Hong Kong, a cautionary tale

The fireworks are done, the barricades are down and the PLA has returned to barracks.

The weekend celebration of Hong Kong’s two decades under Beijing rule was marked by Xi Jinping himself, joining local dignitaries in the obligatory toasts to the ‘success’ of one-country two systems.

From their viewpoint it is a success – Hong Kong remains a source of wealth and under direct party control.

But most citizens would labour to identify any aspect of their lives that has improved. The city today is vastly more unequal, unfair, unhappy and unstable than in 1997. Once a freewheeling trading port with no interest in politics, political tension now infects even the smallest of local affairs.

This goes directly to the 1997 political settlement, in which Beijing allied itself with local business elites and rural landowners – ironically, the groups the communist party was formed to do away with.

The result of this co-dependence is, according to The Economist, the world’s greatest crony-state. Cartels ruled by Beijing-friendly billionaires have a stranglehold on the economy, ensuring the city has the world’s most unaffordable real estate and a permanent ban on disruptive new services like Uber. Under Beijing rule, inequality has also risen to a record high under – another Marxist irony.

In the early years Beijing leaders took care to allow Hong Kong the ‘high level of autonomy’ that they promised in the Basic Law, the city’s constitution. Inevitably they grew tired of that, especially when they discovered there were no repercussions. As well as repeated ‘interpretations’ of the Basic Law – the latest a retrospective rewriting to ensure the expulsion of elected members of parliament – party leaders now insist the document exists only as a function of the China’s own legal system.

China’s economic strength, and its willingness to punitively wield it, has ensured the quiescence of UK, co-author of the Basic Law.

Just this weekend the Ministry of Foreign Affairs dismissed as irrelevant the Joint Declaration between Thatcher and Deng, the 1984 agreement lodged at the United Nations that is the foundation of the Basic Law.

It affirms what is clear to Hong Kong citizens and should be apparent to the rest of the world: China heeds only those laws that it serve its purposes.

Beijing’s supporters claim that the degrading of Hong Kong’s freedoms are the fault of citizens whose protests and lack of patriotic enthusiasm have ‘provoked’ communist party bosses.

In truth a free society with independent institutions was bound to clash with China’s one-party state.

The fate of the ICAC is illustrative.  Thanks to the ICAC, Hong Kong is one of Asia’s least corrupt societies, while in China, which has lost a conservatively-estimated $180 billion from theft by officials, corruption is endemic.  An ICAC would be a powerful weapon against the entrenched cultures of bribery, kickbacks and bid-rigging that Xi has vowed to eliminate.

But the concept of independent law enforcement violates China’s core principle that state institutions are there to enforce the party’s monopoly, not to deliver good governance. Indeed, far from trying to emulate one of Hong Kong’s successes, it appears Beijing is trying to emasculate it, appointing a CCP loyalist as head of the agency’s operations committee, giving her access to all of its investigations.

Most likely no one in Beijing ever made a decision explicitly to enfeeble the Basic Law. Rather, the impulses of a one-party state have a momentum of their own, fed by fear, ideology and pride. When they encountered the inevitable opposition, party bosses defaulted to control mode, setting off a spiral of protest and dissent and Beijing counter-measure.

This has been China’s most sustained engagement with a liberal society.

Western democracies – Australia in particular – should take heed.

[Part 2 of a series on Australia and China]

 

 

3 comments

  1. C.Law

    I don’t think that you should include the action against Uber as part of the property developer/business tycoon/Government cartel.
    There is much wrong with the current taxi and Public Light Bus systems in HK, not least that they are dominated by a few well-placed individuals, and they do, indeed, need fixing. Perhaps ride-hailing or other “disruptive” services could be part of the solution. However, Uber is most certainly not the solution. The company’s business model, internationally, has been to go into markets and flout the law depending on a multi-billion USD war chest to try and wait out local authorities. The local drivers are operating without the proper licences or insurance. The latter is a very serious traffic offence, not least because any passengers or other parties injured in accidents will not receive compensation payments. The local head of the company operation has admitted as much, stating that “Uber should not be illegal”.

    There are appropriate ways to attempt to change the law or licencing systems in various jurisdictions, particularly when the company has so much money it could spend on lobbying. Flouting the law is not one of them. This is a direct attack on the rule of law in HK and other jurisdictions.

    For their own protection and to show that this kind of treatment of the legal process is not supported responsible HK citizens should not use Uber.

    It should be noted that HK is by no means the only jurisdiction to find the Uber business model reprehensible.

    For anyone interested in the background to Uber see the in depth analysis in four articles which begin at
    http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver-part-one-understanding-ubers-bleak-operating-economics.html
    for one take on the company.

    It is interesting to see that the CEO is taking leave following the report by Eric Holder into the company’s m.o. It is to be hoped that they publish the report.

    • Robert Clark

      Yes, Uber is the worst of modern capitalism but it’s been blocked not because of its cynical business practices but because the government is hostage to a taxi cartel. Note that other ride sharing companies, most obviously Didi, have been prohibited as well.

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