In the midst of Scottish independence fervor in September, the world’s business communities and leading figures of the financial sector jointly raised their voices of warning. Alan Greenspan, former head of the U.S. Federal Reserves, also spoke of dire, unforeseeable economic consequences which could fall upon all those who believed in the right of self-governance.

This ‘economic rhetoric’ must have been unsettling enough to turn a significant number of swing voters to the countering NO side; hence Scotland gave up on breaking out of the United Kingdom, at least for now.

Whether the Scots made a right choice or not is to be examined further, but no sooner had this historical plebiscite concluded than the people of Hong Kong, a thriving former British colony, stood up demanding their right to self-governance this time. As expected, the economic rhetoric hurriedly shifted its attention from the Scots to the fresh new Asian discussion,denouncing the Occupy Central protests as reckless, naive, and market-disturbing.

The legal basis of Occupy Central is none other than Beijing’s own promise made to Hong Kong when it was handed back to China: that the citizens of Hong Kong would be allowed to democratically elect their leader in 2017 and on. However, China is trying to renege on this by placing a special pro-Beijing committee to approve of the candidates who can run for the chief executive position, which defeats the meaning of free election. All those who found this absurd and unacceptable rose up and flooded into the streets, where they largely protested in a peaceful and orderly mannerㅡuntil the police waged a blitzkrieg crackdown.

The shocking escalation of violence in Hong Kong, and the wild police actions endorsed by the central government, is unprecedented. However, this overall pattern, marked by the Chinese communist party infusing measures to erode the civic virtues and freedom of its semi-autonomous, pseudo-independent satellite regionsㅡhowever one may define themㅡis hardly new.

familiar?

Occupy Central reminisces another student-led civil disobedience which took place in Taiwan, where the protesters opposed to the signing of comprehensive trade pact between Beijing and Taipei.

Even the ensued online debates were similar to the current ones surrounding Hong Kong: on one side, there stood the advocates of ‘economic rhetoric’, who derided on anything seen as putting politics before the logics of economics; on the other, the forerunners of self-determination and the will of people.

“The reality is that it is already too late. Taiwan needs China more than China needs Taiwan,” said a friend of mine, who is from mainland China. “Now you have the luxury to talk about freedom and dignity, but when trade is cut, jobs gone, and you have trouble putting food on the table, all the other metrics are just fancy words that don’t mean anything.”

Her opponent, by such a coincidence, happened to be a Hong Konger. “If economics was the only factor, then why are people around the globe in affluent states still struggling to achieve happiness?…it is up to the people of Taiwan to decide where they deem as a suitable direction along the (pareto-optimal) curve.”

The clash of these two values resurges on the web, and its intensity is no less fiery than the actual ongoing standoffs between the demonstrators and police force in Hong Kong. The pro-democracy side puts forward the civicness, rule-of-law, and riches of the city as great prerequisites for a fully democratic institution, and calls for the fulfillment of China’s pledge in 1997.

The other side does not back down. It applies a familiar argumentㅡ the talks of economic consequences, and then fear-mongering tactics. They point at the staggering Hang Seng Index; how Jack Ma chose New York to IPO over Hong Kong; a huge chunk of transshipments drying up; the wealthy fleeing, and so forth. According to their scenario, granting universal suffrage will only undermine the investor-friendly charm of the city to end up with a Latin American-style populist pandemonium, let alone China will not let any of this happen.

So dauntingly often are people of the 21st century told, as in both Scotland and Taiwan, that we should listen to, and rightfully feel fearful of, the wise voice of the economic rhetoricㅡthe rhetoric of JP Morgan Chase, HSBC, and even Jackie Chan. They tell us that our democratic endeavors and ideals should be given away in place of supposedly more solid and real economic priorities. But how valid is their argument? Like any sound mind would do with any doctrine and theory out there, one should approach them with a grain of salt in each specific context and situationㅡin this case, the Umbrella Revolution.

JP Morgan , HSBC…tell us that
our democratic endeavors
should be compromised for
supposedly more solid economic priorities.

Is the recent pro-democratic movements putting Hong Kong’s comparative advantage at risk? Is democracy simply a fancy,undeserving “luxury to talk about”? The underlying presumption by those who say yes to the above is that Hong Kong flourishes only because it is the ‘gateway to China’; that China allows it to flourish.

This is intuitively suspicious because Hong Kong is no longer the only gateway. Think of places like Shanghai and Shenzen where China operates within de facto capitalist system. Yet, an unspoken vibe still sets this city off, and it continues to appeal its global presence despite the opening of fresh new, perhaps even better, routes into the lucrative Chinese market. Why?

 

The more likely way to look at it is this: Hong Kong has been, and still is, thriving not simply because China ‘allows’ it to per se, but because of the ‘trust’ built upon Hong Kong as a free and civilized haven. This is what China agreed to respect and preserve for its own good. Throughout most of the 19 and 20th century, China was ravaged by almost constant wars and uncertaintiesㅡThe Taiping Rebellion, Sino-Japanese War, Chinese Civil War, and Cultural Revolution, to name just a fewㅡ while Hong Kong under the British protection for 150 years was a model of stability and prosperity.

The collective historical memories of the Hong Kong residents, therefore, simply have no room to give China much credit. Hong Kong had enjoyed its unique business-friendly tax system well before the Chinese took over, in which virtually no income tax exists and none whatsoever levied on capital gainsㅡa system which has in reverse become a source of deepening wealth disparity, as the influx of rich mainlanders drives up the property prices while the tax revenue plateaus.

Unfazed by the soaring hopes and anxieties among the Hong Kong citizens, China focuses on nurturing alternative financial hubs like Shanghai, which would compete against that lousy ‘special administrative region’. So will Shanghai replace Hong Kong? Possible. Let us wait until the Shanghai courts’ judges are not sat by People’s Liberation Army veterans but by well-trained professional law school deans; until the city government does not arbitrarily block SNS and other somehow-sensitive websites; until Shanghai Exchange completely opens up like Tokyo and New York.

The world, as Hong Kongers themselves, gives credit to this history and trust, not the Chinese benevolence. The bottom line is, citizens of Hong Kong have long prospered without the Chinese patronage, until now. In the light of Beijing providing important policy support no longer exclusively to Hong Kong but to other rising Chinese cities and special economic zones, it is only natural that they grow anxious and distrustful of the communist partyㅡ the party which not only free rides on their productivity and 167-year-old trust at just one take, but oppresses the press, interferes education, and dilutes this long awaited political liberty. Democracy is not a “luxury” to them. Rather, it might as well be the last hope there is left.

When will it meet all these conditions? The combined third market of London and Singapore is already clearing more dim sum bond transactions than Hong Kong does. Competition arises everywhere; how much longer can Beijing hold out?

Hong Kong have long prospered without
the Chinese patronageㅡuntil now.

Nevertheless, China hypothetically still has the ability to cause real and hard pain upon such a small dependent territory, if its activists and independent-minded citizens provoke the big boys in Beijing beyond their patience threshold. As our dear economic rhetoric prophesied, they may cut off the energy supply into the city, shut down jobs, and take away food from their tables, destroying the ‘Pearl of East’ from beneath.

Can China really risk all of this?

But what will such a menace prove, and to what cost? China weaponizing its economy to topple down a once wealthy and peaceful society cannot possibly be a welcoming signal to all of its neighbors, developed and developing alike. The Koreas, Taiwan, Vietnam, Japan, even Russia. You name them, all those who would see what happened and seriously reevaluate China’s place in the international community.

Remember: economic power is a double-edged sword; and China is no Middle East, where people die in all sorts of chaos on a daily basis. How Beijing handles this upheaval may determine not merely Hong Kong’s future, but the future of China itself.

For a creative take on the issue by an urban architect: “Occupy Central is really a battle over the idea of the city” South China Morning Post

Read this article in Korean

Byunghun

Byunghun

Founder, editor-in-chief