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Hong Kong’s Battle for Democracy, Beijing’s War Against It

Politics / Hong Kong Oct 02, 2014 - 09:16 PM GMT

By: Submissions


Ted Baumann writes: One spring day in 1988, I stood in a crowd of thousands of young people. Over us hovered helicopters; in front of us stood armed riot police. We sought democracy. The power of the state sought to deny it to us, with pepper spray, batons and rubber bullets. Unstoppable force met immovable object. Friction ensued, with all its heat and light. I can still perceive its imprint in my mind’s eye.

The first years of the 21st century have seen this drama repeated on every continent. Yugoslavia in 2000. Georgia in 2003. Ukraine in 2004. Lebanon and Kyrgyzstan, 2005. The Arab Spring of 2001. Venezuela in 2013.

And now the quest for democracy stages its script in Hong Kong, one of the world’s premier financial centers — which happens to be under the authority of a nominally Communist party. As I write, tens of thousands of people, young and old, confront the proxy might of Beijing in the form of the police forces of the Hong Kong Special Administrative Region of the People’s Republic of China. At midnight last night, the conflict escalated significantly, as protesters occupied government buildings.

Is Hong Kong’s prosperity in danger? If so, what is that danger? It isn’t what we have been led to believe …

My views on political liberty were shaped by the South African struggle against apartheid. Democracy was an uncontroversial notion then. Almost the entire world agreed that a racially-exclusive franchise was illegitimate and must be ended.

But there is no such agreement in respect of Hong Kong.

Western Import or Basic Human Right?

Hong Kong has never known democracy. In the wake of the First Opium War of 1839, the British Empire transformed a sleepy fishing village into an imperial entrepôt that served as a staging ground for its exploitation of the Chinese mainland. For the next 156 years, Hong Kong was governed as a British Crown Colony. Only in the 1980s did indigenous Hong Kongers obtain significant rights to political participation.

Since the territory’s transfer to China in 1997, Hong Kong has been governed under a Basic Law negotiated between Chinese Communists and British diplomats, with behind-the-scenes input from powerful financial interests. It provides for significantly greater democracy than the British ever allowed.

Hong Kong’s Legislative Council (LegCo) is comprised of 40 representatives elected directly by the people and 30 elected by “functional” constituencies such as industrial, labor and finance associations. Candidates for Chief Executive are selected by an electoral college comprised of representatives of the functional constituencies. The final selection, however, is made by Beijing.

The current dispute pits Hong Kongers who want both the LegCo and the Chief Executive to be elected by direct universal suffrage, without interference from Beijing, against the Communist Party of China (CPC), which insists that it retain the right to make the final selection.

A Capitalist by Any Other Name

Many people instinctively see the events in Hong Kong as evidence of the anti-democratic nature of Communism. In this view, the CPC resists democracy because it sees itself as the vanguard of a revolutionary struggle that will one day wipe out capitalism and usher in a worker’s paradise.

Nothing could be further from the truth.

On August 28, Wang Zhenmin, an academic who advises the mainland government on Hong Kong issues, spoke to Hong Kong’s Foreign Correspondents’ Club. He was sent by Beijing in anticipation of the September 1 announcement by the National People’s Congress Standing Committee that the next chief executive of Hong Kong would be chosen by Beijing.

Wang’s message was unmistakable. Giving people in Hong Kong an unfettered choice in who they could vote for would impinge on the interests of the city’s richest residents, whom, he said:

Control the destiny of the economy in Hong Kong. If we just ignore their interests, the Hong Kong capitalism will stop. […] We must guarantee the continued development of capitalism in Hong Kong. […] Universal suffrage means the redistribution of economic interests among society’s members. We have to take care of every class. […] Especially those whose slice of pie will be shared by others upon the implementation of universal suffrage […] So we have to take full consideration of their concerns.

In other words, the Communist Party of China — heir to Mao Zedong’s glorious peasant revolution, architect of the Cultural Revolution, vanguard of the Chinese Proletariat — opposes true democracy in Hong Kong in order to protect the interests of Hong Kong’s capitalist elite.

Wang did not need to say that the interests of Hong Kong’s tycoons are identical to those in China itself. China has the highest number of billionaires in Asia — 122, second only to the U.S. Most of those achieved their status via connections to the CPC. Many are family members of leading CPC figures.

Names Matter …

Shakespeare wrote that “a rose by any other name, would still smell as sweet.” That has long been my guide to politics. Look beyond words; focus on actions and outcomes. Words like “communism” have power, but mainly over those who aren’t watching carefully to see what’s really happening.

Beijing is not “communist.” If anything they are watered-down fascists. Fascism combines totalitarianism, a single-party state, nationalism and a mixed economy. The ruling party is motivated by the desire for power and to harness capitalism’s power to create wealth. Like communism, fascism is inherently anti-democratic. Power must be retained by the Party, who knows best what’s good for the nation.

Selfish, unprincipled capitalists like fascism because it protects their short-term interests. As long as the CPC keeps the masses in thrall and allows Hong Kong and Chinese tycoons to get and stay rich, they will support Beijing’s stance on curbing democracy. If Beijing does crack down on Hong Kong, it will probably not harm their long-term interests, even if their short-term profits take a knock.

… And So Do Principles

This isn’t just speculation on my part. I’ve heard directly from wealthy individuals in Hong Kong who strongly oppose the pro-democracy forces and support Beijing unreservedly. They fear democracy much more than totalitarianism.

Let me be clear: I don’t think Hong Kong is in any danger of losing its status as Asia’s leading offshore banking, asset protection and stock-trading hub. It is far too valuable for Beijing to allow that to happen. Wealth remains safe there.

But as I was taught by my father, our own Bob Bauman, that wealth isn’t the only thing that should motivate us. Principles matter too, and equality before the law — including the right to participate in one’s own governance — are pretty powerful principles. We abandon them at our peril.

You can take that to the bank … in Hong Kong or anywhere else.

Kind regards,

Ted Baumann
Offshore and Asset Protection Editor
© 2014 Copyright  Ted Baumann - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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