Saturday, 20 August 2016

[Undergrad/HKUSU] Stephen Ku: The Empire on its Way to Death

The Empire on Its Way to Death
Translated by Cesar Guarde-Paz, written by Stephen Ku (Undergrad, HKUSU August 2016)
(Photo: Pixabay)
In 1841, shortly after British troops landed Hong Kong, Charles Elliot, Chief Superintendent of British Trade immediately announced that Hong Kong was a free port. Hong Kong’s economy achieved thereafter a rapid growth through entrepôt trade, leading to the subsequent development of other areas, such as the cultural industry. In the 1970s, when the Cultural Revolution broke out in China and right in the middle of a serious setback both to its economy and to its people’s livelihood, Hong Kong’s trade industries were in the apex of its development, gradually rising upon the world’s stage as an international financial centre. Even if there were usual economic exchanges between Hong Kong and China, such as the outflow of capital from Hong Kong’s industries to China in the 1980s and 1990s, the economic systems of Hong Kong and China have always kept an adequate distance between themselves. However, since the transfer of sovereignty on 1 July 1997 the SAR Government has acted as the colonial agents of the Chinese Communist Party in Hong Kong and has begun to eradicate any difference between Hong Kong and China, for instance, by promoting the “Hong Kong-China economic integration”, slowly making Hong Kong’s economic structure more and more dependent on China’s situation, sowing the seeds for the common notion of “Without Chinese economy there would be no Hong Kong”. In 2003, after the SARS outbreak, Hong Kong and China signed the “Mainland and Hong Kong Closer Economic Partnership Arrangement” (CEPA), reducing barriers for trading between Hong Kong and China and lifting restrictions for individual visits from China to Hong Kong (Individual Visit Scheme) [translator's note: before China had travel restrictions for its people regarding visiting Hong Kong and Macau]. Since then, the focus of Hong Kong’s economy in trade, tourism, etc. has gradually moved towards China, with Hong Kong suffering a growing influence of the so-called red capitalism.

In an article published in February 2016 under the title “A materialist interpretation of the Chinese Communist Party violation of the promises of ‘One country, two systems; high degree of autonomy’”, political commentator Joseph Lian described how Hong Kong has received the obnoxious influence of red capitalism: “Red capitalism is really fond of Hong Kong. Over the last decade, it has had a significant presence, accounting for 40% to 60% of the total market capitalization of the recent Hong Kong’s stock market. Among the companies listed on the Hong Kong Stock Exchange, there are usually more than fifteen of the top twenty shares, ranked by market capitalization, which can be labelled as “red capitalism”. Lian points out that red capitalism has already become the “economic foundation” of Hong Kong and is gradually undermining Hong Kong’s culture, politics, institutions, etc.: “The reason everybody is contemplating the distortion and eroding of the ‘One country, two systems; high degree of autonomy’ policy lies not only behind the fact that the ideology of the authorities is different from ours but, more importantly, behind the revelation and implementation of the will behind this red capitalism”. The leak of the Panama Papers shocked the world. An investigation report led by “Ming Pao” revealed that many scions of the Chinese Communist Party’s leadership who possess a Hong Kong Permanent Resident Status control offshore companies. Hong Kong has been reduced to a very convenient place for this crony elite to launder money. Whether it is the influence of red capitalism on Hong Kong, or Hong Kong’s value for this type of capitalism, the question should not be ignored.

The colonial proxies in Hong Kong who continuously endorse the crony elite of the Chinese Communist Party have transformed Hong Kong into the stepping-stone of China’s economic development. In a policy address delivered by CY Leung in 2016, the Chief Executive points out many times how Hong Kong’s economy should continue to move closer to China: “This year marks the start of the National 13th Five-Year Plan and the implementation of the Belt and Road Initiative, as well as the launch of various innovation and technology initiatives.  It will be a year of significant opportunities for Hong Kong’s future.  Taking forward plans in hand, all HKSAR Government departments will be heavily engaged in their work”. Because of this, Leung proposed in his policy address to “enhance co-operation and exchanges between the Mainland and Hong Kong/Macao in the areas of social policies, livelihood issues, technology, culture, education, environmental protection, etc., as well as deepen regional cooperation in the Pan-Pearl River Delta Region.”. Xi Jinping’s proposed strategy, the so-called “Belt and Road initiative”, was mentioned by Leung in his policy address no fewer than 44 times, becoming the “top priority” of his policy address. It is so obvious that how CY Leung brown-nosed China, and help China to make plans for Hong Kong.

Due to the regime’s much trumpeted lemma “Chinese economy improves”, and set against the background of the “Hong Kong-China economic partnership sharing weal and woe”, the discourse of “Hong Kong Independence” is over and over under attack: those against Hong Kong independence, besides the paradoxical argument of “Hong Kong has been a part of China since ancient times”, they will also hardly forget to say “Hong Kong’s economy has always been dependent on China”, “if ‘grandpa’ is not happy, China will impose economic sanctions on Hong Kong”. An editorial published by Wen Wei Po on April 27 criticized Hong Kong independence for bringing terrible economic consequences for Hongkongers: “Founded on the Rule of Law and good government and thanks to the regional advantages due to the motherland’s support and the preferential policies from the central government, Hong Kong has become an international financial, trading, and logistics center. The consequences of ‘Hong Kong independence’ flood will be the disintegration of that position and those advantages. Do Hongkongers want to become the victims of ‘Hong Kong independence’?”. What is noteworthy about this is that those who uphold the aforementioned arguments include, besides the Party mouthpieces endorsing the regime, many pan-democrat activists. The Democratic Legislative Councillor Emily Lau pointed out on a forum in January 2015 that Hong Kong’s food and water resources are dependent on Chinese imports, and a lot of people work either in China or in a company managed by Chinese. Therefore, Hong Kong lacks the prerequisite for independence. 

In a survey conducted this year by HKUSU Undergrad, entitled “Politics and protest”, one of the questions asked was, if Hong Kong should uphold a referendum to decide whether “Hong Kong should become an independent country”. 61% of the students voted in favour of the referendum in case Beijing did not approve it, but with Beijing’s approval, the result was then 65%. This slight difference more or less reflects the attitude of some Hongkongers: they support Hong Kong independence in their hearts, but because they are afraid that an “unhappy” China will take vengeance with economic and border sanctions, they do not dare to stand out. Therefore, on the emergence of Hong Kong independence wave emergence and strengthening, the society is prevalent with bearish sentiments in this wave: some people believe that China is an undefeatable economic and political giant –“If you offend the Chinese Communist Party it won’t end well”, “this tiny piece of land called Hong Kong has to be under their command for good, we cannot oppose it”. But as the story of David and Goliath tells us, even giants can be defeated, and that “empire” called China is by no means invincible.

Why Nations Fail 
American scholars Daron Acemoglu and James A. Robinson point out in their book Why Nations Fail: The Origins of Power, Prosperity, and Poverty that political institutions are a prerequisite for economic development, and that it is only under inclusive institutions (those with fair market rules and protection of private property rights) that nations can achieve sustainable development. In contrast, extractive institutions (those with a small political elite dominating the country) will lead to the collapse of the country, caught within the vicious circle of extractive political and economic policies whose development cannot be sustained. And after its establishment by the Chinese Communist Party, China’s “political and economic institutions […] were highly extractive” (p. 420). 

In 1978, the Chinese Communist Party decided to focus on economic modernization rather than class struggle, with Deng Xiaoping, Hu Yaobang and others trying to implement inclusive economic institutions. The consequences of opening-up policies reform were that: the rural economy took off and state-owned companies bloomed. However, despite the rapid economic development, the economy was merely developing under an extractive institutional system: in 2003 entrepreneur Dai Guofang’s company competing against a state-owned enterprise led to his detention. Dai is just a victim of the exclusive institutional system, a proof that fair competition is almost impossible to exercise in China. The current governance of the People’s Republic of China is no different from the Soviet Union during the decades of 1960s and 1970s. China “is similarly unlikely to generate sustained growth unless it undergoes a fundamental political transformation toward inclusive political institutions” (p. 151). This is the case for any country in the world, without exception. But the fact remains that the Chinese Communist Party will only maintain a one-party dictatorship and will never allow the existence of any other political party. The authors quote the words of Premier Wen Jiabao: “If there is no guarantee of reform of the political system, then results obtained from the reform of the economic system may be lost”. In an authoritarian regime, even if there is a short period of economic growth, the lack of inclusive institutions and the destruction of creativity will, after all, hinder a long-term development and bring it all to an inescapable end.

In an article published in 2015 by The Wall Street Journal under the title “The Coming Chinese Crackup”, leading China expert David Shambaugh holds similar views with Daron Acemoglu and James A. Robinson. The article points out five indications of the upcoming downfall of the Chinese Communist regime:

First, the economic elites have one foot out the door and they are ready to flee China en masse;
second, Xi Jinping’s regime has intensified its pervasive repression of freedom of press;
third, many regime loyalists are feigning compliance with the empty talk reforms;
fourth, the extend of the corruption problem;
and fifth, the big, hidden troubles that plague China’s economy.

Shambaugh states that the Chinese Communist Party clearly aware of the fact that China’s political system is like the emperor wearing no clothes, and Xi’s tyrannical governance has further pushed China’s system pressure to the brink of a breakdown: “The endgame of Chinese communist rule has now begun, I believe, and it has progressed further than many thinks”. And all the aforementioned problems can only be solved through political reform.

Although in 2016 Shambaugh said that he was not a “collapsist”, but wished China will have a different path, however, this does not affect to his main point, that “without reform, China has no future”. It is clear that today the Chinese Communist Party will not implement fundamental political reforms to resolve its actual crisis. In 2013, Xi Jinping issued the following “Great speech”: “if our party can’t even handle food-safety issues properly, and keeps on mishandling them, then people will ask whether we are fit to keep ruling China”. In 2014 the fourth plenary conference of the eighth session of the Central Committee of the Chinese Communist Party emphasised the “Rule of Law”, “to insist on the dominant role of the people”, “to insist on equality before the law”, etc. And then the Chinese Communist Party promptly overthrew itself: in March 2016 when China suffered the vaccine scandal, each social networking platform in China called for the removal of any “unfavourable” information, including the previous passage from Xi Jinping’s “Great Speech”, which was widely quoted by netizens. A man who asked Xi Jinping to resign was arrested. When on June, the land rights movement in Wukan village erupted again, the activist leader Lin Zulian was taken away by force by the police, who were waiting in the village, fully equipped. Ironically, when the villagers marched they waved the national flag, as they loudly cried out: “Long life to the Chinese Communist Party! Down with corrupt officials! Give us back our land!”. But no one should feel pity for them: a group of fools whose land had been taken away yet are so lucky to have the Party as their consolation, advocating unrealistic feudal ideas such as “I am only against corrupt officials, not against the emperor”. The Chinese Communist Party is a hopeless, hypocrite regime which expects to improve itself by saying things like “according to the Rule of Law” and “Down with corruption” – there is no doubt that these are just the late-night ravings of a lunatic. The Economist has evaluated Xi in the following terms: it seems that Xi Jinping doesn’t have time to make the Chinese Communist Party abide “according to the Rule of Law”, to implement bold social reforms, or to end state-owned enterprise that bankrupted many years ago. Yet, he can use any means necessary to consolidate his own power. Thus, The Economist has called him the “Chairman of Everything” (COE). To expect decentralisation and implementation of inclusive institutions from the Chinese Communist Party is like climbing a tree to catch a fish.

It is the nature of the Chinese communist regime to get rid of the person who points out the problem, rather than getting rid of the problem itself. In fact, the nature of the Chinese communist governance is exactly the same as described in Why Nations Fail. When governance, economic and any other type of crisis accumulate over and over, those in power will turn a blind eye and bury their heads in the sand. Finally, we should point to Why Nations Fail’s prophecy: its economic growth being unsustainable, China will fail. Or as The Washington Post editor Jackson Diehl puts it in his article “The Coming Collapse: Authoritarians in China and Russia Face an Endgame”: 
“Revolutions are, of course, unpredictable. Some regimes fall sooner than seemed possible until the event occurs; some linger long after their demise has become inevitable. But the recent history of unfree countries has shown that while breaking points are hard to anticipate, there is a common set of conditions that sets the stage for change”.
When in 2015 China faced a rare case of national stock market crisis, the signs of China’s economic storm roared like a thunder. On February 2016, Joseph Lian pointed out that the Chinese economic miracle already started to decline in 2008 and, would it not stop, in three years their economy would experience negative growth. “If Beijing’s attempts to counter-attack by force result in conflict, its crisis-ridden economy is likely to collapse: and if it doesn't use force to counter attack, the myth of nationalism will also be shattered into pieces”.

As China buries itself, those enjoying the comfort zone should be alert 
As for today, there are still a lot of Hongkongers who believe that Hong Kong’s economy can only rely on China, that “If Hong Kong is fine, China will be fine; if China is fine, Hong Kong will be even better”. This is especially true for the financial sector. Little do they know that behind China’s apparent national prosperity, a nation is dying inside. It is a matter of time before the wind blows out the candle.

At present China still relies on its sovereignty over Hong Kong and continuously makes use of the world’s freest economy. Nevertheless, the consequences of the invasion of red capitalism will not only be a Chinese model of business or the erosion of the values treasured by Hongkongers, but also the ripple effect of the explosion caused by China’s political and economic crisis. Before doomsday arrives for China and continually spreads over the present situation of Hongkongers, even if Hong Kong’s nationalism does not have a common front, it will eventually awake: to save ourselves, we should first cut any ties with China.

Leave China for self-determination. Save Hong Kong. 

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