The solution for China’s prodigal son

There is more than meets the eye in the recent protests in Hong Kong. While democracy has been a cornerstone of Hong Kong, reality is finally catching up with many. There is definitely a pent-up frustration in Hong Kong as its economic future grows dimmer and social issues become more pressing.

Hong Kong, once the prodigy of Northeast Asia, used to be a strategic trading hub, supported by a vibrant financial center. Its role has diminished over recent years. Having being passed from one master to another, each with its own agenda, Hong Kong is now at a critical crossroads of change.

As a former British colony, it inherited a peculiar phenomenon that all other former European colonies face. During their rule, the British empowered selected locals and turned them into tycoons, to further the interests of the power in London. Many of these tycoons rewarded their British masters with gratitude by being loyal to them, much to the disadvantage of the masses and that of China. This phenomenon or tycoon-empowerment not only created an economic divide between the rich and the poor but also bred cronyism, nepotism and corruption.

This phenomenon was not unique to Hong Kong, as Southeast Asian economies that were once colonized by the Europeans also experienced it. Such social malices cannot resolve themselves, as individuals vested with such power will not go into the sunset on their own accord. They are like cancer that needs to be surgically removed before they metastasize and kill the economy and the dreams of the people.

The Southeast Asian perspective

When the economies in the Southeast Asian region regained their independence, resources and power were still vested in many of these tycoons. To forge a new future, they were instrumental as these economies developed strategic business sectors and built new infrastructure to support their growth as independent economies. The line between politicians and these tycoons was soon blurred, as power lies in the side of those who have the resources to make things happen.

Naturally, cronyism, nepotism and corruption soon took deeper roots and the economic divide between the people just grew wider. Such socio-economic tension not only divides a country but will also impede it from realizing its fullest potential. Being squeezed from being “less than possible,” and where the fruits of people’s labor reside largely with these tycoons and their cronies, such inequality will implode at some point when reality seeks its own equilibrium.

Progressive uprisings took place across Southeast Asia. By the late 1970s, the growing middle class in Indonesia took advantage of the Asian financial crisis to force president Suharto to step down. Their unified call for an end to cronyism, nepotism and corruption gained much traction. Unfortunately, some individuals exploited this uprising by turning it into an ethnic issue, and many Chinese-Indonesians were brutally exploited in the process.

On the bright side, Indonesia is now on a recovery route and has a growing middle class to support its economic push forward. This middle class is also unleashing entrepreneurship in innovations, uplifting the low-income class and helping to rebuild a new and vibrant economy where anyone who aspires can become economically viable without patronage to the old tycoons. Even a commoner can become a president.

The same came true for Malaysia, when its people, activists and former political leaders came together to call for an end to cronyism, nepotism and corruption that ended the Barisan Nasional’s ironclad rule.

These progressive uprisings show that democratic ideology must be aligned with reality if capitalism is to work for the masses, as unrestrained political power will corrupt even the incorruptible and create new economic impairments. As such, these economic impairments, legacy or new, must be periodically purged to keep economies functional and healthy.

Even Hong Kong’s closet rival, Singapore, is also experiencing this phenomenon and it is dividing its people. Coupled with unprecedented pertaining issues that are plaguing the city-state relentlessly, the call to end cronyism and nepotism and the demand for greater accountability are gaining much traction domestically. It too will have to face its own progressive uprising at some point in the near future. This is an inevitable hard truth.

As for Hongkongers, they have much to learn from their progressive Asian counterparts. They can turn their progressive uprising from protesting into positive engagement. Unlike Singapore, Hong Kong still has several trump cards to play to its advantage.

Hong Kong’s perspective

Hong Kong is clearly a progressive democracy where freedom of speech matters. Its legal system remains robust and free of political interference. While its young people practice strong social activism as shown in the recent protests, it has yet to realize the value of its most prized trump card – China.

Unlike other independent sovereignties, Hong Kong is not only part of China but is protected militarily by it. Its strategic importance is also intrinsically tied to China. The prodigy son needs his mentor if he aspires to rise again in the New Economy of rapid changes and disruptions.

As such, Hong Kong’s only real option lies in how it is going to make this reality work for it. Love it or hate it, China is instrumental to Hong Kong’s future. Sooner is wiser than later.

The kind of protest that has been staged in Hong Kong, where millions of its citizens were involved over many days, is not a casual endeavor. Clearly, young people do not have those kinds of funds or resources. Who are the invincible hands empowering them, and why?

When Hong Kong was returned to China in 1997, some form of resistance was to be expected from its old “powerful entities” and their cronies. They would find ways to cling to their power for as long as they could unless they were given a new lease on life by the Chinese to stay relevant.

As such, Hongkongers cannot serve two masters at the same time, as one will be pitted against the other. This could well have been at work in the recent protests. While it may be a simple case of ideological difference, it could also be a case where some “powerful entities” and their cronies are trying to exert their importance upon the Chinese. But China is in no rush to react to Hong Kong’s every whim.

The transformation of Shenzhen shows just how much Hong Kong has to lose by being defiant against the Chinese. More reckless behavior is not going to make China open its arms for this prodigal son.

For Hong Kong to regain its strategic importance, it has to find a better way to engage China in a win/win proposition. Many of its social issues like affordable housing, quality employment and education, social support and many other pressing matters are legacy issues, created during the colonial rule. They are small issues for China to address. The question is how Hong Kong is going to persuade China decisively to help it resolve its pressing social issues and restore its economic importance.

Another way to look at these issues is to consider how long they have been left unmitigated, and that should wake up the consciousness of Hongkongers to be more pragmatic. Clearly, the Chinese were not the ones who created these social malices. If the tycoons and the British had been more pragmatic in balancing their ideology of democracy with their capitalism, Hong Kong would not have been facing these dilemmas in the first place.

Hongkongers must accept the fact that between the lordship of these old “powerful entities” and China, the old way is clearly not working. It may be time for them to consider new approaches such as switching their allegiance and consider giving the Chinese a chance to shows their sincerity about making Hong Kong a success story under its “one country, two systems” policy. It is within China’s abilities to afford Hong Kong its autonomous democracy if it is able to balance its ideology with reality.

Constructive engagement

To do so, Hong Kong would have to break from the dictate of those “powerful entities” and not be used by them or be sandwiched between them and the Chinese leaders. Should the people switch sides to China, these “powerful entities” will lose their importance and power almost overnight. Unlike the British, the Chinese do not need these de facto power-brokers to keep Hongkongers in check.

That means that once these economic impairments are removed, wealth can flow directly to the people instead of these proxies and their cronies. The business-minded Hongkongers should understand this very well. With a simple policy change, China can in one broad stroke reduce the Gini coefficient that has been plaguing Hong Kong for the longest time.

This should incentivize Hongkongers into more constructive engagement with the Chinese. With the trust between the people and the appointed political leadership, Hongkongers may have to rely upon their independent politicians to facilitate the push for a national referendum and help them forge a win/win socio-economic proposition with the Chinese.

While China may be frustrated by the prodigal son’s recent protest, it will still likely give Hong Kong the benefit of doubt if a compelling and tenable socio-economic proposition can be presented to make the “one country, two systems” policy work for them mutually. To do so, it will require the collective consciousness of its people to accept the reality that China is Hong Kong’s only way forward.

If Hong Kong can succeed in this engagement, its future as an Asian financial powerhouse can be very bright. The 1.37 million Hongkongers who are currently living below the poverty line can be alleviated, wealth redistributed more equitably and the many other pressing social issues such as affordable housing mitigated. After all, it is in the interest of the Chinese to show the world that its policy for Hong Kong is viable.

It may be time for Hongkongers to reflect and learn from its more progressive Southeast Asian counterparts and play its cards right. The many chronic social ills that are plaguing Hong Kong are legacy issues, caused by the scourge of cronyism, nepotism and corruption from its colonial past. It is time for Hongkongers to stop treating China as the bogeyman if they truly aspire to move forward strategically and rise from their own ashes.