Hong Kong saw another big demonstration on July 1, when more than 100,000 people marched against the local government and Beijing. Despite having established an even closer economic relationship with mainland China since the handover, anti-Beijing sentiment has now become prevalent in the special administrative region.
But this is a manufactured problem. Beijing has been adhering to the “one country, two systems” policy on Hong Kong since 1997. Interference in Hong Kong affairs has been minimal. Instead, Beijing has offered tremendous assistance and support during difficult times.
The so-called “contradiction” between Hong Kong and mainland China is being propagated by those who want to shift the focus away from real conflicts within Hong Kong society. In the past decade, Hong Kong’s economy has become increasingly marginalised in the wave of globalisation. Domination by big businesses, the gap between rich and poor, and social injustice have all got worse. Taking advantage of such internal conflicts, some foreign political forces and local politicians have shifted the blame to Beijing and mainlanders. No solution can be found without recognising this reality.
Manufacturing, once employing 20 per cent of the working population, was a pillar of Hong Kong’s economy. As globalisation and China’s market reforms took off, Hong Kong’s manufacturing sector contracted as factories moved north. From about one million in the early 1980s, the number of Hong Kong workers in the manufacturing sector had dropped to about 20,000 last year. While this is a common problem for all developed economies, Hong Kong suffers much more than its Western counterparts for one reason – the West, with its leading position in hi-tech and luxury brands, is still making high profits globally, whereas in Hong Kong, low-end jobs in retailing, food and beverage, logistics, and transport have become the only options for ordinary working-class citizens.
Secondly, property prices have skyrocketed. Moving north enabled Hong Kong factory owners to reap huge profits in the 1980s and 1990s. The profits, however, didn’t stay in China and flowed back to Hong Kong, mostly into real estate.
As a result, Hong Kong has become polarised, with big businesses and low-end workers increasing while the middle class is disappearing. Society has entered an unstable phase.
In the past decade, Hong Kong has received more than 120 million mainland tourists under the individual visit scheme. This has lifted four key industries – tourism, servicing, finance and transport. It has also provided plenty of low-end employment opportunities and plays a significant role in keeping the current unemployment rate low, at 3 per cent.
However, this development contributes only marginally to economic growth. In 2012, while mailand tourists’ consumption created HK$26.1 billion of added value, that was equivalent to only 1.3 per cent of gross domestic product. In other words, it helps prevent massive unemployment, but the jobs it helps to create remain mostly low-end. The real winners are Western luxury brands and local landlords.
According to Forbes’ ranking last year, the four richest men are all property developers. Land domination is nothing new in Hong Kong. The “big four” developers held a 55 per cent market share by the end of last century, leaving almost no room for any new player. Making astounding profits, big developers subsequently bought public utilities and services. Nowadays, Hong Kong’s transport and energy companies and even supermarkets are concentrated in the hands of big developers.
Meanwhile, as the middle class keeps shrinking, the real income of ordinary people has been decreasing. The nominal incomes of most people remain unchanged since the handover – a university graduate earned about HK$10,000 per month 10 years ago; now, it is basically the same. However, everything else – property prices and rent in particular – has risen sharply. As the real income of ordinary folks is falling, big developers keep accumulating astounding wealth. This sharp contrast has caused strong discontent among the population.
Meanwhile, according to the Sino-British Joint Declaration and the Basic Law, Hong Kong’s political system shall remain unchanged for 50 years. In fact, that has not exactly been the case since the handover.
Beijing, when drafting the Basic Law, did promise to allow a change in Hong Kong’s system; that was, transitioning from a system under which the governor controlled everything to a more democratic one. Under the Basic Law, the power of the chief executive and the make-up of the Legislative Council are very different from those under the colonial system.
Before the handover, the governor had all the power, with both the Executive Council and Legco firmly under him. Legco was more or less an advisory and not a legislating body. The governor controlled the appointment of the legislators and the agenda of the legislature. Members had no power to initiate any motion. In the SAR, the executive branch has become a weak government hindered by a much more powerful legislative branch.
Another major political change lies in the role of the sovereign power in Hong Kong. The British government could fully exercise its political will in Hong Kong. For example, when London demanded Hong Kong bear half of the expenses of the British military stationed in Hong Kong, the colony could not say no. After the handover, while Beijing holds the final governing power, this power has been delegated to the SAR government. If one compares how Beijing is and how London was controlling Hong Kong, the differences couldn’t be starker.
The crux of the matter is that the opposition in Hong Kong is trying to do away with the Basic Law and contradict the Chinese constitution. They want to negate Beijing’s ruling power and give Hong Kong complete “autonomy”. That’s the fundamental reason why the radical opposition is promoting a “contradiction” between Hong Kong and the mainland by trying to shift the blame for Hong Kong’s internal conflicts onto the central government.
Contrary to the promise of keeping things unchanged for 50 years, as stipulated in the Joint Declaration, there has been too much political change in Hong Kong. While the SAR does need reforms, such changes can’t be towards a break-away from the central government, ruining the rule of law, destroying the economy, inciting civil strife and splitting society.
Hong Kong doesn’t need any political movement to provoke internal conflict. The radicals will never achieve their aim, but in the process of trying, they might destroy Hong Kong. What Hong Kong needs are economic reforms to deal with the marginalisation caused by globalisation and political reforms to design a redistributive process to address social injustice.