Capitalism and Democracy. A Lesson from Hong Kong

The rise of Xi Jinping has made Hong Kong democrats increasingly nervous. But the main threat to their goal to make Hong Kong more democratic does not even come from the authorities in Beijing; it comes from their own home-grown capitalists. The case of Hong Kong raises broad questions about the state of global politics and the future of democracy.

When I last visited Hong Kong, I had a chance to talk to some of the young political activists who have come to the world’s attention through their prolonged occupation of the central section of Hong Kong. But what did they really stand for? I discovered that, though they had acted together in 2013, they were, in fact, divided into three separate factions. The most radical among them were calling for Hong Kong independence; a second group was seeking to assure Hong Kong’s local autonomy; and a third group was pushing for democratic reforms. At the time, I thought that the democratic activi sts had the best chance (and perhaps the only chance) to realize their ambitions. But since then, some of their leaders have been sent to jail and some of their elected representatives have been expelled from the Hong Kong legislature. These actions were taken by local authorities — though, probably, under some pressure from Beijing. But it is noteworthy how readily the Hong Kong authorities acted in tune with Beijing’s wishes.

Since Xi Jinping has come to power the mainland government has inserted itself more and more openly in the affairs of Hong Kong. This month, on March 4, 2018, a leading member of the Central Committee of the Communist Party’s Politburo warned a delegation of Hong Kong law makers: “Using the high degree of autonomy to reject, fight and erode the central government’s comprehensive jurisdiction is absolutely not allowed.” He added: “[Hong Kong] needs to manage the relationship between one country and two systems well … strictly act in accordance with the constitution and Basic Law … and organically meld the central government’s comprehensive jurisdiction with [the city’s] high degree of autonomy.” This restated Xi Jinping’s own call in October of last year for an “organic” melding of Beijing’s authority with the city’s semi-autonomous powers in order to assure Beijing’s “comprehensive jurisdiction” over Hong Kong.

In the same spirit, Wang Huning, Beijing’s new, powerful propaganda chief, has warned Hong Kong in the last few days that “no act that jeopardizes the Basic Law or Hong Kong’s long-term prosperity and stability can be tolerated … The central government also has zero tolerance of Hong Kong independence, and it must be seriously tackled, or even suppressed.” And he encouraged the people of Hong Kong to strengthen their “patriotism and sense of national identity.” They needed to understand that “the nation’s fate is closely related to them, and that … Hong Kong youth’s future and the country’s development are also inseparable.”

Beijing’s determination to bring about a re-unification with Taiwan has contributed to the anxiety of Hong Kong’s democratic activists. Right now, the mainland government is trying to lure Taiwan by offering it favorable trade and economic terms. But if these sweeteners fail to work, the mainland could move forcibly to seize the island. The message appears to be that the Taiwanese may go on enjoying their capitalist way of life but that they must submit themselves to the comprehensive jurisdiction of Beijing. General Han Weiguo, a People’s Liberation Army ground force chief, said a few days ago that the PLA hoped Taiwan’s problem could be solved peacefully, as soon as possible. “Taiwan should be unified, not by force, but peaceful means. But that doesn’t mean the problem could be postponed indefinitely. It should be solved as quickly as possible.” Taipei needed to appreciate the urgency of resolving the issue, Han said. Resolving the “Taiwan problem” is seen as a major step in achieving Xi’s goal of “national rejuvenation.”

While the central government keeps repeating the mantra of “one country, two systems” in addressing itself to Hong Kong, it is becoming increasingly uncertain how the mainland authorities want to interpret this dualism. Hong Kong has lived with some such dual arrangement for a long time. As a British creation it was governed directly from London without any democratic pretensions. At the same time, the colonial authorities allowed a completely unregulated capitalism to flourish. This dual arrangement of political impotence and economic freedom has proved largely unproblematic to the local capitalists. With the end of colonial rule, they quickly transferred their loyalty to Beijing. In their minds the formula “one country, two systems” means: we are willing to go along with Beijing’s political demands as long as we are left to go on minting money. And for their own economic reasons the Beijing authorities have been willing to accept this division of labor.

To return to the Hong Kong activists and their unsuccessful push for more democracy. They quickly found out that they were opposed not only by the central government but just as much by the Hong Kong capitalists who could see nothing but political conflict with Beijing and bad business at home in the agitation. The story is of interest for the rest of us, because it throws light on the relation of capitalism and democracy. We are often told that the two go naturally and, indeed, necessarily together. Hong Kong teaches us a different lesson.

And here is a nice update to this item from the South China Morning Post on March 18 concerning Li Ka-Shing, one of Hong Kong’s richest men:

"It has been common for Hong Kong’s billionaires to cultivate close personal relations with China’s top leaders. The scale of their investments on the mainland was seen as a mark of patriotism, especially during the early years when the country was opening up and badly needed overseas investors.
Li was among the first group of Hong Kong’s super-rich who won Beijing’s trust and in return were gradually able to reap the rewards of investing in the huge mainland market.

Li had an impressive list of peers at the time: Henry Fok Ying-tung, Beijing’s confidante who was elevated to the post of vice-chairman of the Chinese People’s Political Consultative Conference; Y.K. Pao, “shipping king” and founder of Hong Kong’s World-Wide Shipping Group; Pao’s son-in-law Peter Woo Kwong-ching, former chairman of Wharf Group and one of the four candidates to become the city’s first chief executive after the 1997 handover; and Cha Chi-ming, the well-known industrialist and philanthropist who donated much to the country’s aerospace science development and other projects, and one of whose sons, Payson, was once the boss of the ill-fated Asia Television. 

The list goes on, but these were among the most prominent tycoons who forged lifelong friendships with top leaders such as Deng Xiaoping, Jiang Zemin and Hu Jintao."

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