Breaking Hearts in the Streets of Sorrow

Barry Pearton's picture

EXPECT the unexpected. It is the timing, the sheer suddenness of the violence and civil disobedience, that is spooking business in trouble-spots across the world today. Who, less than six months ago, could have foreseen the streets of flames, teargas, terror, bitterness and sorrow that epitomise Hong Kong today ...

COUNTLESS MILLIONS of people with a soft spot for Hong Kong have watched aghast as the Pearl of the Orient self-immolates in a frenzy of fear and frustration.

There is bravery to be admired, stupidity to be deplored, and an over-arching question on all lips: Can Hong Kong ever be Hong Kong again? Those daring to ask think they know the answer.

Protests had extended for several weeks before two students presenting to media outlets in Europe spoke the words that said it all. The dispute, they said, boiled down to a matter of culture.

Hongkongers had been brought up through a long history of British traditions and exposure to world norms. They were not people schooled in the ideology of Mao, people willing to accept the social monitoring of the Xi Jinping version of Socialism with Chinese Characteristics.

Hongkongers despised the culture of the Mainlanders who were taking over their city, their homes, their jobs and their way of life.

Even the hated Mainland Affairs Council, seen to be daily increasing its degree of interference in Hong Kong affairs, did not spur the same resentment level as did daily interaction with the Mainlanders. At its core, this was a Culture War.

IN TODAY'S Hong Kong, conspiracy theories abound. America, Britain, Taiwan and China are each accused of funding and organising protests and counter-protests for their own ends.

Beijing in particular is accused of stepping up the level of violence by using agents provocateur  some said to be Chinese police, and possibly, military, posing as protesters who can double up to perform an increasingly violent law enforcement role.

The truth is out there somewhere.

Largely unspoken, but widely believed, is a theory that Hong Kong is in part also victim to an ongoing political struggle within China, with interests loyal to former President Jiang Zemin, now 92, in ideological conflict with those supporting the policies and extraordinary powers of  Paramount Leader Xi Jinping.

The Jiang camp is said to have strong support, particularly through Southern China, including Hong Kong, and other parts of the Motherland. As President over 13 years, Jiang fostered the emergence of almost all of China's major "private" corporations, and many of the State-owned enterprises driving the China renaissance. He is, it is said, owed more than a few favours.

In this scenario, the China politburo is said to have been unable to unite around a firm strategy that might settle the Hong Kong imbroglio, the Jiang and Xi forces waging their own internal propaganda war, domestically and internationally, over Hong Kong policy.

Again, the truth is somewhere out there. That there have been policy reversals on the Hong Kong issue is not disputed.

HISTORICALLY, Hong Kong has shown an amazing ability to emerge from adversity.  Can it reinvent itself once more?

Of recent times, it has seen the occupation by Japan (from Christmas Day 1941 through to the end of World War 2); the riots of 1966-68, said to have been orchestrated by Madame Mao (Jiang Qing) from the Chinese border at Lowu; a boilover (in Hong Kong) in 1972/73 of pro-China nationalist emotion and anti-foreign sentiment when then-US President Nixon re-established diplomatic relations with Beijing; the political and economic impact of the Tiananmen Square massacre of 1989; the outbreak of the SARS virus in 2003; and the ultimate event, the British Handover of Hong Kong to China in 1997.

Since 1997, Hong Kong's occasional economic difficulties have been seen to be largely solved by China, which has created new business opportunities for the former Crown Colony, especially in terms of the servicing of China's global financing needs.

THE REALITY today is that China still needs the services, skills and access that Hong Kong can provide. It also needs to recognise that recent policy changes inside China do little to encourage foreign businesses to establish a major presence there.

Businesses do not want a Xi appointee on their boards, or anonymous Government officials raiding their books and technology, or harassment and jailing of staff to make a point in a commercial or diplomatic dispute.

The harsh treatment afforded Cathay Pacific, and no doubt some other Hong Kong-based companies, in the current unrest, has also laid bare the overwhelming desire of Xi's China to exert control over all aspects of business.

Many foreign firms dealing direct with the Mainland have experienced first-hand the very same 'cultural' frustrations that are feeding the frenzy now wracking Hong Kong -- which is why they prefer to operate their China business through a Hong Kong conduit.

Beijing might do well to consider such issues as it decides Hong Kong's future.

Apart from mending Hong Kong's wounds, some healing salve would not go astray in confronting the damage caused to Hong Kong's political and legal standing by an over-zealous Mainland Affairs Council.

Beijing also needs to remember that it was the global Chinese diaspora, largely made up of Hong Kong Cantonese making their way in the world, that fuelled China's economic renaissance after Mao's Cultural Revolution.

This unique offshore diaspora, probably second only to the Jewish dispora in terms of global political and economic reach, has unparalleled contact to and within families and businesses in virtually every section of the Chinese Mainland community.

It will, overwhelmingly, be fighting for Hong Kong, using those contacts to influence China policy there.

BUSINESS believes that the true depth of the impact of Hong Kong's current unrest will probably not be known for two years, when international business could begin relinquishing its long-term leases on the world's most expensive office space.

Established RHQs need to unwind extensive staff commitments, and to rebuild supply chain arrangements, before moving house. They need an alternative base, and there are few cities in Asia able to offer the Hong Kong experience.

Singapore is close to putting up the 'house full' sign. There are language difficulties in Tokyo and Seoul, and unresolved problems with red tape and skilled labour in Thailand. Jakarta presents infrastructure and societal challenges. Vietnam stands out as a possible beneficiary of Hong Kong's woes.

In summary, there is still time for Hong Kong to work a miracle. But the clock is running.

The over-riding question: Will we see a Benevolent Beijing help fix the Hong Kong mess? Or will a malevolent China Bear choose to squeeze Hong Kong's people a little harder by extending the economic pain?