Taiwan Today

This month marks the anniversary of the handover of Hong Kong to mainland Chinese authorities. Is the Fragrant Harbor stilln fragrant after all these years?

At the second anniversary of the British handover of Hong Kong to mainland China, most businesspeople, local and foreign, are scanning the gloomy landscape of this Special Administrative Region (SAR) for signs of recovery. And for most residents, some argue, economic woes, unforeseen at the time of the handover, have eclipsed fears about preserving broad civil liberties and the desire to press for democracy.

On the much-heralded occasion of July 1, 1997, when the changeover occurred, many political pundits were optimistic about the future of all sectors of Hong Kong society under the PRC's rule. To be sure, some predicted a bleak outcome. The pessimistic foresaw that the Chinese People's Liberation Army would be oppressive, human rights eroded, media censorship exercised, and interference by mainland officials commonplace in the administration of Tung Chee-hwa, the new Beijing -appointed chief executive.

The some six million Hong Kongers had pinned their hopes on Beijing's promise that the way of life enjoyed under British rule would not come under siege. By mid-1997, a multitude of doubters had departed. In the years between the 1984 Sino-British Joint Declaration on the future of Hong Kong and the 1997 changeover, people skilled and skeptical had left the colony by the tens of thousands annually, seeking politically safer abodes abroad. Ominous official statements had not helped matters. The PRC's Foreign Minister Qian Qichen, for instance, had warned that while press freedom would be preserved, topics that threatened national unity would not be tolerated. Among those who were determined to stay in Hong Kong or who had no other option, some remained wary. Pro-democracy activists exemplified this distrust, anticipating that the annual vigil commemorating lives lost in 1989 at Tiananmen Square might be prohibited, and public demonstrations against government policies squashed.

But as most scholars expected, mainland China has not blatantly suppressed Hong Kong. Indeed, the US Department of State's recent report on human rights in Hong Kong renders, overall, a favorable appraisal. The seasoned tourist to Hong Kong--tourists, in general, are far scarcer than in 1997 because of the Asian financial crisis--is hard-pressed to spot changes more significant than repainted mailboxes and some closed restaurants.

Nevertheless, while on the surface major changes may not be seen, recession quite naturally affects public attitudes. Pre -transition questions were these: "Will I be able to voice my complaints?" "If in legal trouble, will I be treated fairly in court?" "Will my rights be protected, including my vote?" For many, new questions now compete with or overshadow the former: "How long will this recession, the worst since World War II, drag on?" "Will the value of my flat continue to fall?" "Will I even have a job next year?"

There is, however, an important interrelatedness of these pre-handover and post-handover doubts. Britain's last gover nor, Christopher Patten, anticipated this connection while he held office in Hong Kong. Now a voice from Europe, removed from the wind of the Asian financial storm, Patten continues to caution that capitalist and democratic values are mutually supportive. In East and West: China, Power, and the Future of Asia (New York: Times Books, 1998), he admonishes, "Liberal economics and liberal democracy go hand in hand. Freedom, democracy, the rule of law, stability, and prosperity are found most frequently in one another's company."

When Patten left Hong Kong, the territory's economy was robust. Reserves stood at more than US$66.6 billion, and mainland China's dramatic growth, to which Hong Kong now more than ever was tied, was touted as unstoppable. The reasoning only two years ago was that Hong Kong's economic future, so inexorably linked to the mainland's, must necessarily be positive. With a promising economy seemingly assured, Hong Kong's people could afford the luxury of centering their attention on politics and freedom.

But now the PRC's economic prospects and social stability are more dubious, and the link of Hong Kong to the Chinese mainland more daunting than in 1997. Because mainland China's economy is still growing, residents count on Hong Kong's integration into the motherland to safeguard their commercial future. However, the mainland's growth rate now has slowed, its foreign investment has declined, domestic unemployment and labor unrest have risen, and its banking system, many experts say, approaches insolvency. Because of these conditions and that of Hong Kong's own retracted economy, some say the center of concern for most residents has shifted from politics to economics. Such a shift would ignore a lesson that rises from other Asian societies, and Western experience as well: prosperous economies and liberal democracies are related.

Even some journalists insist that the economy, not politics, is now more urgent. They observe little concern about restricted freedom in Hong Kong, since people are demonstrating and speaking out as they did under British rule. One example in support of this view occurred last year in May, in the midst of the bitter controversy over the Beijing-appointed Provisional Legislative Council. An activist group, Catholic Monitors on Legislative Councillors, proclaimed that seven ordinances passed by the body were "sinful," and pronounced the entire legislature unlawful and unjust. As a further sign of the SAR government's open-mindedness, some commentators have noted, the administration allowed the popular pro-de mocracy legislators, ousted from their elected seats when the 1995 legislature was abolished by Beijing appointees, to be returned to the council in the May 24 elections last year.

For many in Hong Kong, exposure to democratic government is very limited--or nonexistent. Hong Kong lacked de mocracy during some 150 years of British colonial rule, although it benefited from British-planted democratic values and freedoms. But from a world democrat's point of view, it can be seen that the British began to live up to their espoused democratic standards in Hong Kong only when Governor Patten attempted to broaden participation in government in the waning years of British rule.

Yet, despite the advantages of a free society (the most important part of what was transferred in 1997), the memories of hardship which residents or their relatives had carried to Hong Kong from the Chinese mainland rivet attention to making a living in a stable, uncontentious environment. And for most Hong Kong residents, maintaining the prosperity to which they have become accustomed grows more worrisome. Unemployment, formerly 2.3 percent, now at six percent, is expected to increase to at least seven percent later this year. The finance industry, the backbone of the economy, stands battered by the Asian economic crisis--the effects of which began to be felt the day after the handover celebrations, when troubles in Thailand became evident.

Amid Hong Kong's economic troubles, it is not difficult to understand how government officials might easily convince residents that economic interests are more crucial than democratic advancement. They are trying to do so on the basis that uncertain election outcomes for a directly elected legislature in 2000, or a chief executive in 2002, could threaten stability. A steady pace for democratization, they claim, is spelled out sufficiently in Hong Kong's "mini-constitution," the Basic Law, which does not allow for a review of electoral procedures until 2007. Even then, reformers note that the Basic Law provides no guarantee of future democracy, and the rules of review contain provisions to block the eventuality of universal franchise for all elections.

In East and West, Patten reminds that Hong Kong was transferred to the PRC with the "hardware" of a capitalist economy, buttressed by the "software" of a pluralist society that allowed the former to thrive. But the interrelatedness of democratic rights and economic freedoms is acknowledged, at least publicly, only by Hong Kong's handful of active democrats. Con fronted with sagging public confidence, the Tung administration--closely counseled by many of Hong Kong's prominent business leaders--now anxiously looks for ways to preserve the hardware. Meanwhile, the software becomes laden with bugs. Inattention to the software suggests, as Patten demurely implies, that Hong Kong's business leaders themselves do not understand what has made Hong Kong successful.

In Hong Kong: China's New Colony (London: Aurum Press, 1998), Stephen Vines recalls that the practice of stacking the Executive Council (or the governor's cabinet) with well-heeled business elite declined only slowly under British rule. But in Patten's last cabinet, such deference to business interests was reduced to the Hong Kong and Shanghai Bank seat--presumably because of the bank's undeniable importance to the community. Tung Chee-hwa, Vines observes, "quickly re vived old practices by stacking his cabinet with big-business types and their friends." This returned to life the problem of business elites' wielding power without public accountability--a mode of governmental operation with which Tung and his associates appear determinedly comfortable.

The Hong Kong government, again dominated by business interests, unveiled plans for a new US$1.7 billion "cyberport" in March 1999, as a way to address Hong Kong's declining economy, which had shrunk 5.1 percent in 1998. Critics maintain that Hong Kong is unlikely to be easily transformed into an Asian Silicon Valley, since Hong Kong--compared, for example, with Taiwan--lacks requisite technical skills and experience. Another much talked about project, a theme park under discus sion with the Walt Disney Company, has surfaced as a potential uplift for the economy, but it seems an unlikely solution to Hong Kong's recession conundrum.

Tung, a dutiful student of appropriate mainland political behavior, follows a mainland pattern which, Vines maintains, ducks policies that deviate from party lines and avoids initiatives that could displease leaders in Beijing. The likelihood, therefore, that Tung and his advisers will speed democratic reform to undergird the economy is remote.

The difficulties of Tung's surrounding himself with advisers, who are of vested business interests and opposed to democ racy while ingratiating themselves with Beijing, became obvious early in his five-year term. In October 1997, Tung an nounced a wish list addressing various social issues that included 85,000 new units of public housing per year for ten years. But soon after, property magnates showed their lack of enthusiasm for housing deals when the economy was tightening, by refusing to bid at government land auctions and by stopping some projects.

Eleven months after the handover, the government suspended land sales at auctions altogether in an effort to prevent a sharp decline in property prices--but with a deleterious side effect: it deprived the government of a main source of revenue. In April 1999, when land sales resumed, some analysts predicted a rise in property prices of fifteen to twenty-five percent. The difficulty is that such increases could further diminish Hong Kong's competitiveness--with advantages redounding only to those deeply invested in real estate. Big business is at the center of the new political order, as Vines points out, and seven of ten Hong Kong companies invest in real estate. Moreover, the real estate business accounts for one of every ten jobs. Some analysts suggest, however, that a rebound in property prices, unsupported by fundamentals, would have the negative effect of detracting from efforts to diversify the economy.

The financial crisis has undoubtedly made Hong Kong people ever more alert to their dependence on mainland China. But many appear passive, as the Tung administration chips away the software that Patten views as imperative.

To date, the defining characteristic of experience with mainland China's "one country, two systems" formula for Hong Kong has been the hidden-hand control of leaders in Beijing and its gradual erosion of the region's freedoms. This has been facilitated by the appointment of Tung, who, with his advisers, can be relied on to marginalize Hong Kong's democrats. Vines describes it this way: "With unseemly haste Tung...ordered an immediate review of the [election] system and produced a masterpiece of gerrymandering which was sufficiently complex to ensure that the bulk of the electorate would not be able to grasp the audacity with which the new regime planned to undermine the electoral process."

Not surprisingly, the results of the May 1998 Legislative Council elections were that, despite winning more than a majority of the popular vote in geographical constituencies, democrats secured only nineteen seats--shy of one-third of the new sixty-seat legislature. (Five of these seats were won in indirect elections in functional constituencies, or special interest groups--a skewed election method rejected by most democratic societies, including Taiwan.) In 1991, the first year Hong Kong voters were allowed to elect directly some legislators through geographical constituencies, democrats won sixteen of eighteen contested seats. By 1995, under Patten's democratic reform initiatives, democrats won eighteen of twenty geo graphical constituency seats. These, together with functional constituency seats they had gained, gave the democrats half the seats in the legislature--allowing them, with alliances, sometimes to shape significant votes.

Since in past elections the pro-democracy candidates won both the largest number of directly elected seats and the greatest percentage of popular votes, in 1998 the Tung administration contracted the franchise. Patten's reforms had ex panded it, allowing one million people to vote in the heretofore narrow functional constituencies. The number eligible to vote in this method in 1998 was whittled to 230,000 people, 139,000 of whom chose to register. Nevertheless, this limited con stituency elected thirty seats, or fully one half of the legislature. When Rowan Callick considers the most significant changes that have occurred since 1997, in Comrades and Capitalists: Hong Kong Since the Handover (Sydney: University of New South Wales Press, 1998), it is not suprising that he concludes, "The most important and controversial changes have been those to the legislature and to legislation."

Further denying Hong Kong's people choice of all their representatives, the upcoming election of the region's eighteen local district boards is being modified. These boards were established in 1981, and by 1994, all board members were directly elected. But in 1999, 102 appointed and twenty-seven ex-officio seats will be added to the 390 directly elected. This is an effort to minimize the ability of pro-democracy forces to gain a majority of seats. Analysts expect that pro-democracy candi dates could win 250 of the directly elected seats, and pro-PRC and pro-government candidates 140. The addition of appointed seats will give anti-democratic forces the majority. Pro-democracy activists anticipate that another setback in local, popular -based government will be the Tung administration's abolition of the Regional and Urban Councils by the end of this year.

The rule of law, which Patten,Vines and Callick deem essential to Hong Kong's survival as a financial and trade center, is also in trouble. The Bar Association, many legal scholars, and pro-democracy activists are disturbed by decisions of Hong Kong's secretary of justice, Elsie Leung. This concern prompted the legislator representing the legal functional constituency to present a no-confidence motion against the secretary in March. The challenge was narrowly defeated when most legislators from the pro-business Liberal Party abstained, after apparently intense lobbying by Tung.

One of many complaints against the secretary of justice is that she did not challenge the Provisional Legislative Coun cil's amendment of the Public Order and Societies Ordinances, enacted to be retroactive to the day of the handover. The additions that were made authorized police to prohibit demonstrations on national security grounds and the government to refuse registration to any group it believes endangers national security, public order, or the rights and freedoms of others. Critics assert that these revisions revive restrictive colonial provisions that had been abolished during Patten's term, and violate both Hong Kong's 1991 Bill of Rights and the International Covenant on Civil and Political Rights, which the Basic Law stipulates must be honored.

Questions about equality before the law have also been raised under Justice Secretary Leung's watch. Leung refused to prosecute Xinhua (the New China News Agency), mainland China's front for the Chinese Communist Party in Hong Kong, which allegedly breached the Personal Data (Privacy) Ordinance. By demanding to see the file Xinhua keeps on her, Emily Lau, an outspoken pro-democracy legislator, tested the government's resolve to make Beijing's representatives in Hong Kong abide by the laws of the region. Nine months of no response were followed by an abrupt denial that such a file was main tained.

This apparent disregard for compliance with the law was soon followed by amendment to chapter 1 of Hong Kong's laws, exempting some state organizations (including Xinhua) from some 100 ordinances. This act, according to government critics, undermined the Basic Law, since it states that all departments of the People's Central Government in Hong Kong must abide by the laws of the region. Raising further concern that selected individuals or groups were being extended special privileges and immunities from prosecution was the secretary's refusal to prosecute a prominent publisher, Sally Aw Sian--as a co-conspirator in a corruption case.

The integrity of judicial review of laws--and also family freedoms--is in doubt. The region's Court of Final Appeal was forced to issue a "clarification" of its January 1999 ruling on the Basic Law stipulation that provides right of abode for all mainland-born children of Hong Kong's permanent residents. The court said in January that it had a "duty" to declare invalid in Hong Kong any laws passed by the PRC's National People's Congress which violated the Basic Law. But when mainland Chinese officials demanded an unprecedented "rectification," the court issued a statement in February that it could not ques tion the authority of the National People's Congress to do any act (which it deemed was) in accordance with the Basic Law. The mainland government's criticism of the court for "overriding" the authority of the National People's Congress and then demanding that it "rectify" its "mistake" exemplifies the difficulty of implementing the "one country, two systems" policy, which has been crafted and is now being implemented by authoritarian officials, primarily--if not exclusively--for the economic system. Of the two systems, mainland China's and Hong Kong's, the second must be subject to the first. And, as Callick observes, it is more difficult to determine where the country ends and the system begins.

Hong Kong is in a significant economic downturn, while simultaneously its freedoms and autonomy undergo diminu tion. Callick maintains that Hong Kong's democratic inclinations would be even more compromised were it not for the one million protesters against the Tiananmen massacre in 1989, and the successful example of Chinese democracy in nearby Taiwan. It remains to be seen whether most people will see that circumstances for Hong Kong have changed significantly, so that in addition to diversification of business, preservation of existing freedoms and advancement of democracy become basic ingredients for future prosperity. Cynics argue the disconnect is historical and permanent, and anyway, Hong Kong's people lack consensus about living in a democracy. But as the fifty-three percent turnout and the capture of two-thirds of all votes by democrats in the May 1998 Legislative Council elections could indicate, residents may no longer be able to afford to trade off their civil and political rights for the chance for prosperity.

Copyright (c) 1999 by Deborah A. Brown.