Hong Kong’s society and economy have changed under 20 years of Beijing’s influence. Chinese capital has bought out companies and real estate and job seekers from the mainland compete with Hong Kong citizens. The influx has generated social problems by exacerbating inequality, and many worry it is diminishing Hong Kong’s identity. The Cipher Brief spoke to Mathew Wong, a professor at the University of Hong Kong to learn more about how Beijing’s administration has changed Hong Kong economically and socially and what these changes could mean for its future.
The Cipher Brief: Looking back at the transfer in 1997, what did experts and policymakers envision for Hong Kong’s future? Twenty years later, how does reality differ from that vision?
Mathew Wong: I think at that time people expected a more drastic change, as should probably be expected given the transition from a colony to a Chinese special administrative region. Not much had changed in the immediate period following 1997. However, looking back after 20 years, a lot has actually changed. Chinese capital now controls much of the Hong Kong economy and properties. Values that Hong Kong people used to believe in, such as freedom, rule of law, and the lack of corruption, seem to be slowly eroding. Chinese tourists and immigrants greatly affect the ordinary lives of local people. The difference is that all of the changes were very gradual and not drastic.
TCB: Can you explain a bit about how the “one country, two systems” policy works in practice? What are some of the areas of friction between Hong Kong and Beijing? What are some aspects that work well?
Wong: The one country, two systems is a framework which ensures China's sovereignty while granting Hong Kong “a high degree of autonomy.” Hong Kong gets to keep a lot of its previous systems, including financial system and judicial system. The policy also promises "universal suffrage" to elect the chief executive, which creates the expectation that democracy in the Western sense would be implemented. This promise was meant to last for at least 50 years after the 1997 transfer.
Overall the system works very well in ensuring economic freedom and competitiveness, as Hong Kong still ranks very high in these areas around the world. The system played a major role in stabilizing the economy and retaining investments. Politically, however, the system seemed to be working well in the initial years, but after a governing crisis in 2003 China shifted its approach and more often intervenes into Hong Kong affairs.
The major area of friction is democratization. As suggested above Hong Kong people widely expect full democracy. China offered a "suffrage" proposal including a popular vote, but the nomination of candidates would be tightly controlled, so it might simply be a ballot among pro-Beijing figures, with no democratic substance. This controversial proposal led to strong opposition and eventually the Umbrella Movement in 2014. The proposal was voted down in the legislature by the opposition.
Other areas of concern also relate to how China intervenes into Hong Kong. Nominally Hong Kong should govern itself under a high degree of autonomy, but the practice is that China maintains a tight control on local affairs, notably via an obedient chief executive. As Beijing has tight control over the selection of the chief executive, it is obvious that he or she would not prioritize local interests over Chinese ones.
TCB: What is the legacy of the 2014 Umbrella Movement and what are the general sentiments about the state of democracy and the one country, two systems policy?
Wong: The general sentiment is disappointment over the policy and the unfulfilled promise of democracy. There is also a huge swell of pessimism following the end of the Umbrella Movement, as it ended without any observable gain. People started to think that if a movement on such a large scale could not change anything (the strong stance of China), what is to be done? People either become pessimistic, or become more radical, leading to the rise of those who advocate self-determination or even independence. Of course, China would not tolerate these ideas and they were dealt with harshly.
In the long run, the Umbrella Movement might have some positive impact through educating the public about democracy or bringing Hong Kong back to the international audience. But these are too vague and perhaps too early to be considered as legacy.
TCB: What is the significance of Chinese President Xi Jinping’s visit to Hong Kong for the 20th anniversary of the transfer?
Wong: It is a gesture to instill confidence and stability for the new government. The visit would have extreme security measures so it would largely be official business, carefully planned and smoothly conducted with no surprises. He is expected to oversee the oath-taking ceremony of the new government and attend meetings with selected elites from different groups.
TCB: Given Hong Kong’s relations with Beijing during the last 20 years, where do you see it headed in the near future?
Wong: I think Hong Kong will gradually become an ordinary Chinese city without its uniqueness. Hong Kong is constantly integrating with China in every aspect, e.g., daily Chinese immigrants, Chinese capital, infrastructure, policy, and the gradual decline of liberty. To give some examples, Hong Kong has received 150 Chinese immigrants (chosen by China) every day to become Hong Kong residents. That is about 1 million out of 7 million of our total population after 20 years. Given the rising economic power of the mainland, Chinese capital can easily outbid local or foreign companies on Hong Kong assets. Nowadays a lot of land and buildings are owned by Chinese companies. The government spent a lot of resources on projects which seem to fit with the needs of the mainland instead of Hong Kong’s. In recent years there are also reports that people were abducted from Hong Kong by Chinese authorities, which are previously unheard of. If this trajectory continues (and I expect it to) Hong Kong would not be much different from other Chinese cities very soon, despite the one country, two systems policy.
