Journal of International Affairs

Maximum Flexibility, Rigid Framework: China's Policy Towards Hong Kong and its Implications

By Steve Tsang

Hong Kong is a subject that provokes strong yet mixed feelings among policy makers in the People's Republic of China (PRC). It is both an emotional and a pragmatic issue. The aging top leaders who took an active part in the communist revolution look forward to the return of Hong Kong from the British as the final chapter in their lifelong anti-imperialist struggle -- one of the principal objectives of the communist movement. The policy makers who were raised under the red flag have been brought up to believe that Hong Kong was the last major vestige of nineteenth century Western imperialism that humiliated China, something which should and would in due course be eradicated. 1 The future of Hong Kong is thus an emotional subject that often provokes an intensely nationalistic response. At the same time, Chinese policy makers are acutely aware of Hong Kong's economic value to the PRC, which has increased rather than decreased in importance as the Dengist economic reforms progress. Their response to these

conflicting demands echoes the immediate post-1949 approach devised under Mao Zedong. In the rhetoric of the Chinese leaders in the 1980s and 1990s, it is their "historic" and "sacred" mission to remove all remnants of China's humiliation by the West and use Hong Kong to set an example for Taiwan and Macao for the ultimate re-unification of the country. However, the needs of the economic reforms lead to a compromise. It involves the adoption of a policy popularized as "one country, two systems" under which this great capitalist enclave will become the Hong Kong Special Administrative Region (SAR) of the PRC in 1997. Capitalist Hong Kong will be permitted to maintain the "status quo" (as it existed in 1984) for fifty years and enjoy "a high degree of autonomy," provided this will continue to be seen by the Chinese Communist leadership as economically beneficial and not harmful to its claim of sovereignty over the territory.

This paper begins by outlining the structure of the PRC's relevant policy-making apparatus. It then examines the forces which determine the PRC's policy towards Hong Kong and explains its nature in terms of maximum flexibility within a rigid framework. Finally, it assesses the implications of the PRC's policy for Hong Kong.

Structure of the PRC's Policy-Making Apparatus  

Since the future of Hong Kong is one that involves sovereignty and national dignity, it is a matter of great importance to top PRC leaders. The effect is that there can be no major policy decisions or changes over Hong Kong without the approval of the top leaders. In structural terms this means the Politburo of the Communist party. In practice, policies over Hong Kong often rest with the Party's Central Foreign Affairs Leading Small Group (Zhongyang Waishi Lingdao Xiaozu). 2 Its current head is Jiang Zemin, a member of the Politburo's Standing Committee and general secretary of the Party. The official head of this Small Group has not, however, always been the ultimate arbiter of policies over Hong Kong, since Deng Xiaoping, as paramount leader, retains the final say when he is physically well enough to do so. 3 This means that all major decisions over Hong Kong are in fact made by the top leaders, which in turn restricts the flexibility of senior PRC officials or diplomats a fact keenly observed by the British in the Sino-British negotiations between 1982 and 1984. 4

Below the top leadership, there are three ministerial-level offices which are directly involved in determining policies over Hong Kong. They are the Hong Kong and Macao Affairs Office () of the State Council and the Foreign Ministry, both in Beijing, and the Hong Kong and Macao Work Committee of the Communist Party in Hong Kong. The latter was elevated to full provincial status in 1983, 5 and thus holds the same bureaucratic rank as a ministry. 6 Its head is also the director of the Hong Kong branch of Xinhua News Agency and is the PRC's de facto representative in Hong Kong. Although the bureaucratic rank of the three offices are the same, their relative importance in the policy-making process has varied. 7 Since the director of or the foreign minister is often also either a vice-premier or a state counselor and usually at least a member of the Party's Central Committee, the HKMAO and the Foreign Ministry generally have precedence over the Work Committee. Indeed, the secretary of the Work Committee (a regional office) is supposed to answer to the Director of HKMAO (a central organ). However, between 1983 and 1990, when Xu Jiatun headed the Work Committee, he had at times by-passed HKMAO and reported directly to the Politburo with the latter's encouragement. 8 Making use of the fluid power relationship in Beijing and his own access to Deng Xiaoping, Xu at times out-maneuvered the others and appeared even more influential than the HKMAO, which had earlier played the pivotal role when it was headed by Liao Zhengzhi from 1978 to 1983. Xu's successor, Zhou Nan, does not have the same standing and clout in the Party. Although both he and Lu Ping, who heads HKMAO, are members of the Central Committee, Zhou appears less influential than Lu. At the moment, the most powerful figure at the ministerial level is Foreign Minister Qian Qichen, who is also a vice premier and a member of the Politburo.

In Hong Kong itself the Work Committee, which functions under the cover of the Xinhua News Agency, is in principle the coordinating umbrella organization for party and state organs in the territory. The need for the Communist party to operate underground is a legacy of 1949, when the Hong Kong government outlawed all political parties affiliated with foreign governments. 9 As a coordinating body, the Work Committee includes in its membership local heads of various representative offices of PRC agencies such as the Bank of China, China Resources Corporation, the China Merchants Group and China Travel Service. 10 The Ministry of Public Security (Gongan Bu), which is responsible for the security of PRC offices in Hong Kong, the Ministry of State Security (Guojia Anquan Bu), which is charged with intelligence work, and various branches of military intelligence also operate under the cover of the Xinhua News Agency. 11 However, in practice different ministries, agencies, provinces and regions have also set up their own offices or stationed intelligence officers in Hong Kong. In other words, they belong to different xitong, which can be defined as organized groupings of bureaucracies and cliques usually led by a senior leader in the Standing Committee of the Politburo. 12 According to Xu Jiatun, cadres who came from different xitong from the PRC did not always follow his direction in Hong Kong. 13 The most reliable figure on the number of communists in the Hong Kong region is that given by Xu, who reported a network of 6,000 members in Hong Kong and Macao, of whom half had been sent from the PRC. 14

The lack of a clear chain of command has served to create confusion, friction and often rivalries among various agencies and officials at different levels. 15 In his memoirs, Xu Jiatun recalls that his deputy secretary, Li Jusheng, who belonged to a different xitong but officially represented the Work Committee in the Sino-British negotiations of 1982 to 1984, kept all knowledge about the negotiations from him. 16 Xu had to get the information from meetings in Beijing. Xu's memoirs confirm that rivalries among cadres responsible for Hong Kong could be intense, bitter and in his case, were actually instrumental to his own downfall in 1990. Policy recommendations over Hong Kong thus sometimes fall prey to rivalries and power struggles among senior officials and do not always reflect sound advice.

The lack of an effective central coordinating body in Hong Kong also makes it possible for individual cadres to work for several agencies separately without informing their superiors in Beijing. Thus, what the PRC government believes to be collaborative evidence from different intelligence sources sometimes comes from the same informant who "supplied intelligence to different offices and took money from them separately." 17 The problem is made worse as competition and rivalries among various agencies and senior officials often lead to a reluctance to contradict views held by their superiors unless their own interests are at stake. 18 Top leaders in Beijing, who have little or no first-hand experience in or understanding of the situation in Hong Kong, are therefore often even less well informed than they realize. Given the concentration of decision-making power in their hands, this leads to policies that are made by top leaders who, because of the sketchy information provided them, often have an incomplete understanding of Hong Kong.

The PRC's policy towards Hong Kong  

The PRC's basic policy towards Hong Kong as it now stands was laid down by Deng Xiaoping in the early 1980s, and has not been changed in any fundamental way. According to Deng, there are three issues. First and foremost is the question of sovereignty,

which he considers "not a subject that can be discussed." 19 The other two issues concern the way in which the PRC will administer Hong Kong in order to maintain its prosperity after 1997, and arrangements with the British to ensure a smooth transition to be completed by 1997. 20 Deng's words on sovereignty imply rigidity whereas his directives for the other two issues point to flexibility. An attempt to reconcile the two gave rise to the idea of "one country, two systems" which provided for capitalist Hong Kong to maintain its status quo as existed in 1984 for fifty years within the wider political framework of a socialist PRC. 21

Deng's and, indeed, the PRC's emphasis on sovereignty in fact merely reflect the views of PRC leaders who have considered it "an unassailable element" of their policy towards Hong Kong since 1949. 22 As much as the Chinese leadership wishes to ensure the stability and prosperity of Hong Kong, it will make no concession if and when it perceives its sovereignty over the territory being challenged. As Deng himself told British Prime Minister Margaret Thatcher, to do otherwise would put the PRC government in the same position as the last dynastic government which, according to the Chinese Communists, treacherously ceded Hong Kong to the British, and it would imply a betrayal of the Chinese people. 23 Deng emphatically added that if the PRC's resumption of sovereignty over Hong Kong should bring about cataclysmic results, then the PRC "would courageously face up to this catastrophe." 24

The PRC leaders' obsession with sovereignty needs to be understood in the context of their experiences and their views of modern Chinese history. Although Deng and his colleagues sincerely believe themselves to be committed Communists, most, if not all of them, became revolutionaries when they were young, as a nationalist movement swept across the country. In 1919, students and future Communist leaders were outraged by what they saw as the humiliating treatment of China at the Versailles Peace Conference, which China attended as a member of the victorious Allies. The issue concerned the transfer from Germany to Japan of special privileges which Germany enjoyed in the Chinese province of Shandong before the First World War. The transfer, agreed to secretly between several European powers and Japan, served as an inducement for the latter to join the Allies. The inability of the Chinese government to defend its own sovereign rights, even as one of the victors in the war, provoked the first modern nationalist movement in China, known as the May Fourth Movement. 25 It was against this background that the Communist party was founded, primarily as an instrument for national salvation, in 1921. The establishment of the PRC in 1949 enabled the Communist leaders to remove all Western imperial presence from mainland China. 26 Hong Kong, the first territory to fall to Western incursion in the nineteenth century, and one which remained under British rule, increasingly came to symbolize China's humiliation by Western imperialists. Until China re-establishes its sovereignty over Hong Kong, PRC leaders will consider their nationalistic goals to be unattained. It is therefore impossible for Deng and his colleagues to make any concessions on sovereignty, even if this should lead to the destruction of this goose that lays golden eggs.

The Chinese obsession with sovereignty over Hong Kong and their contradictory lack of initiative to demand its retrocession before 1982 requires an explanation. When the Communist party sensed imminent victory in the Chinese Civil War in late 1948, its de facto representative in Hong Kong, Qiao Guanhua, told the British that "it was not the Communist party's policy to take the British colony by force when it comes into power," adding that "[t]his was a diplomatic issue." 27 A few months later, as Mao insisted on eradicating all traces of Western imperialism in China, he explained to Anastas Mikoyan (then a personal representative of the Soviet leader Josef Stalin) that he would "defer the seizure of the colonial bastions of Hong Kong and Macao because of their economic value to China." 28 This was elaborated by Peng Zhen, a Politburo member in early 1951. Peng said that it would be "unwise for us to deal with the problem of Hong Kong rashly and without preparation," as it would "not only bring unnecessary technical difficulty in the enforcement of our international policy but would also increase our burden." 29

About the same time, Zhou Enlai instructed Huang Zuomei, the Party secretary in Hong Kong, to follow the Party leadership's decision, which was that, in light of the Cold War, the PRC would not attempt to take Hong Kong from the British, as it was a valuable instrument for the PRC to use to divide the British from the Americans. 30 Zhou also mentioned Hong Kong's value in helping the PRC break the United States and U.N. embargoes on China imposed since the Korean War. When the PRC finally gained admission to the United Nations in 1972, one of the first things it did was to demand the United Nations remove Hong Kong and Macao from its list of colonial territories to be given independence in due course. The PRC representative declared that "Hong Kong and Macao were Chinese territories occupied by the British and the Portuguese respectively," and the settlement of their future were "matters entirely within the sovereignty of China." 31 The PRC's toleration of Hong Kong as a British colony after 1949 was a concession made for pragmatic reasons and in consideration of its wider interests. However, in so doing, the PRC at no point lost sight of the sovereignty issue. It could avoid the matter because the British had not provoked it over the sovereignty of Hong Kong.

The pragmatic Chinese policy of reserving the right to deal with Hong Kong's status without forcing the issue became unsustainable after the British finally sought a long-term solution
in the early 1980s, and was therefore revamped. It soon became obvious the extent to which Hong Kong played a major role in ensuring the success of Deng's economic reforms. He thus devised what he believed to be an ingenious idea to allow the PRC have its cake (recover sovereignty) and eat it too (maintain Hong Kong's economic utility). 32 This involved the application of the "one country, two systems" concept, originally envisaged to solve the Taiwan problem, to the Hong Kong situation. 33

The basic policy of the PRC has in fact been consistent since 1949: maximum flexibility or a high degree of autonomy for Hong Kong within a rigid framework of safeguarding the PRC's sovereignty. The conditions which induced Deng in 1982 to maintain essentially the same policy which Mao devised more than three decades earlier are still present. This is the most powerful factor to induce PRC leaders to keep the promises to Hong Kong that are enshrined in the Sino-British Joint Declaration of 1984.

In spite of the PRC leaders' commitment to make a success of Hong Kong, there are nevertheless good reasons to doubt that their 1984 promises can ever become a reality. It should be recognized that the real purpose of the "one country, two systems" formula is to serve the interests of the PRC rather than those of Hong Kong. Thus, capitalist Hong Kong will enjoy a high degree of autonomy only if by so doing it will enhance, not undermine, the interests of the Communist party-dominated system in China.

One basic problem is that "a high degree of autonomy," by capitalist Hong Kong running its own affairs within the framework of a socialist PRC, can only work if the latter is sufficiently confident in itself to allow an imperium in imperio to practice a system fundamentally hostile to its survival. In the mid-1980s, Deng clearly demonstrated that confidence and believed that the Communist party-dominated system of the PRC was superior to Hong Kong's capitalist system. 34 He merely conceded that it would be advantageous to let Hong Kong's capitalism supplement the PRC system for a limited time. However, the popular challenge to his authority in Beijing in 1989 and the subsequent collapse of communism in Europe greatly weakened such confidence. The foundation of Communist party rule in the PRC was under serious threat. The support which Hong Kong residents offered to the Tiananmen demonstrators was seen as subversion by Beijing. 35 Beijing thus reacted by taking a tougher line towards Hong Kong. Its immediate response was to strengthen its authority to direct events in Hong Kong through the Basic Law, the constitution for the sar from 1997, which was in its final stage of draft at the time. 36 In the future, if and when the Communist leadership feels threatened and attributes this in part to events in Hong Kong, it is likely to react similarly and either preempt or eliminate any threat which Hong Kong may pose.

The PRC's approach to the recovery of sovereignty also severely restricts the "high degree of autonomy" that Hong Kong can enjoy. To a Westerner, the idea of "Hong Kong people administering Hong Kong" within the framework of "one country, two systems" may imply that after 1997 Hong Kong will be free to run its own domestic affairs with no interference from Beijing as long as PRC sovereignty is acknowledged. Such an interpretation is totally unacceptable to Beijing. To the PRC, sovereignty over Hong Kong will not be fully recovered until it has actually exercised authority and stationed troops in the territory. 37 Deng himself emphatically told the drafters of the Hong Kong Basic Law that they "should not think Hong Kong affairs should all be handled by Hong Kong people" because "this is impossible, and such an idea is unrealistic." 38 He added that should it become necessary for Beijing to interfere "it would in the first instance be done through the executive branch without involving the Chinese garrison," which would only need to be called out in the event of disturbances. 39 Deng obviously spoke on the assumption that the government of the SAR would act on directives from Beijing beginning in 1997. Behind its rhetoric about autonomy, the PRC's policy nonetheless is that as long as the SAR government's actions are not seen by the Communist party or its leaders as contrary to their interests, it will be allowed to run its own affairs.

The PRC's policy is also greatly influenced by a basic distrust of the British and their supporters in Hong Kong. This is because the Chinese tend to take a doctrinal and nationalistic approach when they look at the British colony, which colors their views of the nature and intentions of British rule. A notable example concerns the building of a new airport, which was intended by the local government to ensure Hong Kong's long-term prosperity by maintaining an edge in its infrastructural development. The timing for the announcement of the plan was dictated by the need to restore public confidence which had collapsed as a result of the Communist party's military crackdown in Beijing in 1989. To PRC leaders and officials, the project appeared to be a British conspiracy to spirit wealth from Hong Kong to Britain before 1997 at the expense of the territory and its future sovereign. 40 They could not believe that London merely endorsed an indigenous Hong Kong proposal. They did not understand that the public tender system and oversight by various public bodies, including the Legislative Council's Finance Committee, would not give British companies special advantages in building the airport. This is due in part to the differences in the bureaucratic culture and practices between Hong Kong and the PRC. It is also because PRC cadres assume that British imperialists have always exploited Hong Kong and received the cooperation of the local civil servants in such matters. They do not realize that after the war, the Hong Kong civil service developed a very strong commitment to the territory and has at times fought London in defense of local interests. 41 If the PRC had taken a dispassionate rather than a doctrinal and nationalistic approach, or tried to discern the reasons behind the strong public support consistently enjoyed by the colonial and undemocratic administration in the last four decades, they would have understood the true nature of the government of Hong Kong. By the 1980s, it had become an efficient, effective and basically honest government which was paternalistic yet did not intrude into the lives of the ordinary people: as good a government as possible in the Chinese political tradition, which is based primarily on Confucianism. 42 The PRC's failure to grasp this implies that it really does not understand what makes Hong Kong tick; it also indicates that the PRC believes itself to be allowed to interfere out of good (though selfish) intentions, in this case, to pre-empt the British from "stealing" from Hong Kong's Treasury and its large reserve, the ultimate control of which will rest with the PRC in 1997.

The PRC's inability to understand the real nature of British rule in Hong Kong also explains its vehement attack on Governor Christopher Patten's 1992 political reform proposals, an attack which seemed to ignore the potential consequences on Hong Kong. The PRC accepted at face value Patten's exaggerated claim that his proposals were a major democratic reform. Unable to believe that the British had no ulterior motives, they suspected the proposals were part of a British conspiracy. The director of the Hong Kong and Macao Affairs Office, Lu Ping, condemned the Patten proposals as an attempt "to turn Hong Kong into a semi-independent entity with a vain hope that this will influence political developments in China." 43 This was followed by Foreign Minister Qian Qichen, who linked the proposals to alleged attempts by the British to create "one China and one Taiwan" and to interfere with "the so-called human rights issues of Tibet" in order to "create disorder" for the PRC. 44

In fact, the Patten proposals were devised by a clever British politician who tried to strike a balance between the PRC's rejection of democracy and the Hong Kong people's demand for it. The main thrust of his proposals concerned the Legislative Council, which hitherto consisted of 60 members, of whom 3 were ex-officio, 18 were appointed by the governor, 21 were returned (indirectly) by functional constituencies which each represented an economic, social or professional sector, and 18 were elected directly by geographical constituencies. Patten proposed to abolish ex-officio membership in 1995, increase the number of functionally returned members to 30, increase the number of directly elected members to 20, and let 10 members be chosen by an election committee comprising members of the regional councils and district boards who would themselves be elected in 1994. 45 Patten had clearly based his scheme on the Chinese stipulations for the first Legislative Council of the SAR, which were annexed to the Basic Law. The Chinese requirement is that the Council, to be formed in 1997, "shall be composed of 60 members, with 20 members returned by geographical constituencies through direct elections, 10 members returned by an election committee, and 30 members returned by functional constituencies." 46 Within this framework Patten widened the franchise of the functional constituencies in two ways. The existing election by companies of the 21 functional constituencies was to be replaced by individuals who owned or managed them. The nine new ones to be created would be open to all workers in the sectors concerned. Patten pushed to the limit the scope of democratic changes not specifically prohibited in the Basic Law, but did not give Hong Kong democracy, as he accepted the Chinese restriction that only one-third of Hong Kong's legislators could be elected directly. 47 What Patten failed to realize was that the Chinese did not subscribe to the common law approach in interpreting the Basic Law. (In the Chinese legal tradition, what is not permitted by law is prohibited. Thus the Chinese believe that Patten violated the Basic Law.) Mistakenly believing he had reached a compromise acceptable to all, Patten tried to sell his modest proposals as a major democratic reform to the people of Hong Kong. If the PRC leaders had not been so highly suspicious of the British in general, and of Patten in particular, and had not condemned the proposals, they probably would have realized the real nature of the proposals. They did not, however, and their virulent attacks made the people of Hong Kong (and the international media) feel that Patten's tiny step forward amounted to a major democratic reform. In this instance, the PRC's failure to put the matter in perspective greatly damaged the confidence of the people of Hong Kong in the former's ability to keep its promises of 1984, and with good reason.

The PRC's determination to reconcile its inclination to interfere in Hong Kong and to allow maximum flexibility in dealing with this capitalist enclave has led to the application of the united front approach. 48 In essence, the united front requires a carefully formulated and systematic long-term strategy. The first step is to isolate the Communist party's principal antagonist and destroy it by rallying PRC supporters, winning over those wavering and neutralizing the opponent's natural supporters. Once this is completed, the Party moves on to the next target and repeats the exercise until it establishes full control, a process which in the case of Hong Kong will not be completed until after 1997. In the context of the present inquiry, the main target since 1992 has been Governor Patten. The PRC's propaganda and political machinery have tried to destroy Patten's standing, credibility and value as governor by unfairly characterizing him as the man who single-handedly shattered Sino-British cooperation over Hong Kong. The implication is that replacing him would remove the source of Sino-Hong Kong antagonism. They have thus aimed to neutralize the support for Patten of his natural supporters, the Hong Kong civil service and the British government. They also attempted to win over businessmen and public opinion leaders (the waverers) by blaming Patten for threatening local prosperity and stability, and by offering them newly created honorary titles, such as Hong Kong affairs advisers, in order to make them feel they are consultants to the Chinese government and part of the Chinese establishment. The British government and the majority of Hong Kong residents reacted by closing ranks, which took the PRC leaders by surprise, and led to the failure of the united front in its immediate objective, the removal of Patten. By 1994 the PRC accepted the fact that London would not be pressured into firing Patten, and resumed a constructive dialogue with the British, yet continued to refuse to deal with Patten.

The united front has not, however, been abandoned by the PRC. It is merely modifying its approach. It still targets Patten for abuse but no longer commits itself to dislodging him. 49 The thrust now is to enlist as much support as possible from virtually every sector of Hong Kong society. This adjustment is possible since Patten's remaining in office does not pose a threat to the sovereignty of the PRC, and the prize, maintaining Hong Kong's role as the leading locomotive of economic reforms in China, is highly valued. This reflects an adept implementation of the policy of maximum flexibility within a rigid framework.

Implications for Hong Kong  

In political terms, the Chinese approach means Hong Kong must justify its demand for greater democracy in terms of utility to the PRC. It is useless to argue for democracy on the basis of the Joint Declaration (1984). It is also not sufficient for activists or the government in Hong Kong to explain the need in terms of socio-economic changes or the political awakening that followed the opening of Sino-British negotiations in 1982. Although such an explanation is correct, it does not appeal to PRC leaders. What may persuade them is for Hong Kong to demonstrate that democratic reforms there will not lead to a challenge to communist rule in China, that these reforms will be essential for Hong Kong to sustain its economic dynamism in order to support the PRC's economy, and that without democratization Hong Kong's economy will collapse. The problem with this approach is that Hong Kong cannot do so convincingly until it is too late, because the Chinese do not believe that Hong Kong's prosperity thus far is related to democracy. More importantly, the PRC leaders oppose democratization in Hong Kong because of the potential demonstrative effect it could have for the rest of the country, which could pose a threat to the survival of the Communist party in mainland China in the long term. Of more immediate concern is the question raised by Deng Xiaoping: "Those who can be entrusted to administer Hong Kong must be local residents who love mother China and Hong Kong. Can popular elections ensure the selection of such people?" 50 Deng is undoubtedly aware that legislative counselors in Hong Kong have become increasingly critical of their government since 1985, when the hitherto entirely appointed Council admitted a minority of functionally elected members. Thus, while the PRC is likely to offer modest accommodation to the democratic aspirations of the people of Hong Kong in order to prevent them from becoming too restless and upsetting the applecart, genuine liberal democracy for Hong Kong in the foreseeable future remains a gentleman's pipe dream.

The restrictions on democratization in a society where momentum for it has been building up have wider political ramifications. To begin with, the directly elected members of the Legislative Council in Hong Kong can at most form a minority of 33 percent, but they still need to be seen as defending the interests of their constituencies in order to be re-elected. This produces a vocal minority of elected members who have no chance of forming a government, and are therefore at no risk of being held responsible for making wild promises that cannot be implemented. By any standard in the world, Hong Kong's parliamentarians have been remarkably restrained. Whether they will continue to do so since the elections of September 1995 remains to be seen. This injection of elected members into the legislature with no prospect for them being appointed ministers also has implications for the civil service. Since the early 1980s, the rising public demand for accountability has already forced top civil servants, policy secretaries and heads of departments to start to play a quasi-ministerial role in responding to public criticisms. The pressure on the civil service to answer "parliamentary questions" greatly increased after functionally elected members were introduced to the Legislative Council in 1985 and even more so since directly elected members joined in 1991. While enhancing public accountability is a positive development, the lack of non-civil service ministers to make policy decisions and take political responsibilities raises a serious question. Since the senior civil service constitutes the government, the question remains whether it will be able to maintain its political neutrality in the long term and serve as the guardian of public interests basically free from the vicissitude of everyday politics. Will an elected parliamentary minority encouraged by the system to act irresponsibly be an acceptable substitute?

The PRC's basic policy towards Hong Kong also means that the existing independent judiciary will come under serious pressure, if not outright threat. The basic problem lies in the Chinese attitude towards justice. Unlike the Anglo-Saxon common law tradition in which justice is seen to have been done when the law has been allowed to run its course, the Chinese view requires the "right thing" to be done even if it should mean violating the law. An independent judiciary that will not ensure the protection of the PRC's interests is therefore of no inherent value to PRC leaders and their legal advisers. According to Xiao Weiyun, a senior legal adviser to the Chinese leaders and a drafter of the Basic Law, the great value of Hong Kong's capitalist legal system is that it "allows Hong Kong develop to the fullest its advantageous conditions, which will constructively supplement and assist our socialist country's great strive for modernization." 51 All evidence suggests that PRC leaders will only tolerate an independent judiciary in Hong Kong as long as it does not undermine its interests.

A more ominous development is the hostility which the PRC has shown towards the Bill of Rights, introduced by the Hong Kong government against its wishes in 1991. 52 The Bill was introduced after long discussions in Hong Kong, which began in 1987 and intensified after the Tiananmen incident of 1989. It was meant to serve as an instrument to implement those provisions in the International Covenant on Civil and Political Rights (1966) applicable to Hong Kong, which were in fact provided for in general terms by both the Joint Declaration and the Basic Law. 53 Article 39 of the Basic Law stipulates that the above-mentioned Covenant and "the International Covenant on Economic, Social and Cultural Rights, and international labor conventions as applied to Hong Kong shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region." 54 Notwithstanding this, the PRC objects to the Bill, claiming that it violates the Basic Law, because it would introduce a new safeguard for rights and present a fait accompli to the SAR. In October 1995, undoubtedly acting on cue from the PRC government, an advisory body known as the Preliminary Working Committee recommended that those Hong Kong ordinances which had been amended as required under the Bill of Rights be "restored" to their former status in 1997. 55 If the PRC authorities should (as is likely) accept this recommendation would it not darken significantly the prospect that it would tolerate an independent judiciary which is a fait accompli and one that upholds human rights?

In the social sphere, the PRC's Hong Kong policy has had two important effects. In the first place it has led to the emergence of a serious identity problem among the people of Hong Kong. A distinct Hong Kong identity existed in the early 1980s after over 30 years of separation between Hong Kong and mainland China. It consisted of a common outlook and a common popular culture which blended traditional Chinese culture with that imported from overseas, the influences of the United States, Britain and Japan being particularly noticeable. Generally speaking, a Hong Kong person in the early 1980s would identify with Hong Kong and, at the same time, feel at ease with both his Chinese cultural heritage and his British nationality document. The PRC's policy to take over Hong Kong but keep it separate from the rest of the country has changed this situation. Since all Hong Kong persons of Chinese descent will become PRC nationals in 1997 and have, except for a selected minority, been denied full citizenship rights by Britain, many feel they must identify themselves with China. Thus a dual identity, of both Hong Kong and China, has gradually emerged. 56 This has led many Hong Kong Chinese to believe that as PRC citizens they should have a say in determining the future of the PRC, a belief which many acted on during the heady days of the Tiananmen demonstrations in 1989. This is of potentially great significance, as such behaviour is seen by the Communist leadership as threatening to its survival and definitely beyond the limits of flexibility permissible for Hong Kong.

The other social implication involves the movement of people. The PRC's utilitarian considerations, which are primarily economically driven, have led to PRC institutions and an increasing number of individuals to invest heavily in Hong Kong. This has resulted in the immigration of PRC investors, entrepreneurs and even professionals who have received training abroad, among whom are the relatives of many leaders and senior cadres. Those who have access to top leaders in Beijing are emerging as a kind of new elite in Hong Kong. At the same time, many Hong Kong residents have responded to the PRC's policy by voting with their feet. They have emigrated in large numbers, with an average of over 60,000 leaving each year since the beginning of the decade. 57 This outflow is offset to an extent by the return of an estimated 12 percent of emigrants, after they have obtained foreign passports. 58 To their numbers should be added 50,000 Hong Kong families who were given the right of abode in the United Kingdom as a result of the 1989 Tiananmen incident. The net effect of these movements of people is the emergence of social cleavages between those who have access to the inner circle in Beijing and those who do not, as well as between those who have foreign passports and those who do not.

The PRC policy of maximum flexibility within a rigid framework is devised primarily to promote Hong Kong's economic contribution to its modernization. Indeed, it is in economic matters that the PRC will delegate the highest degree of autonomy to the SAR government in Hong Kong, not least because there will be relatively few occasions when the straight jacket of sovereignty needs to be imposed. After the Tiananmen incident and the collapse of communism in Europe, it has become questionable whether the legitimacy of Communist party rule can continue to rest on communism in the PRC. Consequently, Chinese Communist leaders have increasingly sought to consolidate their "mandate of heaven" by improving living conditions, for which sustained economic growth is essential. This means Hong Kong's importance to the PRC has been increased rather than decreased, and the latter's incentive to maintain maximum flexibility enhanced. 59

The irrelevance of the sovereignty issue and the increase in Hong Kong's value do not guarantee that PRC leaders will leave Hong Kong SAR's economic management alone, however. Since they believe the British colonial administration habitually tilted the economy to favor British capitalists in the past, it is not unreasonable for them to expect the SAR government to do the same for PRC investors after 1997, particularly those who happen to be state institutions (such as China Resources or Everbright) or their own relatives. Furthermore, the Hong Kong government's basic belief that the economy should be left to the free market and private entrepreneurs rather than managed by civil servants is anathema to the PRC's economic cadres. In the long term it is doubtful whether all PRC leaders can resist the temptation to pressure the SAR government into manipulating Hong Kong's economy, either for private gains or to help the PRC meet certain, at this stage undefined, short-term economic needs.

Nevertheless, the resilience of Hong Kong's economy will most likely enable it to take a considerable amount of PRC manipulation in stride. There are two dimensions to this resilience. The most obvious is the resourcefulness and pragmatism of its businesses and entrepreneurs. Prior to 1949 Hong Kong was primarily an entrepot built on re-export trade with China. When the United States and the United Nations imposed trade embargoes on the PRC after it entered the Korean War in 1950, trade with China collapsed and Hong Kong's traders adroitly turned to manufacturing light industrial goods. When the embargoes ended and the PRC opened its economy in the 1970s, Hong Kong businessmen promptly revived the entrepot trade. By the 1980s, as local manufacturing costs soared and the investment environment in the PRC improved, Hong Kong businessmen again rose to the challenge. They moved their manufacturing facilities to the PRC and turned Hong Kong into basically a financial and tertiary servicing base. Since they received no help or subsidy from the Hong Kong government, they have demonstrated remarkable flexibility to adapt to the changing environment, whether the change is economic, social or political.

The other dimension of Hong Kong's resilience is the cruel fact that none of the big business conglomerates, both locally based and multinational, can afford to lose confidence and try to pull out of Hong Kong. Given the compactness and interwoven nature of the local business and financial world, an hypothetical attempt by any one of them to sell off a large majority of its assets would be known within hours, provoking a panicked rush by others to do the same, which could cause the entire economy to crash. Since this hypothetical trigger effect is widely understood, it is improbable that any of the big conglomerates will ever test its veracity.


Whatever has been said about the value of the Sino-British Joint Declaration or the Basic Law as guarantees for the future of Hong Kong, they are merely concessions by the PRC to keep Hong Kong, the goose that lays golden eggs, alive. On the premise that the current regime in the PRC will basically continue, the only truly reliable safeguard for Hong Kong's future is its continued value in serving the interests of the PRC as interpreted by Communist party leadership.

The utilitarian calculation of PRC leadership is a powerful inducement for it to exercise maximum flexibility and tolerate a truly high degree of autonomy in Hong Kong. However, its obsession with sovereignty, its lack of understanding of the dynamism behind Hong Kong's politics, society and to a lesser extent its economy, the occasional failures of its bureaucratic machinery to report the reality in Hong Kong either fully or truthfully, and its lack of confidence in its own system's ability to resist undesirable influences from Hong Kong will encourage it to interfere in Hong Kong's affairs. The traditional Chinese approach to the question of justice explained earlier also undermines the value of the two documents. In the case of Hong Kong, justice will be done, in the mind of PRC leaders, not when the terms of the Joint Declaration or even the Basic Law are strictly implemented but when they serve the purposes for which they were drawn up in the first place, namely, to respond to PRC interests. In the final analysis, the PRC leaders' utilitarian considerations are subordinate to their overriding concern about sovereignty, as they set out to secure the economic value of Hong Kong without giving up their right to exercise sovereign authority in the territory.

Note 1: Xianggang Wenhuibao, ed., Jibenfa de Dansheng (Hong Kong: Wen Wei Publishing, 1990) pp.58-59.

Note 2: Xu Jiatun, Xu Jiatun Xianggang Huiyilu, 1 (Taipei: Lianjing Chubanshe, 1993) p. 17. Back.

Note 3: Ye Lei, "Xianggang Xinhuashe Fazhan Shi," Zhonggong zai Xianggang (Hong Kong: Wide Angle Press, 1989) p. 189; A.D. Barnett, The Making of Foreign Policy in China (London: I.B. Tauris & Co. Ltd., 1985) p. 13. Back.

Note 4: Percy Cradock, Experiences of China (London: John Murray, 1994) p. 193. Back.

Note 5: Long Xin, Xianggang de Lingyige Zhengfu (Hong Kong: Haishan Tushu) p. 11; Xu (1993) 1, p. 2. Back.

Note 6: Kenneth Lieberthal and Michael Oksenberg, Policy Making in China: Leaders, Structures, and Process (Princeton: Princeton University Press, 1988) p.143. Back.

Note 7: John Burns believes that the bureaucratic rank of the secretary of the Work Committee was downgraded to vice-minister level in 1990, as Zhou Nan who was appointed then was merely a vice-foreign minister at that time. I have come across no definitive information to prove or disprove Burns' assessment. However, I am inclined to disagree with him for two reasons. Firstly, Hong Kong is being considered on a par with Shanghai or Tianjin which enjoy full provincial (i.e. ministerial) status. Secondly, Zhou was elevated to the Central Committee after his appointment to Hong Kong. John Burns, "The Role of the New China News Agency,"Hong Kong and China in Transition: Canada and Hong Kong Papers 3 (Toronto: Joint Centre for Asia Pacific Studies, 1994) p. 39. Back.

Note 8: Xu (1993) 1, pp. 12, 15-16. Back.

Note 9: Steve Tsang, A Documentary History of Hong Kong: Government and Politics (Hong Kong: Hong Kong University Press, 1995) pp. 283-84. Back.

Note 10: John Burns, "The Structure of Communist Party Control in Hong Kong," Asian Survey 30, no. 8 (August 1990) p. 752. Back.

Note 11: Xu (1993) 1, p. 53. Back.

Note 12: For a more detailed explanation of concept of xitong in PRC politics, see Kenneth Lieberthal, Governing China: From Revolution Through Reform (New York & London: W.W. Norton & Co. Inc., 1995) pp. 194-95. Back.

Note 13: ibid., pp. 68-70. Back.

Note 14: ibid., p. 69. Back.

Note 15: Burns, (1990), p. 755. Back.

Note 16: Xu (1993) 1, p. 72. Back.

Note 17: ibid., p. 54. Back.

Note 18: Xu (1993) 2, p. 426. Back.

Note 19: Deng Xiaoping, Deng Xiaoping Wenxuan (Beijing: Renmin Chubanshe, 1993) p. 12. Back.

Note 20: ibid. Back.

Note 21: Deng Xiaoping, Deng Xiaoping Lun Xianggang Wenti (Hong Kong: Joint Publishing, 1993) pp. 5-8. Back.

Note 22: K.P. Lane, Sovereignty and the Status Quo: The Historical Roots of China's Hong Kong Policy (Boulder: Westview Press, 1990) p. 6. Back.

Note 23: Deng, Deng Xiaoping Lun WenxuanWenti, p. 12. Back.

Note 24: ibid, p. 14. Back.

Note 25: Tse-tsung Chow, The May Fourth Movement (Stanford: Stanford University Press, 1960) pp. 92-94. Back.

Note 26: For the PRC's approach to end the Western presence, see Beverley Hooper, China Stands Up: Ending the Western Presence 1948-1950 (North Sydney: Allen & Unwin, 1986). Back.

Note 27: British Government archives at the Public Record Office (Kew), Foreign Office series FO371/75779, F124/1016/10, Heathcote-Smith to Lamb, letter of 2 December 1948. Qiao was identified in this document by his alias Chiao Mu. Back.

Note 28: Sergei Goncharov, John Lewis and Xue Litai, Uncertain Partners: Stalin, Mao, and the Korean War (Stanford: Stanford University Press, 1993) p. 40. Back.

Note 29: British Government archives, Colonial Office Series, CO537/6798, Colonial Political Intelligence Summary 1951, 3 (March 1951). Back.

Note 30: Xu (1993) 2, pp. 473-74. Back.

Note 31: Xianggang Wenti Wenjian Xuanji (Beijing: Renmin Chubanshe, 1984) p. 17. Back.

Note 32: Cheng Linsheng, Deng Xiaoping "Yiguo Liangzhi" Sixiang Yanjiu (Shenyang: Liaoning renmin chubanshe, 1992) pp. 87-88. Back.

Note 33: Robert Cottrell, The End of Hong Kong: The Secret Diplomacy of Imperial Retreat (London: John Murray, 1993) pp. 64-67. Back.

Note 34: Deng Xiaoping, Deng Xiaoping Lun Xianggang Wenti, p. 6. Back.

Note 35: Cradock, pp. 229-30. Back.

Note 36: For details, see Ming Chan and David Clark, eds., The Hong Kong Basic Law: Blueprint for "Stability and Prosperity" under Chinese Sovereignty (Hong Kong: Hong Kong University Press, 1991) pp. 21-29. Back.

Note 37: Cheng (1992), p. 178. Back.

Note 38: Deng , Deng Xiaoping Wenxuan, 3, p. 221. Back.

Note 39: ibid Back.

Note 40: Xu (1993) 2, pp. 432-33; Wen Hui Bao, 23 November 1992. Back.

Note 41: Norman Miners, The Government and Politics of Hong Kong, Fifth Edition (Hong Kong: Oxford University Press, 1991) pp. 68-69. Back.

Note 42: Tsang (1995), pp. 4-9. In Confucius' teachings a bad government is above all an oppressive one. Back.

Note 43: Wen Wei Pao, 28 January 1993. Back.

Note 44: Ta Kung Pao, 19 March 1993. Back.

Note 45: Governor The Right Honourable Christopher Patten, "Our Next Five Years: The Agenda for Hong Kong," Address by the at the opening of the 1992-93 session of the Legislative Council) (Hong Kong: 1992). Patten's proposals were finally implemented in 1995. Back.

Note 46: The Basic Law Drafting Committee, The Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China (Hong Kong: The Consultative Committee for the Basic Law, 1992) p. 66. Back.

Note 47: Steve Tsang, "Political Problems Facing the Hong Kong Civil Service in Transition," Hong Kong Public Administration, 3, no. 1 (March 1994) p. 135. Back.

Note 48: For a perceptive and detailed analysis of the origins and meaning of the united front, see Lyman Van Slyke, Enemies and Friends: The United Front in Chinese Communist History(Stanford: Stanford University Press, 1967). Back.

Note 49: Ta Kung Pao, 13 October 1995. Back.

Note 50: eng Xiaoping, Deng Xiaoping Wenxuan, p. 220. Back.

Note 51: Xiao Weiyun, ed., Yiguo Liangzhi yu Xianggang Tebie Xingzhengqu Jibenfa (Hong Kong: Wenfa Jiaoyu Chubanshe, 1990) p. 9. Back.

Note 52: Xinhua News Agency report of 24 October 1995, in British Broadcasting Corporation, Summary of World Broadcasts, FE/2446, 28 October 1995. Back.

Note 53: The International Covenant on Economic, Social and Cultural Rights was not incorporated into the Bill as such rights could not be easily enforced in the courts. An Introduction to Hong Kong Bill of Rights Ordinance (Hong Kong: Government Printer, 1991) p. 2. Back.

Note 54: The Basic Law, p. 17. Back.

Note 55: Ming Pao, 25 October 1995. Back.

Note 56: For a fuller exposition of this question, see Steve Tsang, "Identity Crisis in Hong Kong," Hong Kong Monitor (September 1990). Back.

Note 57: Ronald Skeldon,"Hong Kong in an International Migration System," Ronald Skeldon, ed., Reluctant Exiles? Migration from Hong Kong and the New Overseas Chinese (Armonk, NY: M.E. Sharpe, 1994) p. 30. Back.

Note 58: ibid., p. 39 Back.

Note 59: For the intricate economic links between Hong Kong and the PRC, see Yun-wing Sung, The China-Hong Kong Connection: The Key to China's Open-door Policy (Cambridge: Cambridge University Press, 1991). Back.