Advocates of the "one China, two systems" solution to cross-strait tensions often point to Hong Kong as an example of how well a lost sheep can be reintegrated into the PRC fold. Intriguingly, critics of that solution seem equally keen to pray in aid the recent experiences of the Special Administrative Region. As Taiwan and Hong Kong drift apart, what does the future hold for them?
The election of Chen Shui-bian has significantly raised the profile of Taiwan among Hong Kong people. However, this has been more the result of Beijing's reaction to the election than Taiwan's practice of choosing its leader directly, or of its implied support for the principle of self-determination.
Indeed, for the first time ever the government of Chief Executive Tung Chee-hwa has been forced into publicly taking issue with a Beijing official. This followed remarks by the deputy head of the central government's liaison office in Hong Kong, warning local enterprises that they would suffer if they did business with Taiwanese who supported independence for the island.
Tung expressed "concern" to Jiang Enzhu, the senior diplomat who is Beijing's chief representative in Hong Kong, and the Chief Secretary, Anson Chan Fang On-sang, said that the remarks have caused widespread concern among businesspeople. "The SAR government has consistently stressed that business decisions are best left to businessmen and should not invite the interference of any official, of whatever status."
The irony of this incident is that there is very little interaction between Taiwan and Hong Kong business. For sure, Hong Kong is an indispensable conduit for Taiwan-mainland trade and investment. Taiwan provides some 18 percent of Hong Kong's visitors, most of whom are en route to the mainland. Likewise, 7 percent of Hong Kong's reexports consist of goods originating in Taiwan and en route to the mainland, while the percentage of transit trade is even higher. But a mere 3 percent of Hong Kong's retained imports come from Taiwan, and only a similar percentage of domestic exports go there. Portfolio investment flows have increased sharply in recent years as Taiwan's markets have liberalized, but there is little direct investment in either direction.
In many ways, Taiwan and Hong Kong have been growing further apart for years, despite the flowering of cross-strait trade and investment through the former British territory. There was a time when refugee business families in Hong Kong, mostly from Shanghai, kept in close touch with Taiwan and its KMT rulers, many of whom were from Shanghai, Zhejiang, or Jiangsu. The family of Hong Kong's current chief executive, Tung Chee-hwa, was in that mold. Indeed Tung originally hoped to be rescued by Taiwan when his shipping empire nearly went bust in the early 1980s. But in the end it was Beijing that came to his aid, symbolically representing the mainland's claim to Hong Kong. Subsequent political developments and the rise of new economic power centers in both Hong Kong and Taiwan have eroded the connections between the two.
The strong official reaction to Jiang Enzhu's remarks reflected the susceptibility of the Hong Kong government to business influences in general, rather than any particular concerns about Taiwan trade. If there was any sympathy with Taiwan's belief in freedom of choice, it lay well buried. Indeed Hong Kong's official reaction on this occasion contrasted with the lack of reaction in April, when another liaison office official said that the Hong Kong media should not report the views of those advocating independence for Taiwan.
The silence on that occasion led to concerns in the media not merely that informal pressure would be brought to bear on reporting pro-independence views, but that it would in the future come within the scope of laws relating to promoting treasonable activities. At present there are no such laws, but according to the Basic Law the SAR is supposed to enact them. Article 23 provides that the SAR "shall enact laws on its own to prohibit any act of treason, secession, sedition, [or] subversion against the Central People's Government." But Hong Kong has not yet addressed the issue, because of its extreme sensitivity.
The official view in Hong Kong is that all business links between the mainland, the SAR, and Taiwan ought to be encouraged as a step toward reunification. This ignores the fact that the past ten years of steadily increasing interaction have actually been accompanied by a widening of the political gap, as a result of the flowering of democracy and liberalism in Taiwan. But it makes obvious sense for Hong Kong to underline to Beijing that it is only concerned with business, and that business will ultimately bring all sides closer together.
The Tung administration has also tried to score political points by holding up the grant of a visa to Taiwan's chief representative designate in the territory, Chang Liang-jen, by insisting that he must abide by the one-China policy and refrain from promoting former President Lee Teng-hui's "two states" theory. Last year, the head of the government-controlled Radio Television Hong Kong was removed after authorizing the broadcast of an interview with Chang's predecessor.
These events have caused considerable unease in Hong Kong, where they are perceived as examples of threats to the "one country, two systems" principle. But they do not indicate much sympathy for Taiwan itself. Hong Kong people tend to view Taiwan's situation as rather akin to that of Hong Kong, assuming that eventually it too will have to agree to a "one country, two systems" formula. There is little appreciation of the extent to which Taiwan's history has long been very different from that of the mainland. This leads to the conclusion that resolution of the Taiwan question is simply a matter of eventually resolving an issue left over from the era of colonialism and the Chinese civil war. Because independence has never been an option for Hong Kong, there is a reluctance to acknowledge that it could be for Taiwan. Few people, even those most willing to criticize Beijing on human rights and democracy issues, want to appear "unpatriotic" by seeming to appear sympathetic to the idea of independence.
In May, the Legislative Council passed a motion, sponsored by the main pro-Beijing party, opposing Taiwan independence. Some liberals spoke sympathetically of Taiwan's democracy and desire to preserve its freedoms, but they then failed to vote. There was one abstention, but there were no noes.
Hong Kong's democratic forces have in the past tended to view Taiwan as inward-looking and unwilling to commit to promoting mainland democracy. They can be critical of the relatively subdued reaction of Taiwanese people to the June 4 massacre in Tiananmen Square. Whereas Hong Kong's democratic forces have tended to see themselves as having a duty to foster pro-democracy dissidents on the mainland, Taiwanese have been more preoccupied with building their own democratic institutions.
In addition to lack of sympathy for the independence movement, there is general concern that Taiwan's ambitions and self-confidence will lead to tensions which will be especially negative for Hong Kong--politics upsetting sacrosanct business. There is less discussion of how badly Hong Kong would be damaged if cross-strait relations were to improve to the point of direct air, sea, and banking links. Academic or private-sector study of this issue is conspicuous by its absence. That may be no surprise in the context of Hong Kong's political situation but, given that direct links would probably also coincide with the mainland and Taiwan joining the World Trade Organization (WTO), it is important. Yet, to date, Hong Kong has preferred to emphasize the positive aspects of WTO membership as a spur to China trade and investment, and not worry about whether its own relative position would be undermined.
In principle, Hong Kong has to believe that what is good for the concept of Greater China must be good for Hong Kong. Given the northward shift of gravity of the mainland's growth, however, and the increasing attraction of Shanghai as a base for foreign enterprise in China, some observers believe that the status quo--plenty of cross-strait trade and investment but no direct links--serves Hong Kong well. Generally it is believed that the election of Chen Shui-bian is more likely to delay direct links, whereas had either Lien Chan or James Soong been elected, he would have pursued a more accommodating stance toward Beijing than Lee Teng-hui.
At the domestic political level, the example of direct election of President Chen and the orderly transfer of power from the KMT is something of an embarrassment to the Hong Kong government, which has been so keen to limit democratic participation and play down the role of the legislature in policymaking. There was a time when establishment figures in Hong Kong would claim that democracy in Taiwan simply led to corruption, ugly scenes in parliament, and the unleashing of labor and environmental demands which damaged the economy. Those now look as self-serving as they always were. Hong Kong's economic record in recent years has proven much inferior to that of Taiwan, and Hong Kong is now suffering from refusing to take seriously the environmental problems which democratic pressure has forced Taiwan to confront.
Hong Kong's "executive-led" government has proved less effective in many areas than Taiwan's. Hong Kong lacks political corruption of the sort that has tarnished Taiwan. On the other hand, local inhabitants have the (correct) impression that wealth is more evenly distributed in Taiwan, while economic power is dispersed. Probably even the KMT does not control as much of the Taiwan economy as Li Ka-shing's family does that of Hong Kong. Local people are more than ever aware that Taiwan's manufacturing technology achievements have been remarkable. Hong Kong senses a need to be in the same game, but has fallen too far behind to catch up, so it may have to be content with its traditional middleman role.
Hong Kong is aware that Taiwan keeps an eye on it to see how "one country, two systems" works in practice. Taiwanese will have noted that thus far the judiciary and media have both proved robustly independent, but the executive has been the opposite. The main assault on judicial independence has come from the government itself, which last year went to Beijing to use the National People's Congress to overrule a Hong Kong Court of Final Appeal judgement on rights of abode in Hong Kong that the administration found inconvenient. This is a government which often seems to be more like the old KMT--preferring to rule by bureaucratic fiat than be subject to legislative or judicial constraints.
The SAR government has also allowed the mainland authorities to bypass Hong Kong's extradition procedures when seizing those suspected of committing crimes in the mainland. The local courts' ability to implement the Basic Law as they see fit is thus being eroded. The stature of the former colony's Court of Final Appeal has been weakened by the way it handled the right of abode issue. Two of its members are retiring this year, and the choice of their replacements will be studied for an indication of whether they were selected on the strength of their legal abilities, or merely for their willingness to second-guess Tung Chee-hwa.
The quality of the Hong Kong judicial system has often been exaggerated. Even if outright corruption has been relatively rare, it has a record of bizarre decisions. It has retained several costly and archaic British practices long ago abolished in Britain itself, but it has been seen as generally fair, and this remains the case. Foreigners continue to play a major role in the judiciary, as well as the legal profession. The role of Hong Kong as a center for international commercial litigation and arbitration helps retain legal quality, and this provides something of a shield for the rule of law and against arbitrary government. Hong Kong people generally believe that their legal system is still much superior to that of Taiwan.
On the other hand, Hong Kong looks increasingly subject to political pressures on issues concerning "executive-led government." It appears not to understand the concept of separation of powers, or that government itself must obey the law. So despite Hong Kong's lack of sympathy for Taiwanese independence, there is a growing perception that the island's political development, economic achievements, and social progress make it the best example of a modern Chinese society. If only it were more "Chinese"!
Philip Bowring, a columnist for the International Herald Tribune , is based in Hong Kong.
Copyright (c) 2000 by Philip Bowring.