Xi swears in new HK leader,declares capitalism will be permanent

Frank Ching July 04, 2022 06:00

Chinese leader Xi Jinping, in a dramatic gesture, traveled to Hong Kong June 30-July 1 to celebrate the 25th anniversary of its return to China in 1997 and its establishment as a special administrative region under the “one country, two systems” framework, the first time he had left mainland China since Covid-19’s arrival two and a half years ago.

The 25th anniversary is hugely symbolic since the Basic Law – the region’s constitutional document – asserts that “the previous capitalist system and way of life shall remain unchanged for 50 years.”

In recent years, there has been much discussion of Hong Kong’s future after 2047. What Xi did was assure its people that the 50-year deadline is irrelevant and that Hong Kong will not be absorbed into the socialist mainland.

The president, in a 30-minute speech July 1, addressed Hong Kong’s political, social and economic elite and said “one country, two systems” served the interests of all parties involved – the mainland, Hong Kong and Macau – and “is widely recognized by the international community.”

“There is no reason to change such a good system,” he declared. “It must be adhered to over the long run!”

Thus capitalism in Hong Kong will be permanent, not just for 25 more years.

In 2017, during his last visit, Xi had issued warnings against crossing China’s “red lines” regarding sovereignty and security issues.

This time, such warnings were unnecessary. Unlike five years ago, there were no opposition rallies. The national security legislation imposed on Hong Kong in mid-2020 resulted in the flight, imprisonment or intimidation of potential protesters.

The Chinese leader spent considerable time expounding on the paradoxical nature of “one country, two systems.” Thus, Xi said that enforcing Beijing’s overall jurisdiction and upholding the region’s high degree of autonomy “are integral aspects of the same policy, and only by ensuring both can we run the SAR truly well.”

Encouragingly, Xi emphasized the importance of Hong Kong to continue to be different from the mainland in order to “stay connected with the world,” such as by maintaining its common law system.

“The central government,” he said, “fully supports Hong Kong in maintaining its unique status and strengths on a long-term basis, in consolidating its role as an international financial, shipping and trading center, in maintaining its free, open and sound business environment, in retaining its common law system, and in expanding smooth and convenient linkages with the rest of the world.”

“The Central Authorities,” Xi added, “trust that in the historical course of building a modern socialist country in all respects and achieving the great rejuvenation of the Chinese nation, Hong Kong will have an even greater contribution to make.”

Thus, with order restored, China’s leader told Hong Kong to return to what it was good at doing: making money.

Before delivering his speech, the Chinese president swore in John Lee, handpicked by Beijing, as the new Chief Executive.

In his inaugural address, Lee said his five-year term would be “a crucial time for Hong Kong to advance from governance to prosperity.”

In addition to strengthening Hong Kong’s status as a business center, he said, his administration would also strive to develop a range of emerging industries, in particular, creating an international innovation and technology hub.

The new Chief Executive termed Hong Kong’s status as a special administrative region of China a major source of strength.

Lee also cited Hong Kong’s past achievements, notably recognition as the world’s freest economy. He did not mention that the Fraser Institute, which in 2021 awarded the title to Hong Kong on the basis of 2019 information, had warned that “the weakening of the rule of law caused by the interventions of the Chinese government during 2020 and 2021 will likely have a negative impact on Hong Kong’s score, especially in Area 2, Legal System and Property Rights, going forward.”

While Lee is right to say that one of Hong Kong’s greatest strengths is being part of China, he should realize that China can be a liability as well, as shown by the Fraser Institute citation. In fact, China is both Hong Kong’s greatest asset and greatest liability; that is a fact of life that cannot be changed. Lee, who under the Basic Law is accountable to both Beijing and Hong Kong, will be in an impossible position when their interests don’t coincide.

Lee thanked both the central government and “the people of Hong Kong” for giving him his job. But while the central government chose him, he has yet to earn the trust of the 7.5 million Hong Kong people. That will require serious work, not just a “thank you.”

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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.