HKDF Newsletter Issue 19 January 2002

Hong Kong's Role within China Lau Nai Keung, Member of the Chinese People's Political Consultative Committee, was the Foundation's guest speaker on 13 September 2001. This is a summary of his remarks. It was a pleasant surprise to receive the Foundation's invitation to be a luncheon speaker, said Mr Lau. As a pro-China person, he was never invited to talk, or even to lunch. It might be tokenism, or a desire on the Foundation's part to present well-balanced views. But whatever the motivation, he came in peace and was glad of the opportunity to share his views with the audience. He had been given a few titles to choose from, said Mr Lau, and chose the present title because it was so blatantly subversive. No one would ever ask about the role of New York within the United States, or Chungqing's role within China, or even Beijing's role within China. To raise the question of role at all was to presume that the role of Hong Kong was special, different from that of other cities in China. And it was true that Hong Kong had a special role. It had a special role in shaping China. We all wanted to play God, said Mr Lau. We all wanted to change China after our own images. China was so huge, so backward, with so many problems. Back in his university years he had written an article on the question, of how to feed the 600 million population. Now there was more than twice that number to feed. There were so many problems that everyone would want to do something about them.

Contents Alan LUNG Ka-lun, Chairman: From an Unsustainable System to a Working System? Mike Rowse Invest Hong Kong and Its Objectives Lau Nai Keung Hong Kong's Role within China Lo Wing-Lok The Delusion of Costless Idealism Policy committee, HKDF Democracy for Economy’s Sake - Translation in Chinese Selina Chow How We Can Attract Tourists to Hong Kong Jake van der Kamp Has Hong Kong Lost its Competitiveness? NEWSLETTER ARCHIVES Contact our secretariat at Telephone no. 2869-6443, Fax no. 2869 6318 or e-mail at hkdf@hkdf.org for information on the Foundation or comments on this newsletter. Share your opinion on this subject with others in HKDF's online discussion forum eFORUM © Hong Kong Democratic Foundation. Articles in this newsletter may be reproduced with acknowledgment of the source.

One wants peaceful evolution . . . Evolution - change - is inevitable . . . And better to change peacefully than any other way.

And one wanted peaceful evolution. The Chinese authorities saw that as a conspiracy, subverting the purity of the revolution. But evolution - change - was inevitable: China was so backward and had so much to catch up. It had to change. And better to change peacefully than in any other way. So peaceful evolution was the answer. And Hong Kong could play an important role in such a change.

Hong Kong's special role had begun 150 years or so ago with the coming of the British. The British came with their mercantilism, their chauvinism, and their institutions. They wanted Hong Kong as a base to change China. And during its history as a British colony, Hong Kong was an agent of change. It harboured revolutionaries. Hong Kong harboured the activities of the Kuomintang during the Qing dynasty. When the KMT were in power, it sheltered the Communists. And when the Communists were in power, Hong Kong harboured the KMT, the Trotskyists, and the right wing liberals.

Local Chinese in Hong Kong were trained as compradors, or middlemen to intermediate between China and the West. Some of these families originally had become so Westernized that they voluntarily changed their Chinese surnames of Ho and Lo to Hotung and Kotewall. More recently, many had changed their names back again to the Chinese original.

The West was arrogant, said Mr Lau. Some of its followers in Hong Kong even proclaimed its values as universal. But the recent disaster at the World Trade Centre revealed a clash between two value systems. The US and Islamic people both thought that they alone had the truth; it was a Huntington-style clash of civilizations. If people could not adopt an open mind and learn to live with one another, there would be more troubles to come.

This also applied to the Chinese people. The Communists had learnt the hard way that they could not export their revolution. In the 1960s, they thought that they held a privileged insight into the truth, and wanted to share it with other peoples by exporting revolution to Indonesia and other places. But they learnt the hard way that this could not be done.

China today is different from developed Western countries. It has a different culture, many people, but with little land, and it was under a constant state of emergency. In these circumstances, Chinese people would look at the same phenomena differently. For Westerners, cults meant heresy, or free speech - it was an ideological matter. For China, cults meant subversion, because throughout Chinese history cults had been used as a cover for rebellion. It was a political matter.

Hong Kong had the good fortune to inherit many cultures. Most Hong Kong people were from Guangdong; the early industrialists were from Shanghai; last but not least, Hong Kong had also inherited from the British. As a result, Hong Kong was cosmopolitan. As a foreigner, you would be treated in Hong Kong as an equal; no one would stare at you. People would treat you neither better nor worse than their own people. But in Mainland China, people tend to deal with foreigners out of an inferiority-superiority complex. Even in Shanghai, people would crowd around a foreigner to practice their English. This was not natural behaviour.

Hong Kong was a rule-based society, we had learnt that from the British. Chinese people have a tradition of not being bound by rules; rules were meant to be got around or avoided. Hong Kong was the most law-abiding place in China; more so even than Taiwan. You just had to look at the traffic.

One great thing Hong Kong had was freedom. Even before the development of representative government in the 1990s, Hong Kong enjoyed civic freedoms; it was the freest place in China. And today, one could say anything about Jiang Zemin. Even Jimmy Lai, who had severely criticized Li Peng, was free to roam around Hong Kong.

Hong Kong also had precision. It had got this from the Shanghainese: they were the most precise people in China. The Cantonese were sloppy; but the Shanghainese attended to details, they planned.

And Hong Kong was adaptable. This was the inheritance from the Cantonese.

Hong Kong's role within China was that of an entrepot. It had had that role since the beginning. If our northern neighbours came to Hong Kong, they could buy a lot: we had many attractive goods for sale.

Take press conferences. There had been none in China before the Sino-British negotiations began. But when the British negotiators went up to China, crowds of Hong Kong journalists went to cover the event; and they urged the Chinese to hold press conferences.

Another good we had sold to the Chinese was the feasibility study. Legend had it that in the early eighties, an important official came down from the Mainland to Hong Kong and invited businessmen to participate in a major project. He secured commitments from them around a dinner table and then went back home. Nothing happened. In frustration, the official asked why the businessmen had not paid up. "We have not seen the feasibility study," was the reply. And so China learnt about feasibility studies. Now no joint venture is without one.

Another good sold to China was the MTR. If you visited Shanghai, Beijing or Guangzhou, you would see shadows of Hong Kong's MTR there. And then there were pedestrian walks, modeled on Hong Kong's even down to the tiling. And pop music in China started with Teresa Teng. And movies, not only could we see a lot of Jackie Chan there, but a few award winning films were also financed by Hong Kong producers. China had bought many of these concepts from Hong Kong. Accounting was another example. China had the socialist system of accounting, which was chaotic. It learnt Western-style accounting from joint ventures with Hong Kong firms.

As an entrepot, Hong Kong's mission was very simple. Do your work well, and the rest will follow. It was a tremendous advantage for Hong Kong being next to a successfully developing economy. The world had never seen a country grow so fast from an agricultural base. In the late seventies when the Reform and Open Up policy was first launched, Deng Xiao Ping had forecast an annual growth rate of 7%; Mr Lau had doubted at that time whether this was achievable. But it turned out that Deng's forecast was too low.

China had never been conquered by outsiders. Its present culture was a continuation of that of ancient times. And never before in human history had there been such a resurgence of an ancient culture.

Here in Hong Kong we had great leverage, said Mr Lau. Never in human history had individuals had so much influence without sacrifice. One did not need to give anything up in order to influence China's development. One did not even have to earn less. One could make money by selling "goodies" to China: western concepts and know how that the Chinese needed to develop.

The British wanted Hong Kong as a base to change China. During its history as a British colony, Hong Kong was an agent of change.

One did not need to make special effort to achieve this. Don't oversell. It was like the difference between a Western church and a Chinese temple. In the Western church, the priest would go out to attract more worshippers. But in the Chinese temple, the god just sat there and the people would come to him. So in Hong Kong we should act like the Wong Tai Sin temple, not like the Mormons.

Answers to Some of the Questions Raised
Hong Kong was to some extent the tail wagging the China dog. This had been Hong Kong's role for years. But it could only happen if the dog wanted to be wagged. For example, Chinese officials had been visiting Hong Kong's ICAC for years, and had been expanding the anticorruption drive in China. But corruption was a more complex issue in China than in Hong Kong.

China might have been able to learn democracy from Hong Kong. But, although Hong Kong had civic freedoms, its democracy was still rudimentary. China could not learn from us something that we did not have. So sooner or later China would pass Hong Kong, become more democratic than Hong Kong.

The Communist Party could not be the party of revolution forever; it had to find a new identity. It was fifty years since the revolution; you could not go on being a revolutionary forever. Now it was the ruling party, but how did one justify that? And socio-economic development was changing China. The private sector was supplanting the state sector. The industrial workforce was diminishing. Knowledge workers were becoming more important. New factors were emerging that were completely alien to Marx and Engels. Now many people from these new sectors of China's society were joining the Communist Party. The Party was on its way to becoming a social democratic party, although it could not be called that.

The challenge for Hong Kong was integrating with China. It was symptomatic that people like him were not sitting on any of Hong Kong's consultative committees, said Mr Lau. The Hong Kong mentality was still insular; it was still a heresy to be pro-China. Too few people accepted that Hong Kong was part of China and that this was the way forward. There were many practical issues to do with integration which needed attending to. Mr Lau had advocated setting up Hong Kong business associations in the Pearl River Delta cities to help deal with these issues. Waiting for the Government would take too long. It could not even get approval for the headcounts to do the work.

How did Hong Kong compare with Shanghai? Some people would say that Shanghai had already overtaken Hong Kong. But Hong Kong had so many advantages, said Mr Lau; he was not worried. Hong Kong's position was secure for another 15 or 20 years. But what would Hong Kong do in those 15 to 20 years? That was the critical question. Hong Kong would have to work harder if it wanted to stay the number one city in China.

The point was that Hong Kong people were not competing with peasants from China, but with the cream, with the very best people in China. University students from the Mainland were superior to those in Hong Kong. You could see from the quiz programmes how ignorant Hong Kong people were. Hong Kong was in danger of losing its cosmopolitan status. People were too ready just to look at their navels, oblivious to what was happening around them.

The Chinese leaders have to understand that a complex modern society like Hong Kong will not become successful as long as the system can only produce a second rate businessman as its political leader.

Paradoxically, the Chinese leadership was a source of hope for Hong Kong. Their vision, of One Country Two Systems, was predicated on Hong Kong's superiority to the rest of the country. If the gap between Hong Kong and rest of the country narrowed too much, how would the Chinese leaders justify Hong Kong's privileges to their people? If Hong Kong were no better than other Chinese cities, why should it enjoy freedoms that they did not, freedom from taxes, freedom to have children? This question could not be answered. So the Chinese leaders had to help Hong Kong succeed. But they did not know how. The Chinese leaders had to understand that a complex modern society like Hong Kong would not become successful as long as the system could only produce a second rate businessmen as its political leader. The Central Government should make more room to facilitate Hong Kong to further democratize.