Opinion

Ian Bremmer

Chinese leader’s reforms are bad news for Hong Kong protesters

Ian Bremmer
Sep 8, 2014 13:56 UTC

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In 1997, Britain returned Hong Kong to China after some 150 years of colonial rule. In exchange, China agreed to a set of principles: Hong Kong would maintain its capitalist system for half a century, by which point its chief executive and members of the legislature would be elected by universal suffrage. As the thinking went, “one country, two systems” would suffice in the interim; Hong Kong and the Mainland would surely converge on democracy in the half-century to come.

Not so fast. Recently, Beijing has been systematically moving in the other direction. The decision on August 31 to rule out democratic elections for Hong Kong in 2017 was just the latest example. Chinese leader Xi Jinping’s transformational reform agenda is driving this shift — and it does not bode well for Hong Kong.

Xi’s reform agenda has two parts: the first is economic liberalization. The Chinese leadership recognizes that it cannot rely on state-driven investment and cheap labor to provide growth indefinitely. Xi wants to make China’s economy more sophisticated and competitive. He is overhauling inefficient state-owned enterprises and focusing on changes in the financial sector in particular. It’s a top priority of the new leadership, and a requirement for a sustainable and dynamic Chinese economy going forward.

But a prosperous economy is simply a means to an end-goal. Xi is opening up the economy because, above all else, he wants to ensure the long-term survival and stability of the Communist Party leadership. He thinks economic reforms are a good bet despite the risks they will usher in. Over time, reform will require an enormous transfer of wealth from large domestic companies to demanding citizens and it will threaten the vested interests of many powerful elites who have prospered off the status quo. It will inject necessary competition into the economy, which could put jobs, companies, and sectors at risk.

So as Xi opens the economy and the Pandora’s Box that comes along with it, he is simultaneously clamping down on political dissent and consolidating power. Some Chinese citizens may think (or hope) that economic reform will usher in moves toward democracy. Make no mistake: Xi is engaged in political reform…it just doesn’t resemble our Western notion of what that entails. Xi has absolutely no interest in domestic political competition; in a time of economic change, political unity needs to be at its absolute strongest. This is the basis for his anti-corruption campaign, which has already led to some 40 powerful officials with the rank of vice minister or above being detained or investigated. Xi wants to scare China’s political and commercial elite into falling in line with his economic reforms, all while building popular support for his initiatives by attacking perceived corruption.

Democracy doesn’t make miracles for Greece or Egypt

Ian Bremmer
Jun 27, 2012 15:25 UTC

For months now, the world has been waiting for the results of the momentous elections in Greece and in Egypt. In Greece, it was hoped that citizens would reject candidates who called for the breakup of the euro zone, or a Greek exit. In Egypt, the stakes were simpler, but larger: It was hoped that the election itself wouldn’t be a sham and that the country’s people would get their first true taste of the power of democracy.

It felt like everyone was holding their breath for the results in these two troubled countries, but it turns out neither country had the “disaster election” that some pundits feared. No, what both countries had was a “kick the can” election: For very different reasons, neither Greece nor Egypt is going to transform into a flourishing, liberal, fiscally sound nation overnight. And the task of governing in either country, therefore, is no big prize to either Greek Prime Minister Antonis Samaras or Egyptian President Mohammed Mursi. A lot of chips have to fall in their favor before they can even begin to get beyond the basic duties of simply showing up to work in the morning and keeping the lights on in government. But again, each country’s situation is different and bears a different explanation of the reality on the ground. Let’s take Egypt, with its internal threats to stability, first.

While the election of Mursi, the incoming Egyptian president, is a signal achievement that goes a long way toward instituting a tradition of civil rather than military rule, he alone will not get the economy to stand on its feet. The Egyptian tourism industry, its most important, has been absolutely crushed. The economy is in a shambles as the thread that was holding it together – Mubarak’s dictatorship – has been pulled from the fabric of Egypt, and the country is a long way from convincing anyone that it has recovered. While Mursi was the better choice for Egypt, he comes from the Muslim Brotherhood, basically a civic organization with no experience or expertise in macroeconomic management. The brotherhood is an important social organization: It’s a lot of things to a lot of people in Egypt, but it’s not an incubator of technocratic economic thinking or governance. That’s what the country will need to get back on its fiscal feet.

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