China’s Hong Kong experiment faces biggest trial
By Peter Thal Larsen
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Chinaâs experiment with Hong Kong is facing its biggest trial. The former British colony has mostly thrived in the 17 years since it was handed back to the Peopleâs Republic. But a planned âOccupy Centralâ democracy protest is about to test Hong Kongâs openness â and Chinaâs patience.
Hong Kong has defied the gloomy predictions of its demise that greeted the 1997 handover. Despite competition from Singapore and Shanghai, it has become a stronger financial and commercial centre. The authorities in Beijing have mostly respected Hong Kongâs special status, which former paramount leader Deng Xiaoping summarised as âone country, two systemsâ. Many citizens who decamped to Canada or Australia before 1997 have returned.
Yet tensions are rising. Economic success has brought inequality, while ultra-low interest rates â the result of Hong Kongâs currency peg to the U.S. dollar â have pushed up property prices. The cost of the average apartment has doubled in five years. Regulatory demands that buyers put down a large lump sum before qualifying for a mortgage have made owning a home an even more remote prospect for many citizens.
Lots of large cities suffer from similar problems. In Hong Kongâs case, however, the outlet is rising anger at mainland Chinese who cross the border to spend their new wealth on property and luxury goods.
The 1997 handover agreement protects Hong Kongâs special status for 50 years. At the time, British negotiators hoped that China would gradually come to resemble its new region. Yet while economic fortunes are converging, Hong Kongâs approach to political freedom is increasingly at odds with the mainland.
The territoryâs tolerance of free speech contrasts with Chinaâs increasingly sophisticated approach to censorship. The former colony remains the only place in the Peopleâs Republic where citizens can openly commemorate the bloody 1989 crackdown in Tiananmen Square, as tens of thousands did on June 4.
The two sides also have vastly different attitudes to the rule of law. Hong Kong is currently gripped by the trial of the billionaire Kwok brothers, who stand accused of bribing the regionâs most senior civil servant. The court proceedings could not be more different than the Communist Partyâs campaign against corruption in its senior ranks, which has largely been conducted behind closed doors.
The relationship faces an even stiffer test in coming weeks as Hong Kong unveils proposals to give its citizens the vote.Â Despite denying them democratic rights for 150 years, the departing British managed to insert a commitment toÂ hold electionsÂ into the handover agreement. According to the Basic Law that serves as Hong Kongâs constitution, the âultimate aimâ is for the regionâs chief executive to be electedÂ by universal suffrage. China subsequently agreed that the first election underÂ thisÂ system should take place in 2017.
However, the Basic Law also states that candidates should be selected by âa broadly representative nominating committeeâ. Unsurprisingly, the Chinese authorities are keen to ensure that only pro-Beijing candidates make it onto the ballot. Democracy activists, sensing what may be their last opportunity to shore up Hong Kongâs political system, want the nomination process to be open to everyone.
This dispute is set to come to a head in the next few weeks when Hong Kongâs leadership publishes its plan. If, as seems likely, the proposals fall short of the democratsâ demands, a movement calling itself Occupy Central has pledged to stage an open-ended protest in Hong Kongâs central financial district.
Itâs not clear how much support there is for Occupy Central, which has been organised by an academic called Benny Tai. However, this has not stopped local politicians and tycoons from issuing dark warnings about the threat to Hong Kongâs economic wellbeing. The Chinese authorities, perhaps alarmed by the prospect of a high-profile pro-democracy protest 25 years after Tiananmen, have also stepped up the rhetoric. The Beijing government this week published a âwhite paperâ which stated that Hong Kongâs autonomy is the gift of the Chinese leadership â implying it could be withdrawn. Hong Kong residents increasingly fear the debate is polarising, raising the risk of a heated and possibly violent confrontation.
That would not benefit anybody. Hong Kong citizens enjoy a high standard of living they will be reluctant to jeopardise. Chinese leaders, while less concerned about their international reputation than they were 17 years ago, benefit from Hong Kong being a vital window onto the world economy, and a sign of their tolerance for different systems.
The rising tensions mean itâs no longer obvious that those things can be taken for granted.
This article has been corrected in paragraph eight to state that Britain’s Hong Kong handover agreement included a commitment to elections, not universal suffrage. Universal suffrage was first introduced in the Basic Law, adopted in 1990.