Since the end of the city’s largest pro-democracy protests in 2019, Hong Kong has been undergoing an all-around overhaul orchestrated by Beijing. The Beijing-imposed National Security Law (NSL) and the city’s new security law (Article 23) have led to the disbandment of pro-democracy groups, media, and civil society organizations, with their leaders being persecuted by the Hong Kong authorities and harassed by Beijing-backed propaganda.
Hong Kong was once known as the world’s freest society, but those freedoms have been largely, if not entirely, extinguished. The impact of stifled freedoms goes beyond civil liberties: The city’s economy is struggling, and people are emigrating. A recent briefing on Hong Kong published by the Council on Geostrategy highlighted how Beijing has hollowed out the city.
Amidst escalating geopolitical tensions, the world may need to reconsider its perception of Hong Kong. Beijing has reshaped and maintained firm control over the city to advance its global ambitions. The authoritarianization of Hong Kong also raises important questions for political scientists regarding how a semi-democratic system was dismantled when a totalitarian regime assumed power.
A Hollowed-out City Refilled by Beijing’s Strategic Goals
The two security laws stifled Hong Kong’s freedoms, the most crucial element of the city’s success. Subsequent security schemes have made it nearly impossible to hold protests, and events organized by pro-democracy groups are often canceled at the last minute under indirect pressure from Beijing.
For individuals, Beijing’s national security regime has become a de facto collective punishment for what Hong Kongers did in 2019. Shop owners who supported the pro-democracy movement or sympathized with movement leaders have reported being fined for violating various rules such as hygiene and fire safety. Students, including those who are intellectually challenged, are being criticized by school inspectors for not taking China’s national anthem seriously, and football fans have been arrested for not singing the anthem properly.
Due to Beijing’s firm grip over the city, almost half a million people from Hong Kong have left since the NSL was implemented in 2020. This mass exodus has led to a decrease in the city’s workforce, which, combined with China’s economic slowdown, has resulted in a slow economic recovery for Hong Kong. Even though Hong Kong authorities successfully lobbied Beijing to allow more residents from mainland China to visit the city, the number of inbound visitors is only half of the highest recorded level, which was in 2018.
Despite the sluggish performance, it appears that Beijing is willing to accommodate the policy demands of Hong Kong’s Chief Executive John Lee. The hollowed-out Hong Kong has made it a testing ground for Beijing’s global ambitions, including enhancing financial ties with the Middle East, debuting as a shadow marketplace for advanced chips for the mainland, and serving as a trading hub for Beijing’s allies like Russia and North Korea.
As long as Lee continues to uphold the national security regime and align with Beijing’s global strategic goals, Beijing looks willing to support him, even if he shows signs of incompetence in governing the city. As a result, the city is more focused on meeting Beijing’s needs than its own.
Growing Dysfunctional Governance
Since Beijing assumed control of Hong Kong in 1997, the city’s pro-democracy camp has served as the opposition, aiming to slow down policies that could negatively affect Hong Kongers. In certain instances, the camp has put forward proposals that the government has ultimately adopted.
Policy competition among government officials, pro-democracy lawmakers, and their pro-Beijing counterparts has created a functional yet imperfect balance in the policymaking cycle. Across various areas, such as welfare and infrastructure, the pro-democracy camp had held the government accountable and yielded some tangible results.
Nevertheless, the complete wipeout of pro-democracy lawmakers and local councilors under Beijing’s banner of “patriots administering Hong Kong” dismantled this imperfect balance. In the absence of free and open elections, the legitimacy of the Hong Kong authorities now depends heavily on their policies, especially in taxation and welfare, to address the grievances of the people of Hong Kong. For example, the government reversed its decision on the waste tax, which was initially passed into law in 2021 but faced two delays in implementation. Additionally, they have chosen to continue the public transportation subsidy for the elderly despite increasing costs.
The government’s efforts to maintain legitimacy through financial means are straining the city’s public reserve. The Hong Kong authorities have largely struggled to balance their budget since COVID-19, with the exodus of Hong Kongers and a bleak economic forecast leading to a significant drop in government income. Hinting that balancing the books may not happen in a short timeframe, the financial secretary even doubled down on issuing government bonds for infrastructure projects.
Leaders of the Hong Kong authorities are unlikely to admit the structural deficits, let alone their failure to stimulate the economy. Lee and his Cabinet also create distractions to shield themselves from further criticism. These distractions range from ramping up national security rhetoric to criticizing Argentine football superstar Lionel Messi for not playing in a friendly match while in Hong Kong. These actions indicate that the current administration has little intention of addressing the city’s underlying problems. The growing dysfunctional governance is truly worrying.
New Wine in an Old Bottle?
Amid the security regime and the exodus of Hong Kongers, foreign judges, and corporations from the city, both Beijing and Hong Kong have not stayed still. Beijing is encouraging mainland corporations to be listed on the city’s stock exchange instead of in the West. Meanwhile, Chinese firms are expanding their presence in Hong Kong by establishing new “international” headquarters and occupying office spaces left vacant by their Western counterparts.
Additionally, the Hong Kong authorities have introduced new schemes to attract residents, with mainland Chinese individuals predominantly taking advantage of the scheme. Even Cathay Pacific has made a notable move by hiring their first-ever cabin crew from mainland China, possibly in response to pressure from Beijing’s propaganda.
For mainlanders, being a resident of Hong Kong is considered more privileged than being subject to China’s hukou (household registration) system, which is not practiced in the city. Residents of Hong Kong have access to better healthcare and higher education compared to those in mainland China. Additionally, the Hong Kong passport, which mainlanders can obtain after becoming permanent residents, enjoys greater travel convenience as it allows them to travel to most parts of the world visa-free, unlike Chinese passports.
With Chinese companies expanding their presence in Hong Kong, mainlanders may have an advantage, in terms of language and culture, when seeking employment with these firms compared to the locals.
It is uncertain whether these new residents of Hong Kong will learn to speak Cantonese, embrace the common desire for freedom, and otherwise adopt the cultural markers that have long defined Hong Kong. However, what is certain is that there will be a continuous influx of well-educated, middle-class individuals from mainland China to the city, viewing it as a preferable place to live.
Concluding Note: The 2047 “Deadline”
It is important to recognize that while Beijing is stifling Hong Kong’s freedoms, simply categorizing the city as “one country, one system” overlooks the impact of systems and traditions inherited from the British era. From a low and simple tax system to a U.S. dollar-pegged currency to efficient public services, these characteristics make Hong Kong unique from the rest of the mainland. The world should look beyond the democratic-totalitarian dichotomy to understand what is happening in the city and how Beijing exploits those systems and traditions to its advantage.
However, Hong Kong’s unique status may face challenges in the near future. The “one country, two systems” guarantee under the Sino-British Joint Declaration is set to expire in 2047. Although Beijing has stated that the Declaration is “a historical document, [and] no longer has any practical significance,” Hong Kong’s status as a Special Administrative Region (SAR) with a capitalist system within the People’s Republic remains unchanged as of today.
There are concerns that the city may experience a crisis of confidence if Beijing does not announce in the next decade that it will uphold Hong Kong’s capitalist system beyond 2047, and, crucially, its status as a SAR.
Only time will tell if the new Hong Kongers stand up and defend what makes the city unique and attracts them to resettle, but at present, the future of Hong Kong looks grim.