Hong Kong Needs Closer Ties to Democracies

A version of this article was published in the South China Morning Post and The Stand on August 25, 2015. The pro-Beijing newspaper Wen Wei Po issued an attack on the published article on August 27, 2015. (Front photo: Zhao Zi-yang and Ronald Reagan)

China’s recent beggar-thy-neighbour devaluation of the yuan is a reminder that “Asia’s World City” has yet to live up to its name. Its over-reliance on the mainland is becoming a perilous venture.

Having grown fat and lazy on mainland tourism and entrepot services, some of Hong Kong’s pillar economic sectors are now facing the double whammy of both a slowing Chinese economy and a cheaper yuan.

While Beijing likes to make grand pronouncements about Hong Kong’s role in its 5-year plans, the reality is that Hong Kong’s welfare is merely an afterthought in Chinese economic policymaking. The central government simply has too many of its own problems.

Recent examples show the ripple effects of Hong Kong’s invisibility. With almost 40 percent of the city’s retail sales coming from mainland visitors, the yuan’s devaluation not only cut sharply into the retail sector, one of Hong Kong’s biggest employers, but also the commercial property market. Shares of several big developers tumbled after Beijing’s currency announcement. Other sectors are sure to experience similar reverberations.

But the economy is just one arena where Hong Kong would benefit from less mainlandization. In a number of areas, Hong Kong could do a much better job raising its international stature and advancing the interests of its citizens and business sector. To reach its full potential as a more autonomous player operating outside the Chinese milieu, however, will require Hong Kong’s democratic partners to step up to the plate to help the city get its groove back.

With Hong Kong’s prospects for genuine universal suffrage and democracy now on permanent hold, it’s understandable that foreign capitals would lose what little passing interest they had in its future. No longer willing to upset Beijing, democratic governments, when they say anything at all, are only able to rustle up the most neutral of statements calling for Beijing to show more flexibility or Hong Kong politicians to be more moderate.

But if democratic nations want to make a difference in Hong Kong’s future, they will need to adopt more concrete strategies to support the city’s aspirations. This means devising policies in more purposeful ways than currently with the specific aim of helping Hong Kong promote its autonomy, rule of law, and unique way of life. Deepening their own engagement with Hong Kong officials, institutions, and civil society across a broad spectrum of mutual interests is the best way to do that.

A number of key areas come to mind where greater cooperation with democratic societies would lift the spirits of a demoralized Hong Kong citizenry and government bureaucracy, whose ranks have seen increasing micromanagement from mainland officials in recent years.

Law enforcement is a prime candidate for such deeper engagement between Hong Kong and democratic nations. Still considered “Asia’s best,” Hong Kong law enforcement officials have much to offer both western democracies and their Asian counterparts.

While there’s already good international and bilateral cooperation in traditional police work, the same cannot be said about such global threats as proliferation, lax export controls, and terrorism, including terrorist and criminal organizations’ use of Hong Kong as a platform for cybercrime and money laundering.

A formal dialogue between Hong Kong and democratic governments on non-proliferation issues, for example, would go a long way in ensuring Hong Kong gets the cutting edge tools to fully cooperate with democratic counterparts and international organizations on global threats. Any cooperation would have to be structured to fall under the ambit of law enforcement, rather than foreign policy, and comply with the Basic Law.

Regular interaction between legislators is a common practice among democratic nations, such as between the US and the EU through the Transatlantic Legislators’ Dialogue. A formal dialogue between Legco and other democratic legislatures could provide early warning signals of potentially troublesome legislation and should focus not only on economic issues, but other areas such as visas and immigration. Such exchanges are important because laws in any jurisdiction, whether involving finance or privacy, often affect third parties.

Hong Kong’s private sector can be another important driver in reorienting the city’s democratic direction. Together with government officials, the Hong Kong business community could help establish a private-public sector forum to engage senior government leaders in democratic nations.

For example, a Hong Kong-US Business Dialogue, made up of CEOs of the most influential companies in Hong Kong and the US, perhaps expanding on the existing Hong Kong-US Business Council, would meet annually to exchange views and help influence policymakers on a wide range of investment, regulatory, and “doing business” issues.

One of those issues is trade. Once a leader who hosted the 2005 WTO Ministerial, Hong Kong is largely missing in action in setting the trade rules for the next century. That Hong Kong decided to opt out of the Transpacific Partnership is testament to why it now needs to reorient its policies toward reengagement with democratic trading partners and the principles it shares with them, such as free trade and the rule of law. Coming out now in support of the TPP and expressing interest in eventual membership would be an important signal that Hong Kong retains its autonomy in matters of trade.

Beyond these issues lies an ocean of other challenges, ranging from the environment to education to youth dissatisfaction, that are ripe for Hong Kong and its democratic partners to forge new partnerships.

With some 30 years left under “one-country, two-systems,” Hong Kong is in danger of being set adrift. A democratic society without democracy, Hong Kong is in many ways an equal to other democracies around the world. A higher, more strategic level of engagement with other like-minded societies is therefore one of the best ways to preserve its core values and “two systems” in the absence of universal suffrage.

But with the city now in a major funk, Hong Kong’s democratic partners need to step out of the shadows and strengthen the ties that bind democratic societies.




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