Cantonese cowboys

On first sight nothing much has changed in Hong Kong since the British colony was returned to China at midnight on 30th June 1997. No one has been arrested for his or her political views. The People's Liberation Army keeps out of sight inside the Prince of Wales barracks. The corporate skyscrapers still glitter in the wintry sun. The history of British rule still casts its shadows: the noonday gun, originally from a Jardine Matheson opium brig, is fired each day as a token of respect to the Royal Navy; and in Victoria Park a bronze Queen Victoria watches serenely over picnickers and annual mourners for the Tiananmen massacre.

For the moment, political anxiety is masked by economic bad news. Property prices are crashing; tourists are staying away from an overpriced city; and the stock market has lost almost half its value in less than six months. Many estate agents, which dominated the shopping streets only a year ago, are boarded up. And because the Hong Kong dollar is pegged to the US dollar, services are becoming prohibitively dear for people from countries with debased currencies-that is, all of southeast and east Asia. I have lunch with a western stockbroker who used to be one of Hong Kong's greatest boosters. Fresh out of a job, he looks pale, and tells me that Hong Kong could be in for a very rough time.

The most ominous disaster has been the collapse of Peregrine Investments Holdings Ltd, Hong Kong's cockiest brokerage house. It went bust because of one colossal loan ($260m) to a dodgy entrepreneur with connections to the daughter of Suharto, Indonesia's strongman. This was the kind of deal which made much of Asia tick. Peregrine's founder, Philip Tose, was one of the noisiest promoters of capitalism, Asia style, based on authoritarian rule and crony connections. Now this system looks vulnerable. Hong Kong, under British rule, with its relative fastidiousness about the rule of law, was neither as raw nor as corrupt as other countries in the region. But since Hong Kong was handed back to Beijing, whose politics and economics are as corrupted by cronyism as anywhere in Asia, things could unravel fast. Hong Kong's economic future depends on the political future of China. The question is to what extent Hong Kong can affect that future.

At the time of the handover last June there was a brief attempt to blot out the symbols of colonial humiliation with a crude coat of modern Chinese patriotism. Hong Kong television stars turned up on variety shows, wearing Chinese army uniforms and singing patriotic songs. A blatantly propagandistic movie about the opium war was screened. And shipping tycoon Tung Chee-hwa, who replaced Chris Patten as governor, spoke incessantly about the need to uphold "Chinese values."

But this ostentatious patriotism was too plodding, too plain boring, for the taste of most Hong Kong people. Hong Kong is a speedy Cantonese town with its own brand of westernised Cantonese pop culture. Official patriotism is a northern product, a mixture of Soviet-style agitprop and Beijing arrogance. Neither go down well in a capitalistic southern Chinatown. People find it absurd to see Tung ramble in awkward Mandarin to please the northern comrades. And when he recently decided to hold a vote by asking delegates to clap hands, communist-style, the ridicule pouring into talk-radio stations and newspaper columns effectively put a stop to such practices.

And yet Hong Kong - or the Special Administrative Region of the People's Republic of China - is now indisputably a part of China, even if it doesn't yet feel like it. The fortified border blocking off Hong Kong from the "mainland" still functions (to keep unwanted Chinese masses out-and Hong Kong democrats in, to contain their infectious ideas). Hong Kong people, despite exhortations to feel patriotic, are not allowed to engage with the way China - tand thus ultimately Hong Kong-is ruled.

Hong Kong, then, can best be described as a Chinese colony. Yet it is a very strange colony. For Hong Kong is still a far freer, more democratic place than the imperial metropole. Normally, colonies are shaped after the metropolitan models. But in the case of Hong Kong and China, many hope that it will be the other way round, that the colony will remake the central power. Tiny, sophisticated Hong Kong is to show huge, backward China the way forward towards freedom and prosperity. It is an odd proposition: it might conceivably work, but only if tiny Hong Kong doesn't get crushed first.

 

***

 

The uncertainty of Hong Kong's relations with China always has made this city of refugees and fortune hunters a skittish place, prone to sudden panics. These panics are a useful barometer of economic confidence in Hong Kong. The reason the Hong Kong dollar is pegged to the US currency is because of a sudden run on the banks in 1983, when the end of British rule was announced. I am told about the latest panic by Liu Kinming, a local journalist with a sharp eye for the bizarre in Hong Kong life. We meet at the Mandarin Hotel which, in the Christmas spirit, smells of roasted chestnuts. The last time I was there, on the day after the handover, the lobby was filled with partying businessmen and their wives, dancing about in Chinese fancy-dress. This time, just before Christmas, in the same lobby, a choir from a Hong Kong girls' school is singing English Christmas carols. We order two capuccinos and Liu tells me about the "cake-run."

Last fall, a Japanese food store based in Hong Kong went bankrupt. The store rented space to a chain of bakeries called St Honoré. It is customary in Hong Kong to give wedding guests coupons to buy cakes. These coupons are often hoarded. Perhaps vague memories of revolutions, civil wars and famines still haunt Hong Kong; in a crisis, people tend to cash their hoards in. So after the collapse of the Japanese store, long lines began to form at branches of St Honoré. People emerged from the shops staggering under piles of cakes. Some could barely carry their loads, let alone eat their way through them. But eating wasn't the point. When the apocalypse comes, you cash in. Liu shakes his head. "Crazy!" he says. "Just crazy." His face creases in a melancholy grin. "I am still a self-hating Chinese." Why? "Because Chinese people will come out to get their cake, but not to defend their freedom."

Liu is a little harsh on his fellow Hong Kongers. There are still people prepared to promote democracy and civil liberties. And when the occasion feels right - the Tiananmen Square protests, say - Hong Kong people will come out en masse. The most vociferous defender of democracy in Hong Kong is Emily Lau. She was a councillor in the elected legislature under Chris Patten. When that legislature was replaced in July by a hand-picked, provisional legislature, Lau was out of a job. But donations picked up in street collections enabled her to maintain a tiny office in a seedy part of Kowloon for her Frontier party, surrounded by leather workshops and massage parlours. Lau is a handsome, tireless, abrasive woman who irritated the British authorities. She fills the Chinese government with loathing. She is also the most popular politician in Hong Kong.

One of the myths about Hong Kong is that "ordinary people" don't care about politics. To watch Emily Lau operate in the poor suburban housing estates, where her constituents live, is to see the myth explode. On a grey, damp Sunday afternoon, I watch her take part in a public meeting about police brutality. We are outside a small shopping mall, surrounded by massive tower blocks. Discarded plastic bags are whipped up by the wind. Posters and newspapers tacked on to notice boards offer evidence of police abuses. A microphone is passed around, as people discuss what to do about the problem. A similar scene in China is impossible to imagine.

At another meeting I am introduced to a keen supporter of Lau's party. He is a man in his 60s, slim, casually dressed in corduroy trousers and a maroon sweater. He says he is about to retire from the police force, in which he has served for 30 years, and wants to run for election as a district board councillor. I ask him why. He answers by telling me a story.

He has an old relative who drinks tea every day, at the same time, in the same tea shop in Kowloon. One day several cops burst in and arrest the old man, believing him to be a drug pusher. They give him a terrible beating. When he is finally released, the man can hardly walk. "And that," says the retiring policeman, "is when I realised that without democratic rights, we are delivered to brute force."

He presented the Hong Kong problem - or the China problem, or indeed the human problem - in a nutshell. The question is against whom democracy must be defended. I heard many people say that the people they fear most are not the Chinese leaders in Beijing, but the local leaders in Hong Kong.

There is no question that Tung and his advisers are sceptical about democratic government. The 42-year-old property surveyor Leung Chun-ying is an example of the kind of man Tung has around him. Leung, who oozes an unattractive self-confidence, said before the handover that there had been "too much pandering to public opinion by the legislature." In future, "it will be a consultation body only."

This is what Tung means by a more "executive style government." He wants to "depoliticise" Hong Kong. This is also what he means by "Chinese values." Tung likes to describe himself as a Chinese patriot. Patriotism in communist China is a code word. President Jiang Zemin once put it nicely: "In contemporary China, patriotism and socialism are in their nature indistinguishable." There is much speculation whether Tung and his advisers are members of the Communist party. Some may be. But nobody seriously believes that these business tycoons are socialists. Tung's patriotism is indistinguishable from Jiang Zemin's in at least one respect, however. Both believe that democratic politics and parliamentary debate are divisive western practices which are not compatible with "Chinese values," or indeed with the smooth running of a Chinese business empire. This is where the communist autocrat and the capitalist plutocrat find common ground. It is also precisely the kind of government which fostered the economic crisis in Asia: rule by unaccountable business cronies.

One of the sharpest minds in the democratic ranks is Margaret Ng, a barrister, who will run in the legislative elections next May. She speaks in the precise, clipped English of a London silk. She is worried about the erosion of the rule of law in Hong Kong, and the lack of popular representation. Ng sounds almost nostalgic for the late British empire. "Consultation," she says, "was part of the colonial style. But under British rule, we had the moral high ground. So they had to be careful to take all opinions into account. Tung's idea is that now Hong Kong rules itself, there is no more reason to consult."

The problem faced by democrats like Ng, or Martin Lee QC, the leader of the Democratic party, is that the "patriots" dismiss them as westernised remnants of the colonial period. As Ng puts it: "This government can ignore us as leftovers of the British gang."

Martin Lee has a slight Chinese accent. But sitting in his chambers, listening to him, you could be hearing a suave parliamentarian at Westminster. The propensity of his American assistant, Mary Stuart Borden, to answer questions for him, adds a not always welcome dash of Capitol Hill.

Another former member of the deposed legislature is Christine Loh. I go to see her in the new office of her recently founded Citizens party. Her politics are liberal, with a sprinkling of green concerns and feel-good jargon: "Politics with a Human Touch" is the party slogan. Loh was educated in Britain. American books about civil liberties and election laws are on her shelves. The walls are decorated with a mixture of modern European and Chinese prints. Her language shows that she is well up on all the latest western trends. She talks about the need for a "new social contract" and a "new political culture." Tung, she tells me, "represents a culture that is past." She admires Tony Blair.

So it might be tempting to contrast the "westernised" democrats, who thrived briefly under Chris Patten's belated democratic reforms, with the Chinese "patriots," such as Tung and his men, who might be less democratic, but are more in tune with Chinese culture and the feelings of ordinary Chinese people. But such a contrast would be wrong. When they were given the right to vote, in 1991 and 1995, "ordinary Chinese people" voted for the democrats and not for the patriots. And so far as background is concerned, Tung and his advisers are as westernised as Martin Lee or Margaret Ng. Tung himself was educated in Britain and lived in the US. Tung's most senior councillor is the 80-year-old businessman Sze-yuen Chung, a long-time British colonial official, who argued in London against handing Hong Kong back to China, before becoming a last-minute patriot and dropping the "Sir" in front of his name.

What separates the democrats from the patriots is neither culture, nor patriotism, but politics. Christine Loh told me that Hong Kong needed to be "de-colonialised." She meant that Hong Kong people had to be weaned from their colonial subservience. But it isn't the Hong Kong people who need to be weaned, rather their self-appointed and Beijing-approved leaders. They want Hong Kong "depoliticised." That is precisely what the colonial order was about: a "territory" without politics, ruled from afar, but managed by local grandees. Tung's patriots are a mixture of old colonial grandees and aspiring new ones. Their focus has merely shifted from London to Beijing. Or as a former employee of Chris Patten said about Sze-yuen Chung: "From a garden party in Buckingham Palace to a banquet in Beijing, without even stopping on the road to Damascus."

In fact, Chung never really needed a conversion. Hong Kong was effectively managed by Chinese tycoons for a long time under the British. It was they, as much as the British, who resisted any attempts to introduce democratic institutions. Like most businessmen, they saw politics as a hindrance to the production of wealth. Beijing wishes Hong Kong to continue just as it was under the British before Patten came along. But in fact, it is not democracy but official Chinese patriotism which poses the greater danger to the long-term production of wealth.

The democrats, however, will only be tolerated by Beijing as long as they remain a minority. By devising a complicated electoral system, which cuts the number of seats to be chosen by direct vote by two thirds, Hong Kong's rulers have made sure that the democrats will be a minority in the future legislature. The other seats are chosen by corporate votes and pro-Beijing committees. And even as the businessmen make deals in China, and the patriots cultivate their contacts in Beijing, the democrats are not even allowed to cross the Chinese border. So while the democrats worry about local tycoons (and their Beijing masters) destroying Hong Kong, it is the businessmen who talk about "new opportunities," and about Hong Kong changing China.

 

***

 

To hear some businessmen talk, the border between Hong Kong and China might not exist. Their optimism could well be misguided, but it makes a change from the lawyerly gloom of some democrats. I meet Daniel Ng at my hotel. He is the man who set up McDonald's in China. Ng is proud to have been the first foreign businessman to go to Beijing right after the Tiananmen massacre. He was a friend in need. McDonald's did well. The first hamburger joint opened in 1990 in Shenzhen, just across the border from Hong Kong. Another opened two years later in Beijing. Ng is a fixer, a schmoozer, a man who knows how to operate in China's cowboy economy. No rule of law? Ng opens his mouth wide and lets out a cackling laugh. "There's no use complaining about that. You take advantage of it." Corruption? Bureaucracy? "Sure. I relish out-manoeuvring them, every day." Ng is not as crass as he might seem, however. He favours direct elections in Hong Kong and China. He might even be supporting Emily Lau. But he thinks Hong Kong can change China by example: "We are beneficial to China by being ourselves, by showing them how to deal with foreigners, without being a bully or a coward. With an election here we can even show them that democracy is OK."

I decide to take another look at the border between Hong Kong and Shenzhen, where there are now 36 branches of McDonald's. I wanted to see Hong Kong from the other side, so to speak. The first time I peered across that border, through binoculars in the 1970s, Shenzhen was a village surrounded by rice fields. China was the dark, forbidden land beyond the watchtowers and barbed wire. The fences are still there, and so are the towers. But now a brand new city of skyscrapers looms as you enter the train station on the border. You walk out from the other side of the station into China, past a sign saying: "Love the Motherland!" And the first thing you see is a billboard with the Marlboro man. My hotel is five minutes walk from the station. In that five minutes I am offered a young girl at least a dozen times. In Shenzhen, I was told by a businessman in Hong Kong, everything is for sale, including the government.

Shenzhen is a town of fixers and deal-hunters. It is strictly controlled, yet as wild as Tijuana. Young people from all over China come down to work there. The least educated ones work in the factories, manufacturing electronics for Chinese, western or Hong Kong firms. They live in crowded concrete dormitories outside town, freezing in winter, stifling in summer. They make the equivalent of US$150 a month. The prettier girls often leave to make easier money. The prettiest ones might find businessmen from Hong Kong to set them up as weekend mistresses. And the ones who don't make it beg in the streets-or make their children beg for them.

A popular meeting place for young people with cash is the Henry J Bean bar at the Shangri-La Hotel. There I meet Simon Fang, from Beijing. He is a stocky, regular kind of guy, who seems to know everybody in Shenzhen. We talk with one eye on a US basketball game playing on a video screen. Simon has done all right. His main business is to book musical acts from other parts of China. He offers to take me on a tour through the city, which he describes as a "nowhere sort of place." We set off on his Japanese motorcycle. His choice of things to show me is interesting: an American fitness club, a new department store with the latest Hong Kong fashions, the largest McDonald's in town.

Back at Henry J Bean we meet up with a friend of Simon's, another Shenzhen success story. Richard Xia, a compact man with narrow, intelligent eyes, is also from Beijing. After graduating from college he moved to Shenzhen, where he worked for a company, learned English and applied to go to school in the US. It took him three years to get a visa. After several years of study and work on the west coast, he is now living in Hong Kong, trading metals in China. Like Daniel Ng, he points out the propensity of Chinese partners to break contracts. "It happens all the time," he says. But the margins are good, so you live with it. He repeats the businessman's mantra: "China will change, have more freedom. Hong Kong will have a big influence. Things will be better in both places; they will meet somewhere in between."

Simon Fang and Richard Xia act and talk like young Chinese in Hong Kong or Taiwan. What makes China so exciting and disturbing at the same time is the discrepancy between this kind of get-up-and-go optimism and the other stories you hear, of mass executions, corrupt officials, and the gulag with millions of prisoners. Shenzhen clearly has been influenced by Hong Kong, but so far only on a crude, material level. I don't really see how Hong Kong can meet China halfway. For Shenzhen to become more like Hong Kong would be a step forward. But for Hong Kong to become more like Shenzhen would be a retrogressive step into a more brutal, more lawless form of capitalism, the kind of economics that is coming unstuck in the rest of Asia.

We end the night in a disco called House. There are hookers of both genders in the lobby, hookers at the bar on the first floor, and hookers going in and out of private rooms, where businessmen from China and Hong Kong make a lot of noise and drink cognac and expensive French wines. The music is deafening, the green strobes are blinding and the dance floor is packed with dancers. When my eyes get used to the light, I notice an odd detail. In every corner, and in front of every door, armed men in uniform stand guard. I watch three Chinese girls in bikinis dancing on a stage. They move like gymnasts, without much feeling, but with frenzied, almost demonic energy.

 

***

 

If right means being in favour of authoritarian government, then the Hong Kong right is pro-Beijing. Workers are not only cheaper in China, but they also enjoy fewer rights than their counterparts in Hong Kong, and this suits many Hong Kong businessmen. It is not surprising, then, that the most radical opposition to Beijing comes from the left, from independent trade unionists and various left-wing activists.

Lau San-ching is a Trotskyite. He is also a Chinese patriot-of the unofficial kind. In the early 1970s he became active in the student movement against colonialism in Hong Kong and "bureaucratism" in China. In the late 1970s he went to China to join the activists of the Democracy Wall, one of whom was Wei Jingsheng. But his true hero was Wang Xizhe, a Marxist who believed that the Chinese Communist party could be reformed to produce "democratic socialism." Wang was jailed; and so was Lau, who spent ten years in a Chinese prison. He is now back in Hong Kong, where he formed a union for welfare workers.

A slight man with a high-pitched voice, Lau explains to me why he was more of a patriot than the liberal democrats-let alone the tycoons. "We can't divide Hong Kong from China," he says. "We must criticise both. The Chinese are afraid that the liberals will use Hong Kong as a counter-revolutionary base. But actually Martin Lee and the others are afraid of China. When I went to China 20 years ago I went as a Chinese, not a Hong Kongese." Lau feels he is fighting the same enemy in China and Hong Kong: business-led authoritarianism.

It is difficult to imagine a man like Lau posing much of a threat to Beijing. And yet Lau and his allies prick the Chinese leaders where it hurts. The patriotic and socialist slogans which justify communist rule look especially hollow when they are attacked by patriots who stand up for the welfare of workers. And the welfare of workers is a very sore point, with well over 100m jobless Chinese roaming around the cities. Popular patriotism, as opposed to the official kind, is something Beijing fears. Waves of popular nationalism have turned against discredited Chinese governments many times in the past. Hong Kong has played an important role in such rebellions, and could do so again. When 1m Hong Kong people demonstrated in 1989 in support of the students on Tiananmen Square, this was a demonstration of Chinese patriotism as well as political solidarity.

Once a week millions of people in China can tune in to Radio Free Asia to hear one of the most remarkable voices in Hong Kong. It belongs to Han Dongfang, a founder, on Tiananmen Square, of the first independent labour union in China. His message was that the plight of factory workers was the biggest issue facing China. The students didn't take him seriously-what were workers' concerns compared to those of intellectuals? But the Chinese government knew that Han was right, and therefore dangerous. He spent 22 months in jail, where he almost died.

Han was sent to the US for medical treatment - the usual tactic when a dissident becomes too famous. But then he did something unusual. He returned to China, was refused entry, and decided to stay in Hong Kong, knowing that he would be high on Beijing's hit list. Han denies that he has any political ambitions. But in his newsletter, the China Labour Bulletin, he keeps people informed on the problems of workers in China: unemployment; lethal working conditions; pitiful wages; abusive bosses. And he advises people who call the radio station, from all parts of China, on ways to improve their conditions.

Han lives with his wife and two sons on Lamma, an island off Hong Kong. It is cheaper than central Hong Kong and popular with young westerners. We take the boat together as darkness falls. Behind us are the skyscrapers of Hong Kong, the international banks and hotels and business headquarters, a neon blur of corporate logos. Ahead of us is the ocean, dotted with islands, beyond which lies the coast of China. And beyond that sprawls the huge Chinese continent. We are in China, but it does not yet feel like it. Han tells me how strange it is to go home, to spend Christmas with his children, who will receive gifts. When he grew up in Beijing, he never possessed a single toy.

"The most important thing," he says, "is to get organised. We cannot rely on the intellectuals. The Communist party was the work of intellectuals. We helped them come to power and look what happened to the workers." I ask him whether he fears being arrested. He answers that the Hong Kong government still sticks to the law. "As long as that is so, I'm not afraid. I'm not breaking any law. But I am prepared for the worst."

The next day a senior civil servant tells me that "one Han Dongfang in Hong Kong is enough." This says much about the predicament of Hong Kong. Freedom of speech is indeed still protected by law. And the Hong Kong government is not worried about Han's activities. But it is worried about upsetting China. If China gets upset, Hong Kong's liberty is at risk. Even if China isn't upset, the fact that it might be serves as a perfect excuse for Hong Kong's own authoritarians to limit dissent.

It is of vital importance to the future of Hong Kong, and China, that they don't get away with it. For Hong Kong is the only part of China where all shades of opinion can still be openly expressed. As long as this is so, Hong Kong could indeed have a positive influence on China. The businessmen should see the importance of this as much as the radical activists. For without the rule of law, the businessmen would be vulnerable to the corrupt, strong-arm tactics which prevail in cowboy capitalism. Without open government and a strong judiciary, Hong Kong would slowly come to look like Shenzhen.

Things could be worse. China's economy is highly unstable, and in the likely event of a crash, its problems would spill over into Hong Kong, making it difficult to remain insulated from rebellions and violent crackdowns. The freedom to speak would be among the first things to go. And the economy would suffer. But possibly, just possibly, political reforms in China might lead to more open forms of government. Then the Hong Kong democrats would finally be able to break out of their isolation and follow the businessmen into China. In such an event, China will need as many Martin Lees and Han Dongfangs as it can get.