Under mainland China’s watchful eye, the Hong Kong protests continue even with the Special Administrative Region’s Chief Executive Carrie Lam’s formal withdrawal of the extradition bill that supposedly triggered the now nearly 4 months of protests. On 4 September, Lam formally withdrew the detested extradition bill and also “set up an investigative platform to look into the fundamental causes of the social unrest and suggest solutions for the way forward--though stopping short of turning it into a full-fledged commission of inquiry, as demanded by protesters” (from China Morning Post). As can be gleaned from the latest reports, this concession from Lam is not enough to end the crippling protests.
In a series of earlier articles (see links below this paragraph), I have looked into this crisis and analyzed the options the Chinese government may consider. Ideally, the parties should come to reach a win-win formula and end the crisis peaceably. With the way things are going, however, anything can happen, including a repeat of the infamous Tiananmen Square massacre on June 4, 1989. The Tiananmen protests then lasted only for a little less than 2 months compared to the still ongoing Hong Kong protests. Clearly, the times and circumstances may have changed significantly, preventing violence to be a ready option.
The tipping point may have been reached, however, with the “Declaration of the Hong Kong Provisional Government” which, for all intents and purposes, can already be considered a blatant repudiation of mainland China’s authority over the region. It is not an outright declaration of independence but the content can invite the interpretation of, at least, a planned separation from the mainland. The principles mentioned were an acknowledged direct quote from the American Declaration of Independence which, needless to say, contravenes the principles that govern China.
For the first time in these months of protests, there was a reaction from the People’s Liberation Army (PLA). Perhaps, it was a direct reaction to the declaration: a yellow flag used by the police during protests was unfurled in the PLA building. Half a dozen personnel seen standing on top of the barracks, shining flashlights on dozens of protesters below who were aiming pointers and other lights at the building. It was the first known interaction between the PLA and protesters.
The Chinese military, with the PLA garrison housing 6,000 soldiers, has been present in Hong Kong since the handover. Under the city’s constitution, the city’s government can request the assistance of the garrison in the "maintenance of public order and in disaster relief" (CNN). With the further intensification of violence and the use of emergency powers, such as Lam’s banning of the use of masks in protests, it is really testing the resolve of mainland China. The military option is clearly on the table since mid-August with growing numbers of paramilitary personnel in Shenzhen, which is close to the border, now deployed.
Sources from Beijing, on the other hand, suggest that many options remain for China’s leaders. The military option is still the last of several options, suggesting that it clearly is not a main consideration. When pressed further why, it was just explained that as long as it does not compromise the security of the mainland, the use of force would not be an option.
IT'S THE ECONOMY...
China can wait, that seems to be the message. The smile of the source exuded confidence, explaining why force is not likely to be used soon, and that it does not matter how long the protests continue. Without any need to elaborate, it seemed obvious that for China, the protests don’t show any significant economic impact. In fact, without any categorical statement, observers can even go as far as to interpret mainland China’s stance as suggesting they can afford to lose Hong Kong. Of course, this would appear to be surprising and would likely be dismissed as harebrained. It would be interesting to know China's reasons.
China's emphasis has been on its economy ever since the late celebrated Chinese leader Deng Xiaoping assumed power. His political and economic legacy is primarily a development strategy encapsulated and popularized by the maxim “One China Two Systems”. Hong Kong and Macau, both Chinese territories that were once occupied by Britain and Portugal, respectively, reunified with mainland China in the late 90s. This required an arrangement and a strategy in one where both territories continue to operate as they were before the reunification, facilitating a smoother transition. The same government and economic and financial systems were to operate after the handover. The whole of China was then believed to benefit from the setup as other territories learned from the more economically advanced former colonies.
And learn they did. Pride and optimism may have been premature in 2017 when Shenzhen, the nearby technology-savvy city in Guangdong province, declared it had overtaken Hong Kong in terms of GDP but had to withdraw the claim after taking into account currency exchange. There was no withdrawing needed last year, however, after growing by 7.6 percent compared to its neighbor’s less than half of 3 percent growth. It was a hairline advantage as Shenzhen’s growth was equivalent to HK$ 2.87 trillion compared to Hong Kong’s HK$ 2.85 trillion, but an advantage that is seen to remain and even expand in the future.
The numbers may not be enough to explain this optimism from the mainland. The characteristics of each territory’s economy has to be taken into consideration, especially if we are to look at the short political history of Hong Kong as a reunified part of China. Housing is one critical issue that can reveal so much of the city’s economy, the same issue that beset the administration of the first Hong Kong Chief Executive Tung Chee-hwa.
As chief executive then, he proposed a socialized housing program anticipating a housing crunch, which actually developed under the watch of Leung Chun-ying, the third to serve as the city’s chief executive. What could have been a wise political and economic move then was rejected by public opinion, as it was believed that the property market would plummet if such a program were adopted. Basically, it was a choice between the classic market-driven approach and modified Chinese-brand capitalism.
THE TECHNOLOGY FACTOR
Technology is the crucial factor as it serves as Shenzhen’s driver of growth while Hong Kong seems to lag behind embracing technology. The latter remains reliant on traditional industries like finance and real estate while the former’s economy is structured on manufacturing and technology. In fact, these sectors are the ones most crucial in China’s march to economic progress, cited by Martin Jacques in his seminal work “When China Rules the World”.
To boot, Shenzhen is only one of the eight miracle cities, according to the World Economic Forum in a recent report. Explosive growth has also been recorded in Shanghai and Beijing, Guangzhou, Central China Chongqing and nearby Chengdu, including Shanghai satellite cities Suzhou and Hangzhou. All these cities have each reached 1.5 to 3.5 trillion Renminbi or US$ 209.9B to US$ 489.8B in GDP. Imagine how much it amounts to taken together as one China and compared to any country in the world today.
Hong Kong remains significant but seems to be on its way to being just one of the many economic drivers of a behemoth China, hence the confidence that time is on their side. It can be argued, based on similar reports and analyses, that Hong Kong stands to lose more than gain in continuing with protests or even considering separating from mainland China.
Taiwan is surely watching. It can even be argued that Macau is also watching, as are the other territories in the mainland. As already explained in previous articles, however, the social and political mindset of the people in the mainland is starkly different compared to those in Hong Kong. This factor is crucial in anticipating what the government will do to finally resolve the impasse in Hong Kong.
What is clear from the foregoing is that the economy is the paramount consideration of the decision-makers. Whether or not China will allow Hong Kong to be independent, on the other hand, remains a remote issue than considering the use of force to end the protests. Be that as it may, another Tiananmen will be difficult to consider as it will also be costly even if only in the short-term. Especially with a volatile global economy, it is all the more difficult to determine how short is short-term.
(The author is the Executive Director of the Local Government Development Foundation and a professor of Modern Local Governance at the Ateneo School of Government.)
Disclaimer: The views in this blog are those of the blogger and do not necessarily reflect the views of ABS-CBN Corp.