The Hong Kong Protests: the Price of Democracy May Be Economic Prosperity

Protesters march during a flash mob protest in Hong Kong, on Friday, Oct. 11, 2019. Hundreds of masked protesters gathered at Chater Garden in central Hong Kong on Friday to rally against police brutality and show their support for students who have been arrested during the ongoing anti-government demonstrations. (AP Photo/Kin Cheung)
Protesters march during a flash mob protest in Hong Kong, on Friday, Oct. 11, 2019. Hundreds of masked protesters gathered at Chater Garden in central Hong Kong on Friday to rally against police brutality and show their support for students who have been arrested during the ongoing anti-government demonstrations. (AP Photo/Kin Cheung)

Joseph V. Micallef is a best-selling military history and world affairs author, and keynote speaker. Follow him on Twitter @JosephVMicallef.

When Great Britain first indicated in the 1980s that it was considering returning Hong Kong to Beijing's rule, the presumption was that the "one country, two systems" transitional period would be long enough to allow mainland China to evolve towards a more democratic government respectful of civil liberties that would ultimately be compatible with Hong Kong's civic and legal norms.

Hong Kong, of course, has never been a democracy. Ever since its creation in the wake of the first and, later, second opium wars, Hong Kong has been directly governed by London-appointed chief executives.

Nonetheless, as a British colony, Hong Kong was afforded the civil liberties and individual protections of Great Britain's legal system, even though it was not run by a freely elected "representative government."

Hong Kong's curious status as a society with wide-ranging civic freedoms and personal legal rights, which was also governed in an undemocratic fashion, seemed a contradiction in terms. The presumption has been that over time either Hong Kong's civil liberties would be eroded or that the former British colony would adopt democratic and representative governance. After the British handover to Beijing, the key question was whether Hong Kong would become more like mainland China or would China become more like Hong Kong.

Recent developments suggest that rather than being an example for Beijing to emulate, however, Hong Kong seems destined to come under mainland China's increasingly authoritarian orbit.

Over the weekend of October 6, the most recent wave of unrest reached a new crescendo when, in response to escalating violence, Hong Kong authorities virtually locked down the city. The operation of the extensive subway system was suspended, while banks and shopping centers were closed. Over the course of the week, violence has continued to escalate.

Civil unrest is nothing new to Hong Kong. Indeed, over the last several decades, the rush to the barricades has emerged as a common response to proposed government policies that were unpopular among Hong Kong citizens.

In 2003, for example, Hong Kong citizens took to the streets to oppose the introduction of the draconian National Security bill. Because of that opposition, the bill was eventually suspended and lapsed before being implemented.

The same thing happened in 2012 when, at Beijing's direction, the Hong Kong government introduced the Moral and National Education syllabus in the area's schools. The program was sharply criticized as a brazen propaganda attempt in support of the People's Republic of China's (PRC) government. That bill was withdrawn immediately prior to the 2012 Legislative Council elections.

In 2014, protests again erupted when the Hong Kong government proposed tightening the criteria that the election committee would use to select candidates for Hong Kong's Legislative Council. The protests triggered the Occupy Movement, which has continued in fits and starts since then.

The most current period of civic unrest was triggered by the 2019 Extradition and Mutual Legal Assistance bill. The measure would allow the extradition of suspects to the mainland and the freezing of Honk Kong domiciled assets.

Technically, it would be a breach of the governing "one country, two systems" model. Hong Kong has extradition agreements with quite a few countries, but it doesn't have one with the PRC.

The extradition bill has been suspended, but it has not been formally withdrawn. At some point if not formally voted upon the bill will lapse, the equivalent of withdrawing it.

Over the weekend of October 3, in the wake of China's National Day celebrations commemorating the 70th anniversary of the Chinese revolution, there was a sharp escalation in violence with at least two incidents of protesters being shot by police -- one of whom remains in critical condition.

The protests have been deeply embarrassing to the government of Chinese president Xi Jinping, as has the inability of the Hong Kong government and its Chief Executive Carrie Lam to bring the protests to an end.

Lam has offered financial concessions, including expanded housing subsidies and other forms of government largess. The Chinese government has also used limited shows of force, like parading police and military units and their equipment across the border in neighboring Shenzhen. Neither tactic has had much impact on the protests.

Beijing seems determined to avoid a repeat of the Tiananmen Square incident in 1989. Significantly, the Hong Kong protests have not precipitated any supportive protests on the mainland. In fact, they have resulted in pro-Beijing protests in cities as diverse as Vancouver, BC and Toronto, Ontario.

As long as the Occupy Movement does not spillover into mainland China, Beijing can be patient. If the Hong Kong protests start resonating in China, however, Beijing will move swiftly to crush the movement regardless of the international repercussions.

Beijing's actions are further constrained by the ongoing trade dispute with the U.S. The protesters have been quick to appeal to the U.S. for political support, going as far as waving American flags and singing "The Star-Spangled Banner" during the protests.

The Trump Administration has been sympathetic with the aims of the Occupy Movement for greater transparency and more democratic governance, but has not directly intervened or openly supported the protesters.

One underlying factor that has helped galvanize the protest movement has been Hong Kong's steadily deteriorating economic performance. Compared to Singapore, with whom it shares many similar characteristics, the Hong Kong government has failed to move the country's economic base further up the value-added manufacturing ladder.

Most of Hong Kong's light manufacturing base has moved over to the mainland. It has not been replaced by new, higher value-added industries, as has been the case in Singapore.

Hong Kong remains an important banking and services center, and is still the preferred domicile for expatriate companies and their employees in south China. The growth of Shenzhen and Guangzhou, its neighbors in the Pearl River delta, however, have steadily eroded Hong Kong's advantages. Moreover, Hong Kong has steadily lost ground as China’s financial center to Shanghai.

Unemployment rates remain low and most college graduates are able to obtain jobs, but starting salaries have been largely stagnant, while the cost of living, especially the cost of real estate, has continued to increase sharply. Most first-time home buyers find it impossible to buying housing without the support of family. As one protester put it during a recent visit to Hong Kong, "This is not about economics but about transparency and representative, democratically elected government. The fact that the country's economic fundamentals are deteriorating only underscores the lack of transparency and the inability to make changes in the country's political leadership."

Most of the protests occur during the weekends. The protesters themselves span all ages, although students and young people are overly represented. The protest movement seems well organized and well-funded with professionally produced signs and placards.

One persistent rumor that is making the rounds in Hong Kong is that the Occupy Movement is receiving significant financial assistant from elements within the Chinese government, and from factions within the Chinese Communist party that are unhappy with the consolidation of political power under Xi Jinping and are using the Hong Kong protests to embarrass Xi and to prompt the Politburo to curb his political authority.

According to that conspiracy theory, if Xi was to announce that he would not stand for a third term as China's president and would step down in 2022, after his second term at China's helm, as his predecessors had done, financial support for the protest movement would dry up.

It's even been suggested that some of the violent incidents on the part of the protesters were specifically engineered by mainland provocateurs.

Fundamentally, at the heart of the Hong Kong protest movement is the fact that the country has a long history of civil liberties and personal freedoms without the democratic institutions and governance that typically accompany those liberties and which allow citizens to determine who governs them and the policies their leaders pursue.

At the same time, the strategy of "one country, two systems" is not leading to a convergence in the political institutions of mainland China and Hong Kong.

As Beijing has continued to consolidate political power under the Xi presidency, and expanded the degree of control that it exerts over China's civil society, those two systems have grown further apart, not closer.

A divergence that has been further aggravated by Beijing's attempts to impose more control over the political and legal administration of Hong Kong.

Hong Kong’s current situation is also complicated by the fact that over the long term its prosperity continues to be dependent on its role as a gateway and major services center for China. That role presupposes good relations between Hong Kong and Beijing. Continued friction will only accelerate Beijing’s desire to reduce the role of Hong Kong in China’s economy, a role that has already been diminished substantially, in favor of a larger role for Shenzhen and Shanghai. Over the long term, a more democratically governed Hong Kong is probably incompatible with Beijing’s support of its role as a major gateway to China.

Regardless of the conspiracy theories that are making the rounds in Hong Kong, or the continuing issues with the Hong Kong’s government economic strategy and administration, the ongoing struggle to reconcile Hong Kong’s civil liberties with its status as an undemocratically governed country will lead to continuing conflict between its citizens and its government, a conflict that will be made all the more acute by Beijing’s heavy hand. In the meantime, continued frictions will only serve to diminish Hong Kong’s role in China’s economy and in the process Hong Kong’s future prosperity.

-- The opinions expressed in this op-ed are those of the author and do not necessarily reflect the views of If you would like to submit your own commentary, please send your article to for consideration.

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