The End of the Road for Hong Kong’s Tycoons

by Jamie Kenny

Hong Kong’s Beijing-backed tycoons had a sweet deal. But they were too greedy and stupid to keep the show on the road.

First published: 10 November, 2014 | Category: China

Almost six weeks into the Occupation of Hong Kong, the main protest sites—at Admiralty in the government district of Hong Kong Island and Mong Kok over the channel in Kowloon—have begun to take on an air of permanence, at least if the numbers stencilled on the tents for the benefit of postal workers are anything to go by. Neither the demonstrators nor the government show any sign of budging over the headline issue that divides them, namely Beijing’s insistence on vetting candidates for the first full Chief Executive election in 2017.

Currently, the post is filled by a selection committee stacked with pro-Beijing nominees. Under the planned changes, this will morph into a nominating committee, whose choice of candidates will be put before the public. Naturally all such candidates will be acceptable to Beijing. But this stifling of genuine political choice also suits the native ‘tycoonocracy’ since it ensures that their domination of the local economy goes unchallenged.

This point was put forcefully by Wang Zhemin, Dean of the Law School at Beijing’s Tsinghua University. Speaking after the decision was made in August, Wang said explicitly that ideological vetting of Chief Executive candidates would help the ‘small elite’ in the business community which currently ‘controlled the destiny of Hong Kong’.

‘Universal suffrage means the redistribution of economic interests amongst society. The business community’s slice of pie will be shared by others. Their interests must be taken into consideration’, he added.

Dr. Wang was echoed by current Chief Executive CY Leung in an interview with the New York Times on October 20. Open elections, he said, would give too much power ‘to the half of Hong Kong that earns less than US$1800 per month’.

Many protesters say they are part of the so-called ‘sandwich classes’—too well off to qualify for what social security exists in Hong Kong, but with no chance whatsoever of being able to afford to buy a home and no prospect of leaving the parental abode until well into their thirties. They correspond to the ‘squeezed middle’ Ed Miliband used to talk about, and have roughly the same grievances.

‘Our bleak economic situation contributes to our frustrations’, wrote 18 year old protest leader Joshua Wong in a recent New York Times op-ed. ‘Job prospects are depressing; rents and real estate are beyond most young people’s means. The city’s wealth gap is cavernous. My generation could be the first in Hong Kong to be worse off than our parents’.

None of this alters the fact that the main aim of the demonstrators is to make universal suffrage in Hong Kong a matter of substance as well as form. Unlike the older generation of pan-democrats, many of whom identify as Chinese patriots and believe that Hong Kong’s mission is to spread democratic rights and practices across China as a whole, the younger protesters camping out at Admiralty are more likely to view democracy as a means of sealing off the city from Beijing’s influence or even as a matter of fundamental identity. To be a Hong Konger is to be democratic. To be democratic is to be ‘not Chinese’.

Yet economic grievances bubble up because they are real, they are a consequence of rule by a tycoon friendly oligarchy, and because the prospect of a genuinely democratic Hong Kong naturally raises the issue of how people would use their vote to change the city. On the pro-establishment side, loyalty to Beijing is not just a matter of obedience. It also reflects a lurking fear that a popularly elected government might actually raise their taxes. What we have on the streets of Hong Kong right now is a group of mainly student-age democrats facing off against a united front of local capitalists and mainland-based Communists in a city that has long since fallen out of love with its tycoons.

That wasn’t the way it used to be. Hong Kong’s dominant narrative was as Milton Friedman’s Model City; the ‘resourceless rock in the ocean’—in the words of former Chief Secretary Anson Chan—which traded and hustled its way to first world status as a poster child for benign neglect. Every year, rightwing think tanks would come from the U.S., do a quick count of the yachts in the harbour, and award the city prizes for ‘economic freedom’. Every child, meanwhile, supposedly wanted to follow the example of ‘superman’ tycoon Li Ka-shing. This is why the leading politician in Hong Kong is not the Prime Minister or the President, but the Chief Executive.

The ‘business of Hong Kong is business’ consensus has traditionally extended across most of the various parties that make up Hong Kong’s pan-democratic movement, an unwieldy alliance stretching from maverick libertarian media tycoon Jimmy Lai, through various fractious liberal formations, to the Labour Party and League of Social Democrats on the left. In the mainstream pan-democrat view, popular elections will maintain Hong Kong’s reputation as a clean, well regulated business environment. The problem is that much of big Hong Kong business doesn't seem to share this view. The years since 1997 have demonstrated that given the choice between an idealised neoliberal market economy and a corrupt, insider-dependent commercial culture, actually existing businesses would mostly prefer to be on the inside, where the money is made.

None of this implies that Hong Kong is moving leftwards politically in any profound way. Many Hong Kongers were originally refugees from the mainland from which they inherited an outlook that prioritises basic economic survival and a deep-rooted allergy to traditional leftwing rhetoric. While nobody expected Hong Kong to evolve a functioning Labour Party with enough of a vote base to get representation on LegCo, Hong Kong’s parliament, neither it nor the League of Social Democrats has managed to establish itself as the preferred choice of working class Hong Kongers. More generally, neither the pan-democrats nor the young Occupiers of the Umbrella movement have managed to articulate a link between full democracy and economic security. Indeed, attempts to set up occupation zones in low income suburbs like Yuen Long and Shum Shui Po ended early on when protesters were chased out by angry locals. 

There would seem to be fertile ground here for backlash politics, and an effective vehicle for such a mobilisation already exists in the form of the Democratic Alliance for the Betterment and Progress of Hong Kong, usually known as the DAB and regarded by many as a united front operation by Hong Kong’s underground Communist Party. If so, it isn’t apparent in the group’s politics, in which  vaguely pro-welfare and specifically pro-business planks are insecurely glued together by happy-clappy Chinese patriotism. Where the DAB has been really successful is in combining networking across traditional clan associations and community groups with a relentless focus on grassroots social work. Where Hong Kong liberals are great for ringing endorsements of democracy, the DAB will take your granny to the lunch club, sort out the neighbourhood mosquito problem and maybe find someone who will give your kid a job. While pan-democrats as a whole still command majority support across the Hong Kong electorate, the DAB brand of pavement politics has helped it become the largest single party in LegCo.

Some senior DAB members are prominent in the Hong Kong government’s distinctly spotty attempts at counter-mobilisation, such as the blue ribbon support the police movement. Others have kept their distance, perhaps waiting for Beijing to tire of the tycoon nexus and signal support for a populist turn in its management of Hong Kong politics.

If so, that will mean the end of a business oligarchy that the UK was most concerned to protect when it agreed to hand Hong Kong back. At that time, Deng Xiaoping was just starting China’s experiment with Market Leninism, and Britain’s commitment to the ‘one country, two systems’ principle was designed mainly to ensure the survival of Hong Kong’s free enterprise system if that experiment were reversed. In the mid-eighties, as negotiations were continuing, then Hong Kong governor David Wilson engineered a consultation exercise to show that Hong Kongers had no desire to participate in meaningful elections. This was at least partly to reassure both Beijing and the local oligarchy that the city’s autonomy would not extend too far into public agency.

That settlement could not last after the violent suppression of China’s own mass protest movement of 1989, which led in Hong Kong to the introduction of a partially elected Legislative Council and the promise that, eventually, Hong Kongers would be able to vote for their Chief Executive. Much of the story of local politics since 1997 has been a tale of how Beijing and the Hong Kong establishment have wriggled and procrastinated before delivering the most authoritarian interpretation possible of the relevant provision of the Basic Law.

The Hong Kong establishment seems to be completely unable to comprehend why large sections of the public find this unacceptable. ‘American slaves were liberated in 1861, but did not get voting rights until 107 years later… So why can’t Hong Kong wait for a while?’ mused Laura Cha, a member of the Colony’s Executive Council and Director of the Hong Kong and Shanghai Bank, to the local media. 

Perhaps Ms. Cha’s puzzlement is understandable: from her point of view, the ‘one country, two systems’ formula is working just fine. It’s just that her interpretation of the Hong Kong system is one in which the tycoonocracy runs local affairs without much reference to what the public wants, which has indeed been the case since 1997.

Over that time we have seen one Chief Executive resign early after plans to introduce a draconian security law were defeated by mass street protests in 2003. We have seen the candidacy of another defeated by a sex and property scandal in 2011. Even as Beijing expressed confidence in the performance of current post-holder CY Leung, he was embroiled in another scandal after it was revealed that he received millions of dollars in payoffs from an Australian infrastructure company.

Beijing probably hoped that post 1997 would produce a local version of Lee Kwan-yew, a pro-business authoritarian capable of forging a genuinely strong corporate identity for the city. In the current protest environment it could use a Nixon manqué, working to forge a populist conservative backlash against the demonstrators. What it has in CY Leung and friends is a sort of Cantonese Yanukovych-lite, too greedy and stupid to keep the show on the road.

When the protesters hit the streets, support for their actions hovered at around a quarter of the population. According to a recent poll by the Chinese University of Hong Kong, they now enjoy plurality support: not bad going for a bunch of people energetically plastered as wild-eyed extremists by Hong Kong’s dominant pro-Beijing media. It’s vanishingly unlikely that their core demand—that Beijing renounce the right to choose Hong Kong’s leader through local agents—will be met. But they have made very clear to China that the tycoonocracy model of government is reaching the end of the road. 

Correction: This piece originally asserted that Hong Kong Chief Executive CY Leung claimed that elections would give too much power 'to the half of Hong Kong that earns less than HK$1800 per month'. Leung was in fact talking about US, not HK, dollars. The piece has been changed to reflect this; we and the author are grateful to commenters below the line for drawing our attention to the error.

Jamie Kenny is a journalist and writer specialising in China. He blogs at Blood & Treasure.

Top image: Occupy Central CWB Protesters (29 September, 2014).

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