Goodbye Hong Kong

We’re about to say farewell to an old friend . . . a friend of freedom.  “ADD OIL!  ADD OIL!”

Hong Kong 2019: one of Four Rising Asian Tigers of the 1960s (credit: Benh LIEU SONG)

As a historian I’m interested in how the past makes the present look the way it does.  Because, after all, it hasn’t always looked this way.

Along these lines, we see the appearance of four small East Asian countries that all of us know; and which most of us assume have always been on the world scene as economic, political, and cultural contributors. But they haven’t. Only during the 1960s period do South Korea, Taiwan, and Singapore arrive as players, and they have such dynamism and growth that they are commonly called either “tigers” or “dragons.”

Hong Kong c. 1890, HSBC Building at left

Most recently, with the United States concerned with elections and a virus pandemic, China has tightened its grip on the most democratic fourth tiger of this quartet, Hong Kong.  And it is this tiger that is the perverse, yet crucial, subject of this “The1960sToday” column.

Great Britain handed Hong Kong back to China in 1997 – won first in the Opium Wars of the middle nineteenth century, managed as a direct colony of the Crown, and governed on a simple 99-year lease since 1898.

In the early 1980s, Chinese and British delegations engaged in 22 rounds of negotiations to work out the terms under which transfer would take place. In December 1984 Prime Minister Margaret Thatcher and Premier Zhao Ziyang (below right) signed a Sino-British declaration in Peking (Beijing), which put into effect what is known as the “Basic Law,” – a de facto constitution for Hong Kong – and designated the former colony as a “Special Administrative Region” of the People’s Republic of China. The British put in as many safeguards for democracy as possible, then trusted its partner on the other side of the negotiating table to honor these safeguards that created “one country, two systems.”  Since then the world has witnessed the slow undoing of this handiwork, and the betrayal of the Chinese promise laid down by treaty to maintain Hong Kong’s autonomy and capitalist economy for fifty years – until 2047.

1984

The 1997 handover was the final piece of British imperial withdrawal that started in earnest after World War II in 1945, and picked up speed with each passing year. The fact that Hong Kong was among the last to go was one thing.  What made it so emotional was because of what it had become under British rule: a city of unfettered capitalism, a laboratory for liberal democracy, and a symbol of freedom to the world.

The 1960s had made it so.

With resources depleted after the financial, physical, and human costs of the Second World War, London was hands-off her Asian colony. Nor did China interfere with Hong Kong despite its close proximity. For the entire period of this 1960s Project, China furiously turned inward in the twin horrors of modernization called Great Leap Forward (1958-61) and the Cultural Revolution (1966-1976).

Enjoying what some would call “salutary neglect,” management of the 426 square-miles that make up the total area of Hong Kong fell to two Hong Kong governors – Britishers Sir Robert Black (1958-1964) and Sir David Trench (1964-1971). And it was steered by a third: the free marketeer, Sir John Cowperthwaite, who served as financial secretary from 1961 to 1971. A policy of minimal involvement was noticeable, since most parts of the world after World War II saw increasing government guidance of their societies. Hong Kong went the other way; and flourished.

Economist Milton Friedman (1912-2006) considered Hong Kong a model of free market economics. See excerpt from his series Free to Choose https://youtu.be/xqh0zXSd4vc

Businesses were unusually easy to start, and unencumbered by regulations or tariffs. The islands brimmed with entrepreneurial energy, with most of the population of 3 million under 25 obliged to self reliance and ingenuity since the government provided only the barest of public assistance. Hong Kong also had thousands of grateful and resourceful citizens who had fled Mao’s communists initially in 1949, and continued to come from the mainland with their experience and connections. Institutions with knowledge and commercial ties in the region such as the Jardine Matheson Trading Company and the Hong Kong & Shanghai bank – both over a century old – were eager to support, cover loses, and extend credit terms to any one with prospects.

In the 1960s real wages rose by 50%, public primary education became universal, and health services, though spare, improved steadily – with negligible aid from Britain. When Cowperthwaite handed the financial reins to his successor Sir Philip Haddon-Cave in 1971, the editors of the Hong Kong Annual Review predicted a “golden age” for the colony with foundations laid by actions and policies of the 1960s. They were right.

Between 1961 and the 1997 handover, Hong Kong’s GDP grew 180 times, and per-capita GDP increased by a factor of 87 – to $48,717.  And Hong Kong’s vitality is no more vividly seen than in its well-known and dazzling architectural skyline that climbs the hillside of the New Territories and so dramatically encircles Hong Kong harbor. The Heritage Foundation’s Index of Economic Freedom ranked Hong Kong #1 every year since it started tracking in 1995.

#1 until 2019 . . . when cracks – developing since the 1997 handover – began to affect real freedom in Hong Kong.

THE SEQUENCE

• 2002 (June): Beijing tries for sedition 16 HK members of spiritual group, Falun Gong, a group illegal in PRC, legal in HK
• 2002 (Sept): HK chief executive Tung Chee-hwa entertains proposals for enactment of anti-sedition measures contained in the Basic Law (Article 23)
• 2004: Beijing claims authority to approve HK chief executives
• 2014: Beijing states interests of China prevail over HK’s constitutional autonomy, gutting the Basic Law and the “One Country, Two Systems” pledge of 1984; leads to massive street demonstrations (“Umbrella Revolution”)

• 2015: reports of disappearance of pro-democracy activists begin
• 2017: President Xi Jinping goes to HK to swear in current Chief Executive, Carrie Lam.
• 2018: President Xi made Chinese ruler for life, rivaling power of Mao Tse Tung (1949-1976)
• 2019 (June) China passes Extradition Bill against Hong Kongers
• 2020 (June) National People’s Congress Standing Committee passes the National Security Law for the Hong Kong Special Administrative Region, including hotlines for HK citizens to inform on each other anonymously to crack down on “subversion.”

And then . . . while writing this column . . .

• 2020 (November 11): on the authority arrogated to itself under the National Security Law, the People’s National Congress in Beijing passed a resolution allowing Hong Kong’s government without the due process of the Basic Law to disqualify specific legislators deemed to endanger the security of the territory.

Just minutes after passage, HK Chief Executive Carrie Lam unseated four democratically-elected pro-democracy lawmakers from the Legislative Council (LegCo). The remaining 15-member pro-democracy bloc quit to protest China’s intensifying crackdown on dissent in the city.

“Today starts a whole new ballgame on how the battle of democracy will be fought in Hong Kong,” said pro-democracy LegCo member, Wu Chi-wai. Reflecting on his voluntary resignation, he said “Sooner or later we would all have been disqualified.”

And in an emotional Wednesday news conference, the 19 and a gathered crowd chanted the now familiar protest refrain of “Add Oil ! Add Oil !” that originated from the Macao Grand Prix Auto Race in the 1960s. This time, “Add Oil !” didn’t mean for cars to step on the gas, and it wasn’t the 1960s any more. This time, it was 2020, and the same chant meant step up for freedom: “Hong Kong ! Add Oil ! We Stand Together !”

Four dismissed lawmakers (L to R), Dennis Kwok, Alvin Yeung, Kwok Ka-ki, Kenneth Leung

News conference of pro-democracy bloc

HK Legislative Council Chamber

The lights of the skyscrapers that surround Victoria Harbor still sparkle and impress. But the laboratory of the marketplace of which Adam Smith and Milton Friedman would be proud, and to which the 1960s contributed mightily, is beyond endangered today. For so long a magnet for world money and talent, even Hong Kongers are now torn whether to go or stay.

At the start of this column, we said that current Hong Kong provided a “perverse” example of The1960sToday.” We meant this in the sense of being opposite between the period of the 1960s and now. But how ?

The British moved Hong Kong from a virtually uninhabited island grouping of farmers and fishermen in the 19th century to a world-beating financial and commercial hub in the last half of the 20th. And one of the seminal times in this rise came in our period of the 1960s and early 1970s, when the British parliament was pleased that the colony demanded little of it because the British taxpayer’s inability to financially assist in Hong Kong development was exceeded only by his disinterest in doing so. So laissez-faire, hands-off was the magic of prosperity.

Like Britain, China in our period of the 1960s and 1970s was hands-off; terribly preoccupied, inwardly focused on its programs of crash-course development, and militarily feeble. Hong Kong and the outside world were little considered, even spurned.

Territory within red “Nine-dash Line” claimed by China

With the death of Mao came a comparatively liberal period in China between 1979 and 1989 under Deng Xiaoping and others. It was during this time the British cut their agreement for Hong Kong’s future. After 1989, by 1997, and certainly with the rise of Xi Jinping China as absolute leader, China had achieved more stability domestically than in the turbulent 1960s.  It now balanced domestic politics with an aggressive adventurism regionally and internationally made possible by an export-led command economy and, above all, military strength. For Hong Kong, this meant not the hands-off, but big-time hands-on, interference which we see now.

Backed into a fait accompli of an expiring 99-year lease, laissez-faire Britain did all it could on paper to protect Hong Kong legally, but little did it know China would reemerge with a latter-day Mao in the person of Xi; or that China would drive so aggressively for hegemony in the South China Sea – in which a recalcitrant Hong Kong would not only be an intolerable embarrassment but a barrier to the consolidation of naval supremacy in the region.

Wonderful Hong Kong flourished with the lightest of hands during our period. Time will tell now if a heavier hand will change everything. Taiwan, another Asian tiger of the 1960s, will be watching.

Until next time,
PEA
peterevansaustin@gmail.com

November 12, 2020