Hong Kong’s Protectors Are In China, Not Washington

The arrival of the Chinese New Year--the Year of the Ox--this week marks the beginning of a new era for Hong Kong. On July 1, the city-region, seized by Britain from the Manchu empire after the Opium War in 1842, will be formally returned to China. The transfer will be one of the most significant events in the 1990s. For the first time in history, a sophisticated capitalist metropolis will be peacefully taken over by a developing communist country. To celebrate the takeover, Beijing has put up a huge digital clock in Tian An Men Square that ticks off the days and hours remaining before the historic moment.

Of course, not everyone is in a party mood. As the colonial flame dies down, most of the 6.3 million Hong Kongers are worried about their immediate future. Their city has achieved remarkable economic success and social stability under Britain’s rule. Can it retain its free-wheeling character and economic vitality after 1997?

That China has enough political and economic incentives to keep Hong Kong prosperous is beyond doubt. The city’s fate under China’s rule will be a crucial test of Beijing’s ability to manage changes effectively and to join the world community as a responsible power. It will also have an impact on China’s relations with Taiwan. A failure in Hong Kong will make Beijing’s task of convincing a skeptical Taiwan that it is genuinely committed to the principle of “one country, two systems” all the more difficult. China’s dream of peaceful unification with the island could be dashed.

Economically, the stakes for Beijing are even higher. About two-thirds of total foreign investments in China originate in Hong Kong; nearly 40% of China’s foreign trade is conducted through the entrepot. With more than $20 billion invested in Hong Kong, China controls about one-quarter of the city’s total assets and may soon replace Britain as the largest owner of the market.

Since maintaining prosperity in Hong Kong serves its fundamental interests, China has made extraordinary efforts to assure nervous Hong Kongers that its takeover will be smooth and sweet. Beijing has repeatedly promised that it will grant the city “a high degree of autonomy” and maintain capitalism there for another 50 years. Even the People’s Liberation Army has taken unusual steps to present a friendly image to residents of the British colony. Chinese media report that PLA soldiers who will be stationed in the city are busy learning a specially composed karaoke tune, titled “I Love You, Hong Kong.”

However, whether Beijing can achieve its goal is another matter. Domestic politics in China surely will play a role in the Hong Kong game, and the continuing power struggle to succeed Deng Xiaoping will add another element of uncertainty. There are other factors that will shape the colony’s fate as well, but it comes down to a simple question: Can Hong Kong retain its prosperity without democracy? Beijing has made it clear that, under its rule, the city will have economic liberty but no political freedoms. In other words, capitalism may stay in the colony, but it will be retained at the cost of democracy.

Beijing can easily rationalize its belief that prosperity and democracy need not go hand-in-hand. After all, most of the “little dragons,” the rapidly expanding economies of East Asia, leaped forward economically under totalitarian or authoritarian rule. Why not Hong Kong? But Beijing is making a serious mistake if it believes that Hong Kong is simply a British version of the South Korean or Taiwanese economic story.

In most newly industrialized Asian nations, there are no traditions of democracy. Since people in these countries have never enjoyed much political freedom, they don’t expect much of it any time soon. This situation makes it much easier for a heavy-handed regime to maintain control of the society without provoking criticism at home or abroad.

Hong Kong is a different case altogether. Yes, until recently, Hong Kongers exercised virtually no control over the major levers of power in their city. Still, British colonial rule is benevolent and consultative. It does not, for the most part, intrude into the daily lives of Hong Kongers. And it grants more freedom than the Asian model of “semi-democracy.” For example, the press in Hong Kong is one of the freest and liveliest in the world. A recent study shows that 75% of the city’s residents think Hong Kong’s political system is “the best under existing circumstances.”

Hong Kong’s economic infrastructure also bears scant resemblance to those in the rest of Asia. In most Asian countries, economic development is a product of a strong government role in investment, high tariffs and an emphasis on exports. But Hong Kong’s is post-industrial rather than manufacturing.

The city thrives as a financial and information center, a gateway to Asian markets and a major regional base for global businesses. Since its success relies on a low degree of governmental control, the free and rapid flow of ideas and an independent judicial system, Hong Kong, to retain its vitality, must be granted freedoms in addition to economic liberty. In other words, without open access to information and ideas, the foundation of Hong Kong’s economic infrastructure will weaken and crumble. In this sense, Beijing’s policy of being “soft” on economics but “hard” on politics, especially on press freedom, casts an ominous shadow over the colony’s future.

Against such a backdrop, some Hong Kongers want the United States and the West to stand up for their freedoms after the colony’s transfer to Beijing’s rule. Indeed, Congress did pass the U.S.-Hong Kong Policy Act in 1992, which calls for the United States to support democratic institutions in the British colony. But it is doubtful that the White House would give Hong Kong priority on its China agenda.

Paying lip service to the importance of preserving freedoms in Hong Kong is one thing. Confrontation with China, the world’s fastest-growing economy and a nuclear power, is quite another. Secretary of State Madeleine K. Albright has already indicated that Washington’s relations with Beijing should not be held “hostage to one issue, whether it be human rights or trade.” It is also questionable whether exerting pressure on China could work. Previous attempts at forcing Beijing to liberalize politically have all flopped. China’s rapid economic growth has provided it with enough leverage to resist pressure from the West.

In Chinese eyes, the West also lacks moral credibility as an advocate of freedoms in Hong Kong. Throughout most of the colony’s 155-year history, the Chinese were treated as second-class citizens, but Western countries rarely protested. The West’s new-found concern for Hong Kong’s democracy is thus regarded as hypocritical and self-interested.

Indeed, should a controversy over maintaining freedoms in Hong Kong erupt, Beijing can easily win popular sentiment at home. On the issue of national sovereignty, there is little difference between reformers and hard-liners among Beijing’s leaders. As nationalism becomes a dominant trend in Chinese society, even people who have little enthusiasm for the current regime may not want to see their country be humiliated by the West again.

In such circumstances, what should Hong Kong do to protect its interests after 1997? Instead of looking for protectors “outside,” perhaps Hong Kong should turn “inside,” seeking to expand its relations with other parts of China, especially the Guangdong and Shanghai areas. For example, Hong Kong could tap Guangdong’s development potential and turn the region into a coherent economic unit, creating a “Greater Hong Kong.” It could also form an alliance with Shanghai, a major regional center that has reached a higher level of economic development.

This is a pragmatic way for Hong Kong to survive. Although the fate of Hong Kong will eventually be decided by the overall political evolution in Beijing, its immediate future is more closely tied with China’s developed coastal regions. Having become more open and pluralistic in many aspects of life, these regions are more interested in creating new markets than in Karl Marx and are likely to side with Hong Kong, rather than the more traditional inland provinces, in Chinese domestic politics.

In short, the future of Hong Kong will not be guaranteed by Beijing’s promises or by the West’s paeans to freedom. Rather, its fate will depend on its ability to become more “Chinese” and act in ways that promote development in other parts of China. Such a strategy can strengthen the city’s bargaining power in its dealings with Beijing, while convincing Chinese leaders that political repression in Hong Kong will only produce the opposite effect.