Is China using Hong Kong protests to chip away at city’s economic freedoms?
- Hong Kong’s future as international financial hub brought into question as Beijing pressures companies to toe Communist Party line on protest crackdown
- Flagship carrier Cathay Pacific, as well as a host of developers, have already disassociated themselves from the demonstrations
Free enterprises, unfettered access to information and Western-style laws have helped build Hong Kong’s reputation as a major international financial centre, but China may now be willing to undermine those foundations of the city’s success as politics increasingly take precedence over economics, analysts say.
That willingness, they said, reflected the importance to signal a clear political point of view, even at the expense of negative economic consequences that could result from a gradual erosion of the city’s current structure of serving China’s government and Chinese firms as a gateway to international investors and foreign capital.
Hong Kong’s considerable independence in the legal system, regulatory environment and freedom in doing business after the handover to China in 1997 was ensured in the Sino-British Joint Declaration signed in 1984 that had been negotiated between China’s late paramount leader Deng Xiaoping and then British prime minister Margaret Thatcher.
“It would be a mistake to conclude that the authorities in Beijing don’t realise the dangers to Hong Kong of the path they are following,” said Mark Williams, chief Asia economist at Capital Economics. “They do, but they are far more concerned about the challenge to their authority if Hong Kong were allowed to choose its own path.”
Beijing wants to use Hong Kong to showcase the competency of China’s version of the rule of law, in which the legal system serves the economy by enforcing property and contractual rights but is ultimately subservient to the Communist Party, said Eswar Prasad, a professor at Cornell University and senior fellow at the Brookings Institution, last month.
