The Return of Hong Kong to China, 25 Years On

In the context of the on-going worldwide geopolitical transition towards more competition among big powers, Hong Kong is still well-positioned to continue to serve as city of international importance and hence be a valuable asset to its motherland, Valdai Club expert Nelson Wong writes.

July 1, 2022, marked the 25th anniversary of the return of Hong Kong to China. Among the festive celebrations, the most noticeable was the ceremony of John Lee being sworn in as Hong Kong’s new Chief Executive by Chinese President Xi Jinping.

However, instead of congratulating Hong Kong for its remarkable achievements and for having survived the financial and social upheavals over the past 25 years, British Prime Minister Boris Johnson chose to criticise Beijing on this particular occasion for “failing to comply with its obligations that have eroded the freedoms and autonomy of Hong Kong”, a claim that the Chinese government has openly voiced its disagreement. What has actually happened to this former British colony since it was handed over to China, how is it today and where is it heading in the days to come?

In 1997, the well-known city of Hong Kong, already a world famous financial and business centre after 100 years under British rule, was officially handed back to China after more than a decade of intensive negotiations between the Chinese and the British governments. In just a few months after this former British colony gained its new name as the Hong Kong Special Administrative Region (HKSAR), the HKSAR government was caught in an unexpected and ferocious battle to defend its local currency and economy during the “Asian Financial Crisis” that took down many countries in the region including Thailand, Indonesia, South Korea, Singapore, Malaysia, and the Philippines. Hong Kong managed to survive and come out of the crisis relatively intact thanks to the shrewd handling of affairs by the Hong Kong Monetary Authority with the firm backing and financial support from the central government in Beijing, that at the time was not known to the general public.

In the years that followed, the “Pearl of the Orient” continued its turbulent voyage and survived, incurring much pain with the SARS epidemic (2003), the global financial crisis (2008/09), the Umbrella Movement (2013/14), and the current Covid-19 pandemic. But handicap that captured the headlines across the world for months, was the prolonged and well-organised anti-China movement that began in June 2019; this movement turned quickly into mass social riots, wreaking havoc and tearing apart society as a whole. Despite repeated warnings from Beijing calling for the US to stop meddling with China’s internal affairs and its obvious support to even encourage “Hong Kong Independence”, the chaotic situation became uncontrollable and was eventually put down almost a year later in June 2020 when the central government in Beijing stepped in to restore order by introducing and enforcing the national security law in Hong Kong.

Unconfirmed sources have revealed that several waves of people from Hong Kong have since left the territory and moved primarily to the UK which has offered them residency, but this does not seem to have raised much concern internally. Rather than fearing criticism from the pro-western media and some politicians, the HKSAR is now set to move ahead with the new Chief Executive John Lee’s swearing in who should lead the HKSAR government towards a better tomorrow. Although there are still people casting their doubts about Lee’s ability to deliver, considering that his long-time career has only been in the local police force, the new chief executive appears self-confident in his public speeches and has vowed to bring positive changes and solutions to some of the pending issues faced in Hong Kong such as those in relation to housing, education, economic development and stability. Just a few days after he took office and unlike his predecessors, Lee made several phone calls to the leadership of the adjacent Guangdong province and the majors of neighbouring cities of Guangzhou and Shenzhen to garner their support; a well-received gesture showing his sense of belonging and willingness to cooperate. Further, in an interview with CCTV on July 4, Lee reaffirmed that he and his government are committed to working towards delivering good results to win over the trust of even those who may not currently have full confidence in the government.

In all fairness, public opinion across China has always welcomed the return of Hong Kong to the motherland and to hope for continuous prosperity in the HKSAR but any mention of the territory seeking independence is frowned upon. To the average Chinese person on the Mainland, allowing their compatriots in Hong Kong to enjoy more freedom and democratic elections is a given under the “One Country, Two Systems” arrangement, but in no way should the act of denouncing China’s sovereignty over the territory or the desecration of the national emblem can ever be tolerated. This is why there was widespread support throughout the country including the HKSAR, when “being patriotic” was pronounced as the pre-requisite for all those who would register to participant in the latest Hong Kong Legislative Council election in December last year. After all, the truth of the matter is that, when it comes to state or regional governance, respecting and defending the country’s sovereignty is the basic quality and prerequisite for anyone running for office anywhere in the world.

Looking back, some have argued that China’s central government could have done better by taking a more proactive approach right after the handover to guide Hong Kong through the process of “de-colonisation” and to impose the national security law since day one. In addition, the previous policy of “masterly inactivity” from Beijing under the notion of “letting the people of Hong Kong run Hong Kong” might have led some astray and others to take advantage of the central government’s intention. Another argument worthy of note is that the expat community has been largely neglected since the handover, many of whom had already considered Hong Kong to be their home with many living there for generations, showing their commitment by being naturalised HKSAR passport holders. Since the majority of these “gwailo” (foreign) Hong Kongers are deep-rooted and well-respected in different lines of businesses worldwide, making them alien and feeling marginalised was a mistake. Furthermore, what might have been forgotten is that before the handover in 1997, Hong Kong was never governed by the local people, nor was it run by the governor(s) alone. The entire British government was always there to advise and to approve matters when it came to trade policies, economic development, and by and large the overall governance of the then “British Territory”. Having a team of professional and competent civil servants is one thing; the talent and experience of regional and state governance is quite another. That said, it is never too late to make corrections.

On the subject of democracy and human rights, China has also openly announced its support to foster the democratic process of Hong Kong in accordance with the Basic Law to the extent of giving the Hong Kong government absolute authority to fulfil what it sees fit in this respect. What needs to be pointed out, however, is that democracy and electoral procedures were never part of everyday life in Hong Kong when it was a British colony. Allowing Hong Kong to practice democratic elections and to be governed under the “One Country, Two Systems” policy with the Basic Law in place demonstrates the commitment of the Chinese government to let the people of Hong Kong enjoy more freedom and democracy than they had under British rule. But that does not mean that Hong Kong can be allowed to become a base camp for anti-China activities, nor would China ever tolerate any attempts to separate Hong Kong from its motherland. To China, this is not a matter of pride, but of principle.

It is common knowledge that, notwithstanding the unique standing of the territory, none of it will form the basis for the argument that Hong Kong can stand alone and survive on its own as an independent territory. Its emergence onto the world stage as an international financial and business centre over the years was largely due to its strategic position of serving as the gateway to Mainland China and therefore having thrived economically as a result of China’s reform and adoption of an open-door policy, that has brought about the country’s rapid development since the mid 1980s. The notion that Hong Kong is so unique that it can possibly become another city-state like Singapore is not only groundless and politically ignorant but is also a misguided illusion that will lead Hong Kong to nowhere but a dead end. It was the Chinese government’s preferential policies and the opening up of the entire market of the Mainland throughout the decades that was instrumental in ensuring the continued prosperity of Hong Kong.

What has happened in Hong Kong over the past 25 years is a hard lesson learned with pain suffered by both the people of the HKSAR and China. To the people of Hong Kong, it has been a process of self-awakening and of the realisation that the practice of “Two Systems” can function only under the principle of recognising “One Country” as the prerequisite. It is unfortunate that the great majority of the population in Hong Kong has suffered collateral damage over the years and has been misguided by some anti-China forces; the good news is that people have now realised where the red lines are and that any attempt to allow, encourage, or to use Hong Kong as the base camp for separatist activities will not to be tolerated. To the rest of the world, and even for those who believe in different values, it is advisable for them to accept the reality that Hong Kong is now first and foremost a territory of China with its future tied up closely with the country’s destiny, closing the door on the notion that the HKSAR can develop on its own both politically and economically.

Moving forward, and particularly in the context of the on-going worldwide geopolitical transition towards more competition among big powers, Hong Kong is still well-positioned to continue to serve as city of international importance and hence be a valuable asset to its motherland. As an integral part of China, the Hong Kong SAR is the only Chinese territory where judicial-based Common Law is practiced, the spirit of the Rule of Law is deep-rooted, and its currency pegged to the US Dollar. The HKSAR is home to the regional headquarters of almost all of the major banks, of well-known investment and trading houses and of accounting firms and legal practices, resulting in the business community in Hong Kong being multi-cultured enjoying a worldwide reputation of being highly versatile and professional, to the envy of many. In addition, as an internationally recognised financial and business centre, the Hong Kong Stock Exchange is one of the world’s biggest and busiest exchanges on a par with the NYSE and NASDAQ, and its container port and airport will continue to be one of the most favoured logistics centres and transport destinations around the globe.

While new and greater opportunities exist now for Hong Kong to engage itself in the Greater Bay Area development plan together with Macao and Shenzhen, the next 25 years will be even more critical for this Special Administrative Region to further its economic and social development. This will require the commitment of the talented and hard-working people of Hong Kong and the HKSAR government under the guidance and in close collaboration with the central government in Beijing. The central government should dedicate more resources to encourage and help the people in Hong Kong to see this bigger picture, and to understand the reality of global competition among nations. Most importantly, for Hong Kong to continue to be a success story, it must first of all recognise its own identity of being a Chinese territory and take its seat on the train and be part of the country’s overall journey of development and prosperity.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.