Politics can't dim Asia's shining star

Still burning bright...the Hong Kong skyline 10 years after the
former British colony was handed back to Beijing. The restructuring
of the economy is one of its biggest challenges.

Still burning bright...the Hong Kong skyline 10 years after the former British colony was handed back to Beijing. The restructuring of the economy is one of its biggest challenges.
Photo: Reuters/Bobby Yip

June 30, 2007

Hong Kong is still without full democracy after 10 years of Chinese rule but that is the least of its worries, writes Mary-Anne Toy.

A BUSY Saturday morning on Queens Road, Hong Kong Island, sums up Hong Kong 10 years after Britain returned its colony to Chinese rule. Passing the flagship store of the British retailing institution Marks & Spencer, a bright and orderly stream of about 1000 Falun Gong activists march on an overcast spring day. There are at least three brass bands, traditional drummers and wave after colourful wave of banners and funeral wreaths showing pictures of practitioners who have died in custody. They accuse the Chinese Government of torture, organ harvesting and genocide. Watched over by police, the march winds its way through downtown Hong Kong, curious onlookers snapping pictures.

"They're the people against the Chinese Communist Party," an Indian-American woman explains to her young son.

Such a scene - a political protest - is unimaginable on the mainland, where Falun Gong is banned as a dangerous cult and any challenge to the rule of the Communist Party is criminal.

Tomorrow, the Chinese President, Hu Jintao, will oversee celebrations marking 10 years since China took back control of Hong Kong from the British, healing an 150-year-old national humiliation.

However, it is unlikely that Mr Hu will be around to witness one of the unofficial events - a march along the waterfront by an expected 50,000 democracy activists to remind Beijing and its hand-picked chief executive, Donald Tsang, that they expect them to deliver on the promise of universal suffrage guaranteed under the Basic Law, Hong Kong's mini-constitution, which guarantees it relative autonomy for the first 50 years.

On the streets, the impact of 10 years of Beijing rule is clear. Mandarin, once almost a foreign language in a Hong Kong dominated by the southern Cantonese dialect and English, is now widely spoken - albeit imperfectly. A recession, record unemployment and plummeting house prices has softened Hong Kong's rougher edges. Its populace is less arrogant, more polite, and as their efforts to learn Mandarin show, just as adaptable.

More than 500,000 mainlanders have flocked to Hong Kong - with its population of 7 million - many to take the dirtiest, least desirable and poorly paid jobs. But others are professionals and students. Every year 13.6 million mainlanders visit Hong Kong, while Hong Kong residents hop across the border into Shenzhen to take advantage of cheaper shopping and services.

Hong Kong has so far defied predictions that it would be overtaken by Shanghai as a financial centre and that Beijing would allow it to stagnate.

But it is moments like this, watching a political demonstration, or getting uncensored internet access, or buying international newspapers, that are visceral reminders that Hong Kong remains different from the mainland.

That it remains so is due to the vigilance of people like the lawyer and legislator Albert Ho, and the civic activist Christine Loh. Mr Ho and Ms Loh are part of an articulate, highly educated generation that is Hong Kong-born and raised, often with overseas qualifications.

Like many in the democratic opposition to the Beijing-appointed government, they feel passionately that unless China allows Hong Kong people to freely elect their chief executive and government, their freedoms remain under threat.

Mr Ho knows the battle he and Ms Loh are fighting is an uphill one. "Compared to the power of Beijing we are small and insignificant, but Hong Kong is important to China because of its economic value. It is the place where many Chinese entrepreneurs are raising capital," he says. "Even if we can't get to full democracy, we can at least act as a counter to the regressive factors that would lead to the strangling of our civil society."

Most observers think that China has been fairly judicious in carrying out its commitment under the Sino-British Joint Declaration of 1984. As part of the deal Beijing promised that Hong Kong's society and economy would remain unchanged for 50 years, and that the special administrative region would be able to elect its chief executive and government as early as this year.

China has now postponed universal suffrage, but Mr Tsang has promised to resolve the matter within his second five-year term, which began in March when he was re-elected by the Beijing-dominated electoral college.

The line in the sand on the balance between freedoms and integration with greater China was drawn four years ago, when Hong Kong's first chief executive, Tung Chee Hwa, tried to pass an internal security law that many felt was an assault on civil liberties.

The backlash culminated on July 1, 2003, in a demonstration by at least 500,000 residents. The outpouring of anger forced Beijing to replace the unpopular Mr Tung with his deputy, the less abrasive Mr Tsang.

"By and large people have minded their own business because we have the freedom to pursue what we want to pursue but when something really touches them they've done incredible things," Ms Loh says.

It is that track record - the riots of the late 1960s, and the million-strong protests immediately after Tiananmen Square - that keeps Beijing's grip tight. In April 2004, faced with the possibility of more unrest after China dampened prospects of an early move to one person, one vote, Beijing ordered a flotilla of warships to cruise through Hong Kong's world-famous harbour.

Ms Loh, from a distinguished Chinese Hong Kong family, runs Civic Exchange, a think tank that has pushed for a quicker transition to full democracy (half of the legislative council is directly elected). It has also highlighted issues such as a growing pollution problem which, apart from public health implications, is impeding recruitment of the foreign executive talent that has been the backbone of Hong Kong's economic success.

An Australian marketing expert, Deb Biber, has lived in Hong Kong for 18 years. Now the chief executive of the Australian-Hong Kong Chamber of Commerce, she says that despite all the doomsayers, her adopted town is still the place to be. She points out that for most Australian companies operating in China, the decisions are made in Hong Kong. The Hong Kong chamber has almost 1000 corporate members representing 500 Australian companies, and a community of about 50,000. By comparison, Beijing's chamber of commerce has 200 companies; and Shanghai's 220.

Speaking as an individual, Ms Biber believes the democrats and Beijing will be forced to compromise. "I don't think Hong Kong will be a democracy or have universal suffrage, but if you ask the average Hong Kong citizen what they think of the chief executive office and elections and one man, one vote, they don't care," she says.

"They care about their rice bowl, making money, getting their children educated. They work for their family. A lot of activists make a lot of noise, but they are a very small percentage, and if you're asking the middle class, they want stability."

Ms Loh says the idea that Hong Kong people are only interested in the "rice bowl" is a myth. She cites studies such as the Hong Kong Transition Project, which has been tracking people's attitude towards democracy for the past 12 years and found high support for democracy. A survey of 800 citizens by Hong Kong's Baptist University and the US-based National Democratic Institute for International Affairs released this week also found 76 per cent supported or strongly supported direct elections for their leader. "The issue is not whether they believe in democracy or know what democracy is, the question is whether they can have it or not," Ms Loh says.

The same survey suggested public optimism over Hong Kong's future under Chinese rule has dropped since 1997. It found 51 per cent of respondents were optimistic about Hong Kong's future as a part of China, compared with 60 per cent in June 1997. This is despite Hong Kong experiencing its fastest growth since the 1980s in the past three years.

While civil liberties and democracy are politically charged issues, Hong Kong's fundamental problem is economic. In the years immediately after handover, its future looked bleak. Reeling from the Asian financial meltdown in the late 1990s, it then found itself at the centre of the SARS epidemic in 2003. Hong Kong survived, in no small part, because of mainland policies such as exclusive rights to conduct offshore yuan currency banking.

But it has not emerged unscathed. In April Hong Kong was overtaken by Shanghai as China's biggest container port, and is likely to be overtaken again by Shenzhen, the mainland city just across the border.

In the past decade most of Hong Kong's factories have moved across the border. Hong Kong has been left with a financial services sector, and a growing disparity between rich and poor. The city's population needs to grow to 10 million, Mr Tsang says, for Hong Kong to be big enough to remain a world-class city. But Hong Kong residents are hostile to greater migration, despite the ageing timebomb created by the territory having the world's lowest fertility rates, and among the highest life-expectancy.

The increasing pollution, largely attributed to Hong Kong-owned factories across the border in the Pearl River delta, and declining English and education standards, are other weaknesses.

Steve Vickers, president and chief executive of International Risk, a corporate security and investigations consultancy, has worked in Hong Kong for almost 30 years, including 18 in the Royal Hong Kong Police. He is concerned about a lack of creativity in the establishment. But he believes Hong Kong has weathered its crises of leadership, the economy and its future.

"Although it may not have emerged completely from those doubts, Hong Kong has yet again shown it is a pretty resilient place capable of reinventing itself when it needs to."

He says one of the biggest challenges is to retrain the generation of workers left behind as Hong Kong has become an economy based on financial services. "In the next five years that will be the key," he says.

Stephen Lam, Hong Kong's Secretary for Constitutional Affairs, is responsible for overseeing the implementation of the Basic Law and liaising with Beijing. Ten years ago he was the public servant in charge of ensuring the handover ceremonies ran efficiently. Mr Lam epitomises the professional, British-trained public servant. He says Hong Kong's place in the world is assured.

"Hong Kong is a very international city we have rule of law and standards of freedom and human rights totally comparable to the West.

"We believe we play a unique role, and at the same time there is also lots of room for other mainland cities such as Shanghai, and other Asian cities such as Singapore, to play their respective roles."

Mr Lam says Hong Kong's return to Chinese sovereignty solved a historical problem, and its mission now is to help China succeed in the world.

He cites the example of China's first astronaut. When Yang Liwei visited Hong Kong after his 2003 space walk he was "top of the pops". "Hong Kong people were jubilant," Mr Lam says. The same reception is given to Chinese Olympic gold medallists.

"I am pleased that Hong Kong has survived the challenges of the first decade and has been able to maintain rule of law and freedoms, and that despite the steepness of the challenges we are trying to promote democracy."

Joe Cheung, 34, a firefighter, agrees. He says the economy is better, and he is optimistic that mainland China is not necessarily a threat to Hong Kong.

"As long as Hong Kong people upgrade their skills, their own competitiveness, then there are advantages to co-operating with other provinces in China. I am very positive," Mr Cheung says.

Hong Kong's political future remains a work in progress. One key thing in its favour is that the "one country, two systems" format promoted under the Basic Law is also the model touted for eventual reunification with Taiwan. Beijing needs Hong Kong to be a success.