The Handover Hangover

Friday, October 30, 1998

July 1, 1998, was the first anniversary of the return of the British Crown Colony of Hong Kong to China, becoming the Hong Kong Special Administrative Region (HKSAR) of the People’s Republic of China.

Not surprisingly, most of the news coming out of Hong Kong since the hand-over has focused on the battering its economy has taken since the Asian economic crisis spilled onto its shores. Hong Kong’s financial markets continue to be rocked by currency and financial instability. The currency devaluations in Thailand, Indonesia, Korea, Malaysia, Singapore, and the Philippines have put enormous pressure on the Hong Kong dollar. The HKSAR’s defense of the Hong Kong dollar’s link to the U.S. dollar, at a fixed exchange rate, has, in the course of the past year, chopped as much as 50 percent off equity and real estate values; these declines reflect the rise in local interest rates that have been necessary to induce Hong Kong residents and foreigners to hold Hong Kong dollars.

With most attention focused on the economy, less attention has been paid to the state of politics, civil liberties, and social affairs during the first fifteen months of Chinese rule. Unfortunately, the news in these areas is as bleak as the economic news. The new regime, led by Hong Kong’s first chief executive, Tung Chee-hwa, has rolled back fledgling democratic institutions and practices, abrogated some civil liberties, and stood by as mainland cronyism—until the currency crisis—eroded the level playing field that had characterized Hong Kong’s economy under British rule. In short, in almost every respect, the people of Hong Kong are worse off than they were during the last years of British colonial rule.

ONE CHINA, TWO SYSTEMS?
Chinese sovereignty over Hong Kong implies that China is free to determine the political, economic, and social institutions and policies of its newly recovered territory. This, after all, is the meaning of sovereignty. What is different in the case of Hong Kong is that China signed a document with Britain called the Joint Declaration, a formal treaty registered with the United Nations, and then enacted a Basic Law, or miniconstitution, for the HKSAR, which set forth guarantees of autonomy for the fifty years following 1997. The people of Hong Kong were promised that they would rule Hong Kong without interference from China, save in matters of security and diplomacy, and that they would continue to enjoy their former way of life in political, economic, and social affairs.

Will China kept its promise of partial autonomy for Hong Kong? The initial signals are not reassuring.

DEMOCRACY WITH CHINESE CHARACTERISTICS
On July 1, 1997, a body called the Provisional Legislature—handpicked by a China-established selection committee of four hundred notables from Hong Kong’s pro-China business community—replaced the previous, duly elected Legislative Council, or Legco. The 1995 Legco elections had returned prodemocracy (what China saw as anti-China) candidates in seventeen of the twenty geographic constituencies. The other forty members were chosen on the basis of “functional” and district board constituencies.

The new chamber was called provisional to circumvent its lacking any explicit constitutional foundation in the Basic Law. The election held on May 24, 1998, selected the HKSAR’s first official legislature. The simple story is that Tung Chee-hwa, the HKSAR’s chief executive, with China’s full support, changed the electoral rules to reduce the influence of “democrats” and increase the influence of probusiness, pro-China candidates and parties. The individuals and groups referred to as “democrats” are found in several political parties and represent a broad set of interests in Hong Kong including labor, the bar, environmentalists, and popular political figures. They share a commitment to democratic values and a distrust for traditional mainland Chinese heavy-handedness. Within the democratic camp is the Democratic Party, headed by Martin Lee, the single most popular political party in Hong Kong.

Under the electoral rules pushed through the Provisional Legislature by Tung Chee-hwa, the principle of one man, one vote was violated in favor of an extremely complicated, three-tiered, rigged electoral process that ensured that pro-China candidates would constitute a legislative majority. Of the sixty seats in the legislature, twenty were chosen by proportional representation in geographic constituencies; thirty were chosen by functional constituencies, consisting mostly of business organizations; and ten were chosen by an eight hundred–member Election Committee, whose members were predominantly pro-China and probusiness.

Changes to the electoral system benefited the pro-Chinese forces in a variety of ways. For instance, the twenty directly elected seats in the geographic constituencies were determined by a first-past-the-post system in 1995, but this was changed to a form of proportional representation for the 1998 election. Proportional representation makes it possible for candidates who do not gain a majority of the votes to secure a seat in the legislature. In the functional constituencies, the number of eligible voters was reduced from approximately 2,700,000 in the 1995 election to some 180,000 in the 1998 election. And in the Election Committee, fully 17 percent of the votes were reserved for members of the Provisional Legislature, delegates to the National People’s Congress (China’s legislature), and members of the Chinese People’s Political Consultative Conference. Although no official will acknowledge that the new election system was specifically designed to reduce the influence of the democrats, it has been the most significant consequence of the change. Hong Kong’s electoral system represents, to coin a phrase, “democracy with Chinese characteristics.”

One of the major oddities of Hong Kong’s electoral system is that corporations and business interests are given votes in the functional and Election Committee constituencies. In fact, votes are not restricted to domestic firms—foreign firms are allowed to vote in the functional constituencies through designated representatives who are permanent Hong Kong residents. To cite just two examples, foreign firms possess more than half the votes in the insurance functional constituency, and foreign airlines (some of which are owned by foreign governments) constitute 5 percent of the total vote in the tourism functional constituency. The only other political jurisdiction in the world that maintains corporate voting is the upper house of the Slovenian Parliament.Even as Tung Chee-hwa changed the electoral rules, he paid lip service to democracy, insisting that the Basic Law provides for the ultimate aim of universal suffrage, that half the seats would be chosen in geographic constituencies by 2004, and that a review of the pace of democracy in 2007 would be in order. He refused, however, to commit the HKSAR to a fully elected legislature even by 2007.

The National Democratic Institute for International Affairs, a U.S.-based nonprofit organization that monitors elections worldwide, issued a report in early November 1997 assessing Hong Kong’s electoral framework and its impact on Hong Kong’s prospects for future democratization. The report stated that the 1998 elections will “not meet international standards for fair elections” and that the object of these elections is not to accurately reflect public choice but to minimize the representation of popular parties and to obscure the public will.

ELECTION RESULTS
The weather conditions for the May 24 election were abysmal. In some parts of the HKSAR close to one foot of rain fell, and several polling places had to close because of flooding. Despite the weather and the general perception among many that the Hong Kong people are only interested in making money and are not interested in politics, over 53 percent of the eligible electorate turned out to vote. The turnout, whether motivated by disgust with the Provisional Legislature, a desire to see Hong Kong people rule Hong Kong, or a hankering to redeem discount coupons at a local clothing merchant on proof of voting, was more than 50 percent higher than the 1995 elections. The story of the elections themselves can be summarized by contrasting the headline from the South China Morning Post, “Record Turnout Poised to Give Democrats Sweeping Victory,” with that of the Asian Wall Street Journal, “Pro-China Parties Likely to Dominate Legislature.” The democrats received overwhelming support from the electorate, but the electoral system ensured that this support was not converted into seats.

The election system worked like a charm for its designers. The democrats in Hong Kong—the Democratic Party, the Citizens Party, and the Frontier Party—collectively received 56 percent of the popular vote. Under a “pure” proportional representation election system, in which the HKSAR was one district, the demo-crats would have been a majority party with roughly thirty-four of the sixty seats. With the present contorted Hong Kong election system, however, the majority was reduced to a minority; the Hong Kong democrats garnered only eighteen seats (30 percent) in the legislature.

With the elections now over, the political focus in Hong Kong is certain to turn to the pace of democracy. Martin Lee has demanded direct election of the next legislature in 2000 and the chief executive in 2002. The opposition to democratic development will come from Tung Chee-hwa and his handlers, who view a political Hong Kong as contrary to the wishes of the mainland and at odds with Hong Kong’s probusiness commercial environment. The tensions between the two sets of interests are likely to be played out in a more politicized Legco where the democrats, in a numerical minority, must point out that they represent the majority of opinion in Hong Kong and thus are more legitimate, having faced a broad cross section of the electorate.

CIVIL LIBERTIES
A number of civil liberties were rolled back within days of Tung Chee-hwa’s ascension to power. These included changes in the Public Order and Societies Ordinances introducing the dangerous and vague concept of “national security,” which could be used to restrict the freedom of assembly, demonstration, and speech. The government-issued guidelines defining “national security” allow the chief of police to ban gatherings if they threaten China’s “national security,” promote independence for Tibet or Taiwan, or cause public disturbances. Police can also ask the government’s security chief to revoke an organization’s registration owing to national security considerations. Before the handover, people needed only to notify the police if they wished to hold protests; since the handover, people are required to seek police permission. In general, the authorities have neither provoked nor been provoked on public security matters. Demonstrators were allowed to enter the Legco Building on the night of the handover and make speeches from the building’s balcony. Furthermore, demonstrations were permitted, and no significant disturbances occurred during the World Bank/International Monetary Fund meetings in September 1997. Moreover, no group has reported that its request for a permit to demonstrate has been rejected, and a permit was issued for the annual Victoria Park memorial of the Tiananmen Square Massacre on June 4. On May 31, the first legal demonstration commemorating the June 4 massacre took place on Chinese territory. Significantly, the three thousand protestors marched on Tung Chee-hwa’s offices, rather than the offices of Xinhua (the New China News Agency)—the historic focal point of the demonstrators. A candlelight vigil in Victoria Park was held on June 4 without incident.

The display of flags has also become a sensitive issue in Hong Kong. The government is currently reviewing whether the mere act of flying a Taiwanese flag is sedition and whether to introduce laws “to punish people who do not stand or show respect when China’s flag is raised or its national anthem is played.” The annual celebration of Taiwan’s National Day, the Double Ten festival, held on October 10 each year, was more subdued this year, with Taiwanese flags generally flown privately. Taiwanese flags placed on government land or public footbridges were removed by police, and several flag bearers were directed by police officers not to display the Taiwanese flag. Two activists were arrested and found guilty for carrying a defiled HKSAR flag. According to the magistrate, because high emotions were often attached to flags, the actions of the activists could have caused disruption. On the basis of the magistrate’s reasoning, many actions could be constrained because of the fear that they may cause disturbances.

Within days of the handover, Hong Kong’s new government introduced legislation to suspend seven laws, mostly concerning workers’ rights, before British rule ended. By suspending those laws, the new HKSAR government scrapped the collective bargaining powers of trade unions with employers on wages and benefits and the right to use union funds for political activity.

SOCIETAL CHANGES
A growing worry of many Hong Kong parents is the gradual loss of English-language education in Hong Kong. In December 1997, the Education Department named one hundred schools that would be allowed to continue to teach in En-glish but rejected twenty-four applications from other English-instruction schools on the grounds that their students did not have the ability to learn effectively in English. The South China Morning Post, in its December 2 issue, quoted Father Simon Lam, principal of the Saint Louis Secondary School in Sheung Wan, as saying, “In a survey, more than 78 percent of parents objected to us using Chinese in our school.” Father Lam noted that parents thought that teaching in English was a symbol of prestige, especially as a means of getting a good job. The concern among parents is that the remaining one hundred schools, which were allowed to teach in English in 1998, will be whittled down in future years.

In general there has been fairly close scrutiny by the media and activists to ensure that any subtle changes to the Hong Kong social environment are publicized and challenged. Early in the year, it was feared that several movies critical of the mainland, such as Seven Years in Tibet, Kundun, and Red Corner, would not be screened. Some local distributors suggested that there was no market for such films in Hong Kong, and one was quoted as saying “We are afraid to buy it. We don’t want to get into trouble.” Walt Disney had been threatened by China for distributing Kundun. The resulting furor guaranteed that the films were scheduled.

The future vigilance of the media is a concern since various outlets are perceived as increasingly under the control of interests friendly to the mainland. ATV, the second local broadcast company in Hong Kong, was sold to a mainland businessman who previously worked for the commercial arm of the Guangzhou government. And the newspaper Sing Tao was sold to a corporation that has close ties to Beijing.

The Hong Kong government’s tolerance is currently being tested by a forty-foot statue commemorating the Tiananmen Square massacre. The statue, designed by Danish sculptor Jens Galschiot, has been moved from university campus to university campus during the past year while efforts were made to find it a permanent home. The Provisional Urban Council denied it a permanent home in a local park, and concern over offending some elements in Hong Kong society has forced it from several private sites. At the moment it looks like it will drift for a while longer.

POSTSCRIPT
A torrential downpour marred the handover ceremony on June 30, 1997. Heavy rains continued well into the first day of celebration of Chinese rule on July 1, 1997. Indeed, the first full year of Hong Kong under Chinese rule was marked by the largest recorded rainfall in its history. The heavy rains on June 30 and July 1, 1997, were taken, by Chinese seers, as positive omens of future prosperity. Outgoing British governor Chris Patten interpreted the rains as the heavens crying over the British exodus. Thus far it would appear that Patten had the more accurate take on Chinese lore.