Recent Notes from Hong Kong

Earlier this month I spent a few days in Hong Kong, on my way back from Europe. Hong Kong was my home for 6 years – before, during and after the 1997 Handover – and I have continued to visit on a regular basis ever since. While I didn’t directly witness any of the latest clashes between pro-democracy campaigners and the police, I did see (and hear) the knock-on effects of the past 6 months. I also spoke to a range of people living and working in the city – from local residents to long-term expats; from small business owners to entrepreneurs; from corporate employees to public servants; from teenagers to senior citizens. Whatever their particular views on recent events, their one common hope is that the situation can be resolved peacefully, and soon.

“Maze of Today” by Wu Guanzhong (2007) – Image sourced from China Online Museum website*

The trigger for the current protests was a proposed extradition law between the Hong Kong SAR and the rest of the PRC (as well as Taiwan and Macau). The bill was highly contentious, given the very different legal systems between Hong Kong and the Mainland. Serious concerns were expressed by the business sector, the legal profession and the general public. These concerns were given wider voice by the hundreds of thousands of ordinary people who joined the first of the peaceful mass marches at the start of the summer. Since then, nearly every weekend (and at times during the week) there has been direct action in the form of marches, strikes and occupations – sometimes leading to street battles between police and protestors, images of which have been seen around the world. These events have been accompanied by allegations of police brutality, the alleged use of agents provocateurs, and suggestions that the protestors are either terrorists, traitors or a threat to society.

On one level, Hong Kong continues to operate normally (although getting into the international airport is a little trickier since it was the target of so-called “stress testing” of the public roads and transport system). On the other hand, it certainly feels quieter than normal, and visitor numbers are down – as much as 40% overall on one measure, with a 90% decline in visitors from the Mainland. (My flight from Europe was barely half full.)

With the increased protest activity at weekends, public transport can be tricky. Some subway stations are suddenly closed without much warning from Friday evenings onward, and the express train from Central to the airport bi-passes the usual intermediate stops. On the Sunday I was there, there had been a mass gathering in Central, and access to the nearest subway station (for the local train service back to Kowloon) was closed, so there was an orderly queue of several hundred metres as people waited for the Star Ferry – many of the passengers dressed in black t-shirts, the unofficial uniform of the protest movement.

Given the recent bans on marches and gatherings in public places (notwithstanding Hong Kong’s right to peaceful assembly) a strange phenomenon has emerged. Each night, at around 10.30pm, local residents open their apartment windows and start chanting slogans associated with the pro-democracy movement. It is both eerie and extremely moving.

This nightly display certainly evokes the sense that no-one wants to see complete chaos or a violent end to the protests, so they chant in hope that a peaceful solution can be found. Otherwise, hope will give rise to despair, and with it the slow, painful decline of Hong Kong as a global city – a multi-cultural, international hub for trade, commerce, finance, ideas and innovation that combines notions of east and west, new and old, pragmatism and spiritualism.

The protestors have issued a set of five key demands. One relates to scrapping the extradition bill, which has now been withdrawn by the Hong Kong Chief Executive. Three relate to the protests themselves – removal of the term “rioters” to label the protestors; an independent investigation into the police response and alleged brutality (and even into police in-action when protestors were attacked by counter-demonstrators with seeming impunity); and an amnesty for all protestors who have been arrested to date.

The fifth demand, Universal Suffrage in direct elections for both the Legislative Council (Hong Kong’s Parliament) and the Chief Executive, is a lingering issue from the Umbrella campaign of 2014 (when large parts of the city were occupied in protest at Beijing’s decision to “defer” one person one vote). It’s probably even more contentious than the withdrawal of the extradition bill. To summarise: the Basic Law is Hong Kong’s Constitution. It is supposed to enshrine the city’s pre-existing common law systems for a minimum of 50 years after the Handover. Under the “One Country, Two Systems” regime, designed to govern Hong Kong’s legal, political and economic relationships with the Mainland, the people of Hong Kong were assured that their way of life would continue as before after 1997.

Article 45 of the Basic Law, states that:

“The ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures.”

The above has to be read in conjunction with Article 15 (Beijing directly appoints the Chief Executive), and Annex 1 (defines the candidate selection and election process – which has been revised in recent years).

The challenge is that the Central government believes it has to keep control over both the candidate nomination process, and the membership of the Election Committee (election college). On current evidence, the people of Hong Kong are unlikely to get to directly elect their own Chief Executive, nor nominate the candidates of their own choosing. (And the Legislative Council will continue to comprise members who represent “functional constituencies” – elected representatives voted in by their peer groups from various vested interests.) Even if they did directly vote for the Chief Executive of their choosing, Beijing would reserve the right not to confirm them in office, and would appoint their own candidate instead.

Of course, it’s not that Hong Kong was particularly democratic under colonial rule – the Governor was technically appointed by the British Monarch (on the advice and recommendation of the British Foreign Secretary), and acted as the Crown’s direct representative.

On another level, the model for the Election Committee is something like the US Electoral College that formally elects the President, based on the delegates elected by each State. This process was seen as “a compromise between election of the President by a vote in Congress and election of the President by a popular vote of qualified citizens”.

Finally, I was given an interesting interpretation of “One Country, Two Systems” by an elderly gentleman I spoke to on the MTR one day. “Where are you from?” he asked. “Australia” I replied. “Ah, near New Zealand. Same country.”

* My reason for choosing the above picture of Hong Kong by Wu Guanzhong to illustrate this blog is two-fold:

First, the painting is called “Maze of Today”, rather an apt title for the current state of affairs. Second, while I was working as a publisher in Hong Kong in the 1990s, my company licensed another Hong Kong picture by Wu for the cover of an introductory book on the law of the Hong Kong SAR. The first edition was issued in 1996, with a second edition in 2001 – and it still appears to be on the Hong Kong University reading list for law students, and cited in other law books as recently as this year.

Next week: Startup Vic’s Impact Pitch Night

 

Brexit Blues

Reading the latest coverage of the Brexit farce combined with the inter-related Conservative leadership contest, I am reminded of Oscar Wilde’s description of fox hunting:

“The unspeakable in pursuit of the uneatable”

Whichever candidate wins the Tory leadership race and, as a consequence, becomes the next UK Prime Minister, they will inevitably fail to deliver a satisfactory Brexit solution, simply because there is no consensus position.

But the underlying cause for this impasse is a series of flawed processes:

First, the promise made by previous Prime Minister David Cameron to hold a referendum on EU membership was flawed, if not highly disingenuous – because from the start, there were no terms of reference. Cameron chose to make it part of his manifesto pledge ahead of the 2015 general election campaign. Even at the time it felt like a desperate ploy to appease the mainly right-wing and Eurosceptic faction of the Conservative party. Despite being generally in favour of the UK remaining within the EU (but with “looser ties”), Cameron probably never expected that he would have to deliver on his referendum promise let alone lead the Brexit negotiations. Behind in the polls, the Tories were expected to lose the election. Instead, they won, but with a much reduced majority – which should have been the first warning sign that all was not going to be plain sailing with Cameron’s EU referendum pledge.

Second, the referendum question put to the electorate in 2016 was itself flawed. Cameron had originally talked about renegotiating the UK’s terms of EU membership, much like Margaret Thatcher had done with some considerable success in the 1980s. There was certainly no mention at all in Cameron’s January 2013 speech of a “No-deal Brexit”. However, the referendum question put to the voters was a stark, binary choice between “Remain” or “Leave”. As some have argued, the design of the referendum should have been enough to render it invalid: both because the voters were not given enough reliable data upon which to make an informed decision; and because there was no explanation or guidance as to what type of “Leave” (or “Remain”) outcome the government and Parliament would be obliged or expected to negotiate and implement. Simply put, the people did not and could not know what they were actually voting for (or against). I am not suggesting that the voters were ignorant, rather they were largely ill- or under-informed (although some would argue they were actually misinformed).

Third, the respective Leave and Remain campaigns in the 2016 referendum were both equally flawed. The Leave campaign was totally silent on their proposed terms of withdrawal (I certainly don’t recall the terms “Hard Brexit” or “No-deal Brexit” being used), and their “policy” was predicated on the magic number of “£350m a week“. And the Remain campaign failed to galvanize bipartisan support, and was totally hindered by the Labour leadership’s equivocation and ambivalence towards the EU (which has only deepened as Jeremy Corbyn refuses to confirm what his policy actually is).

Finally, the Parliamentary process to implement Brexit was flawed from the start. Cameron jumped ship and ending up passing the poisoned chalice to Theresa May. The latter had supported Remain, but now had to lead the UK’s withdrawal from the EU. However, rather than trying to build consensus and broker a truly bipartisan solution (this is not, after all, a simple, one-dimensional party political issue), May proved to be a stubborn, inflexible and thick-skinned operator. Now, there are threats to prorogue Parliament in the event that MPs vote against a No-Deal or Hard Brexit, if a negotiated agreement cannot be achieved by the October 31 deadline. May’s negotiation tactics have only resulted in deeply entrenched and highly polarised positions, while she ended up painting herself into a corner. Good luck to her successor, because if nothing else, Brexit is casting division and national malaise across the UK.

Next week: Pitch X’s Winter Solstice

 

Postscript on the Federal Election

Well, what just happened there? In a Federal election that was Labor’s to lose (based on all the published opinion polls), the opposition ended up conceding defeat within just a few hours of the ballot closing. Despite the negative national swing away from the Coalition, Labor suffered an even greater negative swing.

Although populist parties gained votes at the expense of the two major parties, they failed to pick up any seats – rather, Labor lost too many seats. The Greens held on to their one seat, while the balance held by other minor parties also remained the same. All of which enabled the Coalition to form majority government. Sure, there were some significant variations in each State (and the Coalition will have to rely on minority parties in the Senate), but overall Labor was the biggest loser.

Yet it was still a pretty close outcome, and as I expected, the deciding factor was Queensland (and Adani).

A key problem for Labor was that rather than beating up “the big end of town”, and advocating a form of class war (thru the implied politics of envy), it should have found a way to help the working population adapt to the reality of a changing economy. Plus, instead of just imposing a carbon tax, it should have offered more incentives to decarbonise.

Equally, during the campaign there was no discussion by either major party on the need for structural economic reforms around competition, productivity and the tangible outcomes of public services.

Labor has since pretty much abandoned key fiscal policies it took to the electorate, with its new leader claiming that the party must appeal to “aspirational Australians” (whatever that means). For me, this implies that people need to feel incentivised to contribute more, while also feeling they are able to keep more of what they earn, through their additional efforts. In fact, the new shadow finance minister has commented on the lack of productivity gains (reflected in large part by wage stagnation?). Whereas, the previous Labor leadership talked endlessly about “ordinary Australians” (whatever that means).

The re-elected Prime Minister, meanwhile, credited “quiet Australians” (whatever that means) for the Coalition’s success.

Somewhat worryingly, the Prime Minister described his win as a “miracle”, and has made a significant personal statement through his own churchgoing habits, while a former Labor Prime Minister said his party needed to “reconnect with people of faith”. The sacking of a leading sportsman for making bigoted comments on social media (because his religion wanted him to say those things) has led to a prominent Coalition senator to seek an administrative review of the decision, on the grounds that expressing religious views cannot be cause for dismissal. The consequence of such a position is that “religious freedoms” effectively protect hate speech. And there was I thinking that we lived in a secular country…

Both major parties have to overcome continuing and significant internal divisions in the wake of their respective election results. Labor’s factionalism has already been on display again with the way its uncontested leadership contest was stitched up in more murky back room deals. And the Coalition’s more conservative members from Queensland will be expecting huge rewards for having delivered the party a surprise win.

Whether or not Australia’s Federal poll result was another example of the populist trend that was started by the Brexit referendum, confirmed with Trump’s success, and now extended following the EU elections, is open to debate. But it’s clear that traditional assumptions concerning the western democratic process have been subverted, in large part by the arrogance and complacency of the very same political parties that have hitherto underpinned them, that were also forged by them, but which now appear willing to undermine them.

Next week: The Finnies