Hong Kong: Have You Read The Headlines?

Once again the media pundits are at it. An opinion piece in the UK’s Times newspaper on Saturday. “China is ready to kill the golden goose”, is what it read, and it goes on to suggest that China will not hesitate to crush the Hong Kong protests if it meant preventing democracy infecting the mainland.

The writer is of the view that Hong Kong is a golden goose that has benefitted China, and because China is now wealthy and powerful enough to stand on its own, it no longer has a need for Hong Kong.

I would respectfully suggest that the author takes a look at the current state of China’s economy. Whilst there may indeed be some individuals in China who have and display considerable wealth, the Chinese economy is not in the greatest shape and indeed is walking something of a tightrope. Not only does China have considerably more to worry about internally than some students demonstrating in Hong Kong, as it attempts to bring a more recognisable style of governance and anti-corruption principles to the country (principles recognisable to the West that is), it also has to deal with growth issues.

I have generally contended that I am more concerned by the potential for social unrest in China than I am about the economy, but there is no doubt that economics are at present playing a major part in the overall situation.

And, by the way, I fail to see clearly where Hong Kong has actually been China's golden goose. What is it that Hong Kong has contributed to China? Hong Kong has certainly received special treatment through its Special Economic Partnership Agreement with China, it has been in the forefront of the internationalisation of the RMB, it has invested in China early on and reaped the first mover benefits, it has been the beneficiary of inward investment by Chinese companies, and it has received influxes of Chinese tourists that have helped keep certain businesses in Hong Kong going.

What has Hong Kong given China in return that has been so valuable?

On the subject of inward tourism for a moment, there has been something of a backlash against Mainland tourists into Hong Kong because of their “uncivilised” behaviour, according to Hong Kong residents. Interesting; on arrival in Hong Kong 40 years ago there were plenty of signs around asking people not to spit on the floor, or anywhere else for that matter. You certainly had to walk carefully for fear of someone “gobbing” on your shoes – although I suppose that could just have been a protest at yet another gweilo walking around their Chinese city of Hong Kong. How things have changed, but it’s like all converts – they become holier than thou in their attitudes, conveniently forgetting what they were like themselves once.

But this is a digression from the “golden goose”. There is a popularly expressed hope that China is going to be forced into stepping in to make some radical changes in Hong Kong as a direct result of these student protests, that are organised and assisted by the students’ own professors.

Obviously I can’t know what the next steps are going to be at the end of the day, but it would surprise me if the Chinese Government were about to give in to threats. How could they as it would open the door to all sorts of demands in future? But if the current defiance continues I also don’t expect them to do nothing. That said, they will tread carefully, no matter how it is portrayed by the media and the protesters.

I have written about this before, but for the reasons behind my thinking first of all look back at the establishment of the Hong Kong Lease in 1898 that gave Kowloon and the New Territories to Britain to run for 99 years. China always described this as an “unequal” or “unfair” treaty. There were a number of occasions when China could have walked into Hong Kong during those 99 years and taken it over. The world would have reacted in horror for six months and then forgotten about it. China chose not to do so. They now have their own agreement with Britain and even though it looks somewhat odd, I think they will stick to it.

Ah, you will say, but China has not kept to the agreement they signed because that is what all this trouble is about; the election, by a universally enfranchised Hong Kong public, of its own Chief Executive. To which the answer I am afraid appears to be encapsulated in Article 45 of Hong Kong’s Basic Law that seems to say that Beijing can reserve the right to appoint candidates on which the public can then vote. Now, clearly if you are voting for candidates that have been pre-vetted, then that is not universal suffrage – but if the Basic Law gives China the right to select candidates, then the fault lies not so much with the Hong Kong Government, but with the drafters of the law who let this go through.

Secondly, China is always hopeful that Taiwan will formally return to the Mainland. Personally I think there is little hope of that ever happening, but to go against an agreement they have signed with the United Kingdom would certainly put a final nail in that particular coffin.

Hong Kong has, again as I have written before in my Blogs, been suffering an inferiority complex for a long time and many of us have tried to ensure that Hong Kong does not become just another Chinese city. However, the hand wringing that has gone on in the past is now set to intensify further as a mood of depression sets in, and Hong Kong slowly becomes an irrelevance.

At some time in the very near future I hope our students realise that they themselves will have no future if this continues. Of course they may like to review the "democracies" of places like those in Zimbabwe, or in the Ukraine, or in Egypt and a myriad of other places – and where the protests in the end have come to nothing.

As for Hong Kong being the golden goose … lame duck is more like it!

Comments

[Billy]

"the fault lies not so much with the Hong Kong Government, but with the drafters of the law who let this go through"

And who appointed those idiots? China? Surely not...

[franceso cipriani]

Please read article 45 very carefully as your perception is incorrect. China government can appoint only after election in HK. It would be similar to the queen appointing governor general of Canada.

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The Chief Executive of the Hong Kong Special Administrative Region shall be selected by election or through consultations held locally and be appointed by the Central People's Government.

The method for selecting the Chief Executive shall be specified in the light of the actual situation in the Hong Kong Special Administrative Region and in accordance with the principle of gradual and orderly progress. The ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures.
---

[June Wong]

I can't agree with your more, David. Thank you for writing the piece: I hope many people get to read it.

I really hope Hongkongers could just stop complaining and asking for things (and things that in my opinion are not necessarily to the benefit of Hong Kong anyway), and just focus on strengthening ourselves and improving our competitive advantage. Otherwise, we will fast become what you said - irrelevant,

[fumier]

The Special Economic Partnership with China is a political fig leaf which, as if by magic, appeared right after the July 2003 demos, after stalling for 10 years. Its provisions are so narrow that only thinly segmented industries can benefit, and even these can have the 'privilege' withdrawn unilaterally if the PRC decides that they are disadvantaging Chinese companies. In case you haven't guessed, I have actually read through all the rules.

I can also tell you that, despite helping companies enter the Chinese market, not a single one out of hundreds of my clients has qualified under SEPA. The 'privilege' itself consists only of offering a level playing field, i.e. removing barriers, to companies from Hong Kong (which have to be 3 years old, apart from the other restrictions).

The figures quoted from time to time by time servers such as John Tsang ("an empty taxi pulled up and John Tsang got out") for jobs created by SEPA are hogwash, conjured out of thin air.