18 BriefingTurmoil in Hong Kong The EconomistAugust 10th 2019
2 show Hong Kong incapable of “keeping our
house in order”.
Perhaps Mrs Lam’s administration
thinks that the protests might lose steam
along with popular support. At the outset,
many parents marched with their children.
But now, growing numbers of Hong Kong
people are deeply concerned about the es-
calating violence on all sides; it is the chief
topic of everyday office conversation. Par-
ents with children at school or university
have been withholding pocket money in
the hopes that, penniless and underfed,
they will come back home. Many long for
the start of the new academic year in early
September, hoping that young protesters
will return to their studies.
But it is not only students who are criti-
cal of the government. Even groups that in
the past have been staunch supporters of
the administration have been having sec-
ond thoughts. This week many businesses
made it clear to their staff that they would
not be penalised for joining the general
strike. And though it strongly condemns
recent violence, describing it as a threat to
Hong Kong’s position as a financial centre,
the Hong Kong General Chamber of Com-
merce, the largest business organisation,
has backed protesters’ calls for an indepen-
dent inquiry as a necessary step for restor-
ing calm. By the standards of Hong Kong
business, that is a bold move. A few other
organisations and individual companies,
risking becoming the target of online anger
from the mainland, are more quietly back-
ing the peaceful aspirations of protesters
(among whom number their staff ).
An emerging viewpoint, even among
some pro-party types, acknowledges that
many Hong Kong businesses had concerns
about how the extradition bill might add to
the arbitrary risks of doing business with
the mainland. This viewpoint admits to
sympathy for Hong Kong’s disaffected
youth, who are alarmed at the rapid inte-
gration of the territory’s economy with
China’s. Members of this camp may hold
that the political job is now to tilt the eco-
nomic playing field in favour of theyoung—more public housing, for in-
stance—but they do not acknowledge a
democratic dimension to the protests.
It will prove a hot and critical August.
For now, the line in Beijing avoids any di-
rect threat of intervention: stand behind
Mrs Lam’s stricken authority, urge the po-
lice and courts to be tough, and be on a
ruthless lookout for separatist tendencies.
On August 7th Hong Kong members of two
mainland bodies, the National People’s
Congress and the Chinese People’s Political
Consultative Conference were ordered to
Shenzhen to hear the message first-hand.
Mr Xi has an urgent reason to wish that a
tighter grip and a firmer message will bring
order to Hong Kong. On October 1st he pre-
sides over China-wide celebrations mark-
ing the 70th anniversary of the Communist
Party coming to power: the birth of a “new”
China which Mr Xi can now claim is also a
powerful one. To ensure the anniversary is
marked without a hitch, security across the
mainland is being tightened and dissent
stifled even more vigorously than usual.
However, firmness in the face of unrest
has been tried before in Hong Kong, and
though it succeeded in the immediate aim,it failed in the long run. The authorities
wore down the umbrella protests demand-
ing democracy in 2014 and restricted even
further the scope for representative poli-
tics. That just bred a more radical genera-
tion of protesters. As for the increasing
“mainlandisation” of Hong Kong politics,
among ordinary Hong Kong folk it has fos-
tered only cynicism and a sense of power-
lessness. The central liaison office, once al-
most invisible, now owns Hong Kong’s
largest publisher, provides loans to patriot-
ic businesses, ensures China’s choice of
chief executive and backs candidates fa-
voured by the Communist Party in elec-
tions for the legislature and district coun-
cils. Now it is also pushing loyal placemen
into the leadership of many professions.
A hopeful scenario does exist for Hong
Kong. According to an adviser to Mrs Lam,
if the streets grew calm it would be possible
to imagine the government presenting
once more a package of political reforms
that it first offered five years ago. It would
include allowing universal suffrage in
choosing the chief executive. In 2014
democrats in the legislature rejected the
package, partly because, in effect, only
party-approved candidates would be al-
lowed to run. This time, says Anson Chan, a
former chief secretary who now backs the
democratic cause, a deal could be done, so
long as a timetable for universal suffrage
were agreed. Mrs Lam should consider this
option. After all, her crisis of legitimacy
comes, at heart, from not being elected by
Hong Kong. All her unelected predecessors
ended their terms in failure too.
Indeed, some democrats are urging hot-
head protesters to rethink their tactics.
Attacking police stations, they say, just
plays into the hands of the authorities. A
more valuable battleground is emerging:
elections for the territory’s district coun-
cils in November. While ordinarily such
elections have to do with matters such as
rubbish collection and bus lanes, in the
current climate they will be a referendum
on political values. Unless democrats
move from the streets to the campaign
stump, says Kevin Yam, a lawyer and col-
umnist, the pro-establishment camp,
whose grass-roots organisations in hous-
ing estates and the villages of the New Ter-
ritories is funded by the central liaison of-
fice, risks dominating. Should that camp
win, Mr Yam argues, it will say: “you see, we
[not you] are the silent majority.”
If the violence continues, avenues for
peaceful advocacy and dissent will be
blocked by one side or the other. At best
this scenario would entail a long tearing of
Hong Kong’s social fabric and a relentless
decline in the territory’s economy. At worst
it could mean the end of Hong Kong as it
has long been imagined, as soon as the ar-
moured anti-riot vehicles roll out of the
garrison compound. 7The goose that still lays golden eggsSources: Bloomberg; World Federation of Exchanges; Hong Kong government statistics; Shanghai & Shenzhen stock exchanges *Excl. ChinaValue of stockmarkets,August 8th 2019, $trn Hong Kong in numbers1184311555321997 Latest
Mainland China
stockmarket value, $bn
Hong Kong
stockmarket value, $bn
Total loans by
Hong Kong banks, $bn
US dollar and other foreign
currency deposits, $bn
Number of multinational
firms with regional HQ*0 5 10 15 20 25 30 35
United States
China
Japan
Hong Kong
Britain
France
Canada
Germany
India
Switzerland6,4,8511,2 77744 1,