For Hong Kong, It’s the Economy, Stupid, Too

Posted by david on Oct 1, 2014 in Blog | 0 comments

As the standoff between the Occupy Central protestors and the HK government over electoral reforms for universal suffrage in 2017 enters its fourth day in Hong Kong’s Central business district, the foreign press is emjoying a field day speculation mongering and wildly comparing it to the tragedy of 25 years ago.

One particularly egregious example was penned by a former Beijing correspondent for the G & M, stating that parallels with Tiananmen are “too obvious to ignore”.  His disjointed piece only reveals utter misunderstanding of contemporary central and regional Chinese politics.  It makes you wonder whether he’s learned ANYTHING in all those years spent in the Chinese capital.

One of the signs, the writer insists, is the use of tear gas and pepper spray that did not quell the crowds could lead to a crackdown, involving the People’s Liberation Army (PLA).  Another sign is China’s state media’s condemnation of Occupy Central as an ‘Illegal movement” that is undermining the social stability of Hong Kong.  “Those are heavy words in the People’s Republic”, he warned ominously.

The author dwells heavily on an interview last year of Bao Tong, the premier underling of disgraced former General Secretary Zhao Ziyang, on President Xi Jinping’s legendary father Xi Zhongxun and whether the son has the moral integrity of the father to be on the right side of history.  Without going into the intricacies surrounding June 4^th, 1989, China today is surely not the country of a quarter century ago.

There is absolutely no comparison between Beijing, China’s political and cultural center, and Hong Kong, a Special Administrative Region (SAR) that enjoys a high degree of autonomy under “One Country, Two Systems”.  As an international financial center under the constant gaze of the world, there is not even a remote possibility that the authorities will resort to highhanded tactics.

Even the normally CPC-phobic Willy Lam of the Chinese University of Hong Kong, quoted by AP, deflected the use of force “only as a last resort”.  “It’s possible Hong Kong Police have enough muscle so they could use water cannons and other things to disperse crowds”, he elaborated.  Earlier, Hong Kong’s Chief Executive (CE) Leung Chun-ying dispelled rumours that the PLA would be called in to help suppress any riot.

The PLA garrison stationed in HK after the handover in 1997 is also located in Central, a stone’s throw away from where the protestors are hunkered down.  Under the Garrison Law enacted by the National People’s Congress (NPC), the Garrison shall not interfere in local affairs.  Public order is to be maintained by the Hong Kong government with which the Garrison has working contacts.  On Tuesday, the BBC reported that the Garrison has been placed on alert, which has yet to be confirmed.

Although the Occupy Central protests are overtly political, the passion of young Hong Kongers masks the territory’s diminishing importance to the mainland and the oppressive feeling among many Hong Kongers that their economic advantages are swiftly being eroded by rapid growth on the mainland.  While China’s growth has been good for Hong Kong, it hasn’t been as good for the relative standard of living of Hong Kongers, underscored a blogger for the Washington Post.

“Not only have the richest mainlanders caught, or even surpassed, them, but now Chinese are pushing up their cost-of-living and snatching everything from their stores.  That’s why Hong Kongers say the mainlanders are ‘locusts’ who come in, take everything, and then leave – and with bad manners, too…Hong Kong has already seen what being just another part of China is like economically.  The last thing it wants is to see that politically, too…”

At the time of the handover, China was in dire need of Hong Kong capital and as a window to the world.  Back then, Hong Kong represented 18% of China’s GDP but that figure has shriveled to a mere 3% today.  Interviewed on CNBC, Andy Xie, an independent economist based in Hong Kong, was quite blunt about Hong Kong’s prospects vis a vis the mainland:  “Economically, Hong Kong…has been marginalized.  I don’t see how this process can be reversed”, he pointed out adding that once the RMB becomes fully convertible, a big chunk of international financial business will move to Shanghai, substantially reducing Hong Kong’s role as an offshore financial center.

Early last month, right after the central government’s decision on the election process for the Hong Kong CE, the Hong Kong Research Association polled over 1,000 Hong Kongers about their reactions.  59% of respondents accepted the reform proposal as announced by the NPC, even though it was viewed as ‘imperfect’. More than 2/3 (69%) opposed the Occupy Central campaign and agreed that the movement was losing support from the general public because ordinary people are pragmatic.

Observers of Hong Kong politics believe despite the rhetoric and gusto for the movement, especially among university and high school students, once the protestors dwindle and the movement subsides, the fighting political factions will return to the negotiation table since all of them are under considerable pressure to make progress in electoral reform for 2017.  However, others maintain that no real negotiations can take place if CE Leung remains in office, suggesting he may be removed as a concession.