Hong Kong system in doubt under ‘one country’ shadow

October 06, 2014 09:34
Relations between Hong Kong and Beijing will be more strained after riot police fired tear gas at pro-democracy protesters. Photo: HKEJ

Much has been said about the decline of Hong Kong, albeit in a gradual manner, in terms of competitiveness amid growing rivalry from other cities in mainland China and in the Asia-Pacific region.

True, the former British colony, now a special administrative region of China, still shines after the 1997 change of sovereignty under the imaginative concept of “one country, two systems”.

Although Hong Kong did not escape the regional and global economic shock waves that followed the handover, its economy remains in good shape.

And 17 years on, its hardware and software -- transportation and infrastructure, economic freedom, administrative efficiency, clean government, press freedom and city management -- are strong and solid. Hong Kong consistently ranks high in various surveys.

But it is equally true that, in addition to doubts about its economic competitiveness in the medium to long term, there have been increasing fears about the erosion of its unique strengths due to intensifying conflict over the “one country, two systems” political framework in the past few years.

In his regular column in the Chinese-language Hong Kong Economic Journal last month, founder Lam Hang-chi described political frictions as his biggest worry about the city.

Lam said the preservation of business independence and intellectual freedom is in doubt. Both, he said, are key to the concept of keeping the Hong Kong system intact while China is practising a different system under the principle of “one country”.

Lam is worried business decisions by Hong Kong entrepreneurs, who want a piece of the China market, have been increasingly influenced by political considerations.

Put plainly, they are anxious to “cooperate” with the policies of the central authorities for the sake of building good guanxi, or relationship.

China’s attitude toward “two systems”, he wrote, has also changed in recent years. Disputes over a national education curriculum and political reform have shown Beijing's bias toward the loyalists who are obedient and loyal to the communist authorities, ignoring pan-democrats or other dissenters.

Lam believes business independence and intellectual freedom constitute freedom of choice unheard of in Chinese societies for thousands of years. And that, he said, is “the core of Hong Kong’s core values”.

Lam, a well-respected intellectual-cum-journalist, is not alone in fretting about the fate of Hong Kong under “one country, two systems” after the historic events of 2003.

That year saw half a million Hong Kong people take to the streets on July 1 to oppose the enactment of an anti-subversion bill, known as Article 23, among other political and economic grievances, by the administration of Tung Chee-hwa. The rest is history.

Shocked by the rise of people power, Beijing abandoned its hands-off approach toward the SAR and took a more interventionist strategy.

If Beijing still exercised a degree of restraint, it was because party leaders were wary of the negative impact, in perception and substance, on Hong Kong.

Taiwan and the world are watching whether Beijing will honor its promises to Hong Kong. Perception matters. Hong Kong still plays an important role in China’s economic development.

Diminishing returns 

The political and economic value of Hong Kong to China, however, is diminishing with the political might of the Middle Kingdom going from strength to strength.

Hong Kong is no longer on the radar screen of major Western powers including Britain. Economically, the future role of Hong Kong in the rapidly growing Chinese economy is in doubt.

Joseph Yam, former head of the Hong Kong Monetary Authority and a voice China’s top banking officials would listen, warned – again -- on Sept. 19 that Hong Kong might become marginalized if the Occupy Central protest disrupted the operation of the city’s financial market.

The blockade plan, Yam said, might deal a blow to investor confidence, prompting Beijing to reduce its use of Hong Kong as a platform for its reform and opening-up policies.

Yam’s warning echoed fears in some political and business quarters. They are worried Beijing’s tolerance of the city’s free-wheeling system, values and culture would wear thin if the SAR is seen as a threat to what Beijing defines as national security and core interests.

Elsie Leung, a former secretary for justice and a vice chairman of the Basic Law Committee, caused a stir earlier when she said Hong Kong is a municipality of China.

She was defending a decision by the National People’s Congress Standing Committee on a framework for electing Hong Kong's next chief executive by universal suffrage.

Under the Chinese constitution, Hong Kong is a special administrative unit that enjoys a range of autonomous powers and rights, which are not given to people in the nation’s four municipalities -- Beijing, Shanghai, Tianjin and Chongqing.

It might have been a mere gaffe but doubters and cynics fear it might have been a slip of the tongue, reflecting a profound change of thinking about Hong Kong’s political and economic status among the central authorities, which is no longer special but similar to the likes of Beijing and Shanghai.

Leung perhaps echoed a warning by senior mainland officials that the city should not become an “independent political entity”.

Obsessed with fear about alleged foreign intervention in Hong Kong politics and the rise of “pro-independence” thinking, Beijing has become increasingly assertive about “one country” on issues such as universal suffrage.

The decision by the NPC that effectively shuts the door for pan-democrats Beijing deems hostile from contesting the election has been criticized as a Chinese-style “bird cage democracy” and a departure from democratic elections under international standards.

Student protest

The Hong Kong Federation of Students, representing university students, and high school student group Scholarism launched a five-day class boycott on Sept. 22.

It triggered an early start of the Occupy Central civil disobedience campaign, followed by an abortive disperal operation which saw riot police fire 87 rounds of tear gas on Sept. 28.

Hong Kong hit the international headlines, with western media calling the campaign “umbrella revolution,” adding a political hue to so-called “colour revolutions” in some parts of the world.

An occupation of the area outside government headquarters shut down traffic in the heart of Admiralty, parts of adjacent Central and Wanchai. Blockades by protesters also occurred in Causeway Bay, Mong Kok and Tsim Sha Tsui.

In a clear response to calls for Chief Executive Leung Chun-ying to step down, the official People’s Daily said in a commentary on Oct. 2 that the central government supports him. It also backed the handling by Hong Kong police of "unlawful activities", referring to the Occupy Central protest.

Regardless of the outcome of the Occupy Central movement, Hong Kong will never be the same.

Cross-border relations will be more strained. However inaccurate, the “umbrella revolution” label will cause more fretting in the communist leadership about the political vulnerability of the SAR to international politics.

In view of Hong Kong’s economic value and role in China’s reform, there is no doubt pragmatic Beijing leaders are mindful of the risk of tinkering with the city’s economic and financial systems.

But in the face of security risks, greater political control over Hong Kong could be the shape of things to come, casting a long shadow over the competitiveness of its systems in the medium term and over the long run.

Chris Yeung is a veteran journalist and columnist. He was editor-at-large at the South China Morning Post and, more recently, deputy chief editor of the Hong Kong Economic Journal.

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Hundreds of thousands of Hong Kong people join the Occupy campaign to call for true universal suffrage. Photo: HKEJ
In what has been dubbed the "Umbrella Revolution", protesters used umbrellas to shield themselves from the rain as well as tear gas and pepper spray. Photo: HKEJ

He was editor-at-large at the South China Morning Post and, more recently, deputy chief editor of the Hong Kong Economic Journal.