Why Hong Kong Is Massively Pissed (A Primer from Big Lychee)

Note: Reader Chris M. wrote to the Rude Pundit, "I enjoy your blog. But you need a refresh. Instead of writing about rednecks in Bumfuck, Tennessee, get your rude ass on a plane and reinvigorate yourself by experiencing a political movement with hope over here in Hong Kong." Then he suggested the blog Big Lychee, Various Sectors, which turns out to be a pretty rude blog by a writer (dude? chick? Who knows? Who cares?) living over in the HK. So the Rude Pundit reached out to ask the understandably anonymous writer if they'd like to bring we (mostly) ignorant Americans up to speed on the big-ass protest movement that's been going on over there. So the rednecks in Bumfuck get a break today. Here's the words from Big Lychee, as clear and concise a history lesson as you're gonna find.

Hong Kong’s ‘umbrella revolution’ has just made it onto the cover of the Asian edition of Time. This suggests that the pro-democracy protests and the story will now start to fade from view. But the root cause of the unrest will not go away unless the Chinese government authorizes the city’s administration to fix what Beijing’s leaders coyly call ‘contradictions’ (i.e., Communist Party fuck-ups).

Hong Kong was founded as a British colony in the 1840s as a base from which merchants could trade with tea- and silk-producing China using opium as a means of payment – the protectionist Qing dynasty having absorbed most of the silver in circulation (an earlier version of China’s more recent mercantilist trade policies). From this no-nonsense start, the city was a business-first sort of place.

When the UK handed Hong Kong to China in 1997, Beijing’s paranoid Leninist dictatorship embraced the city’s tycoons as a support base and to prove it would maintain the city’s capitalist system. The Marxist-trained Chinese officials seem to have assumed that the richest businessmen in town created the wealth. In fact, the big conglomerates were masters at skimming it off from the smaller businesses and enterprising citizens who did the hard work of making the city a major economic success.

You may have heard Hong Kong is a ‘freewheeling’ capitalist paradise. But its economic structure is closer to feudalism. A small group of family-run companies controls the real-estate sector. This has enabled them since the 1970s to amass the fortunes necessary to corner other sectors, like retail and distribution, transport, electric and gas, and construction supplies. Cartels – price-fixing and other anti-competition arrangements – are essentially legal. Hong Kong consumers work like serfs for these guys.

(A quick explanation of the Hong Kong land system is in order. The government owns all the land – a British colonial practice adopted way back following the unforgettable failure of stamp duties as a viable way to raise revenue in the American colonies starting in the 1760s. In today’s Hong Kong both bureaucrats and developers have an interest in maintaining an artificial shortage of land to boost government revenues and profits. The government revenues are earmarked for pointless infrastructure projects which empower bureaucrats and further enrich the tycoons.)

Since the 1997 handover, any semblance of balance between tycoon and public interests has gone out the window. Beijing has bought the tycoons’ loyalty partly by giving them access to Mainland China markets; the plutocrats’ Mainland assets are profitable but at the mercy of an authoritarian system with no due process (the state can grab private assets at any time, thus has the tycoons by the balls). China also seems to have guaranteed that the tycoons will be allowed free rein to gouge whatever they like from the rest of Hong Kong’s economy and society. China’s leaders’ own families are of course up to their ears in Hong Kong-based money laundering and deals with the tycoons.

The result is a huge concentration of wealth in the hands of half a dozen or so families who control the housing market and rented commercial space. Hong Kong’s post-1997 administrations have deliberately kept land supply tight. At the same time, immigration controls on Mainlanders have been relaxed, so Chinese property-buyers and shoppers have flooded into Hong Kong. The young ‘umbrella revolution’ protestors have little hope of buying a decent home in their own city: a tiny apartment (say 400 square feet) will cost the equivalent of maybe 12 years’ total average income for a couple. And their chances of starting a business have plummeted as commercial rents have soared: landlords lease space at sky-high rents to luxury-goods chains selling crap to Mainland shoppers (such goods are taxed or faked in the Mainland). Neighborhood stores selling basics to local residents are closing to give way to designer-label brands for outsiders, adding to the feeling that Hongkongers’ own city is being taken away from them.

You get some of this in New York, San Fran, Vancouver or London. But the process is on steroids in Hong Kong, thanks to the distortions created by government land policies and the influx of Mainlanders. And people are stuck here: move more than 20 miles and you’re in Mainland China, a still-Third World place of corruption, total internet censorship, and worse.

The students on the streets are looking at a future where they can’t afford a home or even to have kids. Subsidized housing for the less well-off is in such short supply that some people are seeking demotions at work and pay cuts to qualify. Meanwhile, in response to the unrest, Beijing is using intimidation and other tactics to subdue the city’s traditional free press. Its rule of law – independent judges, trial by jury, etc – could be next.

This is an incredibly peaceful and civilized place (read the accounts of protestors picking up and recycling trash, or doing their homework during sit-ins). The murder rate in this city of 7 million is one-14th of New York City’s, no-one has a gun, and the police force’s recent use of tear gas is almost unprecedented. Kids don’t blockade streets here, ever. So what might look like a plain everyday urban riot elsewhere is a major deal.

The Hong Kong government has hunkered down, sent the riot cops away and is waiting for the protestors to go home or back to class, which presumably they eventually will. The dictatorship in Beijing is worried about other restive regions, like Tibet, Xinjiang and (free but next-on-the-list) Taiwan. Common sense says that a Communist dictatorship will not and cannot allow democracy, but it can at least let Hong Kong people have their city back, and drop the landlords and tycoons as more trouble than they’re worth. What Beijing decides will give everyone a clue about whether China is going to be a pragmatic force in the world or get deeper into the paranoid mouth-frothing lunatic thing.