Hong Kong: Beijing Has Not Used All Its Resources

Disturbances are continuing for a second week in Hong Kong, and despite Beijing’s efforts to resolve the conflict, the number of clashes keeps growing. The RIAC editors asked Sergey Luzyanin, Doctor of Historical Sciences, First Deputy Director of the Institute of Far Eastern Studies, RAS, head of the Centre for Strategic Issues in North-East Asia and the Shanghai Cooperation Organisation, and professor at the department of oriental studies at the MGIMO University, to comment.

Disturbances are continuing for a second week in Hong Kong, and despite Beijing’s efforts to resolve the conflict, the number of clashes keeps growing. The RIAC editors asked Sergey Luzyanin, Doctor of Historical Sciences, First Deputy Director of the Institute of Far Eastern Studies, RAS, head of the Centre for Strategic Issues in North-East Asia and the Shanghai Cooperation Organisation, and professor at the department of oriental studies at the MGIMO University, to comment.

The demonstrations against Mainland China are on for more than a week. What’s behind the unrest?

The reasons are partly to do with domestic Chinese issues. When British jurisdiction came to an end in 1997 Hong Kong (Xianggang) gained a special administrative status. Hong Kong has always enjoyed a large degree of autonomy within the People’s Republic of China, in terms both of government administration and financial and economic independence and development. Hong Kong represented a different (and totally liberal) system of political and economic relations in comparison to that which operated in the PRC itself. In other words, the principle of “One country, two systems” has effectively been implemented in China since 1997. Hong Kong was in some ways an alternative model of development. The rest of China, as we know, was successfully promoting a strategy of reforms on the basis of socialism with a Chinese flavour.

Sergey Luzyanin

From the 1990s onwards there were occasionally fears in Hong Kong that official Beijing would gradually reduce the level of Hong Kong’s (Xianggang’s) autonomy and try to reduce its position to the status of a Chinese province. The current version of the electoral system offered certain changes: a system of electors was being brought in, along with Beijing’s mandatory approval of municipal election results, the head of the administration, etc. Part of Hong Kong’s population came out against the new election project and called for the right to hold direct elections for the post of head of the administration in 2017.

But there is also a second (external) cause, which has intensified the domestic Chinese disturbances. It is linked to the growth of the USA’s influence and the encouragement of an atmosphere of protest – the same as we are observing in Ukraine and other places with “colour revolutions”. The protesters’ electoral technologies used in Hong Kong were extremely similar to those used in the Kiev Maidan.

What are the demonstrators’ main demands?

The demonstrators’ demands so far are quite spontaneous and contradictory. Their main message is that they want the “old” electoral system to be left untouched; they want Leung Chun-ying to be removed from the post of head of the Hong Kong administration, and they want to maintain Hong Kong’s status as a special autonomous region with substantial rights of administrative and economic development.

But there is also a second set of demands that started to emerge during the demonstrations by part of Hong Kong’s radically-minded youth and intelligentsia. During the demonstrations (September 27-29, 2014) a radical demand was made of Beijing: that Hong Kong should secede from China and that a so-called “Hong Kong Republic” should be set up. Incidentally, a “Chinese Republic” has existed on the island of Taiwan since 1949. It was proclaimed in 1911 by Sun Yat-sen, the first leader of the Kuomintang party, but the PRC leadership considers it to be one of its own provinces which is “outside the fold of the motherland” for the time being but which will sooner or later be reunited with it.

It is completely obvious that the Chinese leadership, headed by Xi Jinping, chairman of the PRC, is not going to meet radical demands of this kind, but will be forced to seek a compromise. However, for international political and domestic reasons it is absolutely impossible for official Beijing to use the harsh model of suppressing protesters that it employed on Tiananmen Square in Beijing in 1989 (when the army and tanks were used). It seems that the use of force will be restricted to actions by the police and to counter-protests by the other part of the Hong Kong population that is not happy with the disturbances.

REUTERS/Stringer
Alexander Lomanov:
No Referendum for China

I would like to emphasise that the Hong Kong events began on 26 September 2014, and that four days earlier Xi Jinping had received in Beijing the cream of Hong Kong business, a large representative delegation headed by Tung Chee-hwa, the first head of the Hong Kong administration and the most authoritative businessman and politician in Hong Kong, who brought with him about 60 major representatives of Hong Kong business, politicians and administrators. Xi Jinping was probably trying to forestall the Hong Kong events, since there were already reports of a growing mood of protest. As soon as this meeting finished, a quote from Xi Jinping appeared on the front pages of all the Chinese media: “One country, two systems: nothing has changed, and we need to discuss these problems and try to solve them.”

At the same time the Chinese leadership published another and more harsh opinion – from Zhang Dejiang, the second man from the top in the Chinese hierarchy of power and chairman of the NPC Standing Committee. He stated that if Hong Kong does not meet the central government’s demands it will bear “historical responsibility”. In other words, the subtext was this: “We can punish too.”

In my view, this meant that during that period (September 22–26, 2014) the Chinese leadership did not have a united approach to the question of how to resolve the crisis, although of course Xi Jinping’s approach was the dominating and prevailing one, since he determines the key decisions in the country. Hong Kong is extremely valuable to the central government, since its share in China’s total GDP is colossal. It is well known that China now has the second-highest GDP in the world, overtaking Japan. Its GDP in terms of purchasing power parity (PPP) was 5.9 trillion US dollars in 2013. Hong Kong’s share in this GDP was almost 300 billion US dollars. In addition, Hong Kong is the third biggest stock exchange in the world after New York and London; it’s a focal point for the elite of global banking capital (189 of the biggest international banks, their subsidiaries and offices work there). Hong Kong is effectively China’s window to the western world of big economics. Any crisis here automatically affects China’s economic growth. Experts are currently registering a small fall in Chinese stock prices on the Shanghai and Hong Kong exchanges, and they estimate the total losses in one week of demonstrations at 2 billion Hong Kong dollars. If the demonstrations go on for a month these losses will rise to 10 billion. This is why Hong Kong’s entrepreneurs are against the demonstrations’ continuing.

Beijing will undoubtedly find a way of resolving this, including the most radical method – removing the current head of the Xianggang administration, Leung Chun-ying, as a way of compromising with the protesters.

In your view, what are the prospects for events taking a negative turn? Won’t Hong Kong become the same kind of problem for Beijing as Tibet and Taiwan?

RIA Novosti
Hong Konf and China
Differences between living in Hing Kong and
China: why are residents of the special region
protesting?

Such a threat theoretically exists, of course, but bearing in mind the capabilities, the resources and the current flexibility of the Chinese central government, it seems to me that Beijing will find some additional ways of stopping, resolving or containing this conflict.

The question of containing and resolving the Hong Kong crisis is not only important in terms of purely internal Chinese interests but is also acquiring a special international resonance, since if China succeeds in resolving the Hong Kong crisis completely and without consequences, it will indirectly deal a blow to the American strategy of pursuing humanitarian interference in internal affairs and destabilising China. There can be no doubt that Washington has such plans. Despite all their financial and economic interdependence, the USA and the PRC regard each other as potential geopolitical adversaries. But what happened on the Maidan in Kiev fairly easily for Washington will not happen and is not happening in China.

I think that Xi Jinping and his team will find a way out of the complicated situation. In addition, Beijing has not yet committed all its resources to resolving the Hong Kong crisis. Of course, it has other methods, methods that do not require force, at its disposal. Tiananmen 1989, as we know, caused a total economic and political blockade of the People’s Republic of China by the West, and some sanctions against the PRC still officially exist. Clearly a new blockade of the Celestial Empire is not needed.

But there’s no likelihood of economic sanctions being brought in against China, is there?

Of course, the idea of introducing economic sanctions looks very naïve and short-sighted, as well as ineffective. Moreover, bearing in mind that the PRC’s trade surplus with the USA is almost 300 billion dollars, and the total American securities bought by Beijing amount to 1.3 trillion dollars, Washington is objectively under Chinese financial pressure and is now extremely dependent on the PRC. Hence, it would seem, the West’s gamble on an attempt to undermine China from the inside via Hong Kong.

Interview by Daria Khaspekova, website editor.