For almost two months now, a “pro-democracy” movement has been besieging the prosperous city-state of Hong Kong. On September 27th 2014, Hong Kong’s high school and college students gathered in a square next to the government buildings calling for open democratic elections and the resignation of Hong Kong’s Chief Executive Leung Chun-ying. The Hong Kong police in turn cracked down on them with pepper sprays and teargas. The next day, the students went out again – this time occupying and blocking Harcourt Road, a major road in Admiralty, one of the busiest commercial districts in Hong Kong. The protesters came out to the streets with umbrellas to defend themselves from pepper spray. Hence, the uprising acquired the name, “Umbrella movement.”
Protestors have taken to the streets occupying some of Hong Kong’s most economically and politically important districts. On Tuesday, October 21st, five representatives from the Hong Kong Federation of Students, dressed in black T-shirts that said “Freedom Now,” met with five Hong Kong government officials at a medical college. At the negotiating table the students reiterated their demands for a more open nomination process for Hong Kong’s leader and the abolition of the functional constituencies – the 28 industrial, professional and social groups that are represented in the Election Committee, the organization in charge of appointing Hong Kong’s chief executive and the Legislative Council, the legislative body of the Hong Kong government. Neither party made concessions or compromises. Thus, the negotiations failed to resolve the lingering political standoff.
At a high level, I’d like to point out the absurdity of the Hong Kong demonstrations. First and foremost, much to Hong Kong’s credit, it has never had “free democratic elections.” During the years of British dominance (1841-1997) the governor of Hong Kong was appointed by the English Crown. Upon the end of the 99-year long Sino-British agreement, in 1997, Hong Kong was given back to China under the condition that it remain a separate administrative region until 2047.
Hong Kong’s Basic Law created the electoral groups system in Hong Kong. Professional groups such as lawyers, teachers, businessmen, and doctors nominate their representatives. The representatives (or electorates), in turn, elect the Chief Executive. Demonstrations in Hong Kong are not a novelty, they occur from time to time – in 2005 people went out in the streets in protest against Donald Tsang’s proposed reform package, people often express their dissatisfaction with authorities’ reluctance to follow public opinion. In 2010 pan-democrats demanded a referendum for universal suffrage and the abolition of the functional constituencies.
The Hong Kong government has historically tried to compromise with the citizens. Thus, for example, the number of electorates has been gradually increased from 400, to 800, and now 1,200. Beijing has also been willing to compromise with Hong Kong’s professional groups regarding the Chief Executives. The first Hong Kong elected leader Tung Chee-hwa was soon recalled by Beijing once he had lost the support of the residents. His successor Donald Tsang, former Financial Secretary, was elected as a Hong Kong leader in 2005 and served two terms in office. Generally speaking, he was well-liked by people and attempted to pursue democratic reforms. Hong Kong is now ruled by former businessman and banker Leung Chun-ying.
In July this year, Beijing and Hong Kong authorities agreed to reform Hong Kong’s election system by 2017. In August, they proposed a universal suffrage-based system allowing voters to choose between two or three candidates selected by a nominating committee and approved by Beijing. Thus, if we compare Hong Kong under the British Crown and Hong Kong under Beijing, before 1997, the governor was appointed. After 1997, the governor was elected by a group of 1,200 people representing various constituencies, including business and professional circles. First and foremost, the governor is no longer appointed, a great improvement from the pro-democratic standpoint. By and large, the current political structure of Hong Kong was created by the British to protect that region from the imposition of Beijing’s communism. Once Britain ceded Hong Kong to China in 1997 following the 1984 agreement, Beijing has neither attempted to take over Hong Kong, nor has it stretched the rule of the Communist party over to the region. The territory has a great deal of autonomy from Beijing, and its people enjoy freedom of speech, freedom of assembly, and economic liberty. Residents of Hong Kong are freer than their Mainland Chinese counterparts on almost any metric.
The result of this complex mixed representational system has been the creation of one of the wealthiest regions in the world. It is the world’s 6th richest country by GDP per capita and the 3rd highest on the Doing Business Index. It is far ahead of Britain on both parameters. Despite having a population of only 7.2 million, Hong Kong has the 8th highest number of billionaires in the world. Moreover, unlike some countries that are ahead of Hong Kong by this criterion, such as India and Brazil, it has a large and thriving middle class. Long story short, Hong Kong is a well designed and a well functioning machine.
There is nothing major to fix.
What Hong Kong appears to be today–a prosperous society that attracts thousands of investors and tourists worldwide–is a direct result of the way it has been organized for decades.
Besides, Xi Jinping, the Chinese prime minister who announced his plan for serious economic reforms at the Third Plenum of the Chinese Communist Party’s 18th Congress, has reiterated that the way forward for China is the market economy. Beijing realizes that Hong Kong is China’s gateway to the rest of the world. To abandon “One country – two systems” is to destroy the Hong Kong economic model and a major part of China’s economic success story. Beijing simply won’t do it. So it retains the status quo, in which Hong Kong enjoys “a high degree of autonomy, except in foreign and defense affairs.”
So why are the Hong Kong students protesting? Why in Hong Kong and not in Mainland China? Even though Mainland China is far less democratic than Hong Kong, neither Shanghai nor Beijing students dare speak up. I spoke to a friend of mine from Shanghai to ask her about political activism there. She said that the major thing people in Shanghai are concerned about is how to make ends meet; they work day and night and have little time for political and ideological ruminations. In Mainland China, students are generally poor, so college education and hard work are the main ladder to success for them. By the same token, their parents have to work hard and save, so that they can afford to send their child to college. In Hong Kong, students come from relatively wealthy families (the median annual household income in Hong Kong is ~$35,000). So, students in Hong Kong are simply not burdened with the need to feed their families, or to work part-time to support themselves. They have plenty of time to do what they want, including pondering on political issues, human rights, social theories, etc.
The situation in Hong Kong today is analogous to that of France in 1968. In both eras, angry students took to the streets in a similar way. France in 1968 was, by the standards of the day, a very prosperous society–by that year it had completely recovered from the ravages of WWII. Its economy was experiencing “Les Trente Glorieuses,” a prolonged economic boom. France’s industrial output was 3.5 times higher than in the pre-war period, it had become the world’s second global food exporter, the average real wages rose by 25%, and vacation time was increased from three to four weeks.
Students of post-war France were no longer poor and hungry people struggling to get education and care for their parents. Most students came from middle-class families. They were well-dressed and well-fed. Like prior generations, France’s young people sought to channel their aspirations and energy, yet there were no wars to win or battles to fight. So, in May-June of 1968, thousands of students engaged in violent demonstrations in France. They criticized capitalism and the “bourgeois society of consumption,” called for solidarity with “oppressed people of the third world” fighting against colonialism, and demanded guarantees of employment after college. The ultra-left radical groups such as the “Gauchistes” protested against “the bourgeois university” and “the bourgeois society” and called for revolution. The protesters were eventually coopted by Marxist groups and the French Communist party. Unfortunately for France, many of the proposals of the protesters were eventually enacted, and even worse, many of the students themselves eventually became French bureaucrats, and are thus responsible for much of the economic quagmire France now finds itself in today.
Should Hong Kong capitulate to the protestors, today’s students could become tomorrow’s bureaucrats.
A strikingly similar situation is unfolding in Hong Kong. Students are protesting against a system that has propelled their society from being a backwards fishing village to one of the most economically prosperous and technologically advanced in the world. Do those students really want unfettered democracy? Do they understand democracy beyond liberal platitudes? So far, what the ongoing unrest has demonstrated is that these people are protesting against the key principles upon which Hong Kong is built on–free markets and non-democratic governance according to the rule of law. By their continuing unrest and blockage of the city center, these people are only damaging the economy of Hong Kong. They have undermined operations of local businesses, paralyzed shopping districts, hurt Hong Kong’s international reputation, and, lastly, harmed Hong Kong’s international competitiveness. A recent Bloomberg survey predicts that such a situation “will push the city’s full-year economic growth to the lower end of the government’s forecast range.” It is no accident that the protesters have called their movement “Occupy Central” as a tribute to Occupy Wall Street.
The Hong Kong protesters should look at their neighbors in Thailand to see how universal suffrage ultimately turns out. There, an educated and prosperous minority is now rioting against a government of corrupt populists and swindlers. How did they come to power? Through universal suffrage, whereby a poor and illiterate majority voted for the politicians who promised the most free stuff and greater equality. Unfortunately, the young and ambitious Hong Kong demonstrators are enthralled by naïve and romantic ideas of “democracy,” and they don’t fully realize what it entails.
Fortunately for the future of Hong Kong, not everyone has been seduced by democracy. A major recent opinion survey conducted by the Chinese University of Hong Kong found that the overwhelming majority of Hong Kong residents thought protesters should clear the streets. Only 1 in 3 Hong Kong residents support the protests, and almost half say they oppose the unrest. So far, the older generation has demonstrated that they have learned a bitter lesson from socialist revolutions worldwide and that they follow news from neighboring populist “democracies,” including Thailand, Indonesia, and the Philippines. Business leaders, parents of the protestors, and political leaders of both Mainland China and Hong Kong remain circumspect and realistic in their interpretation of the potential consequences of universal suffrage –the current leader Leung Chun-ying openly admitted that open elections would give poor people a dominant voice in politics, bringing Hong Kong closer to the adage popularized by P.J. O’Rourke: “A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury.”
This is a really good article. You’ve nailed it and I agree wholeheartedly.
I think the parallel with 1968’s France is not too strong. The economical context and the mindset of the protesters are largely similar. There’s good reason to think, however, that Hong Kong is better equiped to resist the trend, if only because unlike the French, most of the Chinese here have experienced what Communism really is, and those who have not still live with the constant reality of it right across the border. On a broader scale, it is getting noticed that the Western democracies can no longer display the luster they had in the past, their structural problems are getting too obvious to anyone paying attention. No wonder why the protests are filled with young students and the most radical, i.e utopists, members of the local Democratic Party.
It is worth noting that the said Democratic Party has been quite divided all along. A lot of much more reasonable propositions to improve the Chief Executive nomination process have been issued by various moderate members, only to be rejected by the radical wing. The reason why the negotiations have failed is that Occupy Central leaders and the politicians who support them absolutely refuse to consider anything else than a full transfer of the nomination process to civil society – an unrealistic claim, from any point of view. Beijing just can’t afford to waive its control of Hong Kong’s executive authority, in a region where more than 80% of the population would return under Great Britain authority had they the choice, as polls regularly show.
However, Beijing has played a dangerous game in letting the situation rot for a couple of months. It has been quite successful in turning the population against the protesters, as their blockade really is a nuisance in such a small city. The impact in traffic jam and especially retail sales will not be forgotten any time soon by the local population. But in failing to address the situation as any political power with real authority would have, that is, to remove the protesters after a couple of days – can you imagine London or New York paralyzed like that for two months? – Beijing authorities have appeared as they really are: weak. The risk of another Tiananmen was too high for them. Meanwhile, the students are enjoying the support of liberal medias in the western world, and proudly display the front pages of magazines such as TIME amid the barricades.
The 1968 events in France occurred at a time when de Gaulle’s leadership and authority were starting to fade, paving the way to half a century of decline for the country. Hong Kong currently suffers from the same lack of consistent authority, and it becomes especially acute when you compare it to the other major business hub in the region, Singapore, which benefits from a strong leadership – and an ever-increasing attractiveness. There are several major threats on Hong Kong’s prosperity, and Occupy Central certainly is the least of them – it may rather be viewed as a symptom.
Hong Kong is a very oligopolistic market, almost nowhere else in the world is the concentration degree in the big industries as high as here. A lot of markets here are even just duopolies (like supermarkets and drugstores), and in an environment in which compliance and financial requirements are growing beyond measure, it is simply forbidding access to newcomers. As a result, a large part of the economy is in the hands of the a few groups, for which incentives to adjust to the demands of the market are low. Quite a few voices have pointed out that the tycoons’ empires should be a much more urgent concern for the protesters than Beijing – rather truthfully if you ask me.
More importantly, there is a parameter that plays a critical role in the evolution of Hong Kong economy: it is that the rule of law applies in Hong Kong, whereas in China it does not. It creates a huge incentive for any mainland Chinese to invest in Hong Kong, as their assets are protected from an arbitrary seizure here. The direct result is a lot of people injecting money in the Hong Kong economy well above the market value, which sends the overall cost of living in Hong Kong through the roof. It plays no small role in the hostility of Hong Kong people towards Chinese mainlanders, and the whole protestation movement has to be replaced in this context as well.
Hong Kong has an hybrid status, but it is a Chinese city. In 2047, Beijing will no longer be bound to maintain the “one country, two systems” scheme. The number of expatriates is dramatically shrinking compared to the number of Chinese people. The overall level of English is declining. Short of the appropriate reforms, it could very well happen that three decades down the road, when Beijing will reconsider the status of Hong Kong, the latter could be nothing more than an offshore haven for rich Chinese, that will no longer justify its existence as an international, law-protected business hub as it once was.
This is a real risk. This is why Occupy Central, beyond its naive revendications of universal suffrage – and its less naive claims to entitlements policies – also is a symptom of an unrest that is most likely not going to dissipate with the eventual removal of the tents on Harcourt Road.
There would be a lot more to say on the matter but I’ve been too long already, so thanks again for this article and this website.
I agree with you that demagoguery is one of the greatest dangers facing modern Hong Kong. I don’t know if you’ve ever read Marc Faber, but he’s a swiss investor/writer who lived for many years in Hong Kong. The November issue of Gloom, Boom and Doom Report, he wrote an article called “Will Hong Kong Ever be the Same Again?” in which he hits on many similar themes. Like you, he also draws a historical analogy to the 1968 French Student protests. He’s main point is that, when looking back with a long enough time horizon, universal suffrage is truly the experimental untested system.