Here and There – Hong Kong

History and location have conspired to ensure that Hong Kong keeps changing.  For a long time, it was an unremarkable island, at the mouth of the Pearl River in southern China, sparsely populated, principally inhabited by fishermen and farmers.  It probably became part of China during the Qin Dynasty, somewhere around 200 BC.  Everything changed when the Portuguese turned up in the early 16th Century.  First, they established a trading post in Hong Kong’s waters, then acquired a permanent lease of Macau in 1557.  This initiated Hong Kong’s role as an entrepôt.  By the 18th Century, Qing authorities had introduced the Canton System, focussing trade between China and other countries on the port of Guangzhou (Canton).  While Canton was the key, Hong Kong was one among the stopping off points for Russian, Portuguese and soon many other trading nations to barter for tea, silk, and porcelain.  Initially, there was something of a trade imbalance:  visitors wanted Chinese goods, but the Chinese were not excited by western offerings.  That changed with opium.  Soon, it was silk, tea and porcelain one way, and silver, gold and especially opium from India the other.

By now, the British were heavily engaged in trade with China.  In the early 19th Century, the Chinese tried to stop the opium trade, and the British retaliated, bringing military support to ensure the continuation of their profitable business operations.  In 1839 the First Opium War erupted between the England and China, but faced by British warships, the Qing government surrendered and ceded Hong Kong Island to Britain, establishing it as a major trade port.  Hostilities continued, only ended by the formal handover of Hong Kong to Britain in 1842, under the Treaty of Nanking.

Of course, even this wasn’t the end of trouble, as more dissatisfaction and armed confrontations led to a Second Opium War.  The Qing lost this war, too.  The British and French forces entering the Forbidden City, and a second agreement, the Convention of Peking, was signed, with the Chinese adding Kowloon and Stonecutters Island to the British territory. Trade grew, and finally, in 1898 the British signed a 99-year lease for the growing area.  As a result, Hong Kong, Kowloon and the New Territories were now consolidated into one colony.  Nice, messy, and typical colonial history!

I first went to Hong Kong in 1983.  It was a popular destination for visitors from the UK and Australia, as well as several other countries, as well as home for many British expats.  For visitors and expats, the major attractions were the cheap goods, everything from apparel to electronics, together with access to Thailand, Malaysia and other popular southeast Asian destinations.  On my first visit, I met a tailor (introduced through a colleague in Australia), and Wing Kee was to become my source of shirts and suits for the next twenty-five years, and Paul Lee has been a lifelong friend.  However, I didn’t return for five years, blissfully unaware of the issues surrounding the approaching end of the New Territories lease.  The UK’s Governor in Hong Kong had raised the issue of Hong Kong’s longer-term status in meetings with Deng Xiaoping back in 1979, and those negotiations led to the Sino-British Joint Declaration that year.  In 1984, (an interesting year for this to have happened), the British agreed to transfer the colony back in 1997, while China agreed it would guarantee Hong Kong’s economic and political systems for the 50 years following the transfer.

From 1988 until 2009 I would visit Hong Kong 3-4 times a year, partly for teaching, and partly for meetings of management organisations in the region.  Did I say, ‘blissfully unaware’?  Paul would tell me about his concerns.  He had crossed the border from China as a young boy, his family hoping he could build a better life in Hong Kong.  When I got to know him, he would visit his mother in a nearby Chinese village:  I went with him twice.  He was fearful of the mainland Chinese, and he was worried about the future of Hong Kong.

Over the years I would see the magnificent Convention and Exhibition Centre being built.  It was to be the venue for the final handover of Hong Kong.  Everyone I met spoke English but, apart from talking to Paul Lee and his family, this was because I didn’t ‘see’ the rest of Hong Kong outside of my academic and business contacts and meetings.  I was interacting with the wealthy and the privileged, and poor underclass was largely out of sight.  I did see the huge apartment towers on Hong Kong island and the New Territories, but I didn’t meet their occupants.  I was aware of the divided world that existed in this densely populated tiny island, especially through the time I would spend with Paul and his family each time I visited.  However, most of the time I was living and working with people like me in what could best be described as a lingering remnant of Britain’s empire.

I was often in Hong Kong at the beginning of July, a function of university teaching timetables.  However, in 1997 I arrived a little later for my mid-year visit.  The transfer of Hong Kong to China as a ‘Special Administrative Region’ took place on 1 July 1997.  Hotels were booked out, and I was in Hong Kong a couple of weeks after the handover.  It wasn’t to prove an easy start for the Special Administrative Region, and for the next few years economic and health issues dogged Hong Kong.

Within a few weeks of the handover, the 1997 Asian Financial Crisis reverberated through the island, and the government had to draw on a substantial part of its foreign currency reserves.  As if to add insult to injury, this was followed by the first of a series of epidemics.  First, there was a major Avian Flu outbreak later that year, followed by a second in 2001, which was equally serious).  These were followed in 2003 by the Severe Acute Respiratory Syndrome (SARS) epidemic. SARS was to prove particularly devastating, with the region suffering its most serious economic downturn to date.  I continued my regular visits, and was even in Hong Kong in the early part of 2003, before travel to the country was banned.

In some ways, it appeared Hong Kong overcame all these challenges.  It maintained its role as a major capitalist service economy centre, characterised by low taxation and free trade, with its currency one of the top ten traded in the world.  It is still home to the third highest number of billionaires anywhere in the world, the second-highest number of billionaires of any city in Asia, and the largest concentration of ultra-high-net-worth-individuals (UHNWIs) of any city in the world.  Against this concentration of wealth, Hong Kong is also a city characterised by extreme poverty.  It was and is two worlds.  Starving citizens on the streets, hardly surviving while surrounded by the largest number of skyscrapers of any city in the world, and a public transport network carrying more than 90% of its people.  Hong Kong is ranked 4th in the Global Financial Centres Index.  A place of paradoxes.

However, if economic and health issues appeared to dominate, I was a witness to growing political turmoil.  Protests hadn’t been common in Hong Kong.  Prior to the handover, the only major pro-democracy protest had taken place on 21 May 1989, which had drawn around 1.5 million marchers sympathising with the participants of Tiananmen Square protests that year.  It was an astonishing moment, both for Hong Kong, but also for the mainland Chinese government.

Once Hong Kong had become part of China the 1 July protests began, an annual rally, initially organised by the Civil Human Rights Front on handover day.  In travelling to Hong Kong, one of my visits would always be around July 1.  My hotel was very close to Victoria Park, where the protestors would meet in the evening.  On a few occasions I decided to go down to the edge of the park at night and see the sea of candles held by the crowd attending the protest.  For once the words are appropriate:  an awe-inspiring sight.

In 2003 the march drew large public attention by opposing Article 23 of the Basic Law, the legal framework that had been agreed in 1997.  It states that Hong Kong ‘shall enact laws on its own to prohibit any act of treason, secession, sedition, subversion against the Central People’s Government (the government of China), or theft of state secrets, to prohibit foreign political organizations or bodies from conducting political activities in the Region, and to prohibit political organizations or bodies of the Region from establishing ties with foreign political organizations or bodies.’

The 2003 protest, with some 500,000 marchers, was the second-largest protest seen in Hong Kong since the handover in 1997.   The introduction of Article 23 legislation was left aside due to the protest, and it was never re-introduced. However, in 2020, the mainland National People’s Congress imposed a security law on Hong Kong, essentially covering the Article 23 proposal, using another part of the Basic Law.  1 July protest marches have been organised every year to demand for democracy, universal suffrage (a major issue in Hong Kong), the rights of minorities, the protection of freedom of speech, and other political concerns.

Being in Hong Kong and witnessing a little of what was going on was both exciting and frustrating.  Paul Lee and his family didn’t want to talk about politics.  Other people I knew were concerned with business, and just wanted the SAR to keep going without too much interference from Beijing.  They were anxious about protests, and the behaviour of some young members of the Legislative Assembly.  Every so often I would wonder, ‘what can a visitor do?’  But I knew the answer:  nothing.

I was last in Hong Kong four years ago.  The Hong Kong I knew had disappeared.  It was no longer an English-speaking region.  Cantonese and Mandarin are the languages for most people, and English has become the language of shoppers and visiting businesspeople only.  For years I have wondered if it will decline in importance, and I have suggested it will be replaced by Shanghai as the principal economic and financial centre for China.  Each year that seems a little more likely.  The indicator will be if more ‘western’ companies move their operations, either up to Shanghai or away from the region entirely.  If that happens the circle of change will be completed:  from unimportant island to trading base, from trading base to financial centre, from financial centre to a small part of the empire, and from that small role back to an unimportant island.  I’m probably wrong, but I can’t help feeling the decline of Hong hasn’t run its course.

What can we say today?  Clearly, extreme poverty alongside enormous wealth remains.  However, it is the politics that will determine change.  The 1979 Declaration had included the provision that China would guarantee Hong Kong’s’ economic and political systems.  Economic system, maybe.  Political system, certainly not.  The deal with the UK was the result of the British insisting on democracy in Hong Kong, while the Chinese central government followed what it described as the ‘one country, two systems’ principle.

In the event, the political situation went downhill, quickly.  From the moment the handover was signed, several democratic reforms enacted at the last colonial era Legislative Council meetings were reversed.  Other provisions were soon flouted, and dozens of protesters were arrested and charged.  In particular, the central government’s decision to introduce nominee ‘pre-screening’ before the elections for the Special Administrative Region’s Chief Executive set off a series of protests in 2014, which became known as the Umbrella Revolution.  Tens of thousands took part in a 79-day occupation of the city demanding more transparent election.  An Umbrella Revolution?  It came from the use of umbrellas as a means of passive resistance to the Hong Kong Police, who were using pepper spray to disperse the crowds.

Two years later, there were complaints over discrepancies in the electoral registry and, even worse, the disqualification of elected legislators after the 2016 Legislative Council elections.  Slowly but surely, Chinese national law was used to deal with events in Hong Kong, and it was adopted as the legal framework to manage activity at the West Kowloon high-speed railway station, the first time Chinese legislation was applied inside the territory.   In June 2019 another round of mass protests erupted, triggered by a proposal to pass an extradition bill, supposedly to extradite fugitives to Taiwan.  In practice, it would allow criminals to be moved to the mainland before trial.  Those protests have been the largest in Hong Kong history so far, with claims they’ve attracted more than three million Hong Kong residents.

Will the one country, two systems model survive to 2047.  Clearly not.  It’s effectively dismantled already.  For Hong Kong ‘Big Brother’ is the PRC, and the Peoples Republic is clear about its intent.  Perhaps a more accurate – and meaningful – term is ‘older brother’.  The older brother is the person with seniority in a group, and to be named as the older brother is a tacit acceptance that this person is to be respected, even if the relative age assignation is incorrect.  Today, the older brother is looking at the younger sibling with disdain.

In Australia, there is some anxiety we will see a return of the ‘domino theory’, the view that one collapse of a regime will lead to another.  Today such collapses are unlikely to be brought about by force but through steady economic colonisation.  In Australia there has been considerable consternation over an agreement between the Solomon Islands and Beijing.  Next the PRC will establish key links with Papua New Guinea, or some of the small countries in Melanesia or Micronesia.  Perhaps China will be able to build some kind of link with Indonesia, improbable though that sounds today.  A few more steps and all the dominos around Australia and New Zealand will have fallen over.  Where will that leave these two western democracies?

The critical indicator that concerns Australians would be China attacking and reincorporating Taiwan.  However, it is likely China is willing to play the long game, rather than jumping into a confrontational war.  If we want to understand what might take place over the next couple of decades, we should look at what has been happening to Hong Kong.  In twenty-five years, two systems have become one.  If Australia is seeking reassurance over Taiwan’s longer-term independence, it is important to remember there is one difference that matters:  Chinese sees Taiwan as a place that has always been part of China.

As for Australia, it’s possible China sees it as distant and very foreign, best to be managed through economic colonisation and control.  In the short-term that may be a comforting thought.  However, history suggests empires seldom remain satisfied and aspire to keep growing.  Australia is dependent on China buying raw materials.  However, the more China extends links into Africa, the less important that trade becomes.  That leaves other strategies, buying companies, ports, shipping lines, airlines and manufacturing key goods.  Will that be the next phase?  Of course not, that’s already happened!  Some commentators are worried we tend to be seen as the 51st State of the USA.  It’s just as likely we’ll end up as a colony.

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