Populism, Propaganda & Prejudice – Part 2

In the second of the two-part series, the author describes Hong Kong’s current state of the economy; the UK offer to British National Overseas passport holders of Hong Kong and the truth behind President Xi Jinping’s extended Presidency.

How Badly have the Protests affected Hong Kong’s Economy?

In 1997, when Hong Kong was returned to the PRC, the former British colony’s contribution to the PRC’s GDP was a significant 18%. In 2018, it was estimated that Hong Kong's contribution had slid to just 3%. Further, Hong Kong’s economic growth rate has progressively slid from the robust 8%, in 2011, until it turned negative after protests broke out, in 2019. By estimates, more than 20% of Hong Kong's population now lives below the poverty line. On 14 July 2020, consequent to the passage of Hong Kong's NSL, US President Donald Trump signed ordnance, rolling back Hong Kong’s special status.

Analysis: Stagnant incomes and rising rents are fundamental causes of unhappiness, amongst the youth of Hong Kong. Since the protests broke out, tourists have stayed away, and the US-China trade war has also taken its toll. Hong Kong has traditionally been a bridge for exports, between mainland China and the rest of the world. However, in 2019, Hong Kong accounted for only 12% of China's exports; down from 45%, in 1992. Now, with the removal of special status, US imports from Hong Kong SAR will attract the same customs duties, as mainland China. Hence, Hong Kong will lose viability as a re-export hub for exports to the US. Hong Kong citizens will also no longer receive priority for US visas.

Assessment: Hong Kong as a port city, financial hub and an international business centre faces competition from Shenzhen on mainland China and Singapore. Both competitor cities have gained, at the expense of Hong Kong’s protests.

Is the UK Grandstanding on the Protests?

Consequent to the PRC passing the NSL, the British Government announced the expansion of visa rights, to 3M Hong Kong citizens, who were associated with the British National Overseas (BNO) passport scheme. These 3M citizens were born before 1997; the year, Hong Kong was returned to the PRC.

Analysis: Firstly, the offer of extended visa rights is made to mature citizens, most of whom have established lives, with families and professions. This group is unlikely to be inclined to re-locate to the UK, and in fact, many would be relieved that with the passage of NSL, peace and normalcy might actually return to the beleaguered city. Secondly, with looming BREXIT at the end of the year, UK is no longer a preferred destination for migration. Thirdly, it is misplaced to think that the mere extension of visa rights will automatically result in UK citizenship; it is only a possible pathway to ultimate British citizenship.

Assessment: One of the major reasons for BREXIT, was the British public were not prepared to allow EU citizens to compete for jobs in the UK. Therefore, it is unlikely that Britain will accept a large influx of Hong Kong citizens to its island, willingly. The dramatic announcement about the extension of visa rights to 3M BNO citizens enables the British Government to appear benevolent towards its former colony, with little actual costs. It also enables the UK, to avoid the riskier alternative of imposing sanctions on Hong Kong, which might have hurt the now financially-vulnerable and diplomatically-isolated, former colonial empire, even more. Yes, the British announcement is indeed more bluster and with much less substance.

Has President Xi Jinping really become ‘President for Life’?

In March 2018, the National People's Congress at its annual meeting passed constitutional amendments, which removed the two-term limits, for Presidents of the PRC. If it were not for this amendment, President Xi Jinping, would have been expected to step down, in 2023.

Analysis: Many countries do not have term limits for their heads of government. India, Vietnam, Japan, Lebanon, UK, New Zealand, Australia amongst other countries do not place term limits, on the head of government. For more than 150 years, the US also had no term limits for the President. It was only in 1951 and after Franklin Delano Roosevelt had won four consecutive Presidential elections that the two-term limit was set by constitutional amendment.

Assessment: Why should people be deprived of popular leaders, merely because they have completed terms in office, particularly when they are re-elected, with fresh mandates? If merit and ‘will of the people’ are priority considerations, there should be no limits on terms in office, as many states have adopted. On the other hand, if fear of high-handedness and giving an opportunity to others are more important, there is perhaps wisdom in imposing term limits. Personally, I believe merit & popularity should always prevail over fear and sympathy for the underdog.

Author: Maj Gen Moni Chandi (Retd), Chief Strategy Officer, Synergia Foundation