Tiananmen’s legacy

It was encouraging to see how Hong Kong managed last night to peacefully commemorate the bloody crackdown on anti-government protesters around Beijing’s Tiananmen Square, 31 years after it happened. That so many people felt the courage and had the determination to defy a government ban on the annual vigil says much about Hong Kong’s crucial role in keeping memories of the event alive.

How future commemorations will be held, once the National Security Law is passed and added as an annex to the Basic Law, remains to be seen. Could a spontaneous gathering of people waving their smartphones in the air be considered a threat to national security? It will surely depend on how secure the authorities are feeling on July 4, 2021. Last night, the police wisely stood by. It can only be hoped that a good precedent has been set for future events, by both sides.

Taking a step back and examining recent developments related to the new law does not, however, instill much confidence. Hong Kong is not “finished” as a Special Administrative Region, as some commentators have been declaring. But neither is there any reason to believe civil rights won’t be inexorably eroded here in the coming years. There is no longer any place for wishful thinking that might suggest otherwise. 

Exhortations that the new law will only “secure peace and stability” could only be coming from those who picture themselves standing behind the security forces, rather than before them. Regardless of what the new laws actually say, police and prosecutors have made it crystal clear already that they will interpret these laws in a way that errs on the side of, well, their side. Their priority will be to take out secessionists, seditionists, terrorists and anyone who is deemed to be a threat to national security. While this may well send the “foreign instigators” packing, it is hard to see how those left behind will be able to rest easy in any situation that calls for discretion to be exercised over what constitutes an infraction of the new laws.  

This doesn’t mean Hong Kong won’t continue to be a good place to do business. Any doubts should have been erased by the flood of money that poured into the city over the past week, forcing the HKMA to intervene in order to keep the peg secure. Skeptics might conclude this was driven by Chinese patriots liquidating US dollar holdings in order to prop up the Hang Seng Index. But seasoned financiers would know that is not likely to be as big a part of the story as the “risk on” switch being flicked in global markets: now that the coronavirus looks to be subsiding and economies are reopening from lockdowns, funds are chasing better returns in emerging markets. The best are undoubtedly to be found here. 

In the meantime, foreign companies might wax lyrical about the need for impartial judges and a free press, but these concerns will always be weighed against the potential for ROI. China and Hong Kong will continue to offer unbeatable ROIs for the foreseeable future. And impartial judges and a free press will still be here – just not operating at quite the same levels of trust they were before. The moment China’s economic juggernaut starts to falter again, as it has many times since 1979, these calculations might change. But for now, if there is one market above all others in the world worth abandoning political ideals in order to pursue, it is to be found on the other side of Lok Ma Chau. 

Predictions for an imminent “brain drain” ought to be considered with the same guarded analysis. If three million Hongkongers really do take up Boris Johnson’s offer of a place in the cold, wet, and increasingly racist United Kingdom, there will be more than enough replacements lined up at the Shenzhen border within hours of their departure. Go to any brokerage or fund manager’s office in Central these days and Mandarin is already more likely to be heard there than Cantonese.

Having said that, gratitude should be directed where it is due for this enviable situation. There likely wouldn’t be the opportunities investors are chasing right now were it not for what happened in and around Tiananmen Square, and across the rest of the country, in June, 1989. Tragic though the loss of life then was, its legacy was that the country took a sharp turn away from a model of development that had been failing. Its leadership began to take a more conservative, yet no less determined, and arguably more sustainable, approach to the liberalization and deregulation of its economy. In the ensuing decades, the Western world not only applauded this, but supported it.

The Western dream for China only began to fade, it must be said, with the launch of the Chinese Dream by President Xi Jinping, when he took office in 2013. How and why that happened is for another day. Suffice to say here that half of the original Western dream for China remains intact: It is becoming increasingly prosperous; it’s just not becoming more liberally democratic. Rather than delve into the pros and cons of liberal-democratic models of development, all we are attempting to do today is pay homage to the brave protesters who gave their lives not only in support of their political ideals, but who stood against endemic corruption. Were it not for them, China and Hong Kong might well look more like Russia and Vladivostok today. 

This is not a frequently cited reason for commemorating those who were slain by poorly trained PLA soldiers back then, we have to admit. Most people who show up at a commemorative event are there for the “democracy martyrs”. But that is usually because they haven’t read the Tiananmen Papers, which were compiled by Orville Schell and edited by Liang Zhang, Andrew Nathan and Perry Link. If they had, they might have a more comprehensive view of what happened.

We don’t believe anything should be taken away from the memories of those who died for democratic ideals. Neither, for that matter, should anything be done to glorify those who pulled terrified solders from their tanks and strung them up from streetlamps. What should be recognized, however, was that the students would not likely have gained the support of the working classes in the protests were it not for severe underlying socio-economic conditions that had needed to be addressed. And the Party, for all its faults, began almost immediately to address those with a greater urgency. This became apparent in the months and years afterward. 

It took a few years to right the ship again. But by 1992, Deng Xiaoping had “socialism with Chinese characteristics” largely figured out. And the rest, as they say, is economic history. So thank you, class of ’89, for having helped to put China on the trajectory it is on today, which has resulted in 850 million people being lifted out of poverty in less than four decades. We salute you. While we still can.

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