China's Hong Kong: The Politics of a Global City

By Tim Summers

In 1997, Hong Kong became a special administrative region of China under the “one country, two systems” framework. In this new edition, Tim Summers brings his analysis of the politics of Hong Kong fully up to date and discusses the ramifications for the city of the mass demonstrations of 2019–20 and the city’s intensifying confrontational politics that have culminated in China’s new national security law for Hong Kong.

In the process, Hong Kong has lost the sweet spot it occupied for four decades in a world of intensifying economic globalization and decent US–China relations, all the more so after Covid-19. Instead it finds itself at the frontline of US–China strategic rivalry. Summers explores how the city’s future will be shaped by the interaction of these global tensions with Hong Kong’s polarized local politics and its relationship with Beijing.

• Language: English
• Publisher: Agenda Publishing
• Release date: Nov 19, 2020
• ISBN: 9781788213356

Tim Summers

Tim Summers is an assistant professor in the Centre for China Studies at the Chinese University of Hong Kong and a senior consulting fellow on the Asia-Pacific programme at Chatham House, based in Hong Kong. He was a British diplomat for 13 years, including five years in Hong Kong (1996–2001).

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Business with China

Series Editor: Kerry Brown

The titles in this series explore the complex relationship between Chinese society and China’s global economic role. Exploring a wide range of issues – from the legal system to class, from investment to finance – the series challenges the view of a country enclosed in on itself, and shows how the decisions made by Chinese consumers, the economic and political choices made by its government, and the fiscal policies followed by its bankers are impacting on the rest of the world.

Published

China’s Hong Kong

Tim Summers

The Future of UK–China Relations

Kerry Brown

CHINA’S HONG KONG

The Politics of a Global City

Second Edition

Tim Summers

To Lucy and George

© Tim Summers 2019, 2021

This book is copyright under the Berne Convention.

No reproduction without permission.

All rights reserved.

First published in 2019 by Agenda Publishing

Second edition 2021

Agenda Publishing Limited

The Core

Bath Lane

Newcastle Helix

Newcastle upon Tyne

NE4 5TF

www.agendapub.com

ISBN 978-1-78821-332-5 (hardcover)

ISBN 978-1-78821-333-2 (paperback)

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Typeset by JS Typesetting Ltd, Porthcawl, Mid Glamorgan

Printed and bound in the UK by CPI Group (UK) Ltd, Croydon, CR0 4YY

Contents

Preface to the second edition

Note on transliteration

Glossary and abbreviations

Map

Introduction

1. Hong Kong before 1997

2. Implementing the handover settlement

3. Hong Kong’s economy, globalization and the rise of China

4. The Occupy movement and its aftermath

5. International dimensions of the Hong Kong SAR

6. A year of protest

7. Hong Kong’s future

Timeline: Key dates in Hong Kong’s political history

Notes

Index

Preface to the second edition

The writing of this book has been caught up in the rapid changes in Hong Kong’s politics. The first edition was almost complete and ready to go to press in June 2019 when major protests erupted in Hong Kong. Thanks to the nimble work of Agenda Publishing, I was able to add a short Afterword to the first edition, covering events up to 17 June 2019, including the two most substantial and largely-peaceful protests on 9 and 16 June, as well as more violent scenes on 12 June. At the time, it looked as if the government’s announcement on 15 June that it was suspending the extradition bill which was the catalyst for the protests meant that things might subside before too long. However, the protesters had the wind in their sails, and the events of mid-June turned out to be just the beginning of a long, hot summer and autumn of unrest in Hong Kong.

A little more than a year on, it seems to be tempting fate to try to finalize a second edition of this book. Much has changed over the past year, irrespective of the impact of the Covid-19 pandemic which has dominated many people’s attention in 2020. In Hong Kong politics, the year which began with the June 2019 protests culminated in the controversial passage in Beijing of a national security law for Hong Kong on 30 June 2020, the eve of the twenty-third anniversary of Hong Kong’s return to Chinese sovereignty.

This second edition contains a new Chapter 6 covering the last year in detail to the beginning of August 2020; too much has happened to include everything, and these events are recent and highly contested, but the chapter reflects my best efforts to make sensible judgements about them. This is followed by a new Conclusion which attempts another look at the future of Hong Kong. I have kept other changes to the first edition to a minimum.

Many of the underlying trends I identified in the first edition remain relevant today in the way that local, national and global forces are intertwined in shaping the politics of China’s global city. However, uncertainty is rife locally and globally, and we should expect more flash points over the coming months and years in Hong Kong. There is plenty more politics to come.

Tim Summers

Hong Kong

Note on transliteration

This book makes occasional use of Chinese characters. I use the traditional full-form version of Chinese characters dominant in Hong Kong rather than the short form in use in mainland China. As is common practice in writing about China, I follow these in the text with the standard Putonghua (or Mandarin Chinese) romanization, known most commonly as pinyin. However on occasions where the phrases are more particular to Hong Kong or to Cantonese I have chosen to use instead the Yale romanization for Cantonese (without diacritical marks which indicate intonation), to reflect the way that these characters are spoken by most people in Hong Kong. These usages are marked [Cant.].

Many people in Hong Kong have adopted non-Chinese names for use in English, or write their names using initials with the surname second (C. K. Wong or Lucy Chan, for example), and I tend to follow that practice when talking about people from Hong Kong. However, when referring to Chinese officials such as Xi Jinping, I follow the practice elsewhere in China that the surname comes first, including in English. For non-Cantonese Chinese names I use the contemporary pinyin spelling, with the exception of historical figures and references, such as Sun Yat-sen, Chiang Kai-shek and the Kuomintang (Nationalist Party), where I adopt the more common versions in English.

The book uses US dollars to refer to economic indicators. Where these are converted from source data in Hong Kong dollars this is done at a rate of US$1 = HK$7.80, reflecting the peg put in place in 1983. Amounts in renminbi or RMB (China’s currency) have been converted using average exchange rates for the year in question. Tables in Chapter 3 outline some economic data, in particular gross domestic product (GDP) taken from data published in 2018. In the text most of the references to annual rates of growth in GDP are to figures published at the time, rather than to the revised figures using current prices indicated in the tables. I hope that any inconsistency is minimal.

Glossary and abbreviations

Hong Kong Special Administrative Region of the People’s Republic of China

Introduction

In 1997, some 156 years after being taken as part of the spoils of the first Sino-British Opium War, the British colony of Hong Kong was handed over to the People’s Republic of China (PRC). What seemed like the closing of the final chapter of the British Empire sparked attention from around the world. For the Chinese leadership and much of the population this was symbolic of their country’s gradual return to its historical position as a major power. But for Hong Kong and its people, a somewhat uncertain future lay ahead.

The handover followed more than 15 years of Sino-British negotiations, a process which had resulted in commitments that Hong Kong would continue to enjoy the main features of its existing system under Chinese sovereignty. This was the one country, two systems framework under which Hong Kong was established as the PRC’s first Special Administrative Region (SAR) on 1 July 1997.

After the handover, global interest in Hong Kong waned. That changed in the autumn of 2014, when Hong Kong’s Occupy movement erupted, with protestors camped out on the streets of Hong Kong’s central business district for 79 days, amidst intense debates about changes to the way the city’s leader would be selected. Massive protests in June 2019 and their aftermath have again cast attention on developments in the city. Hong Kong’s politics and its future have returned to the spotlight.

Growing interest in Hong Kong has not just been fuelled by protests. Since 1997 the rise of China has proceeded apace as its economy overtook that of Japan in 2010 to become second in size only to the United States. The extent and pace of this rise and China’s integration into the global economy had not been fully expected back in 1997 and has prompted growing debate and uncertainty about the intentions of the Chinese leadership and the impact on the rest of the world of China as a major power. Hong Kong’s experience offers some insights into the consequences of this new Chinese power and influence. For China watchers and policy makers, the past few years have seen Hong Kong return to the agenda in discussions about China’s global future, even more so in 2019 and 2020.

Hong Kong’s story has always been a global one, and part of the development of modern China too, as many scholars have argued. But the nature of global influence on Hong Kong has changed, from British-dominated colonialism when Britain was still a power to be reckoned with in Asia, through Hong Kong’s growing importance to the United States in the context of the Cold War, to something more cosmopolitan but very much reflecting the post-Cold War consensus around liberal models of development under the banner of globalization.

Throughout its history, therefore, Hong Kong has been an important, unique interface between China and much of the rest of the world. It remains so today. It is still one of a small number of global financial and business centres, and one of the most open societies in Asia. A small and densely populated place, Hong Kong is open to flows of people, capital and goods. Its population is wealthy when measured by average GDP per capita, although Hong Kong’s prosperity is unevenly distributed (see the table below for some key data).

This book examines Hong Kong and its politics in global context from its return to Chinese sovereignty in 1997 to the middle of 2020. The aim is to understand Hong Kong, not just as a place in its own right, but as a special part of a country, China, which has changed dramatically since the 1990s, and which continues to be transformed rapidly and in many ways. The book is also based on the premise that events in Hong Kong reflect global developments which have shaped Hong Kong’s politics, society and economy in the past and continue to do so in the present. I hope therefore that this is a book not only about Hong Kong, but about China and the fast-changing world in which we are living.

Table 0.1 Key economic and social statistics (2017)

Source: Hong Kong SAR Government Census and Statistics Department, converted to US dollars at a rate of HK$7.80 = US$1.00.

THINKING ABOUT HONG KONG TODAY

Key to understanding Hong Kong since 1997 is the one country, two systems framework, set out in 1984 in the Sino-British Joint Declaration and in China’s Basic Law for Hong Kong of 1990. The one country part of the formula indicates that Hong Kong was to be part of China, with Chinese sovereignty fully and formally recognized. The two systems component indicates that after 1997 the new Hong Kong SAR would maintain its existing system and way of life, from basic rights and freedoms to property ownership. Enjoying a high degree of autonomy, Hong Kong would be vested with executive, legislative and independent judicial power. It would remain a free port and a separate customs territory, enjoy independent finances, and remain an international financial centre with free flow of capital.

Examining the implementation of this one country, two systems policy has been central to most analyses of Hong Kong since 1997. This dominant framing tends to look at developments in Hong Kong predominantly – sometimes exclusively – as a function of a relationship between Hong Kong and China’s central or national-level state apparatus, or what goes by the shorthand of Beijing (see Box 0.1).¹ Judging the success or otherwise of the implementation of one country, two systems is indeed an important question. But if we assume that Hong Kong’s current and future development is simply the result of policy from Beijing then we miss lots of other things going on, not least the extent to which Hong Kong actors themselves have shaped the city’s trajectory.

This dominant framing has spawned popular narratives of Beijing tightening its grip on the SAR. At least up to 2020, I have tended to see a different Hong Kong, one where power has been diffused, agency fragmented, and polarized politics means that compromise and give and take are in short supply. To stretch the point somewhat, over recent years it has sometimes seemed as if no-one is in charge. Challenging some of the conventional wisdom on the Beijing–Hong Kong relationship will be the first of four analytical themes running through the book.

BOX 0.1 CHINA’S POLITICAL SYSTEM

China today is formally the People’s Republic of China (PRC). The PRC was established in 1949 by the Chinese Communist Party after a brief civil war with the Nationalist Party or Kuomintang (KMT) which followed Japanese occupation of much of the country during the Pacific war. Although the first few decades of the PRC’s existence were politically turbulent, the basic structures of today’s political-administrative system have their origins in the 1950s. The PRC is a unitary state, where formal constitutional power lies at the central or national level and is exercised through both Party and state institutions. The main institutions of the Communist Party of China (CPC or CCP) are a central committee of around 370 members constituted every five years by a national party congress, with a politburo of 25 and politburo standing committee of seven making most of the key decisions. The state apparatus consists of a national people’s congress (NPC) as the highest organ of state power (as opposed to Party power), and the state council which operates as the executive branch of government. The military – the People’s Liberation Army (PLA) – remains an important part of the political structure, although less so than in the early decades of the PRC.

These institutions are mostly replicated through various sub-national levels of government, from provinces, municipalities and autonomous regions, through prefectures and cities to townships and districts and down to villages. Although a unitary state, substantial power to implement policy and spend public finances lies at these local levels of government, with some scholars suggesting that China’s system has evolved towards de facto federalism. Hong Kong and Macao sit at the sub-national level as special administrative regions (SAR) of the PRC, a status created in the 1982 revisions of the state constitution, but with very different political and constitutional arrangements from the rest of the PRC. The Communist Party itself does not have an open presence in Hong Kong, but operates unofficially out of the Liaison Office of the Central People’s Government (between 1947 and 2000, it was housed in the Hong Kong branch of the Xinhua News Agency).

The second, related, theme is that developments in Hong Kong – especially over recent years – have echoed many of the changes we have seen in other societies in different parts of the world. Politics has become more polarized and fragmented, socio-economic divides have grown, and consensus about the future has shattered as different visions and understandings of local and global developments have come to the fore. Elites have become out of touch with their populations, and politicians have looked elsewhere for scapegoats (in Hong Kong’s case the bugbear is Beijing). Immigrants are blamed for a host of social problems. Many of the more recent dislocations have their roots in the developed societies of the West, from the global financial crisis of the late 2000s, through the populism which saw the election in 2016 of Donald Trump in the United States and Brexit, the United Kingdom’s decision following a referendum earlier the same year to leave the European Union.

What is driving these phenomena elsewhere in the world remains a matter of debate, but it seems clear that many of the assumptions of an era of globalization and the spread of democracy which started – or intensified – from the 1980s have increasingly been challenged. This can be seen in Hong Kong too.

Change in China has been a big part of this world in flux. China’s post-1978 reform and opening up took shape at the same time as businesses were reorganizing production in a turn to a neoliberal free market form of globalization. China’s integration into the world economy since then, especially since the early 1990s, has dramatically reshaped globalization, as the extension of global supply chains led China – or more accurately parts of coastal China – to become the factory of the world. As noted above, the economic and social transformations in China which have ensued have elevated it to the world’s second largest economy (the largest when GDP is measured using purchasing power parity methods), although in spite of some of the fearful rhetoric from western capitals, there are good reasons to conclude that in general quality does not yet match quantity. Amidst the current debates over China’s approach to development, I continue to judge that China has so far risen economically largely by playing the West’s game.²

I explore later (especially in Chapter 3) some of the ways in which Hong Kong has been a part of this story, both shaping and being shaped by the economic rise of China and its incorporation into the global economy. The point to make at the start of this book is that Hong Kong is part of both a global and a Chinese story, and that many of the changes in China themselves are best understood by reference to global developments. This wider perspective is therefore needed to understand Hong Kong.

The third theme of the book is the relationship between politics and economics. In many ways Hong Kong politics and economics proceeded on separate, or parallel, tracks for much of recent history. More recently these tracks converged and became increasingly intertwined, as they have elsewhere. We shall see this most clearly in Chapter 4’s discussion of the Occupy movement and its aftermath.

The final theme is about the ways in which various groups both within Hong Kong and outside it have different understandings about the extent and meaning of the handover settlement, Hong Kong’s status, what has been promised, and what has actually happened since 1997. To some extent these different understandings have been conscious choices to emphasize different aspects of the one country, two systems formula. I am often reminded of the Cantonese phrase the chicken and duck talking 雞同鴨講 [Cant.] gai tuhng ngaap gong used to describe people talking past each other.

For the Chinese leadership, the important point has always been the exercise of sovereignty over Hong Kong as part of China. Its goals in Hong Kong have consistently been sovereignty, stability and prosperity (in that order). Within Hong Kong – and much of the international community following its development – it has not been the one country element but the two systems which has been emphasized. The main goal has been to maximize autonomy, whilst framing discussion of Hong Kong in this way has often – deliberately or otherwise – missed the constraints on that autonomy which were set out in the Joint Declaration and Basic Law, which qualify the SAR’s autonomy with the phrase high degree. This has been even more relevant since the summer of 2019.

The four analytical themes of this book are therefore that developments in Hong Kong are not reducible to dynamics between Hong Kong and Beijing, that global factors and trends are reflected in Hong Kong, that politics and economics have become increasingly intertwined, and that there have been serious differences in expectations and understandings. These themes come together in an overall argument: developments in Hong Kong reflect the complex interplay of politics and economics with a rapidly changing and complicated China, all infused by the influence of global developments and the