Article by Ed Bober
When Britain ceded sovereignty over Hong Kong to China in 1997, it was on the agreement that there would be “one country, two systems”. Now it is more a case of “two systems, one problem”.
1.7 million people involved in protests against the Hong Kong government; a general strike; roads blockaded; government buildings occupied; police driven out of certain areas. Hong Kong’s ruler Carrie Lam herself has described this as a revolution.
With a GINI coefficient of 0.539 last year, the highest since records started, Hong Kong is the world’s second most unequal city, second only to New York. It has the highest number of Rolls Royces per person; yet 300,000 of its children don’t eat three meals a day.
To qualify for welfare benefits, elderly people have to get their children to declare that they are unable to support their parents. This puts families under terrible pressure, especially considering Chinese family traditions of self-respect.
Real estate prices in Hong Kong are sky-high. For the mass of the population, housing is increasingly becoming unaffordable. Rents and house prices are a huge source of discontent. In the past, the Hong Kong government was building 20-30,000 units of subsidised housing per year for low-income families. In recent years this has dropped to about 2,000.
The government is artificially inflating land prices in cahoots with property developers. The richest ten families in Hong Kong derive their income from property development, and these are the ones with political power.
Most of the protesters in Hong Kong are very young; many have no memory of colonial rule. But the roots of these problems go back to colonial times, to the end of the First Opium War in 1942, when Britain forced China to sign away Hong Kong as part of the campaign by western powers to inflict the selling of opium on China. Britain’s grip over Hong Kong was ratified in 1898 with a 99-year lease. In 1984, despite attempts to wriggle out of this lease obligation, Thatcher was forced to accept that all of Hong Kong would be returned to China in 1997. As part of these negotiations, the Chinese bureaucracy promised not to impose strict economic controls on Hong Kong.
Under the British, Hong Kong was never a democracy, and it still is not today. Britain ruled it as a colonial governor. After it became clear that Britain would have to relinquish its grip, Thatcher’s envoys started some limited electoral reform – though conceding nowhere near “one person, one vote”. In a true Thatcherite interpretation of “democracy”, they allocated a certain number of votes to leading business people and other members of the social elite – an arrangement Deng Xiaoping was quite happy with – promising to allow such governance to continue after the handover in 1997. Even today, the chief executive of Hong Kong is selected by a legislature of only 1200 people.
“One country, two systems” was the slogan under which Chinese bureaucracy promised to reassure Hong Kong’s business leaders that they would be allowed to continue their rule. This fitted into the thinking of the bureaucracy at that time, because it fitted in with Deng’s strategy to gradually allow an expansion of capitalism under the umbrella of a Stalinist state-controlled economic system.
Economic changes
After 1997, Hong Kong’s economy began to change. It had previously been a manufacturing hub dominated by capitalists who had fled the mainland after Mao’s victory in 1949, and also home to large numbers of impoverished refugees from the mainland, following the civil war and the famine of the 1960s: a supply of cheap labour, facilitating Hong Kong’s boom town status in the 1980s and 1990s. But with the Chinese economy “opening up” and an unlimited supply of even cheaper labour on the mainland, all denied genuine trade union rights, in the 1990s Hong Kong companies began outsourcing to China. Hong Kong’s position as a key manufacturing centre of the region was thus undermined. The rampant global advance of neo-liberalism meant that Hong Kong was left dependent upon finance and real estate, rapidly becoming a service economy with far less employment opportunities for young working-class people. Hong Kong is no longer the only port through which China exports to the outside world; it is being displaced by ports such as Shanghai and Shenzhen.
So there are very similar problems to those that face the poorer sections of society in the west. As these social layers come into action, they bring with them all manner of preconceptions and prejudices. Naturally, they do not surface on to the arena of world politics with a fully rounded-out understanding of all the political strategies required to end poverty and exploitation; they bring all manner of misunderstandings.
Just as with the Ukrainian Maidan or the French gilets jaunes, protests over social issues are mixed up with some nationalistic sentiments. They complain that resources are being wasted on mainlanders flocking to Hong Kong to buy baby milk powder because of contamination scares on the mainland, or to give birth there in order to register their babies as Hong Kong citizens. “Mainlanders are getting the benefit of economic development and we are not”; “rich mainlanders come here and buy up our houses, driving up prices”; “we had it good in the 1980s and ‘90s when we were under British rule; now we have dead-end jobs”.
These reactions are similar to Trump supporters in the USA blaming Mexican immigrants. They deflect the class aspects of economic hardship. They are not covered in official western media reports, which imply simply that this is a movement clamouring for democracy, aspiring for a Hong Kong in the image of Britain or the United States.
But millions of people do not sacrifice their wages in strike action, or risk terrible injury demonstrating in the face of brutal riot police and thugs, just for abstract notions of democracy. Such fantasies can only be conjured up by highly privileged commentators who have never had to strike or demonstrate for their rights. The roots of this revolution are economic: poverty, homelessness, lack of employment, desperation. There is also is a deep fear that if Hong Kong’s legal system is subsumed into China’s, then even limited rights such as trade unionism and freedom of organisation will be curtailed.
It is no accident that some of Hong Kong’s billionaires, such as Peter Woo, first supported the movement but are now turning against it. The extradition bill was the trigger for this movement, not the underlying cause. The issue is now regime change. This poses a whole raft of new problems for all those in power globally: the beleaguered Carrie Lam government, Xi Jinping, Britain and the United States.
The spectre of regime change
Carrie Lam is totally discredited and cannot possibly justify any attempt to remain in office; but Xi Jinping is terrified at any prospect of her resignation, because it would be an eloquent signal to the 300 million industrial workers of China that strikes and protest can bring regime change – not to mention the wider billion or more who stand to gain from an end to corruption and inequality in China
China’s bureaucracy survived the fall of communism in the 1990s. This was partly due to its brutal massacre of the protest movement in Tiananmen Square in May 1989 but it is also due to the underlying economic fact that with an economy less developed than those of Eastern Europe, the Chinese Stalinist bureaucracy could still play a relatively progressive role. Even with all its corruption, inefficiency and economic blundering, it could still preside over an economy which was growing. China was not just scraping along in economic fits and starts like the capitalist countries during the ‘90s. Its growth was unprecedented in world history.
China’s meteoric economic rise, combined with increasing militancy and clandestine organisation amongst its working class, led to huge waves of strike action, resulted in rising living standards on the Chinese mainland.
Of course, with genuine workers’ democracy, harnessing the intelligence of the working class to the process of production, economic growth could have been even greater and far less painful. Working hours could have been reduced, conditions made safer, and cruel managers dispensed with. Furthermore, workers’ democracy provides the only answer to the dilemma which the Chinese bureaucrats are incapable of solving: how to curb wastage, corruption and mismanagement.
Stalinist bureaucracy is not, like the capitalist class, a necessary stage of human history, lifting society from one stage of historical development to the next. It is an encrustation onto a workers’ state as a result of the low level of the economy and the consequent difficulties of constructing a democratic socialist society. Thus it is unable to justify its existence, and this makes it impossible for it to open itself up to genuine democratic scrutiny, with choices available in free elections.
Furthermore, Stalinist bureaucrats are empiricists rather than theoreticians. Their pathetic answer to the problems of developing greater efficiency was to gradually introduce a leavening of capitalism into the state-owned economy. They had no idea how this might end, but were determined to cling on to their own privileged positions within society, some of them aspiring to become real capitalists. The Western powers were keen to enter into trade with China, and rubbed their hands with glee at the prospect of such a huge market becoming available to them.
So during the ‘90s huge chunks of the Chinese economy were turned over to capitalist forms of ownership, opening up the prospect that eventually, as with Eastern Europe, there might be a full capitalist restoration. In the long run, the position of any Stalinist bureaucracy is insecure. It can only be resolved either by the achievement of a political revolution leading to genuine workers’ democracy, or a counter-revolution leading to the re-instatement of capitalist relations. However, the disastrous collapse of Russia’s economy post-1990, followed by the economic meltdown of western banking systems in 2008, made China’s bureaucrats a bit nervous of their love affair with capitalism. They slowed down and held back from going the whole way to a capitalist restoration.
Fear of revolution
So XI Jinping, leader of the most rapidly growing economy and the biggest population in the world, has a problem. This movement in Hong Kong will not back down. He has tried to dismiss it because some nostalgically wave British colonial flags. But they pose a terrible threat to Beijing. Hong Kong’s police are ill equipped and insufficiently trained for civil unrest, and feeble in the face of revolution. Why doesn’t Beijing send in the troops?
China has seen mass protests. It is a tinderbox of discontent, underground workers’ organisations, strikes and protests. The corruption and repression and the gap between rich and poor constitute a persistent source of political ferment. Revolution is not confined to Hong Kong. It is in the air for the one and a half billion of mainland China, especially in the Pearl River delta adjacent to Hong Kong, where much of China’s new industry is located: the biggest factories in the world, hundreds of thousands of young workers concentrated together. There have been massive strike waves. There is frequent contact with the population of Hong Kong.
The scale of this clash is therefore much greater than Hong Kong. It is a curtain raiser for far bigger clashes on the Chinese mainland, clashes that can open up an entirely new era for humanity. Globally there is a thirst for democracy, an end to corruption and an end to exploitation.
Chinese troops are mustering and training in Shenzhen, the state that borders Hong Kong. Armed intervention would be an option of last resort for Xi Jinping. There could be a blood bath. This revolution might be crushed. The suppression of this movement would lead to wide-spread demoralisation and a weakening of workers’ combativity on the mainland; this in turn would make it far more likely that capitalist relations would be fully re-established at some point in the future, with all the added brutality and exploitation that this would bring.
Yet if Xi Jinping sends in the troops, if he tries to do another Tiananmen Square, there is no guarantee he would succeed; this is what is making him hesitate. Conditions are different both geographically and politically.
The US and Britain have never been especially interested in democracy for Hong Kong. They are far more interested in stabilising the situation rather than seeing revolution “get out of hand”. There is no doubt that the CIA try to exploit and exacerbate instability; but reactionaries should be careful what they wish for! When Carrie Lam accuses the protesters of “fomenting revolution that challenges China’s sovereignty”, she is right. However, the outcome could be far more revolutionary than most pro-western commentators could possibly imagine.
Would Chinese troops remain loyal to their commanders if sent against an insurgent Hong Kong populace? Such a scenario as a general strike in Hong Kong seeking solidarity action amongst the workers of mainland China could open up the prospect of a much bigger movement for democracy, including the fightback of hundreds of millions of Chinese workers against both the repression of the bureaucrats and the exploitation of global capitalists. This could be the opening chapter in the movement for a democratic socialist alternative to both Stalinism and capitalism.