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Hong Kong’s Massive Protests Raise Ominous Questions About 2047

Hong Kong’s Massive Protests Raise Ominous Questions About 2047

(Bloomberg Businessweek) -- When U.K. Prime Minister Margaret Thatcher agreed in 1984 to return Hong Kong to China, it wasn’t clear who would end up changing whom. The People’s Republic was still in the early days of the most dramatic economic transformation in modern history, opening for the first time in decades to money, people, and ideas from abroad. Hong Kong, freewheeling and prosperous, boasted plenty of what China’s reformers seemed to want: wealth, of course, but also order and stability, guaranteed by a colonial government that offered clean courts and some individual rights without ever flirting with true electoral democracy. “One country, two systems,” shorthand for Beijing’s pledge to maintain the city’s political character for 50 years after the 1997 British turnover, contained within it the possibility that by the time 2047 rolled around, the systems would have converged—mostly, perhaps, in Hong Kong’s direction.

Hong Kong’s Massive Protests Raise Ominous Questions About 2047

After more than two months of violent confrontation, that’s decidedly unlikely. On Aug. 12 pro-democracy protesters made their most dramatic move yet, flooding into Hong Kong’s gleaming airport and forcing it to shut down completely. The next day, protesters disrupted service again, though short of closing things down. It was the latest episode in what’s become a summer of rage in Asia’s financial capital, with millions taking to the streets to oppose what they say are attempts to steamroll the city’s freedoms. Beijing has responded with undisguised fury, suggesting that some protesters have committed “terrorism” and hinting at the possibility of military action.

To pessimists—and in today’s Hong Kong, there are plenty—the rupture is confirmation that the Communist Party and a free city will never be able to peaceably coexist. And yet they must. Despite the wishes of some of Hong Kong’s more passionate activists, Chinese rule isn’t going anywhere. But neither is the fury of many in Hong Kong. “On the current trajectory, another confrontation is inevitable, unless the younger generation in Hong Kong can see that their concerns are being addressed,” says Steve Tsang, director of the University of London’s SOAS China Institute and the author of A Modern History of Hong Kong. China’s leaders, he says, “just don’t get it. Their default is to use repression, which will only breed more protest.”

Hong Kong’s worst crisis since the handover began in June, with rallies of unprecedented size against legislation backed by the pro-Beijing chief executive, Carrie Lam, that would allow extradition to mainland China. Lam, a longtime civil servant elected by a handpicked committee of local notables, had badly misjudged the public mood. On the eve of another huge protest, she agreed to shelve the proposed law, later declaring it “dead.” For emboldened activists, that wasn’t enough. They’ve now taken to the streets in large numbers for 10 consecutive weeks, clashing with police who have been given the green light to use aggressive tactics. Almost never employed before this year, rubber bullets and tear gas are being used regularly against protesters. At one point on Aug. 11, officers fired the gas inside a subway station.

The activists have five official demands: the formal withdrawal of the extradition bill; the release of arrested protesters; an independent inquiry into police tactics; the retraction of the government’s description of a June demonstration as a “riot”; and the implementation of full democracy. But the protests have also evolved into something inchoate, unfocused, and unpredictable. Concentrated at first in Admiralty, the unofficial government district, they’re now occurring in a wide range of neighborhoods, shifting from preplanned marches to flash-mob civil disobedience organized on social media platforms. In busy subway stations, strangers are sharing pro-democracy memes and information on upcoming marches via AirDrop, the Apple tool for device-to-device file sharing.

China’s willingness to tolerate such dissent is wearing thin. On Aug. 6, the day after a strike paralyzed much of the city, government spokesman Yang Guang refused to rule out military action and said that Beijing would “never allow” unrest that would threaten national security. “Those who play with fire,” he said, “will perish by it.” A week later, he warned that “the first signs of terrorism are starting to appear.”

That it’s taken more than two decades for military intervention to become a real risk in Hong Kong could be viewed as evidence that “one country, two systems” was at least a temporary success. Many in the city were genuinely nervous before the handover, fearing an abrupt end to civil liberties, the rule of law, and their ability to make money. Families with the means bought property abroad, sending their children to attend school and, if possible, acquire foreign passports. In the years before the handover, more than 60,000 Hong Kong immigrants arrived in Vancouver alone.

But as the deadline approached and then passed, the crisis never arrived. Indeed, an unprecedented real estate boom pushed the skyline and housing prices ever higher. Emigrés returned as stocks soared and banks expanded their footprints, seeing in Hong Kong a stable, English-speaking base from which to tap China’s growth. For the most part, Beijing was content to leave the city be, wary of spooking investors or killing a golden goose. (Indeed, many members of China’s elite, or their families, came to own Hong Kong assets.)

Hong Kong’s defenses were certainly tested, but they proved robust. In 2003 activists organized huge rallies to oppose Beijing-backed legislation to enshrine harsh penalties for “sedition” against the mainland. That was eventually shelved, as was a 2012 proposal to require students to receive “patriotic education” that also engendered opposition.

Until now, the tensest moments came during the 2014 Occupy protests, which demanded the replacement of its partially democratic electoral system and took over part of Hong Kong’s urban core for more than two months. The official response was, in retrospect, restrained; police used comparatively modest volumes of tear gas and mostly gave demonstrators a wide berth.

But over the next several years, China’s tolerance for opposition declined markedly. On the mainland, President Xi Jinping was engaged in one of the broadest crackdowns on dissent in decades, detaining thousands and drastically restricting unsanctioned views. In that context it was inevitable that the pressure would turn up in Hong Kong, where the local government jailed pro-democracy activists and placed strict limits on who could run for office. It also banned political parties from advocating independence.

For the Communist Party, which came to power in 1949 determined to unify a nation that had been periodically carved up by foreigners, the suggestion of a future for Hong Kong outside of China is among the ultimate red lines. And despite the growing sophistication of mainland business, the city still has a crucial place in China’s economy. With its open financial markets and international connections, Hong Kong “plays a central role for capital formation,” says Albert Ho, a prominent lawyer and former member of the territory’s Legislative Council. “Hong Kong is important to China, all the more when China is now facing pressure from America due to the trade conflict.”

What no one in Hong Kong can predict is where the relationship with the mainland—and the very nature of the city’s governance—goes from here. There are three obvious scenarios. The first is a broad accession to protesters’ aims, including a pullback of aggressive policing and perhaps moves toward greater democracy. It’s also the least likely. China has rejected even the simplest of this summer’s demands: an independent inquiry into the unrest. The Communists are loath to back down in the face of popular pressure, especially in full view of the global media.

The second scenario, a violent intervention in Hong Kong followed by the intense repression of its citizens, is the most frightening. Elements within the Chinese government appear willing to at least signal the possibility. In late July the Hong Kong garrison of the People’s Liberation Army released a video that included a fictional scene of soldiers marching toward a crowd of protesters; more recently, state media published a video of armored vehicles rolling through Shenzhen, which directly borders Hong Kong.

The potential consequences of military action are too numerous to list. But the best argument against such a move is a practical one: It probably wouldn’t work. Beijing has sought to portray the protesters as a small group of full-time agitators supported by shadowy foreign backers, but one of the most striking things about the demonstrations is their broad participation. The huge crowds include teachers and students, accountants and shopkeepers, and white-and blue-collar workers of all ages. Short of a massacre, there’s almost certainly no way to force them back to their homes.

At this point a third scenario is the most likely. School will be back in session in September, presumably giving students less time to be in the streets. The business community, always Hong Kong’s most important constituency, will eventually lose patience with protests disrupting transport and scaring off tourists. It’s entirely possible that the demonstrations will fizzle out in favor of a return to the day-to-day hustle of one of the world’s most energetic cities.

Any respite, though, will be temporary—and leave behind a city where investors might be eyeing the exits, whether for Singapore or another global hub. And even in the best case, Hong Kong’s long-term status is uncertain. The legal arrangements governing its relationship with China are silent about what happens after 2047, when “one country, two systems” is due to expire. Barring unforeseen events, that will be a decision for the Communist Party. The only public hint of how Xi views the issue came in 2017, when he wrote in a report to the party’s 19th Congress that “we should ensure that the principle of ‘one country, two systems’ remains unchanged.” Some observers interpreted his language as indicating a willingness to extend the status, or something like it.

Even if that doesn’t occur, there are options for integration that would fall short of turning Hong Kong into just another Chinese city. It’s conceivable it could formally join the People’s Republic with an enhanced version of the autonomy enjoyed by some of China’s more dynamic regions, such as the special economic zone that encompasses Shenzhen. That outcome would be viewed by many in Hong Kong as a disaster. The privileges of SEZs relate, as the name suggests, to business and trade rather than democracy or civil rights.

Some critics of the protesters warn that unless unrest subsides, it’s not even certain the existing setup will reach its 50th anniversary without major change. “If today’s situation persists, maybe we won’t even make it to 2047,” says Ronny Tong, a lawyer and member of the Executive Council, which advises the Hong Kong government. If the local authorities can’t bring the situation under control, “one country, two systems could really be at risk,” he says.

While the confrontation has turned entirely on political issues, it’s important to remember the frustrations of Hong Kong’s young people are broader. They live in one of the most unequal places on earth, with an astonishing proportion of the economy controlled by a few billionaires who dominate real estate, retail, utilities, telecommunications, and critical industries. Measured by the Gini index, a common tool for summarizing inequality, Hong Kong looks more like sub-Saharan Africa than East Asia, with an income distribution significantly more skewed than those of Nigeria or Mozambique. Housing is dearer than in New York, London, or Singapore, yet the minimum wage is equivalent to about $4.75 an hour.

Indeed, one of the ironies of Hong Kong’s post-handover period is that, viewed strictly from the perspective of business, its capitalist values may now find their clearest expression across the border, in Shenzhen, Guangzhou, and Shanghai. Billionaires are a very poor guide to ordinary citizens’ lived experience, but in this case they’re probably instructive. The average age of mainland China’s five richest people is about 55; in Hong Kong, it’s almost 87.

What made Hong Kong special under the British, and gave it the uniqueness its citizens fear losing, was more than Western-style liberties. It was opportunity—and the belief that for those willing to work hard, there was nowhere better to dream big. It’s hard to make that case now. China’s leaders and Hong Kong’s protesters are never going to agree on politics. But if Beijing wants to find a way to drain their anger, it might start there. —With Blake Schmidt, Natalie Lung, and Sheryl Tian Tong Lee

To contact the editor responsible for this story: Howard Chua-Eoan at hchuaeoan@bloomberg.net

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