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    Greater China
     Mar 23, 2005
The glorious role of Tung Chee-hwa
By Henry C K Liu

There is a Taoist (or Daoist) saying: Be careful what you wish for because it may come true to disappoint you.

The resignation of Hong Kong Chief Executive Tung Chee-hwa, the leaked rumor phase of which lasted 10 long days before it was finally confirmed, stimulated all kinds of analyses of and allusions to the politics behind the unanticipated development. All over the world, propaganda warfare by tilted news analyses is commonly practiced, elaborated and sustained in all manners by competing forces with different and frequently opposing agendas. Often it is not the soundness of the analyses but the motivation behind them and the self-serving forecast of future impacts that shed light on the geopolitical dynamics of current events.

Now that, at long last, the rumor has become a fact, in the aftermath of an abrupt change of leadership in the Hong Kong Special Administrative Region (HKSAR) of China, the anti-Tung press, which has been relentless in its hostile coverage of Tung Chee-hwa, the business executive-turned-politician by fate rather than training, is beginning to have second thoughts about having systematically ignored his under-reported contribution to having kept Hong Kong free from anticipated intervention from a much-feared China. Try as the hostile press might to find evidence to the contrary, China has meticulously kept its promise to honor the principle of "one country, two systems" in Hong Kong under Tung. The credit for this happy state cannot be denied to Tung, despite the press' relentless nitpicking about his alleged administrative shortcomings. Also, under Tung's leadership Hong Kong has been irrefutably freer than it was during colonial times, when the British routinely eavesdropped on all telephone conversations and arrested and imprisoned anti-British Chinese patriots without due process. The colonial government accommodated MI5, the British intelligence service, to operate unrestrained in the colony through the government's political unit. The Tung administration, for example, disbanded the political unit in the Hong Kong Special Administrative Region government immediately upon entering office, instead of allowing Chinese intelligence service to replace the MI5.

The so-called "Democrats" in Hong Kong politics have been most ferocious in their attack on the chief executive, in the person of Tung Chee-hwa. In the Legislative Council (LegCo), the Democrats' unbecoming role as a persistently disloyal opposition wrought punishment from voters in the last election, returning a reduced minority of a grand total of seven seats out of 30 geographical constituencies. The Democratic Party is now the third-ranking party in the legislature, behind the pro-government Democratic Alliance for the Betterment of Hong Kong (DAB) with 12 seats and the pro-business Liberal Party with 10 seats. The Democrats repeatedly called for Tung's resignation throughout his tenure. Now that his resignation is confirmed - he is now a senior member of the Chinese People's Political Consultative Conference in Beijing - the anti-China Democrats are lamenting that they may become the sacrificial lamb the next chief executive will offer up as proof of loyalty to the Central People's Government. They know very well that an iron rule of power politics is that forcing out a moderate opponent will only bring in a hard liner. But they can relax, for it is only a delusion of grandeur that allows them to conclude that their opposition forced out Tung Chee-hwa. The fact is that while the Democrats can make pointless noises that get reported in the US media and are distorted as the voice of people, locally their tiresome ranting amounts to mere noises of nuisance.

The Democrats' condemnation of Tung had been based on two futile displeasures: they accused him of having been "hand-picked" by Beijing and said he had not advanced Hong Kong's "democratic aspiration" by "standing up" to the central government to their satisfaction. Yet these self-appointed "democrats" regularly damaged their own credibility by repeatedly presenting themselves as fifth-column agents for anti-China foreign parties.

The Democratic Party, founded in the twilight of colonial Hong Kong on October 2, 1994, with foreign, anti-China support, has a current membership of 607 regular members, hardly a broad-based organization. Its founding chairman, barrister Martin Lee, did not face any intra-party election challenge all through his decade-long tenure. He was hand-picked as chairman of his new political party by his off-shore, anti-China backers, a fact that makes a mockery of his condemnation of Tung Chee-hwa as having been hand-picked by Beijing.

Never having been known as an intellectual or activist for democracy under colonial rule, Lee suddenly emerged after 1997 to operate as a shrill one-man band to spill meaningless political slogans of democratic advocacy that had no relevance to Hong Kong's historical conditions. For decades from the beginning of his professional career, he meekly practiced law as an elitist Queen's Counsel without the slightest resistance to British imperialism or having any record of being a freedom fighter or democracy activist. Yet in post-colonial Hong Kong under Chinese sovereignty, Lee has transformed himself overnight as a defender of freedom and democracy. On April 4, 2000, the 10th anniversary of the adoption of the Basic Law, post-colonial Hong Kong's key constitutional document, Lee, in his capacity as Democratic Party spokesman on the rule of law, issued a public statement in the local press titled, "The Basic Law should no longer be used as an instrument of control." It is a peculiar position for a defender of the rule of law, particularly when Lee and his Democrats had been ceaselessly broadcasting "sky is falling"-type warnings of the threat of the Central People's Government's violation of the Basic Law. When the sky did not fall as he predicted, Lee concluded his statement calling for a change of the Basic Law with the sentence: "This is the time for change - change for the better." Such a demand is of course a direct refutation of Article 5 of the Basic Law, which stipulates that the system in Hong Kong shall remain unchanged for 50 years.

The support received by the Democratic Party from foreign anti-China forces clearly shows that the democracy card is used in Hong Kong merely as a devious anti-China device. The party's political platform has been aptly described locally as, "If it's Chinese, oppose it" (Feng zhong bi fan). The Democrats and their foreign backers oppose China because it is communist. Western-style democracy in a community still infested with residual Cold War colonial mentality cannot be expected to vote in support of a sovereign that is communist as long as communism remains a revolutionary ideology. For more than a century, democracy as practiced in the Southern states of the US did not vote for racial desegregation. Historical fact illustrates that democracy as a political process is not sacred; rather, democracy can also lead to evil if public sentiment is heinous. This is the reason why democracy can only be introduced in Hong Kong gradually, along with the steady eradication of residual anti-China colonial-political culture.

China, Hong Kong's economic savior
The Asian financial crisis, which had been brought about by US-sponsored globalization of unregulated financial markets, coincided with the establishment of the HKSAR with Tung Chee-hwa as chief executive on July 1, 1997. For most of the past seven years, the Hong Kong economy has been stuck in the doldrums by the Hong Kong government's fantasy of Hong Kong's alleged "strong market fundamentals" in the context of bankrupt neo-liberal free-market ideology. Hong Kong suffered more than six years of deep economic depression until China came to the rescue with preferred economic measures. Suddenly, while the motherland is still viewed as a political pariah, she is welcomed as an economic savior by Hong Kong, even by US transnational firms active in Hong Kong and China.

The HKSAR's controversial currency peg to the US dollar, which during its long years of undervaluation, pushed Hong Kong into a financial bubble that manifested itself in fantastic price rises in the property sector. After the Asian financial crisis pushed the US dollar to overvalued levels in relation to other Asian currencies, the peg kept the Hong Kong economy stagnant without any prospect of recovery along with other Asian economies that de-pegged their currencies. After seven unnecessarily painful years, with the US dollar now finally falling against other currencies, the collapsed bubble in Hong Kong has been given a temporary reprieve.

But the fundamental problem of monetary policy autonomy continues to prevent Hong Kong from being master of it own economic fate. Despite the Basic Law, Hong Kong still does not enjoy a high degree of autonomy. Yet the culprit is not Beijing, but Allan Greenspan of the United States Federal Reserve, for no autonomy is more important in this globalized economy than monetary autonomy, which Hong Kong has voluntarily surrendered to the US since 1983 through its peg to the US dollar. The myth that the currency peg provided Hong Kong with financial stability has been totally disproved by fact, yet the myth remains firmly imprinted in the minds of many Hong Kong leaders in and out of government. The official who needs to resign is not Tung Chee-hwa, but Joseph Yam, the pretentious self-styled Hong Kong central banker who at one point during the Asian financial crisis even recommended openly that Hong Kong citizens should take out residential mortgages denominated in US dollars to get low interest rates. It was the equivalent of Alan Greenspan recommending US citizens to borrow euro to hedge against the falling dollars. It amounted to monetary treason.

Given the macro-economics and monetary fixes of past decades, there was not much that any chief executive could do to revive the Hong Kong economy, short of asking for help from the motherland, the monetary policy of which remains independent of dollar hegemony by virtue on the renminbi (yuan) remaining not freely convertible. This was Tung's only option, and this was precisely what he did, against stiff resistance from pervasive residual colonial mentality about keeping Hong Kong from turning into another Chinese city, notwithstanding the obvious fact that if Hong Kong is not a Chinese city, it is nothing. The world does not come to Hong Kong as an economic-financial destination; it comes to Hong Kong to access the Chinese market.

The middle class in Hong Kong has also been vocal in its criticism of the Tung administration for the adverse economic effect on its lot from the Asian financial crisis. The unhappiness of the middle class was caused mainly by two economic factors. The first was a quick and sharp fall in property prices that put many property owners and small speculators in negative equity positions in their homes and real estate investments. The second was a high rate of unemployment coupled with falling wages. Both were directly tied to Hong Kong's currency peg to the overvalued US dollar after the 1997 Asian financial crises. The middle class was also influenced by the generally anti-government media, which incessantly ridiculed the personal style of Chief Executive Tung. The Western press and television have a tradition of being merciless in their treatment of politicians while being superficial in policy analysis. Western readers and audiences, being accustomed to such tradition, do not always regard a good press as the ultimate measure of statesmanship.

President Harry Truman, regarded by many historians as a great US leader, never enjoyed a good press. Teflon presidents are increasingly frequent phenomena as a result of the steady decline in the credibility of the commercially controlled press in the West. Tung Chee-hwa is not as eloquent as Britain's Winston Churchill, but he is certainly more expressive than say, Dwight Eisenhower, who could never finish a complete sentence in public, or former US president Ronald Reagan who fumbled over the term "USSR" in mid-sentence and had to settled with "the other side" - both men were treated with good-natured tolerance by the press and enjoyed high levels of popularity. The reason is that in Asia, unlike in the West, Confucian culture does not accept kindly the public ridicule of political leaders in the name of press freedom, and leaders who permit such ridicule are perceived as weak and incompetent by the populace. While the Hong Kong Democrats and their foreign backers hold the ideological hammer of press censorship over Tung, the public concludes that his tolerance of disrespectful ridicule by the yellow press is a sign of personal weakness and proof of political incompetence.

The patriotic forces in Hong Kong were unhappy with Tung for his middle-of-the-road accommodation with residual colonial institutions and personnel and his pro-US inclinations. The patriotic right found Tung's catering to foreign conservative political organizations distasteful, while the patriotic left found the Tung government's blind embrace of neo-liberal market fundamentalism counterproductive in facing the new challenges of post-colonial Hong Kong. Ironically, while Tung, with official support of the People's Republic of China, saw his major challenge as the appeasement of hostile US attitudes, this approach diluted support for him from the grass-roots patriotic forces. Having been oppressed by British colonialism for a century and a half, and having sacrificed for generations by systemic denial of economic and career opportunities by the ruling British as punishment for their patriotism, the patriotic forces in Hong Kong are finding that the principle of "one country, two systems" is condemning them to another 50 years of oppression. Former chief secretary Anson Chan spoke disparagingly about the threat of the local patriotic forces as something more dangerous than Beijing.

The patriotic left was found insulting the dubious annual awards Hong Kong receives from the likes of the US-based Heritage Foundation for being the world "freest" economy. They pointed out that what saved the Hong Kong economy from total collapse was its linkage to the dynamic Chinese economy, not neo-liberal market fundamentalism or bogus economic freedom. They criticized the Tung administration for being slow in linking up with Chinese economic policy and strategy and for allowing Hong Kong to bite the hand that fed it. The patriotic forces point out that Hong Kong does not dare criticize the US for fear of jeopardizing its exports to that country, but it feels free to criticize China while it demands special trade preferences from the motherland.

The civil service has suffered problems of low morale, salary and benefit reductions and budget cuts in the face of rising demand for government services. For most of Tung's first term, it was led by an anti-China and anti-Tung chief secretary, Anson Chan, installed by the departing British colonial governor. In post-colonial Hong Kong, the civil service changed from an apolitical civil service loyal to the British Crown to a surreptitiously obstructionist civil service innately hostile to the Central People's Government (see Hong Kong's unkind cut, July 10, 2002).

HK's poor see government as big-business tool
The poor in Hong Kong are unhappy because they perceive with justification the HKSAR government as a government of big business, uninterested in the welfare of the poor. This has always been the case for Hong Kong, but in colonial times, freedom of expression and mass protest demonstrations were strictly forbidden. When Britain was under a Labor government, Hong Kong's poor received the best deal ever with the introduction of needed welfare programs, albeit still grossly inadequate. Social welfare programs in Hong Kong were also part of the Cold War propaganda contest to win the hearts and minds of anti-communists who had fled the mainland to Hong Kong. Chinese policy on Hong Kong in the first seven years under Chinese sovereignty was focused on "preserving the previous capitalist system" as stipulated in Article 5 of the Basic Law. On the mainland, Chinese economic policy had been focused on a take-off phase of rapid economic development at the expense of economic equality. Only now is China focusing its development policy on "people-based" principles that can be expected to impact the future Hong Kong polices.

By trying to steer a conciliatory political posture, Tung ended up pleasing few both inside and outside of Hong Kong, including factions in domestic Chinese politics and in US foreign policy. All these diverse forces, for different and even opposing reasons, fantasized about the removal of Tung Chee-hwa from the post of chief executive as if that would strengthen their separate partisan purposes. It is ironic and even amusing that as the rumor of Tung's departure took on a life of its own, these competing forces suddenly found themselves in positions of having to recognize that fantasies are only desirable as fantasies. Reality is a much harder pill to swallow. Even those who fantasize about the bliss of the afterlife find the reality of dying unappetizing. The day will come when Hong Kong will wish for a leader as kind and gentle and accommodating to opposition as the amiable Tung Chee-hwa. All the political venom from anti-China forces has been directed at Tung Chee-hwa personally. This is not surprising, since the colonial tradition of Hong Kong politics accorded the colonial governor with exceptional dictatorial power and therefore the governor should assume full responsibility for the fate of the colony. Anti-imperialist forces in colonial Hong Kong also directed their attacks on the British governor. But the chief executive of post-colonial HKSAR does not command the dictatorial power once enjoyed unapologetically by the British colonial governor. Public criticism of the chief executive is now fair game rather than a criminal offense with a direct path to prison as it was under colonial rule. The British colonial governor was the personification of the British sovereign and was held above political criticism. In colonial Hong Kong, criticism of British imperialism and colonialism was subject to criminal prosecution. In post-colonial Hong Kong, criticism of China and its socialist system is celebrated as a defense of democratic freedom. And anti-China forces attacked Tung Chee-hwa personally to hide the fact that the real target was China and its socialist system.

The tactic of making Tung an anti-China whipping boy was rooted in the perception that China would firmly stand behind Tung for his full two-terms of office. Thus any personal attack on Tung was really an attack on his committed backer - the central government. By now it is clear, from his personal appearance, from his public explanation of his decision, and from the official text of his resignation letter, that failing health is the main reason for his resignation and for the Central People's Government's acceptance of it. The timing of the resignation is telling. As can be visibly discerned from his public appearance, Tung's health appears to have been deteriorating rapidly in the past few months, and he has said doctors have told him he might not be able to fully discharge his taxing duties for another two and a half years. Faced with the problem of being a political lame duck, coupled with the additional handicap of rapidly failing health, Tung convinced the central government to let him resign.

It was a brilliant and noble decision on Tung's part. Brilliant because his resignation would skirt the lame duck problem that plagues all final-term leaders. Noble because he knows that his selfless and self-motivated resignation would be twisted by his distracters to look like he was being forced to leave by the Central People's Government for non-performance, regardless of official gestures to reaffirm his consideration in implementing the principle of one country, two systems and to lead Hong Kong through a most difficult financial and economic crisis not of his making. The fact is that if Tung did not want to leave before the end of his second term, the central government had no reason to create an addition problem on its already full plate of serious problems. Tung has repeatedly told the people in Hong Kong that the central government does not want Hong Kong to be added to its list of headaches and that Hong Kong should govern itself by strict observation of the Basic Law. Besides, there is no policy rationale or constitutional basis for relieving him short of treason or corruption, of which Tung is totally above suspicion. The central government does not need the problem of a sudden and disruptive change of leadership in Hong Kong in the absence of serious crisis. President Hu Jintao's public suggestion (in Macao, with Tung Chee-hwa in attendance) of examining shortcomings reflected more upon Chinese domestic politics in a shift to people-based policies than a signal for Tung to resign. If anything, it was meant to help Tung overcome obstructionist resistance within his administration.

Xinhua, the official news agency of China, in a recent report on the term "harmonious society" said that it is:
a sign of society's acute longing for a more quality-oriented and politically balanced, economically fair and socially progressive society ... As President Hu Jintao put it, a harmonious society includes a slew of elements: democracy, the rule of law, equity and justice, sincerity, amity and vitality. That calls for an alternative to single-minded pursuit of economic achievement at all costs ... In the trade-off between efficiency and equity, our policymakers have for a long time put more accent on the former. As a result, gross domestic product (GDP) has become an overriding gauge of political achievement … After years of staggering economic growth, China's national strength has ballooned while its social undertakings have fallen way behind … Now development opportunities are met with a variety of problems, such as corruption, a widening income gap and regional imbalance, a deteriorating environment, workplace accidents and violation of farmers' rights. The central leadership is conscious of the challenges. The 16th Party Congress in 2002 put forward the idea of building "a well-off society in an all-round way," to recall a previous well-known catchphrase. The idea of building a harmonious society has brought home what xiaokang society should be like. At the core of the new concept lies the government's commitment to equity on the basis of the rule of law. To that end, it is vital for the government to revamp its governance … The government needs to make greater efforts to promote social equality by improving social security, employment, medical care, poverty reduction and education. It must especially devise policies to help rural areas develop faster to catch up with better-off urban regions.
Thus President Hu Jintao's call for Hong Kong's chief executive to look for past inadequacies in governance is a new overall national policy that includes Hong Kong and should not be interpreted as a criticism of Tung Chee-hwa, whose monumental contribution to the implementation of one country, two systems, and the health-related reason for his voluntary resignation have been duly entered in the official record of the central government. Yet Reuters reported: "Tung, Hong Kong's first post-colonial leader after the end of British rule in 1997, said he was stepping down due to ill health, but many people believe he was fired by Chinese leaders in a violation of their promise to give the city a high degree of autonomy." Obviously, these "people" wanted to use Tung's resignation to falsely accuse China of violating the one country, two systems principle. The anti-China forces are now whipping up a storm in a tea cup over the issue of the duration of the next chief executive's term; whether he should only serve out Tung's remaining two-year term or be elected to a full five-year term. Beijing has taken the position that, like the US presidency, a mid-term resignation will result in the vice president serving out the remainder of the term, not a new five-year term.

The persistent political turmoil in Hong Kong is independent of the office of the chief executive and it cannot be addressed by merely changing the occupant. Tung, not unlike all other government leaders, has unavoidably made his share of decisions that some would considered mistakes - for no politician can please everyone in a complex society, much less in a society like Hong Kong where socio-political cohesion had been systemically erased by a British colonial policy of divide and rule.

Governance of Hong Kong almost an impossible job
Yet it is unclear to what extent these "mistakes" can be traced directly to Tung personally or even as a political leader. Or that another chief executive could do better. The constitutional structure of the office of the chief executive as defined by the Basic Law makes governance in Hong Kong almost an impossible job. By all accounts, Tung has been a hard-working, conscientious and patriotic chief executive. His level-headed patriotism is above question. Ironically, those who criticize him for not being responsive to popular opinion neglect the fact that he has been too much of a consensus-builder in a political environment where consensus amounts to inaction or policies that appease no one.

As Hong Kong's first chief executive, Tung came into office with insurmountable constitutional and institutional handicaps. He was a political leader without ideological supporters or a political base. His mandate came from a Central People's Government that had committed to non-interference in Hong Kong's high degree of local autonomy. This was similar to a soldier being dropped by his generals abruptly into a hostile war zone behind enemy lines without a weapon. The chief executive was not the head of an established political party and he commanded no loyal party functionaries who would circle the wagons around a chief under attack from all quarters. He could command no political loyalty by exercising party discipline. A clear illustration of this defect is the eleventh-hour political betrayal by the head of the Liberal Party, who abruptly resigned without notice from the Executive Council over the Article 23 issue on the introduction of a security law for Hong Kong, and deprived the government of the needed votes to pass the bill. Such a disloyal and treacherous political flip-flop would have landed the offender in political wasteland in any other polity, but not in Hong Kong. The offender was elevated immediately to the status of a heroic politico and a potential candidate for top office to replace Tung. No one in the Executive Council felt any personal loyalty to the chief executive, and many saw themselves as his potential replacement. This structural handicap will continue to plague future chief executives.

The constitutional process of selecting the chief executive by a selection committee of 400 for the first term and 800 for the second term created genetic political opposition from "democratic" forces who wanted instant universal suffrage in place of gradual transition to representative democracy. Yet throughout the entire colonial history of Hong Kong, the colonial governor had always been appointed by London without any consultation with the people in Hong Kong, down to Chris Patten, the last British governor and devious purveyor of bogus post-colonial democracy, who himself came to Hong Kong after failing to get re-elected to his seat in the British parliament, a quintessential FILTH (Failed in London, try Hong Kong). Nobody elected Patten governor of Hong Kong, not even an election committee of four, let alone 800.

The agreement with Britain regarding the return of Hong Kong to Chinese sovereignty was that there was to be "no change" in the economic-political institutions of Hong Kong for 50 years. Patten, as the last British colonial governor, violated the Joint Agreement by aggressively instituting bogus democratic reform in Hong Kong in anticipation of its return to China, knowing that Western democratic institutions would present structural difficulties in any socialist polity, particularly one with Chinese characteristics and Confucian culture. For one and a half centuries, the British tolerated no democracy in Hong Kong or any of its other colonies. The democracy card was simply a device to make Hong Kong under Chinese sovereignty ungovernable and to draw self-righteous US intervention into Hong Kong politics. Just as Churchill plagiarized the term "Iron Curtain" from Nazi propagandist Joseph Goebbels, Patten lifted the perverse use of democracy used by the Nazis to put Hitler in power, to try to elect a neo-imperialist as a leader of post-colonial Hong Kong. Secretary for Security Regina Yip was forced to resign for observing an historical fact.

The fact that China grants Hong Kong a high degree of autonomy does not means China should not have a policy on Hong Kong. It is the height of hypocrisy for the US to criticize China for harboring a policy on Hong Kong when the US adopted a Hong Kong Policy Act in 1992, a US domestic law that directly interferes in the internal affairs of China. Section 202 of the Hong Kong Policy Act requires "a US presidential determination to be made annually on the state of Hong Kong autonomy after July 1, 1997. Whenever the US President determines that Hong Kong is not sufficiently autonomous to justify treatment under a particular law of the United States, or any provision thereof, different from that accorded the People's Republic of China, the president may issue an executive order suspending the application of such law or provision of law: Notwithstanding any change in the exercise of sovereignty over Hong Kong, the laws of the United States shall continue to apply with respect to Hong Kong, on and after July 1, 1997, in the same manner as the laws of the United States were applied with respect to Hong Kong before such date unless otherwise expressly provided by law or by executive order." It further stipulates that "in making a determination with respect to the application of a law of the United States, or any provision thereof, to Hong Kong, the president should consider the terms, obligations, and expectations expressed in the Joint Declaration with respect to Hong Kong".

In the Sino-British Joint Declaration signed on December 19, 1984, the government of the People's Republic of China declared that the basic policies of the PRC regarding Hong Kong are as follows:

1) Upholding national unity and territorial integrity and taking account of the history of Hong Kong and its realities, the People's Republic of China has decided to establish, in accordance with the provisions of Article 31 of the Constitution of the People's Republic of China, a Hong Kong Special Administrative Region (SAR) upon resuming the exercise of sovereignty over Hong Kong.

2) The Hong Kong SAR will be directly under the authority of the central government of the People's Republic of China. The Hong Kong SAR will enjoy a high degree of autonomy, except in foreign and defense affairs, which are the responsibilities of the central government.

3) The Hong Kong SAR will be vested with executive, legislative and independent judicial power, including that of final adjudication. The laws currently in force in Hong Kong will remain basically unchanged.

4) The government of the Hong Kong SAR will be composed of local inhabitants. The chief executive will be appointed by the central government on the basis of the results of elections or consultations to be held locally. Principal officials will be nominated by the chief executive of the Hong Kong SAR for appointment by the central government; Chinese and foreign nationals previously working in the public and police services in the government departments of Hong Kong may remain in employment. British and other foreign nationals may also be employed to serve as advisers or may hold certain public posts in government departments of the Hong Kong SAR.

5) The current social and economic systems in Hong Kong will remain unchanged, and so will the lifestyle. Rights and freedoms, including those of the person, of speech, of the press, of assembly, of association, of travel, of movement, of correspondence, of strike, of choice, of occupation, of academic research and of religious belief will be ensured by law in the Hong Kong SAR. Private property, ownership of enterprises, legitimate right of inheritance and foreign investment will be protected by law.

6) The Hong Kong SAR will retain the status of a free port and a separate customs territory.

7) The Hong Kong SAR will retain the status of an international financial center, and its markets for foreign exchange, gold, securities and futures will continue. There will be free flow of capital. The Hong Kong dollar will continue to circulate and remain freely convertible.

8) The Hong Kong SAR will have independent finances. The central government will not levy taxes on the Hong Kong SAR.

9) The Hong Kong SAR may establish mutually beneficial economic relations with the United Kingdom and other countries, whose economic interests in Hong Kong will be given due regard.

10) Using the name of "Hong Kong, China", the Hong Kong SAR may on its own maintain and develop economic and cultural relations and conclude relevant agreements with states, regions and relevant international organizations.

The government of the Hong Kong SAR may, on its own, issue travel documents for entry into and exit from Hong Kong.

11) The maintenance of public order in the Hong Kong SAR will be the responsibility of the government of the Hong Kong SAR.

(12) The above-stated basic policies of the People's Republic of China regarding Hong Kong and the elaboration of them in Annex I to this Joint Declaration will be stipulated, in a Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China, by the National People's Congress of the People's Republic of China, and they will remain unchanged for 50 years.

The key point of the Joint Declaration focuses on leaving Hong Kong "unchanged", not on the amelioration of control by Beijing as it replaced London, not gradual liberalization of top-down governance, not progressive relaxation of prohibition of anti-government activities, and certainly not eventual independence. After its signing, the last British colonial governor, Chris Patten, violated the letter and spirit of the Joint Declaration by instituting bogus political reform in Hong Kong designed to strengthen local anti-China forces.

The Hong Kong Policy Act of the United States is a big economic hammer held by Washington over Hong Kong politics because of the dependence of the Hong Kong economy on export to the US market. The US has substantial economic and social ties with Hong Kong. There are some 1,100 US firms, including 740 regional operations (242 regional headquarters and 498 regional offices), and about 55,000 American residents in Hong Kong. According to US State Department statistics, US exports to Hong Kong totaled US$13.5 billion in 2003, and two-way trade totaled $22.4 billion out of a Hong Kong GDP of $158 billion (2003). US direct investment in Hong Kong at the end of 2003 totaled about $44.3 billion, making the United States one of Hong Kong's largest investors, along with China, Japan, and the Netherlands.

As required by the Hong Kong Policy Act, the 2004 Hong Kong Policy Report to the president recommending a presidential determination states: "The most important legal development during this reporting period was the Hong Kong government's decision on September 5 to withdraw legislation on Article 23 of the Basic Law. Article 23 requires that the government enact legislation on its own prohibiting treason, secession, sedition, subversion against the central government, theft of state secrets and links that are harmful to national security with foreign political organizations. In 2002, the government released a consultation document proposing guiding principles for the legislation. After the legislation was introduced into the Legislative Council in February, the government proposed a series of amendments to address concerns raised by interested parties, such as legal and media groups and ordinary citizens, that the bill could restrict fundamental rights and freedoms.

Of particular concern were the proposed extension of treason, sedition, secession, and subversion criminal offenses to permanent residents, without regard to nationality or legal domicile; a proposal to ban organizations affiliated with mainland political organizations that have been banned by the PRC on national security grounds; a proposal for extended emergency powers for the police; uncertainty about the parameters of "unlawful disclosure" of state secrets; and other proposals perceived as potentially limiting freedom of speech and press. Opponents of the proposed legislation conducted a series of protests, including a demonstration on July 1 in which at least 500,000 persons participated. In response, the government announced in July that it was indefinitely postponing the bill. In September, the government withdrew the bill from the legislative process." The report concluded that "there were no suspensions under section 201(A), terminations under section 202(D), or determinations under section 201(B) of the United States-Hong Kong Policy Act of 1992, as amended, during the period covered by this report".

In 1995, a million African-American men met on the Mall in Washington, DC, for the Million Man March. The event was the brainchild of controversial Nation of Islam leader Louis Farrakhan, who led the crowd in a pledge to help improve their communities. The march, rightfully drawing attention to the injustice toward African-Americans in US society, was not interpreted by the press as a political crisis.
On July 4, 2003, three days after the 500,000-person march in Hong Kong, I wrote in Asia Times Online, which was later quoted as the lead sentence in an article on the event in the Guardian: While the government of the Hong Kong Special Administrative Region (SAR) has proved helpless in saving the SAR from a downward spiral of economic stagnation since its establishment on July 1, 1997, it has been unwittingly successful in uniting critical public opposition to its governance. The massive demonstration this past Tuesday, July 1, of an estimated half-million people from all walks of life clearly illustrates the serious disconnect between the government and the governed …

The demonstration was billed as a protest against the proposed security law for Hong Kong, in accordance with Article 23 of the Basic Law …

The New York Times in a front-page report on the demonstration acknowledged on Wednesday: 'Parts of the pending security legislation are less draconian than British colonial regulations still on the books for offenses like sedition.' Local polls on popular concerns repeatedly show democracy and civil liberty trailing by wide margins major livelihood issues, such as rising unemployment, small-business bankruptcies, home-mortgage foreclosures, home ownership with negative equity, education reform, crime, and public health …

Hong Kong is in crisis not because its law-abiding residents are about to lose any civil liberty, but because outside forces are trying to deny basic Chinese sovereignty over Hong Kong. These forces want to continue to use Hong Kong as an anti-China base in the name of freedom and to exploit dissatisfaction with the ineffective governance of the Tung administration toward that devious purpose. What Tung needs to do is to begin to act like a populist leader, adopting measures that will take care of the people of Hong Kong by providing full employment, affordable health care, decent housing, quality education, humane retirement and a clean environment. Tung needs to project himself as a firm, confident and benevolent political leader in the context of Chinese paternalistic political culture and stop acting like a permissive and vacillating father figure who looks to foreigners for useless advice and dubious guidance. He must face local conditions truthfully to devise original local solutions courageously.

It's time for Hong Kong to drop its fantasy of British colonialism as a path of salvation. For most people in Hong Kong, the crisis is loss of employment, not loss of civil liberty (see Why Hong Kong is in crisis, July 4, 2003).
Fifteen months before the 500,000-person march, on October 16, 2002, two and a half years before the official announcement of a people-based approach to governance, I wrote in Asia Times Online:
British imperialism was built on resistance to unregulated markets with a strong central authority to support and protect British imperialist interest worldwide. The nation-building in 19th-century US was accomplished with a strong central government that guided and directed economic development. The New Deal after the 1929 crash greatly expanded the power of the US government to rein in unregulated markets in the name of Jeffersonian ideals of protecting the welfare of the masses.

While even in the United States, the fountainhead of neo-liberal market fundamentalism, populist sentiments are currently again on the rise, crying out for government re-regulation and intervention on the destructiveness of runaway market failures driven by systemic fraud, Hong Kong is still fixated on a governing philosophy that renders government helpless in the face of economic disaster. It's time for the chief executive of the SAR to be a Franklin Roosevelt and not a Herbert Hoover.

Hoover was a victim of a defunct philosophy of passive government that failed to protect the needy. His ready willingness during the Great Depression to give direct government aid to business while denying it to the unemployed left him with a historical legacy of ineffective leadership in time of crisis, despite the fact that he was a man of high personal integrity and compassion and a hard-working administrator.

While Hoover limited himself to the counsel of self-interested businessmen, Roosevelt had his "Brain Trust" of progressive scholars and social activists who proposed bold measures to protect the underdog and to oppose unearned privileges and ruthless exploitation. Hoover's initial response to the 1929 crash was that if people only had "confidence" in themselves, the good times would mysteriously but predictably return in a "what went down must go back up before long" fantasy and a platitude of "Americans had overcome adversity in the past and will do so again by simply not giving up on themselves." Implied in this attitude was that economic hardship was the fault of the victims rather than the system.

When events failed to cooperate, Hoover shifted to the related tune that the only way to remedy the economic collapse was to let it run its natural course without government "meddling", that the self-compensating laws of the market would return the economy to good health if left alone by government. If wages were allowed to sink, that would reduce cost, thus restoring profit that would lead again to new hiring in time; that socio-economic Darwinism of the survival of the fittest would leave the economy in a stronger state in the end.

Long-term restructuring of the economy was used as a justification for pervasive and severe pain for the average person. The government professed deep compassion for the unemployed and the bankrupt, but alas, it could not do much and should not be expected to do much to change natural economic laws. Hoover ignored the social and political cost of a logical deflationary program and refused to guard against the prospect that powerful business interests would use government to prevent their own deflation at the expense of the rest of society. Hoover was captured by corporate interests that had convinced him that corporate wealth must be protected first, or all else would collapse. By allowing demand to shrink from unemployment and falling wages, Hoover condemned the US economy and his own political future to certain demise.

To even the casual observer, the chief executive of the SAR appears to have faithfully retraced Hoover's footsteps in the past five years. While Hong Kong sells itself as Asia's World City, Shanghai promotes itself as the World's Asian City. Even Singapore radiates more national pride than Hong Kong. It is obvious Shanghai has the advantage of being free of Hong Kong's residual compradore mentality …

The middle-income sector in Hong Kong has been squeezed mercilessly by economic restructuring, layoffs and negative property equity ... It is government by spin-doctoring, by insisting on a government monopoly on truth in the face of obvious facts. Undeniable facts then are categorized as natural results of life or external factors beyond the control of government. Tung himself has been a source of policy vicissitude in the past five years, which is actually a positive sign, for having the courage to change policies in response to changing conditions is the hallmark of leadership (see Hong Kong pegged to a failed policy, October 16, 2002).
One country, two (economic) systems misinterpreted
There is widespread, purposeful misinterpretation of the meaning of the one country, two systems principle as inscribed in the Preamble of the Basic Law. One country, two systems applies strictly to socio-economic matters, that "the previous capitalistic system and way of life shall remain unchanged for 50 years" (Article 5). One country is the pre-condition and the concept of two systems refers to two economic systems, not two political systems. All of China operates under one political system, with special administrative regions, of which Hong Kong is one. There is no question that Hong Kong was a Chinese city politically after 1979, the assertion of the likes of former chief secretary Anson Chan notwithstanding. Culturally, Hong Kong had remained a Chinese city even under British colonial rule, albeit one with emasculated national dignity as victimized by colonialism. There used to be a joke around Hong Kong schools that it is not embarrassing for a British native to be not proficient in Chinese and it is not embarrassing for a Chinese to be not proficient in English. But Hong Kong students, being bi-cultural, therefore do not have to be embarrassed for being not proficient in both Chinese and English. It is a effective satire of a colonial mentality that takes pride in the worst of both cultures. But it accurately describes many graduates of Hong Kong schools under colonial rule.

Hong Kong never had a free-market regime under the British, who ran Hong Kong as a colonial capitalist system very much similar to the state-controlled capitalism adopted by the Third Reich of Germany. The Nazis used capitalism to further the political aims of the state which was precisely what Britain did with its capitalistic colonies, including Hong Kong. For a century and a half, Hong Kong prospered under such trade-restraining colonial policies. The idea that Hong Kong was, or should be a free market was a fantasy created by US propaganda during the Cold War. Nevertheless, Article 110 of the Basic Law stipulates that the HKSAR "shall, on its own, formulate monetary and financial policies, safeguard the free operation of financial markets, and regulate and supervise them in accordance with law".

To the extent that a currency peg to the US dollar preempts any prospect of an independent monetary policy for Hong Kong, a case can be made that the peg violates the Basic Law, and is therefore unconstitutional. The concept of Hong Kong being governed by Hong Kong people has been misinterpreted as a commitment on Western-style democracy while in fact it only stipulates that Hong Kong will be governed by a chief executive that holds both Chinese citizenship and Hong Kong permanent residency, selected by electoral processes as defined in the Basic Law. Article 4 of the Joint Declaration states: "The Government of the Hong Kong Special Administrative Region will be composed of local inhabitants. The chief executive will be appointed by the Central People's Government on the basis of the results of elections or consultations to be held locally."

Hong Kong will evolve toward democracy only when democracy is not presented as an anti-China device. It can only be introduced when residual colonial mentality and Cold War hostility toward socialist China have thoroughly subsided in this pit of imperialist ideological toxin. In Britain, when national security was threatened at the outbreak of the Second World War, the king suspended elections and appointed Winston Churchill to form a coalition government. The one country, two systems principle calls for Hong Kong being granted a high degree of autonomy by the Central People's Government, but it should not be misinterpreted as a camouflage for independent sovereignty or even a separate political system. Patriotism is a sine quo non for political rights. This principle holds in all countries.

From the very start in the negotiation for the return of Hong Kong to Chinese sovereignty, China made a fatal constitutional concession by agreeing that the Court of Final Appeal of post-colonial Hong Kong, the counterpart of the Privy Council during colonial times, which was based in London, be based in Hong Kong instead of Beijing. The most serious error committed by the first chief executive was his insistence to Beijing on accepting a historically anti-China judiciary for Hong Kong be headed by a member of a pro-British running-dog family. Predictably, such a chief justice repeatedly led a pro-British judiciary in Hong Kong to create unnecessary constitutional crises over the issue of Chinese sovereignty over Hong Kong. The Hong Kong Court of Final Appeal tried to interpret a "high degree of autonomy" as independent sovereignty and has gleefully ruled against the SAR government on every opportunity. Had the Court of Final Appeal been based in Beijing, headed by the pro-China chief justice, there would have been no question of China's interference with Hong Kong's high degree of autonomy when constitutional issues are ruled, and there would have been no need for the National People's Congress to interpret or amend Hong Kong constitutional law to neutralize a hostile court. Political control of the highest court of the land is a legitimate political aim in all political systems. The choice of the chief justice of the United States Supreme Court is a politicized act. By surrendering political control of the judiciary on constitutional issues, China has placed itself in a position of being constitutionally handicapped over the exercise of sovereignty over Hong Kong.

The term "rule of law" has been bandied about recklessly in Hong Kong politics as a righteous anti-China slogan, echoing US propaganda. Yet the fact that law constitutes two separate aspects, legal and constitutional, is not properly acknowledged even in learned circles. Under the British common law system, legality is based on precedent, with the inclusion of extensive non-statuary law. Unlike the civil law system derived from the Roman concept of statuary law and commonly used outside of the British Empire, non-statutory law is the basis of the common law system. The legal authority in common law rests not on legislation passed by the legislature and/or statutes issued by executive order and eventually codified into a body of law, but rather on tradition, custom, and especially precedent. Common law is recognized within the US constitution as being essentially inviolable, such as the concept of inalienable rights. However, as customs and traditions change and evolve, the common, non-statutory law must change and evolve with them, and occasionally be amended by statute, as manifested in the continuing struggle between strict constructionists of the constitution and the Federalists.

Civil law develops out of the Roman law from Justinian's Corpus Juris Civilis, proceeding from broad legal principles and the interpretation of doctrinal writings rather than the application of facts to legal fictions. Legal fictions are suppositions of fact taken to be legally true by the courts of law, but which are not necessarily true in reality. They typically are done to evade archaic rules of procedure or to extend the jurisdiction of the courts in ways that are considered useful but not strictly authorized by the old rule. A significant legal fiction nowadays is the concept of a corporation as a legal person. In the common law tradition, only a person can sue or be sued. This was not a problem in the era before the advent of capitalism, when the typical business venture was a sole proprietorship. Courts created a fictional solution to accommodate the rise of capitalism in the form of a corporation as a legal person who could sue and be sued, and thus be held accountable for its debts and other legal obligations. This ensured that creditors would be able to seek relief in the courts and contract enforced should the corporation default on its obligations, encouraging investors to buy shares and banks to extend credit to the corporation. This simple fiction has enabled corporations to acquire vast wealth, grow in scope, and become the preferred organization for businesses of all sizes.

Under common law, cases are primary, statutes secondary
In modern times, civil law has become codified as droit coutumier or customary laws that are local compilations of legal principles recognized as normative. Common law jurisdictions have frequently codified parts of their laws, eg in the US Uniform Commerce Code. The difference between civil law and common law lies in the methodological approach to codes and statutes. In civil law countries, legislation is seen as the primary source of law. By default, courts thus base their judgments on the provisions of codes and statutes, from which solutions in particular cases are to be derived. Courts thus have to reason extensively on the basis of general principles of the code, or by drawing analogies from statutory provisions to fill lacunae that arise when there is no previous authority directly dealing with the issue of the case at hand. By contrast, in the common law system, cases are the primary source of law, while statutes are only seen as incursions into the common law and thus interpreted narrowly.

Common law countries, especially the United States, see judges as balancing the power of the other branches of government in the context of a separation of powers. By contrast, the original idea of separation of powers in France was to assign different roles to legislators and to judges, with the latter only applying the law as la bouche de la loi (mouthpiece of the law). Civil law judges are usually trained and promoted separately from attorneys, whereas common law judges are usually politically selected from practicing attorneys.

According to the legal origin theory promoted by some economists, civil law countries tend to emphasize social stability, while common law countries focus on individual rights. This contrast has a considerable impact of different countries' economic-financial development. In economics, the Legal Origin Theory states that many aspects of a country's economic development are the result of its legal system and the source of its legal authority. Thus, one country, two systems will continue to create structural contradiction and conflicts between Hong Kong's common law system that promotes individual rights and China's civil law system that promotes social stability.

Scholars in the Critical Legal Studies movement in leading British and American universities have challenged some of the most cherished ideals of modern Western legal and political thought. These thinkers in learned Western legal cycles claim that the rule of law is a myth and that its defense by liberal thinkers is riddled with inconsistencies. Critical Legal Studies has been increasingly successful in absorbing critical theory into established discourses of law and politics. There are glimmers of the present in ancient Sophist assertions of the conventionality of justice, the 16th century discrediting of the Roman Corpus Juris Civilis, the utilitarian attack of Jeremy Bentham (1748-1832, a founder of the theory of legal positivism) on the integrity of common law, or the Legal Realist critique of deductive legal reasoning.

The phenomenon of the "critical turn" may well be a recurring theme in the histories of law, the exploration of which might provide valuable perspectives at this current moment in the context of an evolving global jurisprudence, including not only intellectual challenges to particular legal orders, bodies of legal theory and legal history, but also to dominant residual regimes regarding the nature of law and of justice, and the recognition of the new political order, not discounting those voices and arguments that had been excluded from the canons of colonial jurisprudence and the legal history of imperialism and colonialism.

What is needed for Hong Kong is not a new chief executive, but a correct interpretation of the one country, two systems policy to ensure social stability, homeland security and economic growth with equity for Hong Kong. For this, the authority of office of the chief executive needs to be strengthened and clarified, with improved political control over the civil service, renewed reaffirmation of Hong Kong's unique strategic role to support national construction and national interests and strict prohibition of all foreign-inspired or sponsored anti-China activities. The HKSAR needs to stop constantly modeling itself after Singapore, or New York, or Switzerland, none of which have any constitutional similarity to Hong Kong. Hong Kong is unique because of the principle of one country, two systems and it faces unique challenges that can be found nowhere else. It's time the Hong Kong SAR starts solving its problems objectively and with independent courage and not wasting time and energy apologizing to outsiders for its new destiny.

Some have raised concerns about the political past of the acting chief executive and his loyal service to British colonialism. The value of a civil servant in the British colonial system is its apolitical loyalty that is automatically transferred to any new political leadership. There is no reason to suppose that a new chief executive with a colonial civil service background cannot serve a Hong Kong under Chinese sovereignty loyally and effectively. President Hu in his new four-point policy proclamation on Taiwan said: "No matter who he is and which political party it is, and no matter what they said and did in the past ..." This posture applies to Hong Kong as well. The test will be based on current and future actions, not past baggage.

History will show that Tung Chee-hwa has not been part of Hong Kong's problem. Rather, he has been part of the solution, and a very credible part at that. All in Hong Kong owe him a gratitude and respect for his personal sacrifices and political contributions in leading Hong Kong through its historic transition from shameful colonialism to constructive participation in the motherland's national rejuvenation. As the first chief executive of Hong Kong under Chinese sovereignty, Tung Chee-hwa will occupy a glorious place in Chinese history.

Henry C K Liu is chairman of the New York-based Liu Investment Group.

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The complete
Henry C K Liu


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(Mar 3, '05)

The battle to run Hong Kong
(Mar 2, '05)

China ready for democracy in 1940s, not today
(May 11, '04)

 
 

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