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HONG KONG: PLACE WHERE EAST MEETS WEST

Teymur NABİLİ

As we know today, Hong Kong was born when the government of the Chinese Qing Dynasty was defeated in the First Opium War in 1842, after Hong Kong Island was ceded to Britain. Kowloon, the New Territories and 235 Outlying Islands have also been rented to Britain over 60 years.

Hong Kong has acted as a center of international trade since its earliest days as a British colony. In the tumultuous years of the early 20th century, immigrants, mostly from China, helped the population of the region. The arrival of immigrants in large numbers helped launch a new role for Hong Kong as a major manufacturing hub. It also introduced the essence of the city to economically enhancing power and manufacturing. While Mainland China’s economy has experienced a process of opening up in recent decades, Hong Kong has once again turned itself into a service-based economy as well as a big gateway to the largest market in the world.

On 1 July 1997, Hong Kong became a Special Administrative Territory of the People’s Republic of China under the concept of’ One Nation, Two Systems’. This agreement allows the region to maintain a high degree of autonomy, including the preservation of its capitalist system, independent judiciary and the rule of law, free trade and free speech.

The complex history of Hong Kong explains its present crisis with China. Elections started in 2014 using a Beijing-vetted list of candidates. This and other Chinese actions, such as a recent attempt to allow extradition to the mainland, led to mass protests, disrupted British- Chinese diplomatic relations, and raised growing concerns about China stifling public dissent, interfering in local politics.

Economy

The economic role of Hong Kong in promoting China’s economic development’s strategic aspects is critical. About 1,500 multinationals have chosen Hong Kong as their global headquarters base. Approximately 60 percent of foreign investment in China and a similar proportion of its outbound investment are channeled into Hong Kong. Under the’ one nation, two systems ‘ agreement negotiated as part of Britain’s territorial transition to China, Hong Kong is granted rights that are impossible on the mainland, such as freedom of expression and fair justice.

Hong Kong’s economy is a highly developed free-market economy with low taxation, free port trade, and well-established international financial market. The economic freedom score of Hong Kong is 90.2, maintaining its status in the 2019 Index as the freest economy in the world. Hong Kong currency, is lawfully distributed by three major international commercial banks, interest rates are calculated by individual Hong Kong banks to ensure that they are market- driven. The Hong Kong Monetary Authority acts as a financial regulatory authority. The gross domestic product of Hong Kong has risen 180 times since 1961 and 1997.The regular rate of income tax is 15% and the top rate of corporate tax is 16.5%. It’s a simple and efficient tax system. The total tax burden is equal to 14.0% of the total domestic income.

Those rights grant Hong Kong a global special status, allowing it to sign trade and investment deals independently of Beijing — for example, it does not have to pay the tariffs imposed on Chinese imports by the United States.

China uses the currency, bond and debt markets of Hong Kong to attract foreign investments, while international firms use Hong Kong as a launchpad for expansion into mainland China. The bulk of FDI in China continues to be channeled through the region. Most of China’s largest companies, ranging from state-owned Chinese Industrial and Commercial Bank to private firms such as Tencent Holdings, are listed in Hong Kong, often as a springboard for global expansion. Last year, Chinese companies earned $64.2 billion worldwide — almost a third of the total worldwide — from initial public offerings (IPOs), but only $19.7 billion of that came from listings in Shanghai or Shenzhen, according to Refinitiv reports, relative to $35 billion in Hong Kong.

Protests

The extradition bill was introduced in April which caused the first outcry. Under certain conditions, it would have allowed criminal suspects to be extradited to mainland China. Opponents said this meant Hong Kongers being subject to unequal trials and abusive punishment. Critics also suggested that the bill would allow China greater influence in Hong Kong and could be used to intimidate protesters and reporters. Following months of protest, chief Carrie Lam reportedly said that the bill would be indefinitely suspended. Protesters worried that the bill might be resurrected, but marches persisted, calling for it to be entirely removed.

By then, fights between police and protesters had become more regular and aggressive. In September, the bill was eventually repealed, but protestors said it was “too little, too late.”On 1 October, as China was marking 70 years of Communist Party rule, Hong Kong witnessed one of its most” violent and tumultuous days.”An 18-year-old was shot in the chest with a live bullet as protesters battled o. The government then prohibited protesters wearing face masks, and a man pretending to be a supporter stabbed a pro-Beijing lawmaker on the street in early November.

A week ago, as protesters tried to set up a road block, a cop killed one protester at close range. Another man was set on fire by anti-government demonstrators later that day. In November, a standoff between police and students barricaded on Hong Kong’s Polytechnic University campus became another defining moment. Later that month, local council elections were held in the city, and were seen as a barometer of public opinion.Some protesters have adopted the motto: “Five demands, not one less!” These are:

  • Full removal from the legislative process of the extradition bill: although on 15 June the chief executive declared an indefinite suspension of the bill, reading on it can be resumed quickly. The bill was in the Legislative Council “pending the resumption of second reading.” On 23 October, the bill was officially withdrawn.
  • Retraction of the definition of “riot”: the government initially characterized the protest as “strike” on 12 June. The explanation was later changed to say that “some” protesters were rioting. Protesters, however, deny the existence of rioting acts during the protest of 12 June.
  • Release and exoneration of detained demonstrators: protesters view arrests as politically motivated; they also question the legitimacy of police arresting protesters in hospitals by accessing their private medical information in breach of patient privacy.
  • Establishment of an independent commission of inquiry into police conduct and use of force during the protests: Civic groups believed that the level of violence used by the police on 12 June, especially those against protestors who did not commit any crimes at the time of the demonstration, was unjustified; police carried out stop-and-search operations with multiple passers-by near the protest site without any evidence. It is seen as a lack in transparency that some officers refuse to disclose or show their police identification number or warrant card despite being allowed to do so by the Police General Orders. There is no transparency for the new authority, the Independent Police Complaints Council, and its work is focused on police cooperation.
  • Carrie Lam’s resignation and the introduction of universal suffrage for the elections to the Legislative Council and the appointment of the Chief Executive: the Chief Executive is currently chosen by the 1,200-member Election Committee and 30 of the 70 seats of the Legislative Council are filled by members from various sectors of the economy, making up the majority of the so-called functional constitium.

U.S. Interests in Hong Kong

The U.S. presence in Hong Kong could be traced back to 1843, when its first consulate was established; but U.S. activities in Hong Kong only became apparent during the Cold War era, when the U.S. replaced Britain as the dominant geopolitical power in Asia. Originally, after World War II, Washington took the view that Britain should return Hong Kong to China, then under the Kuomintang rule, but the rise of “Red China” in 1949 changed its stance toward Hong Kong. In the Cold War, along the “Bamboo Curtain” that demarcated communist governments and the “Free World” during Asia, the U.S. regarded Hong Kong as a neutral foothold.

The U.S. strategy towards Hong Kong is based on a commitment to foster Hong Kong’s stability, autonomy and lifestyle, is set out in the 1992 U.S.–Hong Kong Strategy Act, which stipulated that the U.S. will continue to treat Hong Kong apart from the People’s Republic of China even after the transition of sovereignty in 1997 marking the end of British rule. The U.S. holds strong economic and political interests in Hong Kong. The United States supports Hong Kong’s sovereignty by securing and implementing bilateral agreements; promoting trade and investment; facilitating high-level visits; enhancing law enforcement cooperation; enhancing economic, science, and cultural ties; and assisting significant U.S. citizens and tourists populations.

Hong Kong is an active member of the global counter-terrorism alliance and has joined the Container Security Initiative and remains a major participant in reducing support for terrorist networks and countering money laundering. Hong Kong passed legislation in accordance with applicable United Nations anti-terrorism resolutions and Financial Action Task Force recommendations.

The United States has strong economic and social relations with Hong Kong. Hong Kong has some 1,100 U.S. companies, including 881 corporate operations (298 national headquarters and 593 regional offices), including some 85,000 U.S. individuals. Department figures, U.S.

Exports to Hong Kong amounted to $17.8 billion in 2006. U.S. direct investment in Hong Kong at the end of 2006 amounted to about $38.1 billion, making the U.S. one of Hong Kong’s largest shareholders along with China, Japan, and the Netherlands.

China Interesests on Hong Kong

The Chinese government has started to flex its muscles, forcing Western companies to censor their own workers. Many companies are already caving, even big ones, including Apple, the NBA, and Blizzard Entertainment, a gaming company.

Communists in China are afraid that any compromise in Hong Kong could also unleash democratic demands on the Mainland. So they are increasing their power efforts, leading to more marches, then more arrests, and the cycle continues. Police now regularly refuse protest permits, leaving no legal means to express their anger to Hong Kongers.

Beijing said it would not sit idly by if Chinese stability and sovereignty were threatened by the unrest in Hong Kong. The incidents in Hong Kong were an internal matter said by Chinese officials and condemned foreign interference. But many world leaders have urged caution. Many U.S. lawmakers have threatened to amend and stop treating the Hong Kong Policy Act of 1992 as a separate customs area from the mainland. This depends on their determination this Hong Kong is autonomous enough from Beijing. Some intervention by troops from the mainland is likely to be a deciding factor in making the decision. Even if Beijing does not rely on the so-called “nuclear option” of using troops, signs of more open and direct interference in the affairs of Hong Kong and ongoing street clashes could prompt global investors to look for other low-tax financial centers with highly respected legal systems, such as Singapore.

World Reaction

On August 19, both Twitter and Facebook revealed that they had uncovered what they described as large-scale disinformation campaigns operating on their social networks. Facebook reported that protesters ‘ images and videos had been distorted and stripped from meaning, often with captions designed to vilify democracy activists and their cause.

Some of the astroturfing activities were orchestrated state-backed operations linked to the Chinese government, according to inquiries by Facebook, Twitter, and YouTube. Twitter established a core group of approximately 1,000 “false” accounts, along with an expanding spam network of 200,000 accounts, all of which were “proactively suspended;” Twitter published two data sets exposing the core team. In response to its results, Facebook disabled a seven-page network, three groups (including one with 15,500 followers) and five accounts (including one with 2,200 members). Google announced on 22 August that it had disabled 210 YouTube channels involved in “coordinated influence operations” around the protests in Hong Kong, “consistent with recent Facebook and Twitter statements and actions related to China.” It said the accounts were “closed using VPNs and other methods to mask the sources.”

In June, Tsai Ing-wen said she was “with the people of Hong Kong, and pointed out that after fighting for democracy, Taiwan had to protect and innovate. At the same time, I also repeated the condition in which democracy in Hong Kong has deteriorated rapidly after the transfer of sovereignty.” And that as long as it remains the government, one country, two systems can never be an option for the transfer of sovereignty. The Hong Kong government has been criticized by the Ministry of Foreign Affairs for using Taiwan as an excuse to push the bill, noting that the government of Hong Kong has repeatedly rejected the government’s offer to extradite Chen Tongjia. The Republic of China’s Foreign Minister, Wu Zhaozheng, said he was very worried that the Chinese government would seek more aggressively to disperse demonstrators and that such actions should not be accepted by the international community.

Earlier on August 12, the ruling Democratic Progressive Party issued a statement on Facebook firmly denouncing Beijing’s and Hong Kong government’s violent acts across the moral ground. The announcement claimed that Tsai Ing-wen and relevant government units indicated that they would provide assistance in the form of humanitarian rescue in individual cases. Executive President Yuan Su Zhenchang subsequently confirmed that the Republic of China is concerned with Hong Kong and provides the necessary care. On the one side, it must protect the sovereignty and freedom and democracy of Taiwan, so that for democracy and freedom such as Hong Kong, Taiwan will not be violently suppressed.

In June 2019, Chancellor Angela Merkel’s spokesman, Steffen Seibert, said it was a good sign that the majority of demonstrators were nonviolent “and we appeal to all concerned to ensure that things stay just as peaceful in Hong Kong.” Merkel said in August 2019 that she hoped to end the conflict through friendly talks. It also means that the Constitution (Basic Law) and the security of the rights of citizens must be at the center of any discussion.

At Chatham House in mid-July, former Prime Minister Theresa May said China “needs to abide by and continue to be supported” by the Sino-British Joint Declaration. Foreign Secretary Dominic Raab denounced “violent acts by all sides,” but stressed the right to peaceful protest, adding that “hundreds of thousands of Hong Kong people have chosen this path to express their views,” and was criticized by the Hong Kong authorities.

Michelle Bachelet, High Commissioner for Human Rights of the United Nations, said “We are troubled by the high levels of violence associated with some demonstrations that have taken place over the past few days”, and “Freedom of peaceful assembly… should be enjoyed to the greatest extent possible without restrictions. But on the other hand, we can not accept people who use masks to provoke violence”.She also called on the government of Hong Kong to conduct “prompt, independent, impartial investigation” into the use of force by police against the protesters.

The European External Action Service said on 12 June in Hong Kong that freedoms “need to be respected”: “The Hong Kong people have exercised their fundamental right to assemble and express themselves freely and peacefully over the past few days.

What History Tell Us: Umbrella Protests

The 2014 protests were about getting the universal suffrage provided in the Basic Law to Hong Kong, the constitution that defines how to rule the city after its 1997 return from Britain to Chinese sovereignty.

In the light of the actual situation in the Hong Kong Special Administrative Region and in keeping with the concept of steady and orderly development, the method for selecting the Chief Executive shall be stated. The ultimate goal is to appoint the Chief Executive by universal suffrage upon election in compliance with democratic procedures by a generally representative nominating committee.

While the Basic Law did not include a date for that to happen, nor did the UK-China agreement for the return of Hong Kong, the Chinese legislature’s standing committee said in 2007 that the chief executive would “be” elected by universal suffrage in 2017. (The governor appointed by the United Kingdom was the highest office in the city before the handover).

As the demonstrations dragged on, there were scenes that look awfully familiar today, like assaults on demonstrators and their tents by pro-Beijing gangs. There was a government offer of dialog— the new despised chief executive, Carrie Lam, was the face of that effort — and a public discussion. But as the weeks went on and support for the sit-in decreased, others left the streets alone, while the trio behind the Occupy manifesto also encouraged people to leave as the actions of the police became more violent. Not all universal suffrage was accomplished by the marches. In 2017, the “election” chief executive saw Carrie Lam selected by the same 1,200-person committee as in previous contests, winning with all 777 votes, a number that inspired the city’s off-color jokes.

 

Teymur NABİLİ – Graduated from Bilkent University, department of Economics, getting master’s degree at Linköping University, department of Strategy and Management in International Organizations (Msc) – SWEDEN

 

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