Wither Hong Kong?

There is an important opinion piece in the Globe and Mail by Tom Grimmer, a Canadian consultant and commentator who is based in Hong Kong, that I think is a “must-read” for everyone who wants to understand what’s going on in Hong Kong. He analyzes the nature of the people who are out in the streets and the socio-economic realities that they face. It is not a pleasant read …

This is among the biggest stories in the world at the moment,” Mr Grimer writes, “so I’ll skip rehashing how two million people filled our streets in June opposing an ill-conceived extradition law. That mass movement – one in four citizens – has become an amorphous, largely leaderless outpouring of frustration by Hong Kong’s millennials and Gen Z’ers … [and while] … The crowds are now much smaller … [or were until last weekend] … the violence is exponentially greater. And the brutality undeniable from a police force once considered among Asia’s finest … [and] … The proposed legislation that sparked this is “dead,” says Hong Kong Chief Executive Carrie Lam. But for the people on the streets now, that is too little, too late. They want it formally withdrawn, a step that the government has been inexplicably unwilling to take, along with any other gestures of contrition. The black-shirts, as protesters are known, have other demands, including an inquiry into police behaviour.

He talks about “The lack of cultural identity [which] is, in a strange way, part of being a young Hong Konger – which means, first and foremost, not being from China (although almost everyone in Hong Kong can trace their roots there). Canadians should identify with this because we, too, define ourselves by what we’re not: Americans. Many of those who have taken to the streets were born after Hong Kong was returned to China in 1997 after a century-and-a-half under British rule, and long after the Tiananmen Square crackdown of 1989. In many ways, I admire their David-versus-Goliath guts, but I also wonder if they fully appreciate what they are up against if China is pushed far enough.” That, to me, is the key issue here. As I have said before, Xi Jinping cannot lose. Over and above everything else, over and above right and wrong, that fact is paramount. Xi Jinping will not lose.

Which leads us directly into a discussion of economic desperation,” Tom Grimmer says, which is “perhaps the most intractable issue at play here. Hong Kong is supposed to be in 50-year transition to full Chinese rule in 2047. But economically and socially, it’s already a done deal. Hong Kong always benefited from mobile capital but static labour. That’s no longer the case. In its core industry, finance, the Mandarin spoken on the mainland has all but become the second language. Socially, the mainland allows 150 people a day to emigrate from China, in addition to the professionals who flock here to work. Naturally, Hong Kong’s de facto official Cantonese dialect is feeling increasingly diluted. Slowly outnumbering your hosts is the oldest colonial trick in the book … [and] … There’s more. Hong Kong has the most expensive residential real estate in the world and the second-highest (after New York) Gini co-efficient, the classic measure of the rich-poor gap. A lot of young people in Hong Kong have little hope of ever owning a home, and many live with their parents into their 30s and even after marriage … [thus] … They look upon what seems to them like a rigged economic system, run by a handful of family-controlled conglomerates and pro-China business lobbies. They know they are at a disadvantage in what is mislabelled a meritocracy. (It remains to be seen if their rage stays focused solely on the government and the police, but so far there have been no broken shop windows, overturned cars alight or willful damage to private property despite 10 weeks of unrest.)

This is more than political, there is a deep, underlying social malaise in Hong Kong. Hong Kong is neither unique nor, to China, indispensable. Look at this video from Amnesty International,  listen to the young lady from 0:23 to 0:40. “We cannot emigrate,” she says, “we have nowhere to go,” says her friend. All they can do is try to protect what they have. Later, at about 3:25 she says “Hong Kong is beautiful, not only the sceneryI want a Hong Kong that is just [and] honourable.” The young ladies’ definitions of “just” and “honourable” are meaningless to Beijing. Beijing doesn’t care what they want; it just wants to incorporate Hong Kong into a vast ‘Greater Bay Area’ project, within which it will be submerged.

Mr Grimmer concludes by saying that “As things have spiralled out of control – into “the abyss,” in the words of Ms. Lam – I have wondered about that pair from the pub. They may have been at the airport, or gassed and beaten in that subway station. Will they, in 28 years when Hong Kong reverts fully to Chinese rule, tell their kids about these heady days of rebellion? Perhaps like the anti-establishment Western youth of the sixties, they will simply succumb to economic reality and forge a compromise with the future. They might watch from afar, from say Sydney or Toronto. Of course, it’s very hard to say where China itself will be politically by then, but chances are those two will know one thing for sure: They witnessed free expression as we knew it die in Hong Kong.

I think he’s right. I believe that some short-sighted, narrow-minded men in Beijing are intent on crushing things like “free expression” and the “rule of law” in Hong Kong. One must, those men feel, express only Bejing’s official party line and the “rule of law” is whatever they say it is on any given day. And they believe, against the evidence, that Hong Kong doesn’t matter. There is a very insightful article in the South China Morning Post that examines why Beijing keeps getting Hong Kong wrong. Beijing keeps misjudging Hong Kong, then it sends in teams of experts to ask questions and gather intelligence and then it gets Hong Kong wrong, again. The authors get it right, I believe, when they say that “Some pro-Beijing scholars admit it is not that Beijing does not know the popular will of the pro-democracy movement, but rather that it has neither the will nor the intention to act upon their demands.

The people of Hong Kong want to be “free,” at least as “free” as they are now to solve some pretty serious domestic problems. Beijing wants them to be about 10% of the Greater Bay Area (almost 70 million people with a GDP of about $(US)1.5 Trillion. That compares with, say France, which has nearly the same population, about 10 times the geographic area and twice that GDP. But if the Greater Bay Area can more than double it’s per capita GDP, to the same level as Hong Kong’s, then it will be richer than France. Is this possible? Some planners say it’s both possible and actually probable. But what about Hong Kong? Isn’t it China’s financial door to the world? Well, Singapore, which is already ranked, with Hong Kong, as one of the world’s top five financial centres (London, New York and Zürich are the others) can perform that function, some observers say. Singapore is just as open and honest as Hong Kong, has strong institutions and is a stable democracy. Everyone trusts Singapore; it’s a great place to do business, safely.

In short: Hong Kong doesn’t matter all that much to China. But, no other great nation has a big enough stake in Hong Kong to make Hong Kong’s liberty a vital strategic interest. Only China cares, and China wants Hong Kong to be just one element of its Greater Bay Area plan, which is anchored on Guangzhou, population 14.5 Million. Hong Kong will remain an important commercial and financial hub because it has the people and infrastructure, but China is not dependent upon it. Beijing’s solution to Hong Kong’s young people’s house-price dilemma is simple: move elsewhere in the Greater Bay Area.

It strikes me that we, liberals, have been on the ascendant for 800 years, especially in the West. China, India, the Middle East and Eastern Europe all had their own problems which, for one reason or another, left what is now the West free to experiment with various social structures. Eventually, something we can call Anglo-Saxon-Scandinavian liberal-capitalism became the most successful doctrine. It wasn’t the only one and it didn’t rise to the top easily or even steadily, but by the late 20th century there was the liberal-capitalist West, which includes Hong Kong, Japan, Singapore and South Korea and there was the rest. But after hundreds of years, China rose, again, to challenge the West. The challenge is not just economic, it is socio-political and even philosophical, too. China is not just a conservative, Confucian society. They are not a problem. Singapore, South Korean and Taiwan have demonstrated that a society can be conservative, and Confucian and, at the same time, democratic, law-abiding and free. The problem is that China doesn’t want to adapt to the liberal-capitalist world that was built over the last 250 years, it wants to reshape that world into something more to its liking. Ordinarily, that might not be a huge problem except that just as China was rising America decided to turn away from the world and return to a sort of a throwback to 19th-century ‘know-nothing‘ and ‘nativist‘ isolationism.

There’s an interesting series in the current (September/October 2019) issue of Foreign Affairs, entitled “Autocracy Now.” In the introduction, the editor, Gideon Rose, says that “The leading figures on the world stage today practice a brutal, smashmouth politics, a personalized authoritarianism. Old-school strongmen, they do whatever is needed to grasp and hold  on to power. Here we profile five to see what makes them tick. All fought their way from obscurity to the throne and then took a hard authoritarian turn. But how, and why? … [and] … According to Richard McGregor, China’s Xi Jinping is driven by paternal hero worship and devotion to the Chinese Communist Party. Having concluded that the party’s rule was under growing threat, he has devoted his time in office to restoring its dominance.” If that’s true, and I suspect it is then, as Richard McGregor says in his Foreign Affairs piece on Xi Jinping, “The compromise candidate … [which is what Xi Jinping was in 2007] … would turn out to be a most uncompromising leader.

Uncompromising” is, I suspect, the best word to describe Xi Jinping, but, as I continue to maintain, compromise is what China and Taiwan and Hong Kong all need in order to bring about Xi Jinping’s vision of China in the world in 2050, peacefully. An uncompromising leader in a situation that cries out for compromise is a recipe for failure. But, as I keep says, Xi Jinping cannot fail, he cannot lose, he is the paramount leader of China so even if he takes the worst possible decisions and makes a disastrous choice he will not fail.

In a recent post on the Macdonald-Laurer Institute‘s (MLI) website, J. Michael Cole, who is a Taipei-based senior fellow at the MLI and a senior fellow with the Global Taiwan Institute in Washington, DC, and deputy coordinator of the Prague-based International Committee for Democratic Renewal/Forum 2000 – China Working Group, says that “Barring capitulation by Hong Kong society, and assuming that the CCP [the Chinese Communist Party] will not give in to their demands, as doing so would constitute an unpalatable loss of face to CCP General Secretary Xi Jinping, the only conceivable scenario is a massive crackdown on Hong Kong, something much worse than we have seen to date … [and] … It goes without saying that imposing order on Taiwan … [given it’s] … long tradition of independence and a population that is deeply attached to democracy — arguably the closest to American-style democracy in all of the Indo Pacific — would be a much more difficult endeavor for the CCP and its proxies, by orders of magnitude … [and, he concludes that] … Liberal democratic societies are simply incompatible with the increasingly authoritarian mindset that animates the CCP. The notion that their inhabitants — global, connected and proud of their liberties — would willingly cede their freedoms to Beijing is naive at best. Such illusions are being shattered in Hong Kong as we speak, and the idea that the Taiwanese would be any less committed to preserving their hard-earned democracy is preposterous. It says a lot about the CCP’s appeal that the only way it can quiet down discontent on its peripheries is through pacification.

But if Hong Kong fails, if it is reduced to being a second-tier city, after Guangzhou in the Greater Bay Area, it will be like a light has been extinguished. But even if the light of liberty is snuffed out in Hong Kong it will not mean that Chinese autocracy is, somehow, triumphing over English liberalism. If there is one thing upon which most experts agree, it is that strong institutions, founded on the rule of law, are the key to economic prosperity and social harmony. But, as Japan, Singapore and Taiwan all prove, it is possible to graft those strong, law-abiding institutions ~ the prime legacy of liberalism ~ on to very conservative, Confucian societies. The host will not reject the transplanted institutions. Corruption and autocracy are not, somehow, quintessentially Asian … I suspect Xi Jinping knows that; what he cannot figure out is how to keep all his balls in the air while he juggles internal reforms, global outreach, the normal ups and downs of any large economy and a worsening trade with Donald Trump’s America. Hong Kong is just one of those balls and it’s not the biggest and I fear it will be dropped.

If Hong Kong’s freedom is extinguished it will not spell the doom of classical Anglo-Saxon-Scandinavian liberal-capitalism, but it will be a defeat, on too many levels, for all of us, even for Canadians who are far removed from the issue. It is not a challenge that we should ignore. Hong Kong matters … to its own brave people who are standing up to Chinese bullying, to China, of course, but also the liberal West. We must all stand with Hong Kong … even, in fact especially if its situation is dire.

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