Last Saturday, it was the 20th anniversary of the handover of Hong Kong to China. There were fireworks, lots of news coverage and President Xi graced us with his presence. There were also lots of crowds gathered – mainly in Wan Chai where the celebrations took place, but also around Victoria Park where there were protests.
Back in 1997, China agreed to ‘one country, two systems’ which meant that HK will remain independently run for 50 years. It is debatable whether China has kept to their end of the bargain. Most Hong Kongers would say no. I only moved to HK at the end of 2013, but even so, I can tell that HK has changed a lot over the years.
During his speech, President Xi mentioned that HK is facing various challenges, including housing problems and other issues that affect people’s daily lives. The irony is that quite a number of these issues were exacerbated by the reunification. In 1997, HK was already overpopulated, with over 6 million people living on this small island. Now, there are over 7 million people and mainlanders who have settled in HK through a one-way permit scheme makes up over 10% of the population. The scheme allows for up to 150 mainland Chinese to settle in HK on a daily basis.
On top of that, HK is viewed by the Chinese as a safe haven for their cash, as the currency is still pegged to USD and technically, it does not fall under Chinese jurisdiction. As a result, they have been investing in the property market and led to HK becoming the most expensive home market in the world. Since 1996, housing price has tripled and now costs 18 times gross annual median income, compared to less than 9x in London and 6x in New York. If you’re interested – check out my previous post:
We used to say that ‘when the US sneezes, the world catches a cold’. I think that this could be true of China too and when China sneezes, HK gets pneumonia! HK is viewed as the gateway to China, with its ports mainly used for shipments to and from China and MNCs setting up offices in HK to serve the Chinese market. HK’s retail sector is also reliant on spending by Chinese tourists. With Chinese growth slowing, HK’s economy has almost stagnated. The Chinese government has also been introducing measures to create economic hubs in China, such as free trade zone in Shanghai. Over time, it appears that HK’s importance in the region is diminishing.
From a political perspective, it is clear that China is increasing its influence. The CEO of HK is elected by a 1,200 member committee which is dominated by pro-Beijing politicians and tycoons. As a result, there was a movement in 2014, Occupy Central, with protestors blocking roads to call for universal suffrage. Clearly, this failed and led to the arrest of the protest leaders. This year’s July 1st rally attracted the lowest number of protestors, perhaps a sign that the Hong Kongers are learning to accept their fate or from the fear of increased security due to President Xi’s visit.
In the past couple of years, there have been disappearances as people were arrested by the Chinese authorities, despite having no legal jurisdiction in HK. The most high profile case was the missing HK book publishers who disappeared at the end of 2015. They eventually turned up in the custody of Chinese authorities, rumoured to have been arrested due to their plans to publish a book on President Xi.
A potential upside from the reunification is from a pride and national identity point of view, with China taking back a part of its country which was lost to England. Unfortunately, most Hong Kongers don’t view themselves ‘Chinese’ or at least, not the same as mainlanders. In fact, there is a fear for what the future holds – fear of the loss of freedom, fear that big brother is watching and fear of losing their identity. The fact that I’m writing this shows that it’s not that bad yet (at least, I hope not!). On the other hand though, if I were in the UK or Malaysia writing about the political situation in the respective countries, I would have no fear. But in HK, I paused and wondered whether there could be implications.