Tea Leaf Nation
Hong Kong Is a Modern City Without a Modern Government
Beijing has franchised control to a tiny group of super-rich capitalists.
On the evening of Tuesday, Oct. 21, Hong Kong student protesters demanding universal suffrage in the election for the city chief executive and the city’s legislature (called "Legco") sat down with their territory’s government — finally. The issue now is not whether the Hong Kong government negotiates with students; it is whether Beijing allows serious negotiation with Hong Kong legislators who also must consent to any change.
Read more from FP on Hong Kong
But because of requirements in Hong Kong’s Basic Law, its mini-constitution, that any change in electoral law must receive a two-thirds vote in the Legco, each of three entities can veto constitutional change in Hong Kong: Beijing, democratic legislators, and tycoon legislators (that is, legislators elected not by Hong Kong people but by so-called "functional constituencies" that largely represent business). This prevents the city from solving its problems, which include outdated housing, the need to care for an aging population, insufficient jobs for workers after Hong Kong’s manufacturing economy has mostly moved into China, oligopolies that fleece Hong Kong people, and corruption at the top of the city’s government.
Beijing, which has averred it retains the right to pre-vet candidates for Hong Kong’s 2017 election of a chief executive, is allergic to any suggestion that public protests can affect policy. But current unrest will continue to weaken Hong Kong in future elections for its head of government unless China, Hong Kong democrats, and Hong Kong tycoons move toward solving the issues causing the upheaval. So far, all three have been too proud to do so.
Beijing is unwilling to budge. It may not really want the mass "universal suffrage" vote for chief executive that the Basic Law promised as an "ultimate aim," and that Beijing’s rubber-stamp legislature promised in 2007 would occur in the 2017 election. China is sticking to that timeline, but with nominees pre-approved by a committee that Beijing controls. Disingenuousness hurts Beijing’s legitimacy among half of Hong Kong people, as reliable surveys show. China’s own laws raised the possibility of more democracy by now, and Hong Kong merits it; it is a more modern city, with less political apathy, than it was in colonial times.
Meanwhile, democratic legislators have vowed to vote against a law instituting chief executive elections of the restricted-nomination Iranian kind, in which Beijing becomes like an ayatollah who must approve all nominees that appear on the universal suffrage ballot. If democrats veto the change, Hong Kong would then revert to the 2012 form of chief executive election via committee, one that does not include public participation.
As to the legislative elections, democrats have reason to distrust Beijing’s vague promise that the unrepresentative "functional constituencies" that elect a substantial number of legislators might be abolished soon. But after everybody sees that such a change does not lead to disaster for Hong Kong or China, it would later delegitimize the same lack of broad representation on the chief executive nomination committee. The democratic legislators may veto a universal suffrage election in order to preserve their vow against restricted nominations — even though doing so would not open nominations, and would delay the chance of opening elections both for the executive and the Legco in future years.
Tycoons are also proving recalcitrant. The committee to nominate or elect Hong Kong’s executive is not "broadly representative," despite a Basic Law mandate that it be so; the chief executive committee and functional constituencies in Legco grossly over-represent tycoons. In effect, China’s communists have franchised Hong Kong governance to a tiny group of super-rich capitalists. The wealth of billionaires in Hong Kong equals over 70 percent of Hong Kong’s annual GDP, a much higher proportion than any other polity on earth. (The runner-up is Russia, whose billionaires have a mere 20 percent of GDP.)
This dynamic prevents the passage of budgets needed to solve public problems. Wages are taxed, but lightly, while dividends, interest, inheritances, and capital gains are tax-free. Oligopolies in groceries, pharmaceuticals, and property create extra "rents" that resemble non-state taxes, paid to the tycoons who also control Hong Kong’s government. Anti-trust laws are condemned as state intervention. Welfare is branded shameful, even for people who truly need it. But Hong Kong is a modern city, with demographics that feature a rising dependency ratio — that is, a growing number of elders relative to young workers who can support them — which calls for more public spending on medicine, education, and renovation of dilapidated housing that the government built before Hong Kong corporations moved their blue-collar jobs to the mainland.
Beijing, if it wished, could bypass the tycoons, however formidable they may be. China now needs Hong Kong tycoons’ capital and trade connections less than it once did. Chinese President Xi Jinping could afford to give Hong Kong’s democrats a promise about the year when functional seats in the Legco would disappear, as the Chinese congress suggested in 2007. Xi has on his side in Hong Kong a quasi-communist party, called the DAB. But he may well not care whether Hong Kong has mass elections. The tycoons also care less about their links with Hong Kong citizens than about profits abroad and in China.
Elections are struggles, attracting attention and creating politics. Even in an election of the Iranian type, campaign dynamics give similar candidates incentives to differentiate themselves. That means voters get at least some choice — for example, in Iran’s 2013 presidential balloting, the least conservative candidate won. That is what Hong Kong’s elections for Legco have done, but they’ve accomplished little more, making the body the best-legitimated powerless talk shop in the world.
Sociopolitical divisions are so deep in Hong Kong that Beijing, the democrats, and the greedy tycoons are all acting too proud to compromise. The result is sad: a modern city without a modern government.