HK Observer | A pan-quagmire

Robert Carroll

State leader Zhang Dejiang’s visit here is about Hong Kong’s finance and acumen to revive the Silk Road and reaching out to the community – both potentially very positive as it moves the city to a better bargaining position vis-a-vis the central authorities and may just break the ice between the pan-democratic camp and Beijing. That last matter is a sine qua non to move forward in the relationships between Hong Kong and the Chinese government and the legislature and the executive. This is because, unless the quagmire of non-cooperation between pan-dem lawmakers and the chief executive is not successfully overcome, both business and the community at large will continue to suffer.
A historic moment is upon us; a Chinese state leader meets senior pan-democrats for the first time with the support of 18 of their colleagues and not as bearers of good tidings; they were there to tell Zhang not to support the Chief Executive’s reelection, and to insist that the democratic reform process be restarted.
How can such a turnaround have been achieved? From a point of virtually no relationship to potentially the beginnings of a working relationship between what at worst could have been described as sworn enemies?
Two factors seem to be at play. Firstly China’s grand and highly ambitious Belt and Road strategy to revive the ancient Silk Road needs Hong Kong’s financial, legal and regulatory skills; a package that adds up its internationally trusted reputation and outstanding track record in raising funds for Chinese businesses, both in the private sector and State Owned Enterprises. Secondly – and tied in with that – is Beijing’s need to have the city functioning as optimally as possible in order to maintain the conditions for this crucial financial centre to keep doing what it does best: raising capital and providing associated services. Hong Kong has performed this role in a reliable, competent way that has serviced the Mainland exceptionally well since 1979, when Deng Xiao Ping opened the country economically to the outside world.
In order to keep the engine running, the stagnation of relations between the government and the legislature must be successfully tackled and China must trust that in Hong Kong the small but growing independence movement is a flash in the pan which does not have significant support. Therein lies the bargaining advantage of the pan-democrats and a solution to both problems if Beijing and the opposition lawmakers can start to see eye to eye.
Recent developments and looming legislative and chief executive elections have added poignancy to these issues. The Chinese economic slowdown means that the Belt and Road initiative’s success will require Hong Kong’s tried and tested expertise. The rise of ‘localist’ forces here has also alarmed the central government already dealing with secessionist movements in Tibet and Xinjiang as well as an ever fractious relationship with Taiwan, which it regards as a renegade province in need of reeling in.
The pan-democrats are therefore presented with the old adage: the devil you know is better than the devil you don’t. That is, better to deal with them than the much more radical youth parties that might emerge. And as many business leaders say; if the Belt and Road project is to harness Hong Kong’s skills fully, it needs to be a high-functioning city with a legislative council that is behind legislative moves to support that.