By Anubhav Gupta

Edited by Anandita Malhotra, Senior Editor, The Indian Economist

The Index of Economic Freedom, published annually by the Wall Street Journal and the Heritage Foundation, has declared Hong Kong the world’s freest economy for the 20th consecutive year. The economy is characterized by virtually no public debt, extremely low taxation and a 0 per cent tariff rate. These factors have led to Hong Kong’s establishment as one of the leading international financial centers, rivaling London and New York, and its classification as one of the Asian Tiger economies. The picture seems too good to be true, doesn’t it? Well, for once, it is.

As you read this, tens of thousands of pro-democracy protesters have descended on the streets in Hong Kong and have severely disrupted the workings of the city; schools and universities are closed, shopping districts and major thoroughfares have been blockaded.

 At the heart of this standoff with Beijing is the interpretation of the ‘One country, two systems’ policy, adopted by China when control of Hong Kong was transferred from British to Chinese hands in 1997.  Under this policy, Hong Kong became a Special Autonomous Region (SAR) of China with its own mini-constitution, called the ‘Basic Law’. This guaranteed that Hong Kong would follow the capitalist system and way of life for the next 50 years. It also delineated the process of selecting Hong Kong’s leader, called the Chief Executive, and said that the same would follow democratic procedures, in particular that of universal suffrage.

The first democratic election of the Chief Executive was to take place in 2017. However, there had been disturbing signs throughout the year that the Chinese government might renege on its promise. In July, Beijing released a ‘white paper’ on the ‘one country, two systems’ policy which stated explicitly that Hong Kong’s autonomy derived from Beijing, and implicitly that it could be taken away as per Beijing’s will.  Then, in August, Beijing announced that the candidates for the 2017 election would have to be approved by a special nominating committee, whose composition would be similar to the pro-Beijing committee that currently nominates the Chief Executive. This would let Beijing handpick candidates. To the people of Hong Kong, it felt like a death-knell to their hopes of democracy. A majority of people saw the Chinese government’s action tantamount to taking away the rights promised to them in 1997. Thus the issue became one of Hong Kong’s freedom and it’s people’s way of life.

In this setting, a movement called Occupy Central captured the imaginations of a lot of Hongkongers. Occupy Central for Peace and Love is an organization established by a law professor of the University of Hong Kong in 2013. He proposed that if China’s promises of democracy turned out to be ‘fake’, a civil-disobedience movement should be launched in Central, the business and financial district of Hong Kong. This would aim to peacefully occupy this district and bring the financial center to a standstill in order to pressurize the government to keep its promise of universal suffrage.

Last week, thousands of students began a protest against China’s proposals for the 2017 election. On Friday, the members of Occupy Central joined them. The protesters peacefully occupied the forecourt of the government headquarters. Protest marches are regular in Hong Kong so the ongoing one didn’t seem unusual. But what came next shocked Hong Kong as well as the international community.

Hong Kong’s police cracked down with surprising force, fighting in the streets with protesters and eventually emerging with guns. In response, outraged Hong Kong residents flooded into the streets to join the protesters, and on Sunday, the police blanketed Central with tear gas, which has been seen as a shocking and outrageous escalation. While this type of reaction is common in China, police have never cracked down on a protest in Hong Kong in this manner. Although the riot police was withdrawn the next day, this incident has further enhanced the fears of people, who see this as a step towards Hong Kong losing its special status and its cherished freedom to debate and protest.

The fear of international condemnation and the possible financial ramifications have forced the Chinese government to express restraint. Beijing has tried to censor any news of the protests in China. ‘Hong Kong’ became the most widely deleted search-term on Sina Weibo, China’s largest social media website. But Hong Kong’s international composition and relations have ensured that the international media has covered the protests and broadcasted them all around the world.

This is a pivotal moment in Hong Kong’s history and one that could finally resolve the uncertainty about its future that has plagued Hong Kong since 1997. The leaders and participants of the Occupy Central movement risk arrest and censure in a territory and country that values stability above all. On the other hand, many other people in Hong Kong are not on the streets and think the protesters are pushing their luck with Beijing. They also fear that growing protests could lead to instability, and the possible flight of capital.

Chinese President, Xi Jinping, and the Communist party have a significant choice in front of them. They can either continue the short-term tactics of censorship and suppression, or they can cede to the protesters’ demands and offer the olive branch of democracy to Hong Kong. Whatever happens down the road, Hongkongers should be proud of the Occupy Central movement for carving out a space for civil and political participation throughout Greater China, and for working towards their cherished collective dream: democracy.

“Anubhav is a first-year student of Economics at St. Stephen’s College, University of Delhi. As a future investment banker, he strives to explore and learn about every nook and cranny of the financial markets. He is an avid reader with a particular interest in philosophical and historical fiction. He devotes the rest of his time to running and globetrotting. You can e-mail him at anubhav_96@live.com

Posted by The Indian Economist | For the Curious Mind