Why Hong Kong matters now

The 21st anniversary of China taking possession of Hong Kong was marked by protest, rather than celebration and for good reason, writes Thomas Coughlan.

It’s been 21 years this week since control of Hong Kong was handed to China from the United Kingdom. Control’s hardly the right word — especially after a week like this one. To mark the occasion, protestors stormed the Legislative Council building, the centre of government in Hong Kong, defacing its debating chamber with messages calling on its Chief Executive, Carrie Lam, to resign.

A messy 21st then, even by New Zealand standards. Control of Hong Kong is certainly what China wants — but whether or not Hong Kongers will allow it is up for debate.   

The anniversary is worth remembering, for it represents the passing of a world in which we played a small but substantial part. The grandiloquent handover ceremony, held on the quayside of Victoria Harbour (note the name) is often thought of as the dying coda of the British Empire, the final punctuation to a refrain of retreat that was begun decades before at Suez, or Singapore, or wherever you want to begin counting. 

The Brits marked the occasion by rolling out a rehabilitated Tory, as they have a habit of doing in moments of international crisis. In 1997 it took the form of Hong Kong Governor Chris Patten, last seen as an MP trying to shepherd Margaret Thatcher’s detested poll tax through Parliament — a move that cost Patten his political career, and precipitated Thatcher’s demise. Both were present at the handover ceremony, which concluded with fireworks and Patten departing Hong Kong accompanied by Prince Charles on the Queen’s private yacht, Britannia. It was Britannia’s last voyage too — the ship was turned into a floating museum when they got back to Britain, the then-new Prime Minister Tony Blair having decided it was a bit of a relic; what’s the use of Britannia when you no longer rule the waves?

Hong Kong ended up in British control because of drugs.

In the 19th century, as the British Empire expanded across Asia, its merchants began selling opium into China. It was a canny way of getting rid of a product that grew in abundance in India, then in British possession, but which the British didn’t want very much to do with. A new book on the history of capitalism in the 19th century speculates that British merchants were simply stumped for what Chinese consumer might want for. Their food, tea, and clothing already being superior to anything Europeans might be able to offer. 

Chinese consumers were hooked and the free-trade area around Canton, close to modern day Hong Kong, became a hub for the importing and smuggling of vast quantities of opium into China. The Emperor was none too pleased, and, after begging Queen Victoria to intervene, went to war with the British. China ended up losing two opium wars. Each time it conceded a piece of territory to Britain, which became modern day Hong Kong. First, Hong Kong island, followed later by a slice of territory on the mainland.

It’s the territory on the mainland that’s important. Unlike the Island, it was ceded on the terms of a 99-year lease. It was always going to revert back to Chinese control eventually, but in the intervening century, it was merged with Hong Kong island and the two pieces of land grew together, growing rich off the trade that came from being the British Empire’s chief outpost in China. During the 19th century, Hong Kong was part of our world too. As a port in the British Empire, it was a node in the web of trade routes that connected New Zealand to the rest of the world. It’s no accident that Francis Carver, the sinister villain in Eleanor Catton’s The Luminaries is a Hong Kong-born Cantonese speaker. Loose-footed figures of the Empire were just as likely to pop up in Hong Kong as Hokitika. 

Hong Kong grew rich off its convenient location and status as a capitalist enclave surrounded by communist China. Photo: Thomas Coughlan. 

You’d think the Empire was still alive in Hong Kong too, but a few minutes with most Hong Kongers will reassure you that it’s as dead here as it is anywhere else. Last Monday, Hong Kongers flew the old British imperial flag in the Legislative Council chamber. It’s become something of a minor symbol for dissenters in the protests that have rocked the city since handover. When I visited earlier this year, I asked some of the protestors whether the flag symbolised a lingering nostalgia for the colonial period. They all replied in the negative. There’s no nostalgia for the old order. They just know the flag is a very effective way of enraging the Mainland. 

In the latter half of the 20th century, the city became a financial hub. With British laws, courts, and international trade it became a base for Western firms in Asia. It also profited from the slow, but steady rise of Mainland China, which used the city as a helpful capitalist entrepôt. Free of the tight restrictions on capital flows that were imposed on the Communist Mainland, Hong Kong provided essential financial infrastructure, like currency transactions, necessary to send Chinese products overseas. Hong Kong allowed China  to enjoy the benefits of a major financial centre on its doorstep, without allowing corrupting capitalists to set foot within its borders. As China’s manufacturing capacity grew, so did Hong Kong’s importance as a hub.

The transformation lifted millions out of poverty, but only just. Families who once lived in crowded tenements in old Kowloon, were made richer — but Hong Kong’s astronomically high rents rose just as fast as incomes. The city responded, building masses of state housing, making it one of the largest landlords in the world, but it was never enough. The city has never been able to make headway into its decades-long homelessness crisis. 

It’s an old cliché trotted out by sinologists that China is a patient country, measuring political epochs in centuries and millennia, rather than the blinkered outlook of its Western rivals who can’t see beyond the next election. Hong Kong’s 20th century history stands testament to the cliché’s truth. The Communist Party could have taken the city back from Britain at any point after it took power in 1949, but chose not to. It could have cut off the city’s supply of fresh water, which came from the mainland, or food, but it chose not to. The truth is that the city’s independence suited both sides. Hong Kong was for a time China’s largest export market, with much product then re-exported to the rest of the world. Before the the opening up of Den Xiaoping, Hong Kong served as a useful de facto financial centre for China, which was quite happy to have corrosive foreigners desert Shanghai, its own financial hub, after the revolution. 

Hong Kong was essential to modern China, as the Economist’s former correspondent wrote in the mid-70s “The only way [China] can industrialise is by buying technology from places like the United States, Japan, and Europe. The proven best way to marshal this money, to use the services of capitalists without letting them live in China with their dangerously bourgeois ideas, is to keep Hong Kong the way it is”.

And so the status quo dragged on, until the question of what to do when the 99-year lease on the new territories expired in 1997 could be avoided no longer. Hong Kong island itself, the most built-up part of the territory, could possibly have continued on in British possession forever. Only the sliver of land that stood between the island and mainland China was subject to the terms of the 99-year lease. In reality, however, Britain knew which direction the wind was blowing and in 1984 the Sino-British Joint declaration signed back the whole lot, under the proviso that the capitalist system and way of life, including freedom of the press, rule of law, and right to protest be preserved for 50 years after the handover on July 1, 1997 under the rule dubbed “one country, two systems”. 

As China left Britain with a 99-year time-bomb, so Britain left China with its own unfinished business. While it had been happy to rule Hong Kong as a tin-pot dictatorship, they unleashed a wave of quasi-democratic reforms as China ushered them out the door. Liking this taste for democracy, Hong Kongers were keen to acquire more — potentially even a referendum that would decide the city’s fate in 2047 when the clock runs down on one country, two systems. 

China is understandably none too keen, and had already begun eroding what little democracy Hong Kong has, which brings us to the current impasse. Hong Kong desperately wants to preserve the status quo, whilst China appears to have run out of patience even to wait until 2047. The number of Hong Kongers identifying themselves as “Chinese” has slumped to record lows. 

In a survey the University of Hong Kong conducted just after the first protests last month found 53 percent of people identify as Hong Kongers, with just 11 percent of people identifying as Chinese and 12 percent “Chinese Hong Kong”. Seventy-one percent are not proud of being citizens of China, with just 27 percent responding yes. 

Broken down by age, the results are even more stark: 90 percent of respondents in the 18-29 age group answered they were not proud of being national citizens of China. 

The politics of identity have spilled outside the borders of both Hong Kong and the Mainland. When Francis Hui, a Hong Kong student studying in America penned a column for her student newspaper titled “I am from Hong Kong, not China,” it was met with what the Washington Post described as “intense and, at times, threatening backlash” from Mainland students at the school. 

Anxiety over Mainland invasion is everywhere. Hong Kong is wealthy, its citizens sophisticated, and worldly. Mainlanders are seen as uncultured, uncouth — even unhygienic. Many restaurants have erected signs reminding patrons not to spit, some pointedly captioned in mainland Mandarin, rather than local Cantonese.

Last month’s protests began over a fairly obvious and flagrant violation of the “one country, two systems” rule. An extradition law would have allowed China to pluck Hong Kong citizens from the city to be tried on the Mainland, where they would not enjoy a free and fair trial. China had already been testing its luck. Booksellers publishing material critical of the Mainland were abducted in 2014, appearing sometime later in the Mainland. Local journalists speaking at a conference I attended in the city spoke of years of intimidation by Mainland authorities, who were able to marshal low-level muscle to intimidate them into backing away from stories (never a fruitful strategy). 

A tipping point was when Financial Times Asia editor Victor Mallet was refused a visa to the city, apparently as punishment for allowing a dissident to speak at the famous Foreign Correspondents Club, of which he was president. Local journalists were used to a fractious relationship with the Mainland — the CCP had always had agents in Hong Kong after all — but taking a swipe at foreign journalists in such a public way represented a new level of Mainland brashness. 

The fact that the current protests have only become more brazen and violent after the extradition law was withdrawn is telling too. Protests have erupted in the past, and died down when the government decided to place its unpopular reform on the back burner. Protestors I spoke to at the beginning of the year were divided over whether mass movements on the scale of 2014 would ever be possible again. Well, it seems they were and momentum is temporarily with the Hong Kongers.

The Mainland will not be cowed though. The People’s Liberation Army pointedly held drills in Hong Kong this week, releasing a statement telling Hong Kongers so — just in case they missed it. The PLO could march into the city at any time to restore order, as China sees fit. But China is constrained. Its famous patience seems to have worn thin. It’s hemmed in on each side not by friends, but by enemies. Its famous Belt and Road initiative seems to have inspired more skepticism than support and if the last 50 yers of America’s global hegemony are to serve any lesson it’s that exerting military power is harder than it looks — even against states a fraction of your size.

But even the most optimistic observer must concede the scales are tipped against Hong Kong and Hong Kongers. The Mainland has already drawn up plans to amalgamate the city into a wider “Bay Area” metro plan, where it would be just one of many large and wealthy cities in South China. Hong Kong’s glittering success is no longer unique — not even in South China. This year, for the first time in history, Hong Kong’s GDP was overtaken by its Mainland neighbour Szhenzen from across the border, home to tech giant Huawei. The city’s best bet is exploiting alliances with its free friends like the US. The UK has spoken out on the freedom of its former colony. But whether word will be matched with deed is probably contingent on how powerful the UK feels post-Brexit and whether it can stomach turning its back on a relationship its leaders have done much to cultivate.

The city and its people are on their own, cast adrift in a sea of troubles. What happens in Hong Kong matters. It’s a useful barometer of just how powerful China feels and how committed it is to the “rules-based order” we hear so much about. Britain and the United States have repeatedly reminded China that it is committed to upholding “one country, two systems”. New Zealand’s response has been more muted. In fact, the only formal statement on the issue to come out of our Government came as a result of me asking Foreign Minister Winston Peters myself — and to his credit, he did not mince words. We should continue to use our voice to defend the city’s freedom. China is the rising power in our region, which can be a good thing. But it should be reminded that it too is bound by the rules that have allowed it to climb so high. 

Thomas Coughlan travelled to Hong Kong with the assistance of the Asia New Zealand foundation. 

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