4) Politics again. Our friend Minxin Pei is back to explain how outside-world hopes for “reform” in the Xi Jinping era should be assessed now.
Sobering, all. Nonetheless, happy Labor Day.
A note from a foreign resident of Hong Kong:
As a [Westerner] based in Hong Kong for 20+ years, I think the Standing Committee has really misread its audience this time around.
The Chief Executive position is relatively powerless - certainly less so than any mayor or party chief of a comparable city inside China. There was very little to be lost, even if one of the super democrats had somehow been chosen. And the chances of that were nil in the first place, as Hong Kongers know better than to mess with success.
Which "foreign elements" are Beijing so worried about these days? Western governments have far less real economic influence than the large multinationals. Those companies (of which my employer is one) have an enormous vested interest in quiet and calm access to the China market and protection of the many strands of their global supply chain that flow through Shenzhen and Guangzhou. It is impossible to imagine [most US- or European-based companies] advocating for anyone remotely unacceptable to the Party. Former success stories like Cisco have taken such a beating from the NSA scandal that they would have played along quietly with any scenario that kept things on an even keel.
Now Beijing has issued what sounds from this end like a ham-fisted, poorly-thought-out edict. How many tech company execs will now choose to live in Singapore? How many banks will have another look at Tokyo as a regional center now that the hot money pouring into Hong Kong and Singapore property has put them nearly on par for cost-of-living?
Nothing about the Central Government's current rhetoric or recent action indicates it will have sufficient subtlety to manage the situation that helps Hong Kong's position in the short term or the long term. It won't take many days of traffic disruption or occasions of hammerhead pronouncements demanding "love of country" before that begins snowballing.
Here was a risk-free for China to soothe Taiwan and the West and they blew it. At a time when the economy looks wobbly at best why would you want your professional class dusting off those pre-1997 Canadian passports?
To mix cultural metaphors, China could have put on a kabuki show with an elected figurehead but a cowed or bought-off civil service and business class without a basis for complaint (hey, it works in Singapore). Instead multinationals will now put on the puppet show - maintaining paper headquarters in Hong Kong while seeking stability and predictability elsewhere.
As noted many times over the years (e.g. this and this), successive Chinese governments have shown very little interest in Western concepts of "soft power." The Chinese government would only gain rather than lose by being lenient with its imprisoned Nobel Peace prize winner Liu Xiaobo (and his wife). It would gain rather than lose by making it easier for international journalists to get into the country, since most people who get to know the place find more to like than dislike, and since the vast human reality of China is more diverse, vibrant, open, and appealing than the stern government postures would ever lead you to believe. It would even—according to me—gain rather than lose by easing up on Internet and press and academic censorship, allowing its universities to attract first-rate talent from around the world.
But all that is according to me, not according to them.