In a scholarly paper put forth by Jacques deLisle, Director of the Center for East Asian Studies at Penn, he proposes the seldom-asked question of what is the state of affairs in Hong Kong today, two decades after the end of British imperialism.
There are many reasons one should care of such, most notably the relationship Hong Kong has with China, with its “one country, two systems” arrangement. Historically, the British ceded the region approximately 150 years after initially taking control of Hong Kong Island in the First Opium War in 1842, and then additional surrounding territories in subsequent wars.
The British held a 99 year lease on Hong Kong that expired in 1997, which then led China to ostensibly take control. Notably, China would argue the cession of Hong Kong to Britain had never been legitimate or legally effective.
Hong Kong enjoys an enviable free market economy, with the country linking its currency closely to the US dollar, maintaining an arrangement established in 1983. Mainland China has long been Hong Kong’s largest trading partner, accounting for about half of Hong Kong’s total trade by value.
Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2015, mainland Chinese companies constituted about 50% of the firms listed on the Hong Kong Stock Exchange and accounted for about 66% of the exchange’s market capitalization.
The dichotomy that exists between democracy and Mainland China is widening under Chairman Xi. Beijing is either worried that democratization and liberal politics in Hong Kong are a threat to its control and a potential contagion that could spread to the mainland, or is confident that it can simply ignore pressures for political change in Hong Kong.
The confrontation over democracy is not likely to go away, and as mentioned, has in some respects been escalating. The pro-democracy push in Hong Kong for both economic and social reasons is likely to be held in contempt, as the Chinese view such actions with paranoia. This reaction is likely to play out as one would assume.
It’s like taking your kids to Disney World and then bringing them back to Fargo in January. China is very resistant to allowing Hong Kong to show the next generation of Mainland Chinese youth the upside of capitalism.
In today’s world where the U.S. and China are the two biggest powers, there is rivalry on a lot of fronts, including geostrategic, economic, and so forth. This is not likely to change anytime in the near future.
The giant that is China is once again slowly making its move back toward Maoism under Xi. Hong Kong could perhaps be viewed as the canary in the coal mine for Mainland China. Economic growth and a pseudo-democracy have put Hong Kong in the epicenter of change. Sovereignty will always be dictated by China, and it will ostensibly be part of the bigger plan to control not only Hong Kong, but where ever its Belt and Road Initiative will allow it to go.