The Post Occupy Central Economic Order for Hong Kong
While some business elites in Hong Kong describe the students who have been occupying the streets of Hong Kong as a“Generation hope-less”, the movement has done something that’s beyond everyone’s expectation. The scale, influence and sympathy the movement got from around the world have been shocking — particularly to Beijing. The surprise factor is so high that President Xi Jinping and his office* are now taking charge of China’s policy on Occupy Central directly (see picture below). Beijing could now be examining whether “One Country, Two Systems” has been working properly in Hong Kong since 1997. From various stories leaked to the media, it seems there is now a broad consensus that Hong Kong’s narrowly defined economic structure and the monopoly on the decision-making power by the tycoons and the business elites on how resources are allocated in Hong Kong are now positioned as the root causes of Occupy Central. The 2017 Chief Executive Executive election framework declared by the Standing Committee of the National People’s Congress (NPC-SC) on 28 September 2014 is probably seen as the event that triggered off a protest to many deep-rooted problems that have been troubling Hong Kong for many years.
Youths of Hong Kong do not want bread crumbs
The suggestion that a political issue could be solved exclusively by an “economic solution” gives false hope. The idea of solving the problem by “… a rethink of Hong Kong’s job creation strategy to address young people’s frustration” is too simplistic. It should be noted that British Hong Kong’s original revenue foundation since 1841 had been built on land transaction revenue, trade and free port. Therefore it is not surprising that HKSAR Government reverted back to a high land price strategy in the absences of alternative thinking.
One of the amazing things Occupy Central succeeded in achieving is bringing about a consensus between the activists and the leadership in Beijing — that Hong Kong’s economic structure is too narrow and the economic policy that favors the tycoons after 1997 has been unhelpful. The current economic support policy of sending more mainland tourists to Hong Kong to create more low-end jobs in the retail sector is not what our youth wants — the university trained workforce does not want sales assistant jobs as they could not afford to buy a home or raise a family on a HK$12,000 (US$1,538) monthly salary. There is now a better understanding that unless the decision-making process in Hong Kong becomes more liberalized and the policy-making power is shared more widely with those who have been made powerless under the current system, “Occupy Central” will come back again and again in different forms.
The Financial Secretary should stop spreading the gloom
For John Tsang, Financial Secretary who has been talking about the“Future Fund” and spreading economic gloom in Hong Kong, the opportunity to accompany President Xi Jinping and the Chinese team at the G20 Leaders’s Summit in Brisbane (15-16 November 2014)could be a good learning opportunity. Ideally he should now have a better understanding that talking down the Hong Kong economy is not what he’s suppose to do as Hong Kong’s chief economic development officer. He should also notice how the global leaders got together, set economic growth targets and work together to lift growth and create jobs for many economies that are in much deeper trouble than Hong Kong.
The G20 leaders promised accountability. Although Hong Kong is not part of the G20 Leaders’ Communique, what was said by the national leaders from China and from around the world at the summit should inspire John Tsang to put on a thinking hat that is more fitting to his job as the head of economic development of an economy that is about the size of many smaller countries in Europe. Let’s hope he does not talk about the “Future Fund” in future and he’d give up the strategy of driving economic growth solely through hard infrastructure building. Let’s also hope he had listened to his counterparts from mainland China and from the other developed G20 countries on the merits of driving economic growth through innovation and technology and the knowledge-based economy.
Hong Kong problems to be solved by HK people
It was against this background of Occupy Central and China’s rising world stature that Chief Executive CY Leung met with President Xi Jinping and the two heads of his office* in Beijing on the 9 November 2014. While very little was said in front of the television cameras, the seating arrangement clearly shows that Xi and his office are taking charge. It is well known amongst the diplomatic community in Beijing that the key directive on Occupy Central from the very beginning was: “No violence, no compromise”. While Beijing will not make compromise on the 2017 Chief Executive Election Framework announced by the NPC-SC, it is also unwilling to use violent force to disperse students who are occupying the streets of Hong Kong.
This “No violence, no compromise” operational guideline could largely explain how the HKSAR Government has been responding to the Occupy Central Movement. It also reflects Beijing’s wish to see Hong Kong affairs being settled in Hong Kong by Hong Kong people in Hong Kong’s way. The subtle warning on the tycoons by New China News Agency (NCNA) in a story titled“Hong Kong tycoons reluctant to take sides amid Occupy turmoil” and the pulling back of the propaganda that Occupy Central is a “Colour Revolution” inspired by foreigners could also be seen as recognition of the failure of past policy on Hong Kong.
Rebuilding HK’s economic development capacity
How will Beijing change its economic support policy on Hong Kong is not known but a new strategy is clearly needed. But putting together a new “Youth Policy” that will end up with no more than giving bread crumbs to the younger generation is not the answer. Many, including a leading Hong Kong economist have said “… a more open political system alone will not be enough to Hong Kong’s growing social problems”. A youth policy and a “new economic policy” that favors the tycoons and the business elites but continues to shut out new ideas will not work either. Hong Kong clearly has some fundamental advantages mainland China do not have. And these advantages include: the rule of law, strong institutions and a sophisticated First World economy with many subtle characteristics that are not so obvious to the national leaders who are trained in a different tradition.
Hong Kong needs to be innovation driven. And “innovation” is something that cannot be narrowly defined. In the Hong Kong case, we should be proud of our achievements in the past and hope the free-thinking younger generation could take Hong Kong further under a liberal political environment provided by “One Country, Two Systems”. Hong Kong should also look at Korea’s transition from a “Chaebols-centered” economic development model to a SME-centered and technology-intensive growth model seriously. Hong Kong must start using the very distinct economic advantage as the most liberal, most innovation and most international cities of China to its own advantage. “Bread Crumbs” will not solve the growing incoming disparity problem — many of the “rebels on the street” are also likely to be the “rebels of markets” and key drivers of the Knowledge-based economy in future. Only clearly defined social and economic visions, a system that shares power and gives enough room for Hong Kong people to make their own decision could stop “Occupy Central” from coming back.
(Note on Xi Jinping’s Office: *”中辦 Zhongban” — 中共中央辦公廳 Office of the Central Committee of the Chinese Communist Party)
Hong Kong Democratic Foundation (香港民主促進會)
November 22, 2014