Current Situation of Hong Kong - Research Paper Example

of Unit Current Situation of Hong Kong Introduction Hong Kongs economy is characterized by minimum government involvement, low taxation, and free trade. It is the eighth biggest economy trading with mainland China. It has a key service-oriented economy linked particularly to mainland China and other countries in Asia-Pacific region (Chen and Andrew, 2011). In 2013, Hong Kong recorded an economy growth of 2.9 percent. The economic growth was 2.2 percent as compared with the same period in 2013. Private consumption spending dropped to 1.4 percent year-on-year. Investment expenditure, which include equipment and machinery acquisition weaken to 1.5 percent year-on-year. Total exports of services and goods grew mildly by 1.4 percent. Domestic demand is projected to recover moderately while export prospects are expected to be positive (Bedford, 2014). The economic environment of Hong Kong is quite different from that of mainland China. Therefore, the direction of the relationship between Hong Kong and China is expected to alter the political and economic situation of Hong Kong. This paper analyzes Hong Kongs current situation. It then predicts and analyzes the possible outcomes, and forecast the future of Hong Kong and the resulting impacts on the world. History of Hong Kong Following the First Opium War, which happened between the years 1839 to 1842, British Empire made Hong Kong a colony. The Island of Hong Kong was ceded first followed in 1860 by Kowloon Peninsula. The British Empire leased the New Territories to Japan in 1898. The Japanese occupied the region until the end of 1945 when British restarted control until 1997 (Blake, 2011). The amalgamation of Chinese and British cultures marks the current culture of Hong Kong. For instance, the educational structure followed the British form until 2009 (Leece, et al. 2011). Due to the elongated, existence of British in Hong Kong, and the island had unique characteristics that have made Hong Kongers dislike mainland. Prior to the takeover, many people fled to Western countries. The People’s Republic of China received control of Hong Kong from Britain following their agreement of 1984 (Gerdes, 2006). Hong Kong became the first Special Administrative Region. A strong sense of the need for righting a historical injustice and the economic prospects led China to push hard for acquisition of Hong Kong in the 1980s and 1990s (Menpes and Henry, 2014). At the time, Hong Kong had everything, China required. It had international connections, wealth, and membership to global trade organizations. Beijing realized that those assets could assist China pull out of periods of communist isolation. It also served as a model for modernizing and industrialization of the agrarian economy in the mainland. Hong Kong Hong Kong is officially recognized as Hong Kong Special Administrative Region of the People’s Republic of China on the Southern Coast of China (Blake, 2011). South China Sea and Pearl River Delta geographically enclose it. Hong Kong has expansive and good natural harbor and expansive skyline and a land mass of 1,104 km2. It is one of the most densely populated regions of the world with a population of over seven million people. People from ethnic Chinese make 93.6 percent with people from other groups like Indians, Philippines, and Indonesian making 6.4 percent. Cantonese-speaking majority came mainly from Guangdong province mainly between 1930 and 1970. They were running away from communist rule and war in mainland China. Hong Kong’s political model is unique from that of mainland China. It has an independent judiciary functioning under the framework of the common law. The Chinese drafted the Hong Kong’s Basic Law before the handover. The Basic Law is based on terms in the Joint Declaration, which governs the political system and maintains the high level of autonomy of Hong Kong. It has a multi-party system. However, Hong Kong’s democracy is considered flawed as a small-circle of electorate manages 30 out of 70 positions of the legislature. Hong Kong is a city ranked fifth most significant city in the Global cities index of 2014. It has the biggest income inequality amongst advanced economies. It has the greatest income per an individual in the world and a high Human Development Index. It also has a high economic and financial competitiveness and is the third key international financial center after New York City and London. In the world, Hong Kong dollar is the eighth most traded currency. Mainland China and Hong Kong There are sharp contrasts in cultures and systems between mainland China and Hong Kong. The differences have caused noticeable tensions between Mainland China and Hong Kong since the handover in 1997. Politically, many people of Hong Kong have increasingly resented mainland for her meddling with the political system of Hong Kong. Unlike mainland China, Hong Kong has a free press. However, pro-mainland voices have taken control of a number of city’s key media outlets and caused controversy by downplaying or censoring negative stories about the central government of China. Culturally, mainland tourists and Hong Kongers commonly come into conflict due to the mainlanders’ behaviors, which do not like up the strict British- influenced standards of Hong Kongers. Mainlanders are occasionally referred derogatorily as locusts consuming resources meant for them. Hong Kongers have complained of eating behavior and spitting in public. They have also complained of mainland mothers who give birth in the city in order to access superior economic conditions and schools and relative freedom in the city. In other cases, many individuals from mainland, especially mothers have been criticized for their purchase of a massive amount of milk powder for infants due to distrust of mainland supply (Kuah, Khun and Gilles, 2009). Mainland’s supply is distrusted following the contaminated milk powder scandal. On their part, Mainlanders lash back Hong Kongers for their ungratefulness. Kong Qingdong, PRC Nationalist commentator called Hong Kongers dogs. The commentator chose the identity in reference of the submissive nature of colonial subjects. Qingdong view caused widespread protests in Hong Kong. China Failure to Honor Handover Agreement Under the one China, Two Systems principle, China legally allowed Hong Kong to possess its government, legal systems, monetary systems, and police forces (Qian, Qing, and Riki, 2013). It also allowed multi-party legislatures, national sports teams, immigration policies, official languages, education systems, and considerable capability in external relations. However, for the last seventy years, China has effected sustain changes of different aspects of the city. Symptoms that contradicted self-autonomy came up after 2003 (Lo, 2010). For example, the Marine Department prevented Hong Kong boats sailing to the Senkaku Islands without any sound reason. Hong Kong has experienced increasing media censorship in the past decade. Hong Kongers have noticed changes, which threaten their long-cherished press freedom. Politically sensitive news like June 4 commemoration and any other news that are unfriendly to the authorities are sometimes censored by paranoid media groups. Fewer new items can be viewed on the two free TV news channels in the city. Some local businesspersons have been denied licenses without persuasive explanations even though the government prides itself to support entrepreneurism. Some radio hosts known for sharp criticism of both the domestic and the mainland governments have been sacked without explanation. Press Freedom Index placed the city at 61 in 2014 yet in 2002; it was 18 (Li, 2012). Conflicts On August 31, 2014, Mainland’s top legislative body, the National People’s Congress’ Standing Committee (NPCSC), collectively passed a ruling. The ruling state the need for the existence of a broad delegate nominating committee to scrutinize for political contenders starting with the election of 2017. The legislative body stated that a panel consisting of 1,200 strong election committee members who would be picking the Chief Executive. The candidate is required to receive at least half votes of a panel before he/she runs in the election. The requirement is higher than the existing one-eighth threshold that allows a pan-democrat candidate to run in an election. The new ruling led to a demonstration. Democracy activists believed that Chinese nominating committee would be used to eliminate candidates who are not inclined to the mainland. They also pointed out that the panel was not a representative of all people and thus the number of the panelists should have been increased. Therefore, tens of thousands of people went to the streets to call and push universal suffrage. The Occupy Central movement threatened to blockade the central business district in Hong Kong. Under the leadership of Benny Tai, the movement prepared an unofficial referendum. The referendum was held as from June 20 to 29, 2014. Voters chose from three proposals for the election of 2017. Voters chose whom to nominate as a candidate to the position. There was a turnout of 792, 808 votes. The movement asserted that the high turnout represented the strong backing of the movement by the public. On September 28, Mr. Tai called people to conduct sit-ins around the headquarters where students had already assembled throughout the night. The call led to an increased in the number of demonstrators in the streets. Opposition lawmakers vowed to obstruct the passage of electoral bill. Execution of the threat required two-thirds of the 70-member legislature. However, they did not succeed. The defended the ruling of a legislative body on election candidacy for the city. Mr Li Fei, the deputy secretary-general defended NPCSC by claiming that the nominating guidelines would guard the broad stability of the city. Beijing condemned the pro-democracy activists. The China’s authority related the unofficial referendum by Occupy Central movement to a farce. In June 2014, it declared in the White Paper that demonstrators had lopsided and confused understanding of the one China, two systems model. Mainland China claimed that even though Hong Kong enjoys autonomy, it is still under the comprehensive jurisdiction. Responding to worsen the situation in September 28, government of China remained confident that the authorities in the city could handle demonstrations. The current Chief Executive, Leung Chun-ying held a press conference on September 28, where he declared his government opposition of the actions of Occupy Central. He also pointed out the government plan to hold public education for planned political change. Mr. Leung also emphasized the unofficial nature of the election organized by Occupy Central. Protesters left the streets after a week. Fatigue, the need to go back to work, a police crackdown, and the stableness of China led most to exit. China cannot Back Down The crackdown of the pro-democracy protesters depicted the high power imbalance between Mainland and Hong Kong’s officials. The city was once an important gateway for investment, capital raising, and trade, to its northern neighbor. The role intensified in 1997, after the handover. Unlike in the past, China’s economy was more dependent on the economy of Hong Kong than it is today. Even though the GDP of Hong Kong is included in China’s overall GDP, the economy of China is less dependent on Hong Kong. According to Trigger Trend, several key cities in China are likely to overshadow Hong Kong by 2022. The report given on 27, August 2014, came at the time Beijing affirmed that it would not give in to open nominations calls. Before Beijing made the affirmation, Hong Kong’s democracy activist faced a hard choice between accepting fake election for the Chief Executive and occupying the central financial district of the city. In either way, the mainland government pointed out that it is not ready to yield to civil disobedience acts in the region. Even with jittery of business owners or investors, Beijing’s firm decision was unshakeable. The hard-line position against giving real democracy to Hong Kong sent a message to the rest of China and the world. Beijing’s actions sent a message that civil disobedience does not cause political concessions. Probably, the central government believes that its increasing economic weight to cast a threatening overshadow over the city. The report portrayed the inexistence of very special status for Hong Kong. The report pointed out that annuls GDP growth for Hong Kong has been two percent only in recently years. Unlike Hong Kong, the Chinese regional centers have been registering a growth rate of over 7 percent. In 2013, Hong Kong’s GDP was about 261 billion U.S dollars, while Beijing had 317 billion U.S dollars and 354 billion U.S dollars. At the time of acquisition, the GDP of Hong Kong was 15.6% of China’s total GDP. However, the percent had dropped to 2.9 percent in 2013. According to the Trigger Trend report, if the present growth rates persist, the southern cities of Shenzhen and Guangzhou and northern municipality of Tianjin GDPs will possible overtake the GDP of Hong Kong by the year 2017. Shanghai is usually seen as the direct competitor of Hong Kong. In September 2013, Shanghai announced the creation of free trade zone (FTZ), development of tariff-free ports, and offering policy and tax policy breaks to foreign investors. Shanghai FTZ offers more publicity than substance (Sha, 2014). Hong Kong’s policymakers warned that a business ought to prepare competition. Hong Kongs business community have adopted the view that calls and fights for democracy destroy or harm the economic competitiveness of the territory. It also distracts outlook and seriousness of present issues like infrastructure, social welfare, and employment. Hong Kong’s position as the global financial center is based on several factors other than the GDP. The city has superb infrastructure, cosmopolitan culture, and well-established legal system. Mainland cities like Shanghai and Beijing lack these characteristics. The Economist Intelligence Unit classified Hong Kong as the fourth-most competitive city in the world ahead of Beijing, which was ranked 39th, and Shanghai was ranked 43rd. In terms of wealth, Hong Kong is much wealthier city in regards to per capita income. The city is the gateway to human capital and international investment. Investors, new immigrants, and expatriates flock to Hong Kong as the city is considered livable, with cleaner air, safer food, fairer judiciary, and freer media than Chinese metropolises. Hong Kong’s economic decline is relative to mainland but remains top global city. The ability of Hong Kong to maintain an advantage over others is largely due to the effectiveness of its civic institutions and relative political independence from China.. The importance of Hong Kong’s usefulness as a trade route into China has dwindled. The city is more dependent on itself than is the mainland dependent on it. One- tenth of Hong Kong’s GDP is made up of retail and tourism elements. The several reasons that make violence in Hong Kong have possible harmful effects on the mainland. The region still has important inroad foreign investment with capital markets that produce foreign capitals for companies belonging to China Boudreaux, 2008). Again, the large sums of corporate, government, or personal wealth have never been mentioned. A crackdown can most like hurt the property market in Hong Kong and thus jeopardize the banking sector. Disturbance of the property market can drive up bad loans. The city is the world center for Yuan trading. Again, it is a platform where large sums of liquidity flow through both fake and real trade financing. Chinese leaders do not seem to understand the ever-rising dependency of China on Hong Kong. Presentation of the Hong Kong’s China Relationship by the Social Media Western social media view China with suspicion. China is always presented as a country that lacks democracy and preservation of basic human rights (Liu, 2012). Therefore, to a larger extend the foreign community as regarded the key changes that mainland China have implemented or intends to implement over Hong Kong as unacceptable (Kyong, Jeff and Yongtao, 2013). The Chinese government is regarded as inconsiderate in its dealing with the city. During the Occupy Central demonstration, various media channels instigated many debates throughout the world to call for the respect of human right by the Chinese government. Most people were angry of the failure of China to honor its agreement with Britain over Hong Kong. The Western nations and U.S. have been in the forefront calling China to reconsider its strategies with the city. However, with the globalization, the efforts of these and other countries have failed to influence China to alter its policies. Due to globalization, nations rallying behind Hong Kong are forced to limit their calls for changes as they attempt also to maintain diplomatic relationship with one another (Stone, Piera, and Chow, 2010). Nations prefer maintaining the relationship for economic reasons. For instance, president Barrack Obama has been softly calling for reconsideration of the new policy, which is planned to be implemented in 2017. Recently, President Obama and the Chinese Prime mister Mr. Xi Jinping of China met to discuss various issues including US- China cooperation. In the meeting, President Obama made a clear to the Prime minister to reconsider the action they intend to take as the Chinese government. However, the calls were not accompanied by sanctions as was done in the past. The issue thus remains unsolved and the Chinese government to show the world that it got power and ability to make changes it considers necessary and beneficial to it. The Exit, Voice, and Loyalty Exit, voice, and loyalty are a conceptual ultimatum written by Albert O. Hirschman, which presents conceptual factors that face a consumer. They are the alternative ways of reacting to dissatisfaction or deterioration in a situation in an organization or business. A customer might exit or quit the organization or voice by agitating for change within an organization. A customer can also decide to be loyalty to an organization despite the deterioration or the dissatisfaction with the organization (Hirschman, 2013). The competence of a competitive mechanism, with complete dependence on exit, depends on certain situations. Exit undercuts voice while incapable to counteract the decline. Loyalty is the retarded exit while allowing voice to play its appropriate role (Wilkinson, 2013). The interplay of these concepts illuminates political, social, and economic phenomena. Members of the company, an organization, nation, business or group have to options when the perceive deterioration of benefit or quality. They can decide to exit the relationship, or they can decide to voice their grievances in an attempt to improve or repair the relationship or organization. For instance, citizens of a country might decide to protest or emigrate as their respond of expanding political repression. Similarly, an employee either can choose to quit his /her unpleasant job or might decide to raise concerns in an attempt to better the situation. In the same manner, the people of Hong Kong have two options to face the pressure from China. Loyalty Loyalty in used by not applying the concept of exit and applying well the concept of voice. According to the loyalty concept, an individual would accept deteriorations without making any complain about them. For instance, an individual would accept to pay taxes without making any complain to the government. The concept of loyalty is not fully applicable in the case of Hong Kong as their grievous reasons that are affecting people and must be altered. Hong Kongers are not ready to face the injustice silently. They are ready to make certain adjustments, which can help them achieve the conditions they want. Therefore, in this situation, the concepts of exit and voice can be applied. Exit The Chinese government did not implement handover agreement has expected (Poulsson, Kate and Robin, 2010). The agreements were expected to be respected for at least fifty years. However, in a period of less than ten years, mainland China had already started implementing a new change. For instance, it started limiting freedom of speech. The new changes brought about China, which is less democratic as compared to Hong Kong, surprised, many people. For example, unlike in the previous time people in Hong Kong had gotten used to acting of sharp criticism of the government. However, with China, several radio hosts who sharply criticized the local and central government was laid off work. Others were killed. For instance, Kevin Lau Chun-to, an expert journalist was stabbed six times in a hit-run attack. Even though he survived the tragedy, the attack on him left a long-lasting scar on the freedom of local press. It also led to erosion of freedom of speech and self-autonomy of Hong Kong. The attack portrays a new image of the society. Unlike the previous situation, the coming of China led to the deterioration of the society. Therefore, due to these and other changes, which are distasteful a large number of people have opted to leave the society and search for others. They want areas that can offer the quality of services, products, skills, behaviors, and other aspects of the human society, which they miss. Many people ran away, mostly to western nations has they feared communism by China before China took control of Hong Kong. Currently, a large number of youths in Hong Kong dream of moving out of their city. They dream of going to places like the United States, Australia, Canada, and to countries in the Eurozone to start life again as their lives have become unbearable. These people are applying or are intending to apply the concept of exit. Even though in its conception sense is applicable to everyone, there are certain people who would not prefer its used. Therefore, the concept of exit is not applicable to everybody in Hong Kong. It can be applicable to a few people like some few radio hosts. The remaining group of people can use the concept of voice. Voice Over the years, since mainland China started to implement unexpected new changes, many pro-democracy activists have been challenging the changes. Riots erupted on August 31, 2014, after, Mainland’s top legislative body, National People’s Congress Standing Committee (NPCSC), collectively passed a ruling. The ruling stated the need for the existence of a broad delegate nominating committee to scrutinize political contenders starting with the election of 2017. Many people especially the youths occupied the streets for a week. On September 28, Mr. Tai led people under the group Occupy Central movement to conduct sit-ins around the headquarters where students had already assembled throughout the night. Protestors pointed out that the panel was not a representative of all people and thus the number of the panelists should have been increased. They also called and pushed for universal suffrage Opposition lawmakers vowed to obstruct the passage of electoral bill (Gu, Lulu, and Reed, 2013). The use of voice can sometimes be the most effective way of find a solution in a situation where there is deterioration (Müller, 2013). Nonetheless, the use of voice by Hong Kong seems to lead to failure. Responding to worsen the situation in September 28, government of China remained confident that the authorities in the city could handle demonstrations. Due to its economic power, the need to demonstrate political power to the world, and due to the reduced importance of Hong Kong to China, mainland was determined to fail demonstrators. It was confident that the local government by Leung Chun-ying ability to control demonstrators. Furthermore, the central government is not ready to accept the grievances of the demonstrators as Hong Kong is not more its key city. The government thus does not lose a lot of in case it refuses to give to the protestors. Instead, the protestors themselves are impacted negatively forcing them to stop their demonstrations. The wealthy people in Hong Kong understand this fact and thus side with the government. The central government employed this strategy during the Occupy Central movement. During the protest, it requested the local government by Leung Chun-ying to remove demonstrators in the streets. The police fought almost severely with the demonstrators at the beginning of the protest. The government later commands the police to watch the demonstrators for any serious misbehavior. Most demonstrators had left the streets by themselves after the first week. Fatigue, the need to go back to work, and the projected failure can explain the reason demonstrators left the streets. Again, it shows the failure of the application the concept of voice in solving the different issues in the society of Hong Kong. After the end of the protest, the protesters were back at the same situation. They did not succeed to start talks with the local and the central government. They end up with nothing as they joined the demonstration. Their failure demonstrated the determination of the central government to bring change no matter the impact to the Hong Kong. There is thus a need for application of another concept. Even though voicing can lead to failure, correct voicing can produce success. People of Hong Kong can negotiate with central government in order to reach an acceptable position for each part. The local people through their local leaders can seat down with the official of the government and discuss a way, forward on issues of concerns. In negotiations, every party has a bargaining power. With respect of the bargaining power of every party, the conclusion reached is usually acceptable to every party. However, every party must be ready to be tolerant during and after the negotiation. Negotiation can solve the problem facing the people of Hong Kong. Because of the failure of demonstration, negotiation, which is another form of voicing is another form of approach for voicing grievances and at the same time generate solutions to problems. Negotiation would require representatives of people to seat down with the official of the central government for negotiation. As mentioned earlier, negotiation requires tolerance from both sides so that conclusions can be reached. Negotiation can lead to certain changes to the policies of the central government and the general situation of Hong Kong. The possible changes would be on the political system of the city. However, people’s representatives should negotiate to maintain political democracy and consequently give away self-autonomy. The other factors of the city would not receive many changes due to the economic characteristics and important of Hong Kong. The central government would agree to maintain the economic characteristics of Hong Kong like low taxation, minimum government involvement, and free trade. It would agree to do this as it would want to maintain the economic importance and position of the city in the global. Therefore, there would be no much change the world as a political system would only be altered. However, people’s representatives should try to ensure that political democracy of Hong Kong is strengthened. Conclusion Hong Kong is a Special Administrative Region of the People’s Republic of China (Blake, 2011). Due to this status of the city, Hong Kong is facing certain pressure from Mainland China. China is putting up certain changes, which are causing unrest in the city. Protesters failed to achieve the attention of the central government. They failed to achieve what they were looking for through voicing their grievances through protest. However, through negotiation, certain agreements can be reached between Hong Kongs people and the central government. The agreement would lead to political changes. It would lead to the elimination of self-autonomy with the maintenance of the economic characteristic of the city. The central government would agree to maintain the economic characteristics of Hong Kong like low taxation, minimum government involvement, and free trade. Maintenance of the economic characteristics of the city is necessary for the maintenance of the significance and position of the city. The people representing the local people should attempt to ensure that political democracy of the city is maintained. Works Cited Blake, Richard. Six-monthly Report on Hong Kong 1 July - 31 December 2010. London: Stationery Office, 2011. Print. Boudreaux, Donald J. Globalization. Westport, Conn: Greenwood Press, 2008. Print. 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