Northward in Kowloon, modern container ports—their giant cranes lined up like robotic elephants on parade—load waiting freighters. Barges scurry like worker ants, flags from every port of convenience flap in the breeze and jetfoils buzz back and forth from Macau.
For decades, as East Asia’s export economies rose to pre-eminence, the scene has grown more frenetic year by year. But sometime soon—or perhaps that day has already passed—the vast natural harbor that first attracted British opium traders to this spot on the South China Sea in the 1840s will reach its own peak, and start to fall.
The big question in Hong Kong—and it’s one that has echoed since the jittery pre-handover days back in 1997—is elemental: what’s next? Official statistics suggest a port that’s maxed out, a maritime hub that has slipped from number one in the world to number three and sometime next year will likely be overtaken by a city that didn’t even exist until the final few years of British rule: neighboring Shenzhen. What will happen, many Hong Kongers justifiably worry, when shipping follows the manufacturing up the Pearl River Delta into mainland China? Will their city slip to the global economic periphery, as some analysts forecast, becoming the 21st-century equivalent of Venice?
Ten years after the Union Jack flew over Hong Kong for the last time, change is most certainly afoot. But change, as they say, can be good. And although Hong Kong’s traditional status as East Asia’s premier shipping hub is already lost, the city is on the cusp of a reinvention so profound that the view from the peak will likely look quite different in a few decades. First there will be fewer freighters and barges. Then, perhaps, the dockyards will yield to new urban landscapes as they’ve done previously in places like London and New York. And, if all goes to plan, the scene that unfolds below the peak won’t depend so much on whether the winds kick up to clear the toxic skies.
Think of Hong Kong as China’s New York. Not today’s N.Y.C., to be sure, but the Gotham that had hovered on the verge of bankruptcy in the 1970s and then struggled to reinvent itself by deregulating its two stock markets and becoming the world’s leading financial center at the dawn of the digital age. Now China is the growth engine, and the transformation underway entails providing the financial savvy, rule-based business culture and global logistical reach that the vast Chinese economy demands but can’t create for itself. ‘‘Every economy changes as the major players [in the global arena] change," says Hong Kong’s Financial Secretary Henry Tang. ‘‘In the past we have always used China as a manufacturing base, but now we look to it as a market [with] a huge demand for world-class financial services. Hong Kong is where we supply it."
A ‘‘paradigm shift" is underway in the city, Tang says with confidence. And in Hong Kong’s case the consulting jargon actually fits, economically as well as politically. Truth be told, Tang and his fellow cabinet bosses are struggling to come to grips with what’s happening all around them. Whereas New York confronted urban decay, high crime and tense race relations, Hong Kong’s challenges center on today’s rich-poor divide, quality-of-life issues such as air pollution and the city’s still-unmet yearning for one-person, one-vote democracy.
Indeed, the influence tycoons exert on policymaking is under attack as never before. And the government’s management—or, say its critics, mismanagement—of precious waterfronts and green spaces are major concerns among the middle class.
Although opinion polls show that most Hong Kong people support China’s national government, Beijing’s ham-fisted efforts to manage the city’s democracy debate is engendering fear that the motherland could ultimately renege on its pledge to allow Hong Kong ‘‘a high degree of autonomy."
Perhaps most significant, “a dynamic generational shift” is underway, argues former legislator Christine Loh, founder of the influential think tank Civic Exchange. A new and politicized middle class has emerged, one that’s well traveled, technologically savvy and committed to more than getting rich. Their issues include the environment, education and protecting Hong Kong’s cultural heritage—the common denominator being better official accountability. ‘’[This generation] presents the tycoons and the government with its next challenge, and it is where [questions over] how our society ought to be run and where our priorities lie will come to a head."
By most accounts Hong Kong is on the mend as it prepares to begin its second decade as a special administrative region of the People’s Republic. Back in 1997, euphoria over the gala July 1 handover yielded quickly to an Asia-wide financial crisis that sent stock and property markets tumbling. Then the city sank into political indecisiveness, suffered a deadly SARS outbreak and after a botched 2003 government move to pass a new public-security law, experienced the largest political protests on Chinese soil since the 1989 Tiananmen Square demonstrations in Beijing.
The setbacks cost Hong Kong’s first chief executive, Tung Chee-hwa, Beijing’s confidence and eventually his job (he resigned citing ‘‘health issues" in early 2005). And since then, Tung’s successor, the bow-tie-clad Donald Tsang, has renewed public confidence, delivered strong economic growth and vowed ‘’to break barriers and realize Hong Kong’s potential in an ever-changing world," as he said recently.
The clearest evidence of Hong Kong’s transformation comes not from official rhetoric but in the city’s economic data. Since 1997, market capitalization on the main stock exchange has ballooned almost fivefold to just under $2 trillion, about one sixth the size of the New York Stock Exchange today. Over the past three years, Chinese companies have raised about $84 billion with initial public offerings in Hong Kong, and, according to the accounting firm Ernst & Young, the city’s main bourse generated 17 percent of the total capital raised worldwide during the first 11 months of 2006, ahead of London (15 percent) and New York (11 percent). The main driver was the Industrial and Commercial Bank of China’s $22 billion dual listing, which garnered $16 billion in Hong Kong and $6 billion in Shanghai. This flurry of activity broke an old pattern whereby Chinese companies, fearing a lack of liquidity in Hong Kong, preferred listing simultaneously in either London or New York. ‘‘We have always been successful, but these past few years have really put us on the map," says Tang.
Hong Kong’s financial sector now accounts for 13 percent of GDP, up from 10 percent in 1997. And as big as it is, today’s IPO boom represents only a part of what Hong Kong’s money tribe can offer China.
Consider: the IPO market sends capital into the mainland from outside investors (both Hong Kong Chinese and foreigners). But increasingly, China’s main challenge isn’t raising funds abroad, but disposing of the enormous pools of money it has amassed by running huge trade surpluses.
Now trapped inside the country’s closed financial system, this liquidity is too hot for China’s banks and stock exchanges to handle. This year’s stock bubbles in Shanghai and Shenzhen, for example, feature extreme volatility, rampant insider trading and price inflation driven by too much money chasing too few good companies.
China’s embarrassment of riches represents a huge opportunity for Hong Kong. According to the city’s top government economist, K. C. Kwok, Beijing has little choice but to channel ever-larger amounts of financial business Hong Kong’s way. One example is a scheme enacted late last year that will allow Chinese banks to invest $75 billion in overseas assets, with much of it expected to land in Hong Kong. Another influx is coming from Chinese multinationals, which are gradually being freed from a longstanding requirement that they repatriate foreign earnings back to the motherland. A third source (and by far the largest) is Chinese households, which together have an estimated $2 trillion in savings squirreled away. ‘‘Imagine you are a mainland Chinese sitting on a pile of money in your bank account," says Kwok. ‘‘You look at all these companies going to Hong Kong to list and you think, ‘Why can’t I invest there, too?’ "
Tourism is another growth sector with promise beyond filling hotel rooms or selling tickets to Hong Kong Disneyland. Since Beijing permitted its citizens to visit Hong Kong four years ago, not only have they bolstered a local travel industry slammed hard by the SARS epidemic, they’ve also revived the prospects of Hong Kong’s private hospitals. Some had been struggling until Chinese nationals began showing up for everything from heart surgery to maternity care. ‘‘You can’t just walk in and get a [hospital] room because Chinese who are rich enough and do not trust their own hospitals are there," says Jimmy Lai, publisher of the Apple Daily and a harsh critic of Beijing. ‘‘If you believe Hong Kong’s rule of law, free-flowing information, professionalism and integrity are part of our comparative advantage, you can assume that the more we integrate with China the more our advantages will be manifested." Even the old port is transforming into a modern service industry. From 1995 to 2005, the percentage of Hong Kong’s GDP derived from freight transport and storage stagnated; its contribution to the economy rose just a single point, to 4.8 percent, while container traffic to Shanghai and Shenzhen doubled every few years. But in a shift that remains ‘‘off the radar screen" to many analysts, says Kwok, trade and logistics actually rose as a percentage of the city’s GDP, from 18 to 23 percent, during the past decade. The new business comes from services that include managing complex supply chains that link Asian factories to American and European consumers, regional product sourcing and third-country trading that doesn’t bring products into Hong Kong at all. ‘‘We’re seeing the globalization of production," says Kwok. ‘‘And Hong Kong is the nerve center for a lot of these activities."
This shift is tectonic, and it gets to the heart of issues that now fuel much of the political debate in Hong Kong.
Like Japan, Hong Kong pours a staggering amount of concrete—much of it in the service of vested interest. It has spent $3.8 billion a year on capital expenditures since the handover, a figure roughly equal to what India now invests annually on its ambitious national highway program. The bulk has gone into new roads, additional reclamation (some along the scenic downtown waterfront) and campus like facilities built at taxpayer expense to bolster the nascent science and technology industries. Next on the drawing board: a massive government office complex that will occupy the last harborside plot near Hong Kong’s postcard central waterfront, as well as a logistics hub, another container port and a massive bridge to Macau all located on Lantau Island, Hong Kong’s largest remaining wilderness area.
Such projects are increasingly a tough sell in a city where public opinion is turning decidedly greener and local campaigns to preserve historic areas slated for redevelopment garner substantial middle-class appeal. Pressure groups have formed to demand more parkland, oppose demolition of historical landmarks (like the Star Ferry Terminal in Central, which recently went under the wrecking ball) and limit the height of buildings in certain areas to preserve views and keep breezes flowing. Even the business community has begun to lobby for waterfront redevelopment modeled on successful projects that have revitalized docklands in cities like Melbourne, Barcelona and London. ‘‘It’s not that people are against construction," argues Ma Ngok, a political scientist at the Chinese University of Hong Kong. “They’re against [Hong Kong’s] development-led ideology.”
The opportunity costs of bad policy could be enormous. Hong Kong’s environment is already deteriorating rapidly; air pollution, which on average reached hazardous levels every third day in 2006, is now a major deterrent to the professional talent the city needs to maintain its edge in finance and logistics. Last year, in a survey conducted for the American Chamber of Commerce in Hong Kong by A.C. Nielsen, 95 percent of business executives said they worried the city’s smog would harm them or their families, and more than half said they knew professionals who had declined work opportunities in Hong Kong because of the city’s poor environment. Earlier this year the city took a major PR hit when the Hong Kong Philharmonic’s vaunted Dutch conductor, Edo de Waart, abruptly moved his wife and kids to Wisconsin to escape the city’s ‘’terrible" smog.
Hong Kong’s have-nots can’t vote with their feet. But because they’ll someday wield ballots, their lot is a major political issue. Since 1997, working-class incomes have stagnated; unemployment peaked at nearly 10 percent a few years back but has since fallen by more than half, and living costs have risen sharply. Job insecurity is also rife as labor-intensive industries continue their exodus to China. Since 1995, official data show, the percentage of semiskilled workers in the economy has declined by almost a quarter and now accounts for just 16 percent of total employment. That’s good news in that it illustrates Hong Kong’s climb up the service chain.
But because the government didn’t implement compulsory education until 1978, there’s a huge demographic of workers now in their 40s and 50s who can’t easily be retrained for the information age and who cling to menial jobs paying meager wages. ‘‘I was a bus washer 20 years ago, and I know a woman who cleans buses today," says legislative councilor Leung Kwok-hung, a.k.a. Long Hair, a 51-year-old Marxist political activist who won his seat in 2004. ‘‘Her salary is lower than what I got and her working hours are longer than mine were. It’s ridiculous."
Hong Kong’s tycoons are famous for their resistance to political change. They never pushed for democracy under British rule, and since the handover they’ve argued that the city is not yet ready for it, or that universal suffrage would threaten the economy because low-income voters would elect populists promising costly social programs. ‘‘This is their blind spot, their idée fixe, about people who have no money," says Loh. ‘‘They think everyone who is poor wants welfare, and they kind of discount the middle class, which is concerned about aging parents, the state of public health and have kids in good public schools." Loh and other activists say the root of the debate lies in interest-group politics and a business elite that believes ‘‘if we give average people a political say, they’re going to upset our apple cart."
The old apple cart is toppling anyway.
Labor-intensive industries are leaving, and no matter how much the government invests in cross-border roads and additional container terminals, Hong Kong’s days as the pre-eminent maritime gateway to a vast continental economy are over. As with New York and London, necessity is proving the mother of invention.
To avoid decline, Hong Kong has begun to rethink how best to manage its precious green areas, rescue its historic waterfront from overdevelopment and otherwise enhance itself as a financial center worthy of global attention even as it better addresses the needs of the city’s have-nots. Ten years ago such ideas amounted to heresy; now they are central to the political debate. As always, Hong Kong is showing the world it can learn, adapt and stay ahead.
title: “A Reflection Of Power” ShowToc: true date: “2022-12-27” author: “Janice Ericson”
NEWSWEEK: Many analysts say Hong Kong is enjoying its best moment since 1997. Do you agree? How has life for average people changed over the past decade? Leung Kwok-hung: Their social status is deteriorating. Their economic situation is deteriorating. The gap between rich and poor is getting bigger and bigger.
Why do you think you were elected in 2004? I was a bitter rival of [former chief executive] Tung Chee-hwa. People who voted for me used their ballots to say: “Tung, step down.” One of my proposals was to hold a referendum [on] universal suffrage. I was the protest vote.
It’s been a couple of years and the economy is doing better… But how? Hong Kong has gradually become a casino for financial capital from all over the world. And it’s a money-printer for the Chinese government. Those so-called state-owned enterprises have begun listing themselves [on the Hong Kong Stock Exchange]. Why? Because they don’t stand a chance of listing in New York or London or anywhere else. Well, maybe in Indonesia (laughs). Under globalization, anyone who accumulates capital and invests it at least has a chance to eat the cream on the cake. But the people who can’t afford to invest are the losers.
So you’re antiglobalization? It’s a system that allows major corporations to make more money over a shorter period. It’s redistribution of wealth from the poor to the rich. The problem is that more and more people feel abandoned. There is not enough job security [or] social mobility.
If Che Guevara were alive today, what do you think he’d be doing? I don’t know, but his struggle isn’t finished yet. In the past 40 years we have witnessed the collapse of so-called communism—which was not even close to the socialist ideal—and since then the market has enlarged to a tremendous scale. Yet the capitalist system cannot solve the poverty problem. Africa is almost written off. South America is a paradox. When George W. Bush launched his war on terror to attack the so-called rogue states, his own backyard was on fire. And what about India and Pakistan? Even though economic growth is quite significant, the gap between rich and poor remains huge. If you put a globe on your desk and look at it, there are not many places we can point to and say there is broad-based prosperity and development.
Hong Kong is so deeply identified as a center of global capitalism, and yet it elects a guy who talks about Trotsky and wears Che Guevara T shirts. My platform is not socialist [but] social democratic. I want to stop the collusion between big business and the government. I think universal suffrage is a must for Hong Kong. And I would like to change our taxation system to make the rich pay more to benefit the poor.
Several tycoons have warned that democracy in Hong Kong will lead to populism, in which people elect leaders who promise a welfare state. That’s what democracy is for! Think about it. Can you single out one nation that hasn’t [been compelled to] launch social reforms after becoming democratic? All democracies use reform to avoid revolution. Even America. Lyndon Johnson, a right-wing democrat, launched the Great Society because he needed to do so.
Do we need a revolution in Hong Kong? If [the rich businessmen] want to avoid it they must implement social reform.
And if they don’t take your advice on this they could end up dealing with someone who isn’t so nice? That’s it. In a way I wish I would lose the election.
I don’t like bullshit. But [I hope] for something like what happened in the 1960s in America. Who changed the world back then? People who dared to put up a fight. It wasn’t the Vietcong, but left-wing campaigners that actually changed the Western world. They encouraged young people to think, to struggle and to remind their parents that something needed to be done.
How are you treated inside the Legislative Council? Like a stranger. I don’t know my colleagues very well and we don’t have any personal contact. C’est la vie. I was not supposed to be here.
You sound bitter. You could say that. The last 10 years have been a textbook lesson on the corruption [of Hong Kong’s] system. If you go to the streets and ask normal people they will tell you. After the handover, they waited and waited, and were disappointed time after time until they took to the streets. The system is not working at all. I’ll give you a good example. I was a bus washer 20 years ago, and I know a woman who cleans buses today. Her salary is lower than what I got and her working hours are longer than mine were. It’s ridiculous.
Are you doing any good? I can use the chamber as a platform to speak on behalf of people who don’t have a voice. I can preach for the ideals of social justice, universal suffrage and further democratization. I can honor the martyrs of Tiananmen Square, and no one can stop me. When PRC leaders come to Hong Kong I can chant slogans in the banquets even though I can only survive for 15 seconds. My responsibility is to speak out.
Will you run for re-election? I need to try very hard to keep my seat. If I don’t win I’ll go back to being an activist. Actually I still am one. … I was arrested last Sunday when I took part in a demonstration over public housing. We launched a protest outside the residency of the head of the housing authority. He wants to pass legislation that will abandon the cap on rent [for public housing]. The police formed a cordon line, and we tried to push our way in. Did you know I am still a tenant in a public-housing estate?
Doesn’t your income disqualify you? I earn about HK$55,000 ($7,150) a month, but I donate [most of it] to a fund that supports all kinds of social activities. My net income is about HK$15,000 ($1,950), and I have side income from writing columns.
Even so, I needed an exemption [to keep my public flat]. I told them that I didn’t choose my job [as a lawmaker], the people chose me.
title: “A Reflection Of Power” ShowToc: true date: “2023-01-27” author: “Melissa Long”
NEWSWEEK: People were concerned about media freedoms being upheld in Hong Kong after 1997. How have things gone since then? Jimmy Lai: Beautifully. The press has been free. But a lot of the media has gone into self-censorship, either because they’re so afraid or purely for economic considerations. They think that if they lean the Chinese government’s way they will get [financial] benefits, or that by getting close to power they will become the voice of China. Still, there hasn’t been any persecution or suppression.
What has been your strategy at Next Media? We are the opposition media here, but we’ve never had a journalist arrested in Hong Kong. In China, some have been detained for a few days, then released. But [the foreign media] have had this happen, too. I have not been allowed in China for more than 10 years, and our reporters have to work there on tourist visas. But we’ve never been intimidated, persecuted or threatened. [Beijing] has tried very hard to keep the promise of one country, two systems.
Did you expect the Chinese government to act differently? Ten years ago a lot of people told me: “They will have to arrest a few hundred people just to make sure Hong Kong doesn’t revolt.” And I thought that if they were to arrest just 10, maybe I’d be one of them. I was scared to death. Then the People’s Liberation Army came in, and ever since we haven’t seen them on the street. And nobody has been arrested.
So it’s all good news? Some subtle things have been eroded, like the legacy of Western values. Free markets, small government, things like that. Under [former chief executive] Tung Chee-hwa we had some very negative years. People lost their jobs and saw their houses go into negative asset value. Since China has allowed its tourists to come here, the economy has revived but we’ve become more dependent on China. In the old days we struggled through hard times using our own skills and resources. Now, whenever we encounter a problem we think that China may be able to help us. The more we are dependent on China, the more Beijing will be able to maneuver or even control our lives. This is a danger, but it’s very subtle.
Do you know why you are blacklisted? We’ve always rubbed [Beijing] the wrong way. But if we don’t do that who else will? If we don’t [create] a small space for different opinions, opposition opinions, there will be no competition of ideas and society will lean to one side. That would not be good for Hong Kong.
Any hope you might be allowed back into China? Not for a long time. I think we have very good leverage [over Beijing] in Taiwan. We are the biggest newspaper and magazine there, which gives us protection because Beijing cares more about Taiwan than they do Hong Kong, which is already in their pocket.
When you moved into Taiwan’s media market, some people saw it as a vote of no confidence against Hong Kong. You’re suggesting it was an insurance policy? That was the intention. I couldn’t go to the United States and say: “Can you protect me?” Nobody would care. But I knew Beijing was thinking very much about Taiwan, and that they don’t want bad press there. So we built the Taiwan business as leverage. If they do anything to us, our Taiwanese readers will know what happened. And Beijing knows that [should they move against us] we will do everything we can to make them pay on Taiwan.
What about China’s own media? Is it gaining more freedom as China rises? The media is actually under greater control than before. [Chinese President] Hu Jintao has really squeezed them a lot since taking power. If they can find better ways to control the Internet, better ways to control the media, they will do so. Eventually, what is going to overcome Chinese control is technology. But they are not going to launch their own initiatives to open the media [until] Chinese politics begins to liberalize.
Some experts argue that China does not intend to Westernize or liberalize, but only to modernize. Do you think people in China understand what democracy is and want it? Not at this moment. But anyone who would differentiate between Westernization and modernization is just talking rubbish. Take out the western culture and what else is modern? Nothing. The technology is Western, the trendy culture is Western, all this modernization is Westernization. China is prosperous today because it deals and interacts with the West. No, democracy isn’t on normal people’s radars yet. China will be open to it only when the economic cycle turns down. And when that happens, China will be in chaos.
How so? In other countries, when there is a recession, you have churches, temples, charities, NGOs, civic organizations, unions and other institutions reaching out to help each other. They are shock absorbers. In China, you don’t have any of this. Organizations that are not governmental are not allowed. In China, you have two pillars: the market and the government. If the market fails, the government will be dragged down because there is nothing in the middle.
That is just the opposite of what many economists here say. There’s no such thing as perpetual-motion machines, and no economy without cycles. We haven’t seen the boom’s flip side yet, and when we do it is going to be disastrous. As the cake becomes smaller in China, everyone will fight for it. There is no moral infrastructure. People don’t care about anyone but themselves, about making money and having a better life. Then all of a sudden, this hope is dashed. People will fight in situations where, in places like Taiwan or the United States, they would extend their hands to help each other.
What makes you think so? Look at the environment. The fundamental issue is not regulation but morality. If I don’t care about the people next to me, how much can I care about trees and animals in the forest, the birds in the air or the fish in the water?
When do you think this crisis could occur? I have no sense of the timeframe, but things are heating up. The craziness you see in the stock market is a sign that things may have gone too far already.
China has expanded for the last 20 years. And so far everybody that predicted when it would end has been wrong. But one day they will be right. The government has tried so hard to make the [2008] Olympic Games a success. They have distorted a lot of investment and a lot of infrastructure development [to achieve that], and such waste could be the fatal blow.
Is Hong Kong’s economy at risk from competitors like Shanghai and Singapore? No. Hong Kong still has financial integrity, professionalism, rule of law and transparency. All that will draw in the biggest financial deals. It’s very natural. Before China allowed its citizens to visit, our private hospitals were almost dying. Now they’re all full. You can’t just walk in and get a [hospital] room because Chinese who are rich enough and do not trust their own hospitals are there. If you believe Hong Kong’s rule of law, free-flowing information, professionalism and integrity are part of our comparative advantage, you can assume that the more we integrate with China the more our advantages will be manifested in other areas.
Such as? Insurance. Legal matters. Anything where you have to trust the system, obey the law and respect contracts—as they don’t do in China—will gravitate here.
At the end of the day, Hong Kong’s competitive advantage is the legacy of a Westernized, cosmopolitan city that we inherited from the British. This Beijing understands. To keep Hong Kong prosperous, you have to preserve its integrity as an international city.
title: “A Reflection Of Power” ShowToc: true date: “2022-12-05” author: “Maxine Burnett”
The border was also a political fault line. On the mainland, stories mythologizing the People’s Liberation Army monopolized radio and television broadcasts, and morning lessons in class struggle blared from public PA systems across the country. Hong Kong, in contrast, was mired in political apathy. Although my roommate and his fellow sociology students obsessively deconstructed Pink Floyd’s “The Wall,” local politics didn’t hold their interest. Nor did that change very much when, in 1984, Beijing and London sealed the deal that would insure Hong Kong’s peaceful return to China. It took the 1989 massacre of unarmed students in the streets of Beijing to convince Hong Kong people that things might go horribly wrong for them. And they reacted in predictable fashion—by hedging their futures with second passports to countries like Canada, Australia and the United States
Those escape hatches were unnecessary, as the fear of Chinese jackboots hasn’t materialized in Hong Kong. Still, the handover has politicized society in ways unimaginable under the Brits. That’s partly a result of former chief executive Tung Chee-hwa’s misguided rule, to be sure. But the rise of China’s market economy is another important driver. Had the mainland remained a bastion of Maoism, Hong Kong people would have faced a simple choice: toe the party’s line or depart. But today their political yearnings spring from hope, not despair. Many not only believe Hong Kong would function better the more it democratizes, but see their city’s political evolution as a model for China’s future opening. Just as Beijing took its initial cues from the city when it launched economic reforms in 1979, goes the logic, the mainland could someday follow in Hong Kong’s footsteps politically as well.
The city seems an ideal crucible for political experimentation. So much so that one wonders what exactly Beijing fears. Paternalism is one issue; the notion that a former British colony could ever set the political tone nationally no doubt rankles the politburo. But China’s leaders can’t seriously view Hong Kong politics as a threat. The city’s political demonstrations, though large, rank among the world’s tamest. Protesters march parade-like along preset routes. There’s plenty of fiery rhetoric and a good deal of fist pumping, but violence plays no part of the proceedings, and demonstrators heed traffic signals to prevent gridlock. In their wake organizers dispatch volunteers to remove banners and sweep trash from the streets.
What Hong Kong people want, survey after survey shows, is the right to elect their leaders. This yearning is only natural in a region that has seen two of Hong Kong’s economic cohorts—South Korea and Taiwan—successfully democratize since the late 1980s. But Beijing seems to suspect an ulterior motive, and that paranoia is manifesting itself in a tawdry campaign of identity politics. The city’s democrats have been accused of not loving the motherland enough even though they were among the few who openly criticized colonial rule before 1997. Their opponents have coalesced into a “patriotic” camp whose members routinely blast their foes for criticizing Hong Kong while abroad (which supposedly gives succor to China’s external enemies) or embracing western views on history. Recently the leader of a large pro-Beijing party denied that China’s 1989 suppression of pro-democracy demonstrations in Tiananmen Square in 1989 constituted a massacre, and encourages schools to teach a “patriotic,” meaning whitewashed, version of the crackdown.
Opponents of Hong Kong’s democratization have long argued that the locals don’t mind autocratic rule because they “just want to make money.” The British took that view until the final colonial governor, Chris Patten, belatedly pushed for greater self-rule. China has since stressed the need for stability and continued economic development, reimposing what amounts to a false dichotomy that pits prosperity and representative democracy as inversely proportional. But since 2003 Beijing has begun to link the city’s political opening (which it can no longer oppose wholesale) to patriotism and adherence to the Communist Party’s view of history.
The ramifications of today’s political debate extend across Greater China. Beijing knows that a democratized Hong Kong would inspire calls for pluralism on the mainland, which is why the city’s political evolution is a potential wedge issue dividing reformists and hardliners inside China’s Communist Party. But leaders also realize they must gauge the cost of not allowing democracy to flourish in Hong Kong on their historical quest to bring Taiwan peacefully back into the fold. That island’s raucous, multi-party democracy is deeply entrenched, and so any perceived effort by Beijing to slow Hong Kong’s political development invariably sows fears that any future unity deal could cost Taiwan and its 21 million citizens their own political freedom. The divergent perspectives are in full view these days as China’s state media lauds Hong Kong’s “glorious” post-handover development at the same time that government agencies in Taiwan spin the city’s post-colonial history as a cautionary tale about the pitfalls of autocratic rule.
In that sense Hong Kong remains a front-line city. In recent decades its economic system has had a profound impact on China. Over the next few decades, during which the challenges facing Hong Kong will be more political than economic, the city’s evolution will likely foreshadow China’s own development. If Hong Kong democratized, so will the mainland eventually. If not, that failure will reverberate in Taiwan and across Asia.
title: “A Reflection Of Power” ShowToc: true date: “2023-01-06” author: “Keith Sands”
WEHRFRITZ: How has Hong Kong’s economy changed since 1997? TANG: Dramatically. Ten years ago, service was already over 80 percent of our GDP; today it’s over 90 percent. That 10 percent means very much. In the past 10 years we have demonstrated that we [can provide] China world-class financial services. Our capital markets have displayed a degree of depth and liquidity that an international market should have. We have seen some mega-IPOs. In the past, companies would never have thought about doing an IPO just in Hong Kong.
Is it accurate at this point to think of Hong Kong as China’s New York City? It’s fair to say that we are China’s international financial center, whether you compare us to New York or London because each is quite unique. Though it will be a long time before we catch up with the amount of capital raised in New York.
How will Hong Kong’s growth change over the next 10 years? I expect that the contribution of financial services will increase, and the shrinkage will come at the expense of other sectors. The growth in maritime shipping will lag behind financial services. It’s not a bad thing, per se, because the mix of every economy changes as the major players [in the global economy] change. In the past we have always used China as a manufacturing base, but now we look to it as a market [with] a huge demand for world-class financial services.
A debate is raging over how to manage the waterfront and improve the environment. Is that part of the paradigm shift? It’s a change for the better. A few years ago, in the middle of a very deep recession and deflationary cycle, people worried about their jobs and their children’s schooling. But for the last three years GDP has been growing at 7.6 percent. Unemployment has been cut in half. People have gotten over the hump and don’t worry if the boss is going to fire them tomorrow [but] are looking forward to the next pay rise. They care more about the environment, the air and green spaces where they can go and enjoy the weekend.
You have a big budget for capital expenditures. Why pour so much concrete when, as you suggest, Hong Kong’s focus should be shifting from hardware like bridges to software, including education? This doesn’t mean we just want to build more roads, more bridges. But we do want to keep up infrastructure investments so that we remain competitive. Our airport is now one of the best in the world. We have invested in the western crossing into the mainland, which will [improve transportation into] the Pearl River Delta. The Hong Kong-Zhuhai-Macao Bridge will bring us closer to the western side of the estuary. Quite a bit of the budget has been spent on community facilities, halls and swimming pools. Those are also necessary to improve the quality of life. On the software side, education is our largest single expenditure.
Hong Kong’s transition has been hard on older workers who didn’t get a lot of schooling. What’s the answer for them? We have one core value, that alleviation of poverty does not mean just giving [the poor] more money, better housing or more food. It is about how you equip that person so he can join the work force and, through work, lift himself out of poverty.
What about attracting talent? Let me give you one statistic most people don’t notice. The number of working permits Hong Kong has issued to persons who are not foreign domestic helpers or from mainland China is about 30 percent more today than in 1997. Children of these expatriates are clogging up the whole international school system. This is a very good sign that people are coming to Hong Kong not just because it’s a nice place to live, but because it is also a place where they can work for a few years or longer.
