Hong Kong-China: Possible Compromise

07.10.14 Publication:

It is an inspiring sight—unless you are a member of the Politburo of the Chinese Communist Party. Tens of thousands of brave young people, marching peacefully, politely and very tidily in the streets of Hong Kong, campaigning for the values of liberal democracy. Watching it from afar, however, you cannot avoid feeling worried that at some point this will end with violence. But you can hope not, for it should be in the interests of all sides to play for time and keep the issue peaceful.

The confrontation between the desire of Hong Kong citizens to be governed by people who are accountable to them, and who can be relied upon to maintain the rule of law and an independent judiciary, and the desire of the Chinese Communist Party to maintain control in the territory, was inevitable. In 1997, when Britain handed back the colony to China under a treaty the British and Chinese governments had signed in 1984, I recall putting a cover story on The Economist warning of storms ahead over this very issue.

I was the magazine’s director in those days, and immediately I got calls from a lot of British businessmen telling me that I was wrong. There would be no confrontation, they said. Hong Kong people aren’t interested in democracy, they said. They are interested in stability and in being able to continue making money.

Well, it is true that I was wrong. It took much longer than I expected before the confrontation took place: 17 years. But the confrontation was still inevitable, unless of course the Chinese Communist Party had decided to use Hong Kong as an experimental oasis of democracy inside China.

That actually is what the Chinese government almost said it would do when Deng Xiaoping and Margaret Thatcher signed the Sino-British Joint Declaration in 1984. The word “almost” is needed, because the treaty did not spell out any plan to move to a full democracy. But what it did say was that the choice of what system to use to choose Hong Kong’s Chief Executive and his government would be determined not by Beijing but by the Hong Kong Government itself. The Joint Declaration said the Hong Kong Government would simply have to report its decisions and plans to Beijing.

Nobody really thought the decision about democracy could be made independently by the Hong Kong Government. Nevertheless, the principle is clearly stated: the choice should be made in Hong Kong. It is that principle that the protesters believe has been violated by China in its recently published plans for the next election of Hong Kong’s Chief Executive.

What China has announced can fairly be described as an election modeled on the methods used in Iran. There will be a democratic vote. But the decision over which candidates will be allowed to compete will be made by a committee whose members will be determined by China. In Iran, the choice of candidates is made by clerics. The effect is the same.

So what is going to happen? Will it be like Tiananmen in 1989, with a brutal, bloody ending? Or will the protestors get tired and fade away? Or perhaps they will become divided between those who wish to negotiate and compromise, and those who want to keep on campaigning?

The honest answer is that we cannot know—and it is that uncertainty that makes this stand-off in Hong Kong of great importance for the world, including for its financial markets.

Over the past few days, it is clear that someone—perhaps the police, perhaps Chinese authorities, perhaps business groups—has hired gangsters to go into the demonstrations and beat up protestors, in the hope presumably of persuading some of them to give up. It appears to have had the opposite effect.

If China’s leader, Xi Jingping, is bold and shows political vision, there could be room for compromise. To make the electoral system acceptable requires a change in the way in which the candidate-approval committee is itself chosen. Perhaps if President Xi could give permission to the Hong Kong Government to set up a new committee to review that procedure, preferably over several months, then a deal could be found that would allow China to concede without losing face.

The difficulty with this scenario is that President Xi has so far shown himself to be tough and resolute, rather than visionary. He has been engaged in a very vigorous anti-corruption campaign on the mainland, which has also been a purge of his rivals. He has not shown himself to be a man of compromise.

One source of hope could be, however, the fact that China has kept an extremely tight control to stop news of the Hong Kong protests from reaching mainland China. If the Chinese public do not know about the protests, then it could be easier for the Communist Party to make concessions without embarrassment or without risking encouraging any mainland cities to campaign for political reform.

It is often claimed by critics of my country, Britain, that we have no right to say that Hong Kong should have a democracy given that we never gave Hong Kongers democratic rights while it was a colony. That is true, but is not the full story. In the 1950s, the then governor of Hong Kong seriously proposed starting the process of introducing democracy. But it was decided that to do so would be to risk provoking the then new Chinese Communist regime to invade Hong Kong—just as they did during that decade in Tibet, and in 1962 in India.

So democracy was shelved in order to preserve stability and avoid conflict. Now, it is clear that in a 21st century world in which many affluent Asian countries do have democracies (which they didn’t in the 1950s), Hong Kong citizens are demanding a say in the choice of their own government. If it is denied, then the likely outcome will be instability and conflict.