hong Kong over to China, Fortune magazine famously published a cover story boldly proclaiming “The Death of Hong Kong” written by its top Asia hand, Louis Kraar.

Hong Kong, Kraar wrote, would remain “the gateway to fast-growing South China” and be “a place where you can make plenty of money.”

What’s dying, he said, “is Hong Kong’s role as a vibrant international commercial and financial hub – home to the world’s eighth-largest stock market, 500 banks from 43 nations, and the busiest container port on earth.”

Thus, Hong Kong will transform from a global metropolis into a Chinese city.

But that didn’t happen. The city had refused to die.

But now, since China imposed the national security law on Hong Kong on June 30, 2020, naysayers are back, saying, in Kraar’s words, “It’s over.”

Hong Kong’s position as Asia’s business hub is under threat as the territory confronts interlinked challenges in the political, economic and legal realms.

Politically, Beijing is tightening its hands-on control. The security law created crimes of subversion, secession, terrorism and collusion with foreign forces.

Then, in 2021, China’s National People’s Congress acted to “amend electoral rules and improve the electoral system” in Hong Kong. The trend toward western-style democracy was reversed.

Economically, strict Covid quarantining has caused companies to consider relocation. This directly threatens Hong Kong’s role as Asia’s business hub.

The American Chamber of Commerce in Hong Kong recently announced the findings of a membership survey, which disclosed that “over 30% of respondents have had to delay new investments in Hong Kong and 30% struggle to fill senior executive roles.”

Amcham disclosed that “over 40% are more likely to leave the city from a personal perspective, and over 25% of companies say they are more likely to leave Hong Kong.”

Hong Kong’s population dropped 90,000 from mid-2020 to mid-2021, the first such fall in almost two decades.

In the Amcham survey, 80% reported that their operations had been affected by the national security law, with 47% saying staff morale had suffered and 45% having lost employees to emigration. About 68% said Hong Kong’s rule of law had worsened and 48% reported a lack of confidence in it.

There are widespread fears that the judiciary’s independence is being eroded.
On Jan. 24, at the ceremonial opening of the legal year, both Chief Justice Andrew Cheung and Secretary for Justice Teresa Cheng asserted that the judiciary was independent, as stipulated in the Basic Law.

Actually, the Basic Law provides for many things, including presumption of innocence. But today, there are defendants who have not been tried, some of whom have not even been charged, but who have been incarcerated for a year or longer. Independent judges have to approve each detention and, evidently, have done so at Cheng’s department’s request.

Another Basic Law article says that judges “shall be appointed by the Chief Executive on the recommendation of an independent commission.” Recently, Reuters disclosed that Chief Executive Carrie Lam, in an unprecedented move, has sat on the Bar Association’s nominee for the commission for five months. No explanation has been provided.

No doubt, Hong Kong’s legal authorities know well the aphorism, “Justice must not only be done, it must be seen to be done.”

Judges and Justice Department officials need to ensure that their actions are perceived by the public to fully accord with the Basic Law’s provisions. It is not enough to recite the law; judges and officials have to be seen to live it.

Many today have a dim view of Hong Kong’s future. But beauty is in the eye of the beholder and China’s top representative, Luo Huining, in a Lunar New Year address, asserted that “the Pearl of the Orient” has “re-emerged with renewed luster and glamor” after the national security law.

Luo praised the strategy to align Hong Kong’s development with that of the mainland and said “the world looks to China for opportunities, and opportunities abound on the mainland for Hong Kong.”

Chief Executive Lam agrees. She has explained that the zero-Covid stance is necessary to persuade the mainland to reopen its borders with Hong Kong.

Lam has said: “Of course, international travel is important, international business is important, but by comparison the mainland is more important.”

But such a strategy, transforming the city from an international commercial and financial hub into a prosperous appendage of the mainland may cost the city its self-proclaimed title of Asia’s world city. At the same time, it may well make Kraar’s 27-year-old prediction come true.

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Frank Ching

Frank Ching opened The Wall Street Journal’s Bureau in China in 1979. He is now a Hong Kong-based writer on Chinese affairs.