Inside Story

How Beijing sees Hong Kong

The city’s economic importance has declined significantly, but China itself isn’t immune to the pressures on display

Kerry Brown 4 August 2019 1366 words

Confirmation: a protester spray-paints a slogan on a wall during a demonstration in Hong Kong on Saturday. Vincent Thian/AP Photo

Hong Kong has been through challenging times before. Widespread rioting occurred during the Cultural Revolution, in an early refutation of the hoary view that the city’s inhabitants aren’t interested in politics. Residents have protested at a series of legislative moves since 1997, including changes to Article 23 of the Basic Law relating to subversion. But since Occupy Central started in 2014, the city seems to have moved into a new era of almost perpetual contention and crisis. Something significant is happening, though no one seems to know quite what.

As the economist Leo Goodstadt and others have argued, the facade that so impresses the city’s visitors is simply that — a facade. Life is tough for most inhabitants, and getting progressively tougher. Property is unbelievably expensive — the most expensive in the world, according to property consultants CBRE — and the city’s very high living costs place it alongside Paris and Singapore in global rankings.

Pressures like these would be a source of dissatisfaction anywhere. But what really antagonises residents is a sense of political impotence. Previous protests might eventually have been dispersed, but the anger clearly hasn’t disappeared. Indeed, there is every sign that it is deepening. Hong Kong, a global capital of finance, is fast moving to the front rank of fury too.

Hong Kongese express an unusually intense disdain for their leaders. No chief executive has managed to serve out two full terms since the handover in 1997. The first, Tung Chee-hwa, resigned after the Article 23 protests. The second, Donald Tsang, didn’t stand for re-election, and is now serving time for corruption. The third, C.Y. Leung, also survived for just a single term after experiencing extraordinary levels of discontent over his handling of Occupy Central and electoral reform.

Leung’s successor, Carrie Lam, has reached the same invidious position, only far quicker. That might have nothing to do with her ability, and may well be a sign that the city has become almost ungovernable since the collapse of public confidence in local leaders. In essence, residents don’t believe that people like Lim really hold power. The real power resides several thousand kilometres north, in Beijing.

Beijing’s intentions towards the city after the recent huge, sustained protests are the subject of wide speculation. Although Carrie Lam says the extradition bill that sparked the current unrest is dead, the protests have continued, growing more violent and disruptive. When People’s Liberation Army troops were spotted on the border with Guangdong province in late July, concerns grew that Beijing would do what many feared.

Two things must be remembered about Beijing’s view of Hong Kong in the era of Xi Jinping. The first is that, economically, the city matters much less to China than it did in the past. In 1997, at the time of the handover from Britain, Hong Kong’s economy constituted a fifth of China’s. Today, it is less than 3 per cent. Shenzhen, the former fishing village that only grew because it could supply the great Hong Kong across its border with cheap labour and land, now has a larger population and a similar-sized economy, and is growing faster. The upstart is now very much in the driving seat.

The world outside might have a distorted view of the priority Beijing leaders place on Hong Kong. It’s true that China once had much to learn from Hong Kong’s finance and business sectors. The handover also mattered for China’s sense of status. Over the first decade of the new order, Beijing was careful to abide by the spirit and letter of the reversion agreement and the 1990 Basic Law, the city’s de facto constitution.

Under Xi, though, Beijing’s commitment to that history seems weaker and weaker. Hong Kong has served its purpose; bigger targets and ambitions are in sight. Xi’s main concern is to avoid giving China’s critics ammunition that might interfere with its larger aims. Hong Kong, on its own, matters less to the Chinese leadership than many assume.

The second issue is one that is often forgotten. Xi and his colleagues believe absolutely in at least one thing — the viability of socialism with Chinese characteristics. This belief sustains them as they try to steer their country towards a prime economic position while dealing with daily pushback from the United States. The collapse of the Soviet Union, once seen as a portent of Chinese communism’s demise, actually reinforced Beijing’s commitment to its faith. For China, Russia’s post-Soviet decline showed that jettisoning the core ideology was disastrously wrong.

More recently, the global financial crisis, the election of Donald Trump, Brexit and other unpredictable events have confirmed for Xi and those around him that their predecessors were utterly right to reject the liberal political reform many in the West would like to have foisted on them. As Deng Xiaoping decreed, practice is the sole criterion for truth.

From within this worldview, Hong Kong absolutely reaffirms the long-term impracticality of Western capitalism. In more complicated ways, it also proves that democracy and Chinese culture don’t go together. Words like “chaos” and “lawlessness” — terms designed to evoke the spectre of everything Beijing says would happen if the Communist Party lost power — have been bandied around in the Chinese official press.

In a strange way, the fact that Hong Kong seems so riven by problems will be taken by Beijing not as a criticism of anything it has done but as proof that the political and administrative legacy of British rule was always unsustainable. This is just a matter of fate, China’s leaders believe; all they have to do is to see that the old Hong Kong breaks down in a managed way. Shanghai and other places in China will increasingly take on the city’s old role, they believe, and Hong Kong will sink to 2 and then 1 per cent of the economy of the great empire.

With these two factors in mind — the city’s declining economic importance and its perceived confirmation of Beijing’s worldview — will Hong Kong be the subject of anxious debate among Xi and his colleagues during their regular summer retreat in the seaside town of Beidaihe? It will figure on the agenda, of course, but it’s likely to be well below the discussions about the need to reinforce loyalty in the struggle with the United States, and to ensure that everyone is on side as the country marches towards China’s first centenary goal (a collection of targets including a 60 per cent urbanisation rate, a transition to clean energy, and a “moderately well-off society”) by 2021. The talk at Beidaihe will be more about whether Hong Kong will figure in this story as a proof of the rightness and viability of capitalism with Chinese characteristics, or will simply be left out of the narrative altogether.

This complacency might be Beijing’s attitude, but that doesn’t mean it is right. Hong Kongese are involved in a fight over much more than a single piece of legislation or the poor quality of their political leaders. We are seeing the emergence of a new form of politics in what was once a great crucible of commercial creativity. That shouldn’t and can’t be dismissed. Hong Kongese are angry about things that plenty of people in mainland China are also feeling — inequality, toughening economic circumstances, problems with the environment, housing, public services, and the effects of youth unemployment and ageing. Just because these are not as apparent on the mainland doesn’t mean they don’t exist. Hong Kong is the one place in the People’s Republic where you can see people’s worries and anxieties out in the open.

What should, and may well, worry the Xi leadership is not so much the very evident fights in Hong Kong but the hidden ones north of the border. Upheaval in Hong Kong is a crisis; the pent-up frustration in China could lead to a calamity. For different reasons, and in very different ways, Hong Kong’s travails are teaching everyone to look at things differently — even the Chinese leadership, if they see what is happening in the right way. •