OPINION: Freedom vs inequality?

Norman McFarlane

For 11 straight weeks, protesters in Hong Kong have pursued escalating demands, and the world watches with bated breath.

Will People’s Republic of China (PRC) paramount leader, Xi Jinping, revoke the promise that any intervention in Hong Kong “won’t be a repeat” of Tiananmen Square, and unleash the Chinese troops massed on the border with Hong Kong, and crack down on the protestors?

What started as a protest against an extradition bill proposed by the government of Hong Kong, has escalated into a fight for greater democracy in a territory that has lived in limbo since 1997, when the territory was handed back to the PRC by Britain.

The “one country, two systems” constitutional model, conjured up by then paramount leader, Deng Xiaoping, was intended to reunify China, while allowing for the establishment of special administrative regions (SAR), which, in the case of the Hong Kong SAR, resulted in the adoption of the Hong Kong Basic Law.

Effectively a mini-constitution, this Basic Law ensured that Hong Kong could retain its capitalist economic system and currency (the Hong Kong Dollar), legislative system, legal system, and people’s rights and freedoms, but for a period of 50 years only.

This arrangement has permitted Hong Kong to function independently in relation to many international bodies, such as the World Trade Organisation and the Olympic Games, rather than as part of the PRC.

Hong Kong’s diplomatic relations and regional defence, remain, however, the responsibility of the PRC central government.

The Hong Kong SAR is provided for thus, in the Hong Kong Basic Law, Chapter 1, Article 5:

“The socialist system and policies shall not be practised in the Hong Kong Special Administrative Region, and the previous capitalist system way of life shall remain unchanged for 50 years”.

What is likely to happen after this 50-year period expires in 2047 is unclear, but the ominous silence in this regard, suggests that Hong Kong society will come fully under the jurisdiction of the PRC, and the rights and freedoms the people of Hong Kong have continued to enjoy since reincorporation will be summarily revoked.

But considering the extent to which China has embraced a capitalist model of industrialisation, production, and international trade, just how different life is in mainland China, compared to Hong Kong, begs the question.

The PRC’s Beijing Consensus, implemented by Deng Xiaoping, is characterised by a development strategy based on semi-free markets and an illiberal political system, in contrast to the countervailing Washington Consensus, which is based on free markets and unfettered democracy.

Hong Kong, as a mandated SAR, finds itself somewhere between the two, but because Hong Kong residents frequently interact with people from all over the world – it is Asia’s international finance hub and a major tourism destination – they understand what they stand to lose, when China comes knocking on the door in 2047.

Whereas the overwhelming majority China mainland residents have far less interaction with (for want of a better characterisation) Western-style democracy and freedoms, those who live and work in the various special economic zones on the mainland that manufacture the vast array of consumer and industrial goods which contribute to China’s stellar economic growth, most certainly do.

Consequently, they must understand that aside from the benefits of relative economic freedom and attendant affluence they enjoy, the political and social freedoms enjoyed by most of the rest of the world, are denied them.

That the Beijing Consensus has contributed significantly to the China economic success story is undeniable, and proponents of the overtly developmental-state model suggest that the trade-off of personal and societal freedoms in return for economic affluence is justified, but at the heart of the debate, is whether or not the broader population which must make the sacrifices in return for the economic benefits, sees a net benefit.

The trouble is, cherry-picking freedoms – granting some while withholding others – cannot endure long-term.

Despite the iron-control exercised by the PRC over news media, social media channels, and the internet, economic affluence affords the wherewithal to sidestep such restrictions and to open a window on the much freer world out there.

The population of mainland China is, no doubt, watching with great interest as events unfold in Hong Kong, and the PRC leadership is also, no doubt, painfully aware that how it deals with the crisis, has grave implications for its continued control of the populace.

A compounding factor to growing unease in China, is the longer term effect of China’s disastrous former one-child policy, an ageing population, dubbed “The Grey Flag” by Clem Sunter, which is also contributing to slowing economic growth in China.

President Donald Trump, in typical fashion, has very publicly told his China counterpart that the pending talks about their escalating trade war are on hold until the Hong Kong impasse is amicably resolved. Since China is incapable of consuming locally what it exports into the American market – its continued economic growth is largely dependent on sustaining its major export markets – it is likely to tread cautiously.

Whereas the PRC has previously had little compunction in cracking down brutally, including deployment of the military, when unhappiness with the status quo has spilled over into open revolt, Tainanmen Square being the single greatest – but not only – example, its hesitancy in doing so in the current circumstances, suggests how great the risks are.

And so, the PRC leadership walks a tightrope as it navigates declining economic growth and the risk of escalating demands for political and societal freedoms, which, if it missteps in its handling of the Hong Kong crisis, could spiral out of control.

What happens next is contingent upon the face-off in Hong Kong, and who blinks first.