Asian Strategies Group


Copyright The Daily Yomiuri

Hong Kong Dances with the Giant

A Year and a Half after Reversion, Its Relations with Beijing Are Taking Shape

by David Gries

A Hong Kong billionaire makes sure that his son's kidnappers are tried (and executed) in China rather than Hong Kong. The Hong Kong government stems a stock-market slide with massive share purchases. In January, English ceased being the primary medium of instruction in any Hong Kong public school.

As these events show, Hong Kong's relationship with its huge mainland neighbor has changed since it reverted to China in June 1997. The political changes are subtle-far more so than what has happened to the territory's economy. But in many ways, trends on the political side are at least as important as the economic turmoil that has captured all the headlines.

Four political trends stand out:

First, greater emphasis on Hong Kong's Chinese heritage. In his very first address, Chief Executive Tung Chi Hwa exhorted residents to be more Chinese. Hence the removal of English as the primary language of instruction from the public schools. Cantonese is also used rather than English in some court cases. Indeed, a phone call to any government office nowadays will probably be answered just in Cantonese. In government, Hong Kong's Central Policy Unit no longer includes the chairman of the Hong Kong Bank, who has always been an Englishman.

In many ways, Sinification of this sort is a natural, even desirable, product of Hong Kong's new status, but it entails challenges and risks. British common law, for example, is enshrined in the legislation that brought about reversion. Hong Kong courts may have to find a way of melding it with Chinese jurisprudence. And in the economic arena, the downgrading of English could undermine the territory's appeal as an international entrepot and its ability to compete in world markets.

Second, something that looks a bit like what Americans call "political correctness"-involving Beijing in matters that once would have been resolved inside the territory. Billionaire Li Ka Shing's successful efforts to have his son's kidnappers tried in mainland courts is one example. Another involves Sally Aw, a major newspaper publisher in Hong Kong. Her advertisers have sued her for gouging them, but like Li Ka Shing she has excellent connections in Beijing. She has so far escaped serious punishment.

Beijing's presence is felt in other ways as well. Northerners (including Tung Chi Hwa himself) occupy many important posts, and Mandarin is now being taught all over the territory. This influx of northerners and northern ways does not always sit well with the Cantonese majority.

Beijing is not getting everything its way, however. This is especially true when it comes to the territory's Legislative Council, which is proving surprisingly obstreperous.

The council, called Legco, is an element of popular democracy that clashes with the Chinese tradition of authoritarianism and behind-the-scenes dealmaking-as well as with the way the British governed Hong Kong through most of the colonial period. Although Legco now contains only a minority of elected representatives, by 2005 it will have an elected majority, and in 2007 all its members will be elected by universal suffrage.

Perhaps the Chinese agreed to this tradition-breaking scenario because Legco has little formal authority: for, example, it cannot originate any legislation requiring the expenditure of funds. But it does have the right to question government officials, an echo of the British Parliament's question time. It has exercised this right aggressively, to the point where its relations with Tung Chi Hwa are severely strained. One of the most important issues to watch will be how both sides deal with this tension between democracy and authoritarianism.

The third trend is the government's shift from passivity to activism, especially in economic matters. Under the British the government was famously averse to intervention. Last summer, however, the Hong Kong Monetary Authority used $15 billion of its foreign currency reserves to buy securities in the local stock market, halting a slide that had reduced the Hang Seng index by 70 percent. Such intervention would have been unthinkable in the past.

Tung Chi Hwa also froze the government's sales of new land last summer. The government's landfill operations are the only source of new land, and its regular sales to developers were a fixture of the economy and a key source of government revenue. But when the real estate bubble burst, the government took the unprecedented step of suspending sales, thus propping up the price of existing land.

Finally, Hong Kong seems on the way to becoming less of an international city and more of a Chinese regional center. Non-Chinese as well as Chinese seem to recognize this change. When the baggage system at the new Hong Kong airport failed, for example, the government got no foreign takers when it tried to set up an international commission of inquiry. One observer claims that non-Chinese are becoming less involved in the life of Hong Kong, be it athletics, the arts, or meetings.

In short, Hong Kong and the mainland are engaged in a complex political dance. They are making up the steps as they go along. Clearly, there is no other partner for Hong Kong, and its Chinese-ness seems bound to become more pronounced. But Hong Kong has assets of its own, particularly its entrepreneurial and administrative skills and its capital wealth. Just possibly, Beijing might even look to Hong Kong for ideas about participatory politics as its experiment with economic liberalization and political rigor evolves. The dance is likely to take novel turns over the next few years-turns the Asian and Pacific Rim communities will ignore at their peril.

Note: TT. C. Tao, Asian Strategy Group's senior associate in Shanghai, offers the following essays on political dynamics in present-day China and the optimum approach for the United States and other outsiders. The views are his own.


Maintaining Direction

The past twenty years have seen an historic shift in China from a rigidly controlled society to one that offers the possibility of increasing liberalization and prosperity. The change up to now, however, is by no means irreversible. Outsiders should not expect, much less push for, too much too soon. Given the special attributes of the Chinese nation-the huge population, the low literacy rate, the long history of feudalism-we must anticipate that it will be a long time before the new, less rigid approach is firmly established. For now, the most promising course for China is simply to maintain the current trend of reform in a determined but carefully managed way.

Rocky Road Ahead

Recent Sino-US tension over Beijing's arrest of dissidents trying to establish a new political party shows the pitfalls ahead. The American people, long used to a multi-party system where the losing party has another chance in the next election, have great difficulty comprehending a structure like that in China, where the ruling party is almighty and has been so for half a century. If the Chinese Communist party should lose power in an election, those at the top would see it as the irrevocable loss of all that is important to them in both a material and a spiritual sense; to them, this would be unthinkable.

The challenges of greater political openness are even more daunting because of the unresolved political and class tensions that have simmered beneath the surface for decades. If the ruling party were suddenly exposed to free public criticism or to attacks from an opposition party, all types of factions would come into the open, fighting with each other for personal benefits and using democratic jargon to clothe illegal activities in legitimacy. China experienced conflicts of this sort during the Cultural Revolution, in part precisely because it was extremely difficult in that period to fathom what was happening in the leadership. Given this history, it would be nearly impossible to persuade the Chinese Communist Party to allow the establishment of an independent political party.

Beware of the Leftists

One important fact we should not forget is that the current transitional stage allows

the coexistence of both forward- and backward-looking forces in the same society-and in the Chinese context, "backward-looking" equates with "leftist," those still dedicated to some version of Marxist-Leninist-Maoist dogma. It may seem strange, but whether China can reduce the influence of these leftist conservatives and maintain its momentum toward liberalization depends on the degree to which it can tolerate the political status quo, i.e. one-party rule. Any attack on the present political structure would give the conservatives a good argument for curtailing the rights that have been extended up to now.

As is shown by the many political upheavals in the fifty years of Chinese Communist rule, the biggest threat to progress in China always comes from the left. And the leftists' best hope for reversing current trends lies in the efforts of over-enthusiastic liberals to push reform more broadly, more deeply, and more rapidly.

Extremely Risky

I worry that China may be following the path of Indonesia as a political disaster and Russia as an economic disaster. The common thread in those two disasters was a weakening of the leadership that left individuals on their own. A breakdown of the present equilibrium in China would allow tensions to surface that have been obscured for decades by the country's sheer size and complexity and by the stoicism of its people. The result could be a disaster far bigger than those in Indonesia and Russia, a disaster that could set back world stability for a period that might be measured in centuries rather than decades.

You may think this is an exaggeration. But consider the chain-reactions of security problems that are possible if major political unrest occurs in China: contention in the Taiwan Strait, conflict in the Korean peninsula, Japanese military resurgence, a nuclear buildup in South Asia, a Russian decision to use nuclear weapons, the export of Middle Eastern terrorism-all these are tied in one degree or another to stability in China.

Moreover, without a strong government to ensure the availability of quality labor and a stable legal environment, it is unthinkable that western trading houses and investors would still be interested in the China market. Considering China's size and the vast western interest in China, I think the policy that is best for both China and the West is to help China maintain the current pace of its political and economic development speed. In my opinion, any effort to force the growth of these political seedlings would be detrimental rather than helpful to all parties.

Soberness and Balanced Projection

Currently we can sense the development of another round of misunderstanding between the United States and China that might spiral into a conflict not desired by the people of either country, a conflict not in the interest of international community. It is the responsibility of all of us who look soberly on this important relationship to guide the people in both counties toward a more balanced perception of the future of China as a factor in stable and secure US-China relations.


Getting Serious

The difference of views on US-China relations is getting bigger and wider. I think the results will be serious if they continue to expand.

Healing is More Important

There is vast potential for cross-cultural misunderstanding between the American and the Chinese people. The American belief that China needs democracy before it needs economic self-sufficiency stems from American kind-heartedness (as well as from American history). But exhortations such as this are like bringing a delicious steak to the bedside of a patient who has just recovered from major surgery. The Cultural Revolution, during which millions of Chinese people were killed, ended only twenty years ago. The present-day Chinese is more interested in nursing his wounds and those of Chinese society than in eating a rich dinner.

One-Party Rule: An Accepted Form

One-party rule indeed has many defects, but at the moment the Chinese people are willing to accept it as a way enabling the whole society to proceed in a stable and steady way towards the ultimate goal of democracy and prosperity. To try to establish an opposition party at this particular moment would only put China into chaos. Once people knew that the leadership could be removed through an election, fighting and killing, using the Cultural Revolution as an example, would ensue. The result would no doubt be a social disaster, and American interests, the American people, and the American government would withdraw from China.

Wishful Thinking

To expect China to develop a multiparty system quickly and peacefully way is wishful thinking. The fallacy lies in the obsolete belief that there is one person who can set the course for the whole nation. But there is no such person. The ruling Chinese Communist Party, with 60 million members, is now a leading force in whole process of China's modernization. If the interest of this huge political group is jeopardized or its leadership undermined, then China could easily swing into chaos. It is not difficult to see that there would be serious social conflicts: nonparty members against party members, poor people against rich people, and even non-English-speaking people against English-speaking people.

Detour Possible

Another mistaken concept begins with the belief that trends in China are already irreversible. This may be true as far as the formation of a market economy is concerned. But if outsiders seemed to be forcing an unwelcome course on China, the Communist Party remains strong enough to detour political developments in a direction that would not be in the Western interest.

Profound Impact

In other words, China still has the option of closing its doors to the West and linking up with international forces opposed to the US. This would cause grave concern in many parts of the world (although the biggest sufferer from such a turn to the past would be China itself). It would be many decades before today's level of openness could be regained, a prospect with far broader implications than the denial to American consumers of Chinese-made sneakers, toys and home appliances.

Better Not Disturb

Envisioning such an outcome may help Americans gain a truer understanding of China's current situation. I myself have experienced many times of turmoil in China in the three-quarters of a century since I was born in Shanghai. Although problems, some of them immense, do exist, the last twenty years is the only period in China's contemporary history that has witnessed such social stability and pluralism. This stability is the essential underpinning for China's economic development. The Chinese people like it. Why should we disturb it?

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