The Suicide of Hong Kong

Project Syndicate  |  Jul 1, 2002

By Sin-ming Shaw

China has been celebrating the five year anniversary of Hong Kong's return to the motherland from British rule. Firecrackers, dragon dancers, and President Jiang Zemin's visit marked the festivities. Now that China's rulers have returned to Beijing, it is time to take a more realistic look at what those five years have wrought.

Hong Kong's ruling elite delights in telling foreign visitors how wrong pessimistic predictions of the territory's have proven to be. Fortune, for example, once entitled a cover story "The Death of Hong Kong." That article forecast heavy-handed meddling by Beijing in local affairs, which would allegedly emasculate the vitality of Hong Kong's economy. The article was wrong, because Hong Kong's deepest wounds have not come from China's ruler, but are self-inflicted.

Tung Chee Hwa, Hong Kong's leader, insists that the "one country, two systems" scheme devised by Deng Xiaoping works perfectly. The Financial Secretary, Anthony Leung, last year boasted that Hong Kong would become Asia's "Manhattan Plus." Chief Secretary Sir Donal Tsang calls negative assessments of the territory the product of second-rate minds.

But official bravura has little sympathy beyond this narrow circle. Among Hong Kong's public, there is a pervasive feeling that it has changed for the worse since 1997 -- not as a result of overweening interference from Beijing, but due to worrisome decisions made by local rulers.

Mr. Tung, the scion of a shipping empire, and his tycoon friends like to blame Britain's colonial government for leaving behind "time bombs" that make Hong Kong look bad. In 1998, for example, the government led a chorus blaming the British for the property price bubble that was punctured by Asia's financial crisis of 1997, causing the stock market to fall sharply. But the bubble was really manufactured by China's communist rulers over a decade earlier on the advice of local property magnates, who wanted to limit the amount of land British colonials were permitted to sell.

Local officials soon began to broaden their attack. In 1999, the government sought and received the Beijing government's direct intervention to overturn a decision by Hong Kong's Court of Final Appeals on an immigration issue because the verdict did not please the government. Humbled and humiliated, the Court has acted timidly since. Locals now call it the "Court of Semi-Final Appeals."

In 2000, one of Mr. Tung's political aides called on the president of the prestigious University of Hong Kong to express concern over a faculty member's opinion polls, which consistently recorded Mr. Tung's declining popularity. Soon after the meeting, senior university officials warned the pollster that further funding for his work might not be forthcoming.

Robert Kuok, the Malaysian owner of Hong Kong's major English language newspaper, the South China Morning Post , is one of Mr. Tung's friends and fiercely loyal to China's leaders. In 2001, the journalist Willy Lam, a respected China expert, was sacked from the paper after Mr Kuok publicly berated him for his views on China's rulers.

President Jiang and China's rulers have had very little, if anything, to do with any of these decisions. They were taken because Mr. Tung and his allies wish to demonstrate how in tune they are with official thinking on the mainland. But are they in tune?

The presumption that China wants Hong Kong to become more like the mainland is ludicrous. China has had entirely too much of the "one country." What it wants now is the "two systems." China's search for an alternative social and economic arrangement became urgent with the student revolt of 1989, the subsequent Tienanmien massacre, and the collapse of the Soviet Bloc. The Chinese communist party knew it had a legitimacy problem, and the driving idea behind Deng's ingenuous formula was to allow Hong Kong to show China a short cut to prosperity.

True, China's ruling elite remains a Leninist party prepared to crush all potential threats to its monopoly of power. Yet many officials working directly under the party leaders are earnestly scrutinizing western countries for institutional details that might shed light on what China can do for itself in the future. In other words, China is looking for a new system to replace the existing one.

Mr. Tung, whose moral precepts are informed by a doctrinaire interpretation of Confucian classics emphasizing obedience to one's superiors, seems oblivious to what China views as the fundamental challenge that it now faces. Instead, his behavior is reminiscent of a feudal district official whose main priority is to ensure that his superiors are treated with due reverence.

Nor is Mr. Tung alone. Much of Hong Kong's elite shares the same mindset, despite their training in Western business schools and their fortunes gained from property trading. Their priority is to nurture a cozy relationship with Chinese officialdom -- much of which can be easily bought. Whether Hong Kong remains an open, liberal society has never been a major issue for them.

One senior Chinese cadre doing graduate work at Harvard recently uttered in amazement that Hong Kong, with its leaders acquiescing dutifully in every inane utterance by China's rulers, struck him as more "leftist" than the mainland. Indeed, many Chinese officials privately laugh at Mr. Tung and his cronies sycophantic behavior and are increasingly confident that the mainland has nothing to learn from Hong Kong's example. What China regards as Hong Kong's comedy of deference is quickly becoming a tragedy of errors for Hong Kong's citizens.
Sin-ming Shaw is a leading investor in Hong Kong.
Copyright: Project Syndicate, July 2002

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