Crisis and Transformation in China's Hong Kong

Ming K. Chan, Alvin Y. So

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781315498638
• Edition: 1
• Topic: History
• Subtopic: North American History
• Index: History

Hong Kong has undergone sweeping transformation since its return to Chinese sovereignty in 1997. This is a multidisciplinary assessment of the new regime and key issues, challenges, crises and opportunities confronting the Hong Kong Special Administrative Region (HKSAR).

1

Introduction

The Hong Kong SAR in Flux

Ming K. Chan

This multidisciplinary volume aims to assess the major crises confronting and the crucial transformative processes reshaping China’s Hong Kong since July 1, 1997. While drawing definitive characterization of or rendering a summary verdict on the overall performance of the Hong Kong Special Administrative Region (HKSAR) of the People’s Republic of China (PRC) would be premature, its five years of local autonomy under Chinese sovereignty did yield some sufficiently clear indicators on the actualization of the “one country, two systems” formula as being practiced in the HKSAR.

Despite many of the pre-1997 doomsayers’ dire predictions about Hong Kong’s inevitable loss of political autonomy and basic freedoms as part of Communist China, the worst did not happen. So far Beijing has exercised considerable restraint and avoided any overt interference in the HKSAR’s internal administration. Yet the highly optimistic forecast of post-1997 Hong Kong’s “better tomorrow” with undiminished “stability and prosperity” also has been far off the mark. In fact, the most serious crises that have assaulted the HKSAR came from an almost totally unexpected area—the economy. Since late 1997, the HKSAR has been engulfed by rising unemployment, negative growth, widening budget deficits, rapid equity depreciation, and unprecedented price deflation. Such economic woes stemmed at first from the autumn 1997 pan-Asian financial turmoil and the subsequent bust of the twin economic bubbles—the overheated local property market and runaway stock market speculation. Such serious threats to the livelihood of Hong Kong’s populace were also partly due to the painful and long-term fundamental economic restructuring that has been unfolding since the late 1980s. More recently, the already deeply depressed local economy was dealt another devastating blow by the global fallout effects of the September 11, 2001, terrorist attacks in the United States, Hong Kong’s foremost international economic partner. Even though both the worst and best post-1997 scenarios failed to materialize, popular expectations, collective self-confidence, and common aspirations of the nearly seven million HKSAR residents did undergo very drastic changes within the last five years. A disturbing mood with the public fearful about the deteriorating employment picture, with little prospect of either immediate relief or near-future improvement, and a widespread sense of helplessness and inability to cope with the deepening economic crisis have hit the entire HKSAR community, from the hard-squeezed middle class to the still more deprived grassroots.

On the surface, the daily life of the great majority of the local populace in the early SAR era seems to remain little changed from the pre–July 1, 1997 colonial days. Other than the replacement of the British Union Jack by the five-star PRC national flag, the sovereignty retrocession has not been particularly noticeable in a physical sense. Even the once-worrisome stationing of People’s Liberation Army (PLA) troops has become a nonissue, as the local PLA garrison is almost invisible behind its barracks. Despite this façade of apparent normalcy, Hong Kong, its institutions, and its residents have been negotiating tight and delicate processes of subtle changes and uneasy adjustments, sometimes in response to unexpected external forces, other times due to the need to conform to administrative and constitutional requirements framed by the Basic Law. In fact, the HKSAR’s autonomous status under PRC sovereignty has reshaped institutional structure and personnel decisions of the Hong Kong polity, while the need to manage a growing community and complex economy necessitated novel undertakings in infrastructure projects, government programs, and public services. As an organic and dynamic functional hub and economic center of global significance, Hong Kong should change and has changed since the sovereignty retrocession. Depending on the specific criteria and particular perspectives, however the changes have not always been for the better in the early HKSAR era.

If change indeed belies the reality of China’s Hong Kong, the past five years saw the SAR regime under Chief Executive Tung Chee-hwa confronted with more than its fair share of devastating crises and major disasters. These challenges placed his administration under considerable strain and stress, often magnifying hidden faultlines and revealing sheer incompetence on the part of both the SAR leadership’s governing capacity and the entrenched civil service’s emergency response capabilities. These crises included the pan-Asia financial meltdown that resulted in deficit budgets for the SAR government; the 1997–98 bird flu; the 1998 new airport opening fiasco; the unsafe construction of public housing estates scandal; and other glaring cases of serious misdeeds by government personnel, agencies, and public bodies. They testified to the grave crisis mismanagement of the new regime’s civil bureaucracy that was inherited from the British colonialists. In addition, the conservative, paternalistic, and interventionist Tung Chee-hwa regime also suffered from self-inflicted wounds in that he tried, at the very start of his reign, to launch numerous far-reaching reforms in various vital policy fields almost simultaneously; these fields included education, housing, welfare, and the civil service. Tung’s too-much, too-soon, all-at-once, multifront chain of reforms provoked stern opposition and determined resistance from almost all affected quarters; many of them, such as teachers and civil servants, even resorted to public protests on the streets. Coming together, all these constituted many of the basic causes underlining a clearly discernable crisis of governability that has troubled the HKSAR regime under Tung’s leadership from its early days.

If the 1985–97 transition period had been overshadowed by the Beijing–London–Hong Kong political discords on disputed sovereignty and contested democratization, then it should be natural that the new SAR leadership would deem it desirable to refocus public efforts on, and to reallocate official resources to, various necessary but long-delayed domestic reforms ignored or avoided by the departing British sunset regime. The very rigid and restrictive Basic Law provisions do not yield much room for the Tung administration, even if it were ever so inclined, to attempt many major changes in the political system, at least not until the premandated 2007 constitutional and electoral review. Rather, it is in the socioeconomic realm that the SAR regime supposedly can enjoy much more room to maneuver.

In fact, on the domestic front, the HKSAR has a completely free hand to move forward to seek breakthroughs, to unleash new initiatives, and to chart fresh courses for both novel undertakings and exploration of untapped opportunities, as well as to remedy colonial defects and address past inadequacies in order to make Hong Kong a better place under Chinese rule. However, as the first local-led administration that was inaugurated with very strong Chinese national goodwill and high local expectations, the Tung regime’s performance on the domestic front so far has been quite disappointing. It not only failed to inspire public confidence and enhance people’s trust in the government amid the worsening economic crisis, but unrelenting public criticisms of his misguided policies and administrative failures became so severed and widespread that Beijing was compelled to step into the fray in order to buttress the tattering Tung regime and salvage the “one country, two systems” experimentation in the HKSAR.

To rescue Tung from plummeting popularity, senior PRC leaders on different occasions repeatedly expressed strong approval of his performance. Aimed specifically at countering the very loud calls from all quarters in Hong Kong demanding Tung not to seek another term of office, Beijing’s top brass, including President Jiang Zemin, even openly issued clear endorsements to support his reelection as HKSAR chief executive for a second five-year term starting July 1, 2002. Such high-profile signals, if not highhanded intervention, from the PRC central government did have a direct deterrent effect in preempting other credible and qualified potential candidates from joining the March 24, 2002, contest to challenge Beijing’s preordained Tung Chee-hwa. Nonetheless, even though the prospect that Tung would easily be “reelected” without opposition as the sole candidate for the chief executive’s office was very high, there could be no guarantee that Tung would automatically receive an overwhelming share of votes from the eight hundred members of the Election Committee as a show of popular support. A near-nightmarish scenario would have Tung win unopposed but receive little more than four hundred votes out of eight hundred. This would reflect an approval ratio in line with Tung’s about 50 percent popularity rating in various public opinion polls during the past two years. Had that been the case, it would reconfirm the legitimacy crisis that has been haunting the Tung regime and has further complicated its governability problems. In early March 2002, as the only nominated candidate (by 7 of 794 electors), Tung was deemed the winner without the need to conduct the actual voting.

While Tung is undoubtedly a very decent, sincere, and honest person, his questionable democratic legitimacy as the first SAR leader (anointed in late 1996 by Beijing’s hand-picked HKSAR Selection Committee of four hundred) was compounded by his strong aversion to political parties, electoral campaigns, and parliamentary politics; his noncharismatic leadership style, coupled with an acute lack of public communications skills (along with an equal lack of desire to communicate); and his submissively overt pro-Beijing (as against staunchly pro-Hong Kong) slant on many sensitive political matters. All these factors did little to enhance his political effectiveness and public credibility, or to make his task in implementing sweeping reforms any easier. Nor have his belated crisis alertness, narrow and shallow attempts, and generally meager responses with incoherent policies or ad hoc half-measures to refloat the deeply depressed and still-fast-deteriorating economy proved to be timely and effective.

Reflecting his grand capitalist origins, big business career experience, and clear tycoon sympathies, but handicapping unfamiliarity with the plight of the grassroots, critics were justified in labeling many of Tung Chee-hwa’s economic relief policies as aiming more at “saving the market” for the business elites but doing little at “saving the victimized people” from unemployment, wage freeze or salary reduction, and negative equity burdens. Eventually, the cumulative effects of his sudden policy shifts and secretive about-faces on key issues (such as the fiasco over his housing policy with a targeted eighty-five thousand new units annually), self-contradictory official pronouncements, ill-thought-out proposals, biased decisions, and counterproductive measures alarmed and disturbed even those in the business world, including many of his previous elite supporters, in addition to the already alienated middle class and the hard-pressed grassroots.

On top of its various administrative debacles and policy missteps, the HKSAR regime, in its search for administrative expedience or political correctness, also seriously undermined judicial independence and the rule of law in two mainland China-related cases in the eyes of many legal practitioners and informed observers. The first was the by-now-notorious case of the right of abode for Hong Kong residents’ mainland children, against whom the SAR regime resorted to requesting the PRC National People’s Congress to reinterpret Articles 22 and 24 of the Basic Law in order to invalidate the HKSAR Court of Final Appeal’s January 1999 ruling in their favor. This in fact amounted to opening the front gate to invite Beijing’s direct judicial interference in order to save the SAR executive arm from certain defeat on purely legal ground in vital matters of great consequence.

The second case occurred in spring 2001, when Tung Chee-hwa, carefully toeing Beijing’s official line, openly condemned the Falun Gong as “definitely a devious cult,” without any solid factual proof, and without proper legal justifications regarding the probable unlawfulness in the Falun Gong’s activities according to the HKSAR’s own laws. Such deliberate actions by the SAR leadership’s “looking to Beijing” for an easy exit from the unwelcome practical consequences of due legal process as administered by the SAR’s supposedly independent judiciary system or in an anticipatory attempt with political correctness to seek Beijing’s approval on controversial matters could only erode the independence of the judiciary and hamper the fair administration of justice for all, which are the key pillars supporting Hong Kong’s rule of law to guarantee basic freedoms and economic fair play. Such actions also would run counter to the true sprit and real intent of the one country, two systems design in the legal and administrative spheres. These are but two of the more alarming examples of questionable political judgment, leadership inadequacies, and legal lapses that have tarnished the SAR regime’s early record and contributed to a potentially fatal constitutional crisis undermining the SAR’s much cherished high degree of autonomy.

Another SAR malaise has been manifested in a serious lack of confidence in near-future prospects among Hong Kong’s populace, whose trust in the SAR regime has been sharply declining. In turn, the officialdom itself also suffered from both a growing public credibility gap and pervasive civil service demoralization, while desperately trying to confront the many crises and challenges in the post-1997 era. Unlike the prehandover era’s common fear of Chinese communism under the negative China Factor, this new confidence crisis is much more than just the normal and expected teething pains for the new HKSAR community while undergoing the inevitable political and constitutional transformation and long-term economic restructuring. In large measure, this stemmed from the populace’s collective sense of desperate victimization and panic helplessness as well as the Tung regime’s proven incapacity and even ineptness in relieving the majority’s threatened livelihood and alleviate the common economic sufferings, which were first set in motion by the 1997 pan-Asia financial turmoil and further intensified by the post–September 11, 2001, global downturn.

Within the SAR’s highly autonomous domain in domestic affairs, the new regime has ushered in several deliberate measures of drastic institutional change such as the December 1999 abolition of the Urban Council (which had the longest history of local elected representation) and Regional Council, and the reintroduction of appointed members to the previously all-elected District Boards (renamed District Councils). From July 1997 through April 1998, the SAR was also burdened with an unelected and extra-constitutional (as it was not provided for in the Basic Law) “provisional legislature” (PLC) which replaced the all-elected Legislative Council (Legco) formed in 1995 under British auspices. This PLC of dubious legitimacy and low public esteem, after repealing a host of prehandover era liberal laws on labor protection and civil rights, enacted a set of regressive electoral rules for the creation of future HKSAR legislature.

When the first ever HKSAR Legco elections were held in May 1998, they were conducted according to new rules under which almost a million voters in some of the thirty functional constituencies were disenfranchised. As for the twenty directly elected geographic constituencies, a new proportional representation system was adopted to marginalize the democratic camp and to effect a divisive partisan alignment to retard the emergence of a single majority party. So serious was this deliberately crafted electoral mandate-legislative representation disconnect under the new SAR rules, that while the democratic activists in May 1998 still captured the same two-thirds of the popular votes as they did in 1995, they were entitled to only one-third of the Legco seats, down from their near majority in 1995. All these electoral twists and turns supposedly would fit in well with Tung’s often-repeated emphasis on “depoliticizing” Hong Kong public affairs and on refocusing the populace’s energies on socioeconomic undertakings in order to mitigate Hong Kong’s rapid politicization during the 1985–97 transition era, which was marked by Sino-British conflicts on local democratization. Thus, a continuing crisis of democracy interacted with the crisis of legitimacy to deepen the new SAR regime’s own crisis of governability.

Despite’s avowed “depoliticization,” the SAR regime is about to formally politicize its own administrative top echelon and overhaul the entire policymaking system with plans for political appointees on contract terms to head key government policy bureaus. Serving a fixed term and occupying a seat on the Executive Council (Exco), these appointees would be directly accountable to the chief executive in a “pseudoministerial system” that should become effective by July 2002, at the start of the chief executive’s second term. Perhaps this new system, first suggested by Tung Chee-hwa in his October 2000 fourth policy speech and more clearly outlined in his Legco public speech on April 17, 2002, will enhance the chief executive’s overall personal control of the policy formulation, decision-making, and public promotion processes currently undertaken by career bureaucrats who are ill suited for such overt political and even partisan functions.¹ The earlier-than-planned April 2001 departure of Anson Chan (the most senior of the colonial era handover officials) from the post of chief secretary for administration and the appointment of an experienced banker, Anthony Leung, as financial secretary to replace Donald Tsang (who became Chan’s successor) in fact had already enabled Tung to enlist personally loyal and politically “patriotic” talents from the private sector to fill two of the top three portfolios in the SAR regime under him.

These personnel decisions could be taken as the vital first steps toward a political appointees–dominated cabinet form of executive-led government, allowing the chief executive much stronger direct command over the entire policy machinery, which for the first four years of his tenure had not been functioning optimally while staffed by colonial-groomed civil servants. Of course, after this new system is inaugurated, Tung Chee-hwa would no longer have as a convenient pretext for policy failures the lack of full cooperation from or smooth coordination among someone else’s senior officials whom he had simply inherited. As such, he would have to be fully responsible for all the decisions he made with his own hand-picked appointees. Yet, this new system, which is labeled by Tung as “improving the quality of administration,” while definitely constituting a major political reform, will not necessarily yield greater governmental accountability to the Legco and the public at large. Without the advice of and institutional constraints by a civil bureaucracy top layer, these political appointees could well be selected on the basis of their personal loyalty to and ideological compatibility with the chief executive rather than for their public affairs experience, professional expertise, administrative skills, political wisdom, or developmental visions.

These top officials would be recruited and appointed by, accountable solely to, serve only at the pleasure of, and easily removed from office by the chief executive at will, and yet the chief executive himself or herself is not directly elected by the HKSAR community on a universal franchise. Thus any notion of this system as enhancing genuine “executive accountability” to the public or its elected representatives, the Legco councilors, is far off the mark. It will remain very much a scheme to consolidate more power directly into the hands of the chief executive and thus supposedly to facilitate greater administrative efficiency and policy effectiveness in the executive-led SAR government. Neither would this new system be able to solve a major built-in defect in the SAR polity. The Tung regime’s lack of a stable and firm base of support among the political parties in the Legco will continue to strain executive-legislative relations in the SAR, at least until electoral reforms, if any, can be introduced to change the realpolitik dynamics by 2008.

Another significant postcolonial transformation has already been unfolding in the realm of political software—the official ideological tilt and partisan color underlining policy orientation and public affairs mechanism. Despite its avowed wish at depoliticization, the HKSAR leadership has been practicing a new kind of political correctness by increasingly looking toward Beijing, often in an anticipatory and solicitous mood, in purely domestic and hence supposedly “autonomous” matters. As an integral part of this “northern orientation” and perhaps also a concerted effort to rectify the past British slights and compensate for the nearly five decades’ repression under the old colonial order, leftist partisans received more than their fair share of HKSAR official appointments to public bodies, political honors, regime patronage, and Tung’s personal attentiveness while the democratic camp activists were systematically sidelined and underrepresented in the corridors of power.

Of course, reflecting Tung Chee-hwa’s shipping family scion background and very ...