HK Observer: Reality Checks

Robert Carroll

How will Hong Kong continue to be governed, given the great social impasses revealed during the Occupy Movement?  On the one hand, there are those seeking Beijing’s good will, which nobody can deny is a sine qua non for Hong Kong’s future, but which – as many see it on the pan-democrat side and among students – demands an unpalatable obeisance to an unrepresentative political system evolving too slowly. On the other hand, there continues to be a disconcerting accommodation for the handful of business families who dominate the economy, which has led to great income inequality.
While these dozen or so tycoons may do wonders for their shareholders, contribute greatly to the economy and provide local employment, under the present laissez-faire aspects of the economy from which they benefit  – and extensive monopolization and government collusion – they have no qualms about squeezing every cent from every corner of the territory’s economy in the name of sound, profit-making business principles. Unfortunately, for the current system in place for the election of the Chief Executive, hundreds out of the total 1200 votes are controlled by these tycoons. C. Y Leung admitted quite frankly that he could not be elected without currying their favor and that it was a waste of his time to seek blessings from the near-
half of the population which ears less than HKD11,500 per month. Government figures in 2013 show the median income at HKD12,000.
In between these two groups are the ever-shrinking middle classes and much of the mid-to-late- secondary and tertiary student body.  These are traditionally represented by the pan-democrats who, given their veto power in the Legislative Council, are able to stymie the government by obstruction. In order to govern HK, this ‘three-legged stool’ should find room for compromise: why is this not happening?
Perhaps the easiest conclusion to make is of an inevitable inflexibility within the Chinese leadership, a predictable reaction to the confrontations and strident demands by both pan-democrats and student movements. We must also take on board the fact that, given their Leninist, Stalinist, Maoist origins, as well as their internal politics, the Chinese Communist Party is based on a system of top-down control.  It also cannot show weakness publicly and, being China, giving face is crucial. Moreover, the fact is that Hong Kong is only a pimple, albeit an important one, on the map of China. The territory has served the country very well economically, and continues to do so, especially in IPOs which help fund State Owned Enterprises and are directed by CCP core leaders and their families.  Essentially, maintaining these IPOs is considered a cornerstone of CCP power.
As such,  Beijing is, on the one hand, happy to reap the economic benefits of Hong Kong and therefore tolerate the pre-1997 status quo – to a degree. We have much more liberal markets than on the mainland, even if they are mostly restricted within the few families controlling the lion’s share of the economy’s private sector. We also have free press – again, up to a point. And, so far, Beijing has allowed us rule of law.  However, that’s arguably being chipped away at too. Last but not least, China has been mostly disengaged with local administration, except in areas of high political sensitivity, or where they see national security at stake.
China genuinely welcomes all the advantages that HK has long offered their market – most notably, access to the developed world on a legally binding trust basis – but the rules here inevitably fail to align with Stalinist, Maoist, Deng and their successors’ CCP thinking. There lies the challenge for Hong Kongers.
So that’s stool leg number one.  As for stool leg number two, there’s the question of the ten families that dominate the economy’s private sector and wield great political influence. Given that they naturally cozy up to Beijing, why shouldn’t they also cozy up to stool leg number three – the pan-democrat politicians and their very substantial voter support? It seems they don’t think they need to. While they are almost unrepresented in direct elections, their tentacles are well-spread in the small circle election of the functional constituencies.  This is enough to block inconvenient legislation that might reduce their profits.
The third stool leg is made up of the pan-democrat politicians, now joined by student movements. Why are they not reaching a compromise with the two other legs? Firstly, they feel they are not only not being listened to, but also lack highly vocal members who are strident in their demands and can directly challenging the authority of the Chinese leadership.  They are inebriated with the promise of democracy for China, a country which has, at least politically, gone against the flow of most of the world. Secondly, it is because they have mistakenly taken a vast gamble on democracy models which are just not going to develop as quickly as they would like, if at all, with the present conservative and suspicious CCP leadership. If any progress is to be made the pan-dems and the students need to climb down from the high perch. Politics, even if it leaves a bad taste in the mouth, is compromise, and, to repeat the much used axiom, the art of the possible.
That brings us to the one person-one vote CE election in 2017. As long as there is any sort of promise, this is not the end-point of political reform.  However, as one senior Chinese official said last year, it is just another step on the way of ongoing reform. Surely now that the HK government is mooting a return to the low nomination threshold for the 2017 chief executive, the universal suffrage deal on offer is a better starting point than continuing with the present system.