Smart Thinking

Hong Kong 20 years on

In 1997, the Britain handed Hong Kong back to the Chinese, after a 165-year rule. 20 years on, predictions made at the time of a swift decline appear to have been greatly exaggerated. But Hong Kong hasn't had it all its own way

Words by
Alec Marsh

Certain moments define countries, and the night of 30 June, 1997 defined ours. The location was Hong Kong and in the seconds before midnight, as the military band played God Save the Queen, the fluttering Union flag was lowered with due solemnity.

As the first moments of 1 July arrived, Chinese anthem began and its red banner ascended, announcing the handover of sovereignty after 156 years. Hong Kong the crown colony was now a Special Administrative Region of the People’s Republic of China. It was raining heavily.

Within 15 minutes, the Prince of Wales and governor Chris Patten, flanked by his weeping daughters, boarded the waiting Royal Yacht Britannia to affectionate cheers. Moments later, Britannia slipped her moorings and steamed off into history. In a speech earlier, Patten paid tribute to the colony’s people. ‘We are entitled to say that our nation’s contribution here was to provide the scaffolding that enabled the people of Hong Kong to ascend: the rule of law, clean and light-handed government, the values of a free society, the beginnings of representative government and democratic accountability,’ he said. ‘Now Hong Kong people are to run Hong Kong: that is the promise and that is the unshakeable destiny.’

Except it wasn’t. And certainly, whatever Patten might have hoped, long before the flag had come down, many were foretelling doom for Hong Kong.

Hong Kong independence, The Jackal magazine

All that protected the future of its then six million population were the accords that London and Beijing had signed up to in advance, notably the 1984 Joint Declaration that laid the basis for the ‘one country, two systems’ approach. An approach Hong Kong continues to be ruled by. This agreement confirmed that for the 50 years following 1997, Britain would continue to enjoy oversight of its former possession, which would continue to enjoy ‘a high degree of autonomy’ from Beijing and one day be able to elect its rulers.

So how has it worked out? Dr Tim Summers, a Chatham House China expert who lives and works in the city, gives it a four out of five for progress thus far. ‘It’s not changed in the ways that people either hoped or feared 20 years ago,’ says Summers. ‘Politically there were two views – one was that the “one country two systems” formula would work reasonably smoothly because it was in everybody’s interests for it to do so, including China’s. Then there was another more doom-ish view that there was no way that Beijing would go along with this and that eventually Hong Kong would start to lose everything that made it different from the rest of China and gradually descend into a lack of freedom and vibrancy. The former has ended up being more accurate than the latter. I don’t think Hong Kong just yet lost its special characteristics.’

Not everyone agrees, not least the last governor of Hong Kong, Chris, now Lord, Patten. Earlier this year, he issued a sharp rebuke of British government policy. ‘We signed the joint declaration with China. It’s a treaty at the UN. It’s supposed to commit us to standing up for Hong Kong’s rights until 2047. You don’t get much sense of the British actually standing over those obligations. I wonder what has happened to our sense of responsibility?’

Hong Kong independence 20 years on

For many, Britain sacrificed any honour on the subject when it stole the territory by force from the Chinese in 1841 during the First Opium War. As for democracy, Martin Jacques, author of When China Rules the World, points out that Britain had 150 years to introduce it and never did. ‘The government enjoys a lot of legitimacy in the eyes of the Chinese,’ Jacques notes, ‘but it’s not a legitimacy delivered by the same means we have in the West.’ As a result, he points out that ‘democracy was never going to work in an unconstrained sense’ in Hong Kong, but that elections of a sort for the chief executive have occurred. ‘Actually China’s taken a step, however inadequate you think it is, which the British never made,’ Jacques says.

And that’s something the incoming chief executive, Carrie Lam – the Beijing-favoured career Hong Kong civil servant who was elected by a process of sorts in March – appears to understand. At a meeting with China’s hard-line president, Xi Jinping, in April, she told him: ‘Hong Kong citizens passionately hope for more democracy.’ No one’s holding their breath.

Democracy aside, the handover hasn’t been so bad for business. Twenty years ago Hong Kong’s population was 6.4 million, and it had an economy worth $177 billion. Now its 7.3 million citizens generate an economic output of $309 billion. The International Index of Economic Freedom, meanwhile, compiled by the US-based Heritage Foundation and the Wall Street Journal, judges it to be the most economically free place in the world, a slot it has occupied since 1995 when the index began. The international civil liberty watcher Freedom House, meanwhile, says that there is a ‘statistically significant correlation’ between the level of political freedom it measures and that of the economic index. So something is right.

Hong Kong 20 years on, independence, The Jackal

And dosh it has in abundance: according to the US wealth bible Forbes, there are no fewer than 67 billionaires in Hong Kong – 13 more than the UK, which has a population nine times larger. Not only that, these billionaires boast a combined personal fortune of $266 billion – bigger than the GDP of New Zealand, Kenya and Iceland put together. By comparison, Britain’s 54 dollar billionaires are worth a paltry $154.5 billion. Hong Kong also has more skyscrapers – 1,300 – than anywhere else in the world. In fact, half the population lives above the 15th floor.

Handover or no handover, the rise of China economically has been central to all this. Since 1997, China’s GDP – the total value of goods and services created in a year there – has expanded by the equivalent of 20 Belgium-sized economies from $900 billion to more than $11 trillion today.

Yet while China’s rise has been a boon for financial services and luxury retailers in Hong Kong, it’s also caused property prices to rocket. According to estate agent Knight Frank’s skyscraper index, Hong Kong is the most expensive city in the world to rent office space – at $302 per square foot. That’s almost double the next most expensive city, New York, which is $159. (By comparison London’s skyscrapers look affordable at $104.) Pollution is also a major problem, one of the reasons that the research organisation Mercer puts Hong Kong down at 71st in its global quality of life index. ‘The shop on the corner that used to sell noodles to the local clientele now sells luxury handbags,’ notes Summers. ‘It’s exacerbated tensions and led to a growth of an anti-mainland feeling, which I would differentiate from an anti-central government feeling.’

Hong Kong independence 20 years on, The Jackal magazine

And there’s been no shortage of that, either. These issues – along with a desire for more democracy – boiled over in the Umbrella Revolution of 2014, when protesters occupied swathes of the Hong Kong for 79 days. This was unprecedented. ‘If you’d put it to people 20 years ago, people would have laughed at you,’ asserts Summers. Even the prosecution of seven policemen for beating one of the protesters offers a perverse grounds for optimism. ‘Compare it to the rest of China – you never would have had any of that happening.’

At that time a delegation of British MPs was due to visit as part of its investigation into UK-Hong Kong relations, 30 years after the Joint Declaration. Beijing bluntly told the MPs where to go – and they did what they were told. In their subsequent report, the MPs expressed dismay at the UK government’s supine response to the ban and said that we should doing far more to stand up for the freedoms that Hong Kong was promised. They warned that Hong Kong’s ‘high degree of autonomy was coming under pressure from Beijing’.

So, what does the next 20 years of Hong Kong’s life hold? ‘The question is what will China look like in 20 years’ time?’ reckons Summers. ‘Do we assume that China continues to grow economically? Will it still be ruled by an authoritarian-minded Communist party or a different-minded Communist party or something else?’ Summers’ instinct is that there’ll be a greater form of ‘guided’ democracy come 2037 and that Hong Kong will continue to exploit its niche position between China and the world. Meanwhile, more democracy or less, the Hong Kong residents will make the best of it. ‘It’s very difficult to clamp down on people’s spirit,’ he says. ‘Hong Kong people have got a democratic way of thinking about the world.’

Just as well. Sounds like they’ll need it.