A Sense of Malaise Sets In

By Robert Keatley, Editor

Although Beijing has given Hong Kong the possibility of introducing a long-promised but undelivered universal suffrage in the years 2017 and 2020, the political parties comprising the pan-democratic movement—its greatest advocates—seemed a bit despondent as the year reached the halfway point. Some leaders even worried about being able to capture an all-important third of the Legislative Council’s 60 seats in elections this September, and many feared the Hong Kong and Chinese governments were busily rigging the political system heavily against them over the longer haul.

          The pro-democracy parties currently hold 25 seats, including most of those chosen by popular vote rather than indirectly by interest groups; they need at least 21 (a blocking third) to ensure they retain effective leverage in Legco as the government works out rules for future elections with an expanded electorate. The first tests will come soon after the September ballot when the government begins drafting laws to increase the voter rolls moderately for elections in 2012, something Beijing has called mandatory before Hong Kong can introduce universal suffrage for those that follow.

          The problems are manifold. For one thing, the several parties that favor fully democratic elections remain divided among themselves, unable to unite on a specific agenda or, in some cases, common candidates, or in negotiations with the government about the political future. They remain relatively small, and none can match the pro-Beijing Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), the city’s largest party by far, in organization and ability to meet constituents’ needs. (Many contend they’re involved in an unfair fight because the DAB allegedly receives much funding and other help from the mainland.) These constraints at times make them seem little more than middle-class debating societies that can’t get along with each other, unable to win broad support by connecting with concerns of the general public. [See Prospects for Hong Kong’s Democratization, by Larry Diamond, in this issue.]

          Beyond that, some of their leading Legco members are leaving office. Longtime Democratic Party leader Martin Lee Chu-ming—probably the pro-democracy activist best known overseas and certainly the one most often criticized by Beijing—is retiring when his terms ends this year. Two of his legislative colleagues also have said they won’t seek re-election, causing the party’s vice chairman to worry that its Legco membership might drop from nine seats to only six (and compared to 16 in past years). Meantime, veteran Civic Party legislator Margaret Ng Ngoi-yee, who represents the legal profession, may leave Legco, and it is not clear whether former Chief Secretary Anson Chan Fang On-sang, winner of a by-election in March, will run again.

A Training Plan Begins

          At the same time, Chief Executive Donald Tsang Yam-keun launched a program designed to train government-friendly politicians who might staff the upper levels of future administrations. He named eight deputy ministers and nine political assistants—who outrank career civil servants in key departments—as part of a newly-authorized plan to give management experience to those who someday may seek elective office as the political system evolves. Critics claimed that loyalty sometimes outweighed proven competence as the selections were made, and the DAB in particular seemed to benefit from the choices. That party’s goal is to become Hong Kong’s ruling party, perhaps along the lines of Singapore’s People’s Action Party which by various means has dominated that nation’s politics for decades and now holds 82 of its 84 legislative seats. [See A Party with a Future, by Tsang Yok Sing, in this issue.]

          The democrats’ misfortunes were compounded by a wave of Chinese nationalism that swept Hong Kong, stemming in part from Olympic fever. The Olympic fire’s global tour made its first Chinese stop in Hong Kong, and large crowds were mustered to watch various dignitaries jog by with the flame in hand. (Chief Executive Tsang had wanted to be one of the runners but was persuaded otherwise by his advisors.) This mood may help explain why, for the first time in five years, a respected poll found that less than half of the Hong Kong population now believes Beijing should soften its harsh judgments on those who took part in the 1989 Tiananmen protests. In addition, 85% believe human rights conditions on the mainland have improved in recent times and 77% say this trend will continue—both figures are records.

          Mr. Tsang’s appointment of the 17 new senior officials also fed the nationalistic mood unexpectedly, though it also gave him a surprising political row that he didn’t want. Many of the appointees—like perhaps one million other Hong Kongers—have second passports. When this became known, there were public demands that they prove their loyalty by surrendering their foreign citizenship, though neither Hong Kong nor mainland law requires it. (Many did so.) When Mr. Tsang also refused to say precisely what these new officials would be paid, the criticism rose. He eventually backed down, but the row helped drive his public approval rating down to 51%, the lowest since he took office in 2005.

          Nationalism is a sensitive subject for the pan-democrats. Although none dispute that the former British colony has become an inseparable part of China, they often criticize the central and Hong Kong governments for failing to deliver the promised universal suffrage more quickly, and for various other political faults. This causes their pro-Beijing opponents to contend they aren’t “patriotic” enough to be trusted with power, and China has used this as an excuse for delaying political reform. Many leading businessmen, perhaps concerned about their mainland investments, often echo this charge or at minimum don’t dare help finance the democrats. Thus anything than fans Chinese nationalism inside Hong Kong generally doesn’t help the pan-democrats’ political prospects.

          The fact that Hong Kong is well-governed by global standards also remains a major asset for the government and its friends, no matter what complaints the opposition may have about shortcomings in such areas as public health and education. A new World Bank survey of 212 countries and territories shows why. It ranked Hong Kong in the 86th percentile for political stability and absence of violence, in the 94th for government effectiveness, in the 99th for regulatory quality, in the 90th for rule of law and in the 92nd for control of corruption. The fact that it ranked relatively low (in the 65th percentile) for voice and accountability—which measures public participation in the political process—often seems less important to Hong Kong citizens.

          (By contrast, the World Bank gave the rest of China especially poor marks. For example, it put mainland governance in only the 6th percentile for voice and accountability, in the 32nd for stability and in the 31st for control of corruption.)

The Economy Still Grows-But for How Long?

          Also helping the government and those who support it is continued economic growth despite signs that difficult times may lie just ahead. As of March 31 the economy expanded 7.1% from a year earlier, helped by high investment and large export increases. An April survey showed private sector pay rose 4.5% to 6.9% over the previous year. May unemployment remained steady at only 3.3%. Official finances remained in surplus as tax revenues for fiscal 2007-08 totaled HK$200.6 billion (US$25.7 billion), up nearly a quarter from the prior year. A Merrill Lynch-Capgemini Consultants survey showed why so many local shopping centers feature the world’s priciest brands; it found 95,000 Hong Kong residents—a 10.2% increase—with net financial assets exceeding US$1 million. $200$

          But there are concerns about just how long these good times can last. The world’s financial woes and rising fuel costs began having their impact, notably in the form of higher prices. The inflation rate passed the 5% mark, aggravating a rich-poor divide that all sides consider to be Hong Kong’s major social problem. One survey found that supermarket prices for items like cooking oil and rice rose up to 50% this spring. Business activity stalled in May, according to a purchasing manager’s index, and bank economists predicted that GDP growth would slow sharply from the first quarter’s 7.1% rate. Rising fuel costs drove Oasis Hong Kong, a low-cost carrier, out of business and other airlines began cutting Hong Kong flights; officials said this too would harm the economy. It was no surprise that stock prices dropped 20.5% in the year’s first six months, the worst performance since 1994.

          All this was mostly outside government control, but officials did order one relief measure: they canceled tax on Euro V diesel fuel, though keeping it in effect on the more-polluting other grades. This brought a mixed response; some truckers demanded broader regulation of fuel prices, something highly unlikely to happen.

          But if the tax cut also reduces air pollution, it will be none too soon for most Hong Kong residents. Foul air remains a major source of discontent, as local conditions and prevailing winds from China cause unhealthy pollutants to collect more thickly than ever in the canyons between tall Hong Kong buildings. If a report in Guangzhou’s Southern Weekend newspaper is true, there is no relief in sight. It said nearby cities like Dongguan and Shenzhen—leading sources of Hong Kong smog—are setting new records for filthy air, one reason Hong Kong had its dirtiest March air in four years. To compound the worries, the Observatory began issuing warnings against intense ultraviolet radiation, the major cause of skin cancer, making the city the world’s first at its latitude to do so.

          Officially, Hong Kong and Guangdong Province have been drafting a joint plan to improve air quality since 2005. But the project is more than six months behind schedule and so far has led nowhere. For one thing, the two sides use different monitoring systems and can’t agree on how to define bad air. They now hope to set common standards by yearend, letting them move on to practical proposals that could actually cut emissions, but any real progress will require greater political will than shown to date.

          Meantime, another old problem—avian flu—reappeared after a five-year absence. The deadly H5N1 strain was found in certain poultry markets, causing the government to act quickly to reform the live-chicken trade and cut the risk of epidemic. It announced a HK$1 billion (US$128 million) plan to close existing markets, compensate those in the business and impose strict rules on a revived poultry trade. (However, traders staged demonstrations to  demand a bigger payout.) As usual, and unlike the mainland at times, Hong Kong quickly made data on the disease available to international health experts.

          Finally, it appears that Hong Kong residents, in case other things get too gloomy, will have a new source of entertainment within three years. A Legco committee approved payment of HK$21.6 billion (US$2.8 billion) to build a cultural center on landfill in West Kowloon. Details remain to be drafted but it is expected to include public parks, performance venues and new museums, among other things. The Guggenheim, the New York Museum of Modern Art and the Pompidou Centre have all been approached about setting up branches there.

 

          Robert Keatley is editor of the Hong Kong Journal.

07/01/2008