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02-10-2014, 07:35 AM
Instead, all eyes are on what Lee Kuan-yew once forecast, with lubricious schadenfreude, would end up as “just another provincial Chinese city”.
The Hong Kong time bomb ticks for China
THE AUSTRALIAN OCTOBER 02, 2014 12:00AM
Rowan Callick
Asia Pacific Editor
Melbourne
THIS should be a time for celebrating — during its National Day “golden week” — China’s modern achievements, especially the rise and rise of its economy despite its current slowdown as it restructures.
Instead, all eyes are on what Lee Kuan-yew once forecast, with lubricious schadenfreude, would end up as “just another provincial Chinese city”.
Hong Kong, though, shows few signs of relegating itself to a backwater.
The great harbour city of seven million retains a vibrancy only paralleled by Manhattan, and a capacity to renew itself. It has certainly seized the central ground of the great debate about how states, especially in Asia, are best governed.
As one of the world’s great business centres, it has a bottom line on which that vibrancy is built: the rule of law, free trade, free and open media of all kinds, a spirit of self-reliance, and widespread admiration, not envy, for success — I was once in a minibus there whose unkempt Cantonese driver slammed on the brakes to usher out of a side road a golden Rolls Royce driven by a stiff-backed chauffeur sporting a peaked cap.
Hong Kong’s sovereign, however, has a rather different bottom line: common purpose, carefully calibrated engagement with international business, hard work, immense savings directed by the financial structure, dominance in key sectors of state-owned enterprises, massive infrastructure investment — and pervasive governance by the Communist Party.
These are the two systems — under Deng Xiaoping’s formula for the 1997 return of HK of “one country, two systems” — that were to keep running in parallel for 50 years.
But lurking inside that timetable, was a time bomb. Hong Kong’s Basic Law states that “the ultimate aim is the selection of the chief executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures”.
First the date for that “ultimate aim” was determined by China’s National People’s Congress — 2017. Then the NPC elaborated on what that nomination process — what those democratic procedures — might mean in practice: only candidates approved by at least half of the 1200 carefully selected members of the nominating committee will be eligible.
This set the parallel lines of the two systems on a collision course. Many Hong Kongers wish to choose their leaders, and that challenges a core requirement of the Chinese system — that the party retains control, or at the least a capacity to control, all key decisions, events, organisations and appointments.
Beijing has sensibly abandoned Marx’s requirement of communist states that they own the means of production, but instead insists on owning all the means of governance.
It has made explicit in its June “white paper” on HK the manner in which it requires the special administrative region is run.
This includes judges being categorised as “administrators”, for whom “loving the country is the basic political requirement” — despite there being 35 foreign judges sitting on HK benches, including several eminent Australian jurists, such as Murray Gleeson and Anthony Mason on the court of final appeal. The HK Bar Association warned, in reply, of the danger of “undermining the independence of the judiciary”, a core element of HK’s identity and of its business case.
The trigger for today’s extraordinary outpouring of commitment by Hong Kongers to what they view as their “bottom line” including the rule of law — not rule by law — was Beijing’s “white paper”. Characteristically, China’s clear-minded, strong and popular new leader Xi Jinping insisted on making his party’s position clear.
He invited to Beijing a fortnight ago, the folk whom he has identified as his kind of HK people: 70 tycoons and family members, most of whom have made much of their money out of gaining access to invaluable land parsimoniously supplied by HK governments, both colonial and postcolonial — and leveraged the resulting profits through service monopolies or oligopolies.
The protests target HK’s own government and its fellow-travellers, as much as Beijing.
HK-based Tom Holland writes in a research note for GavekalDragonomics that “even if this week’s protects end peacefully, the discontent will rumble on’’.
“And if slowing Chinese growth and rising US interest rates” — the HK dollar is pegged to the greenback — “inflict economic hardship on the city, the dissatisfaction is only likely to mount.”
Might Beijing promote Shanghai with its new free trade zone over HK? Holland says China’s slowing growth sets back interest rate liberalisation and capital account opening-up, vital steps if Shanghai is to compete: “The mainland city still looks decades away from mounting a credible challenge to HK.”
But an erosion of HK’s rule of law and a tightening of its governance reins would rebalance the contest, putting HK more on an equal footing with Shanghai.
The question posed of HK’s business community, including many Australians, by this dramatic turn of events, is whether their focus is on installing Beijing’s new status quo, or on the longer-term survival of the city’s core values.
The Hong Kong time bomb ticks for China
THE AUSTRALIAN OCTOBER 02, 2014 12:00AM
Rowan Callick
Asia Pacific Editor
Melbourne
THIS should be a time for celebrating — during its National Day “golden week” — China’s modern achievements, especially the rise and rise of its economy despite its current slowdown as it restructures.
Instead, all eyes are on what Lee Kuan-yew once forecast, with lubricious schadenfreude, would end up as “just another provincial Chinese city”.
Hong Kong, though, shows few signs of relegating itself to a backwater.
The great harbour city of seven million retains a vibrancy only paralleled by Manhattan, and a capacity to renew itself. It has certainly seized the central ground of the great debate about how states, especially in Asia, are best governed.
As one of the world’s great business centres, it has a bottom line on which that vibrancy is built: the rule of law, free trade, free and open media of all kinds, a spirit of self-reliance, and widespread admiration, not envy, for success — I was once in a minibus there whose unkempt Cantonese driver slammed on the brakes to usher out of a side road a golden Rolls Royce driven by a stiff-backed chauffeur sporting a peaked cap.
Hong Kong’s sovereign, however, has a rather different bottom line: common purpose, carefully calibrated engagement with international business, hard work, immense savings directed by the financial structure, dominance in key sectors of state-owned enterprises, massive infrastructure investment — and pervasive governance by the Communist Party.
These are the two systems — under Deng Xiaoping’s formula for the 1997 return of HK of “one country, two systems” — that were to keep running in parallel for 50 years.
But lurking inside that timetable, was a time bomb. Hong Kong’s Basic Law states that “the ultimate aim is the selection of the chief executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures”.
First the date for that “ultimate aim” was determined by China’s National People’s Congress — 2017. Then the NPC elaborated on what that nomination process — what those democratic procedures — might mean in practice: only candidates approved by at least half of the 1200 carefully selected members of the nominating committee will be eligible.
This set the parallel lines of the two systems on a collision course. Many Hong Kongers wish to choose their leaders, and that challenges a core requirement of the Chinese system — that the party retains control, or at the least a capacity to control, all key decisions, events, organisations and appointments.
Beijing has sensibly abandoned Marx’s requirement of communist states that they own the means of production, but instead insists on owning all the means of governance.
It has made explicit in its June “white paper” on HK the manner in which it requires the special administrative region is run.
This includes judges being categorised as “administrators”, for whom “loving the country is the basic political requirement” — despite there being 35 foreign judges sitting on HK benches, including several eminent Australian jurists, such as Murray Gleeson and Anthony Mason on the court of final appeal. The HK Bar Association warned, in reply, of the danger of “undermining the independence of the judiciary”, a core element of HK’s identity and of its business case.
The trigger for today’s extraordinary outpouring of commitment by Hong Kongers to what they view as their “bottom line” including the rule of law — not rule by law — was Beijing’s “white paper”. Characteristically, China’s clear-minded, strong and popular new leader Xi Jinping insisted on making his party’s position clear.
He invited to Beijing a fortnight ago, the folk whom he has identified as his kind of HK people: 70 tycoons and family members, most of whom have made much of their money out of gaining access to invaluable land parsimoniously supplied by HK governments, both colonial and postcolonial — and leveraged the resulting profits through service monopolies or oligopolies.
The protests target HK’s own government and its fellow-travellers, as much as Beijing.
HK-based Tom Holland writes in a research note for GavekalDragonomics that “even if this week’s protects end peacefully, the discontent will rumble on’’.
“And if slowing Chinese growth and rising US interest rates” — the HK dollar is pegged to the greenback — “inflict economic hardship on the city, the dissatisfaction is only likely to mount.”
Might Beijing promote Shanghai with its new free trade zone over HK? Holland says China’s slowing growth sets back interest rate liberalisation and capital account opening-up, vital steps if Shanghai is to compete: “The mainland city still looks decades away from mounting a credible challenge to HK.”
But an erosion of HK’s rule of law and a tightening of its governance reins would rebalance the contest, putting HK more on an equal footing with Shanghai.
The question posed of HK’s business community, including many Australians, by this dramatic turn of events, is whether their focus is on installing Beijing’s new status quo, or on the longer-term survival of the city’s core values.