Mind the Gap

Hong Kong remains stranded in the wake of mainland China’s post-Tiananmen growth

What the world saw since 1989 is a China whose government and people are sure about their direction – improving the economy and standard of living. This is unlike Hong Kong, where successive administrations since 1997 failed to articulate and embody a collective purpose.

PUBLISHED : Sunday, 04 June, 2017, 11:57am
UPDATED : Sunday, 04 June, 2017, 10:09pm

The history of besieged regimes is ultimately a tale of arrogance and blindness to the ruler’s shortcomings, of wilful ignorance from uncomfortable realities.

The June 1989 protest in Tiananmen and its subsequent suppression represented an unavoidable collision point for China. Its consequences can be felt today in its social, technological and economic development.

China’s post-Tiananmen policies and the world’s reaction determined if an authoritarian regime would display more signs of deterioration typical of a decrepit one-party state – or be capable of modernisation and economic reforms.

Tiananmen only heightened Hong Kong’s uncertainty about 1997. But looking back, what looked like a revelation of cruel and absolute truth has today been rendered impermanent and transient.

China is now the second-largest economy in the world. Over the past 28 years, China’s economy expanded at an astonishing rate. Spending, debt and investment have been undertaken on a massive scale. Thirty new airports, 42,000km of highways and a new skyscraper every five days have been built in China in the past five years.

Today, it is inconceivable that the Chinese government would consider rolling tanks into the streets of Beijing to quell a protest. The domestic and international repercussions would be devastating.

Income and wealth inequality threatens capitalism in China in different ways from the US. Capitalist dynamism, even with Chinese characteristics, disappears once established rent-seekers are become entrenched and threaten to hoard capital resources.

These include banks and privileged state-owned enterprises, whose non-performing loans represent an opaque and murky threat to better wealth distribution and economic stability. How China sustains its high economic growth is part of the cycle that defines the rise and fall of nations and empires – dynamism, success, complacency and decay.

Today, post-Tiananmen China faces new challenges. The rapid evolution of the internet and the demand for the kind of individualistic creativity necessary for technological innovation simultaneously represent an opportunity and threat to social order and government control.

The Tiananmen protest took 50 to 60 days to climax. Today, China’s internet enables its 730 million users to communicate and socialise in a way not imaginable in 1989.

Whether the government’s extensive policing of the internet can truly head off mass social unrest has yet to be tested. But it is unlikely the reaction time will be the same as in 1989.

It is a Sisyphean task for authorities to monitor the entire Chinese internet. An estimated 30,000 to 100,000 officers manually monitor China’s web with the help of a national technology infrastructure. The internet is as much a tool for control and surveillance as it is for empowerment and commerce.

Achieving unprecedented economic success with a one-party state, China needs to confront A Clockwork Orange kind of utopia or dystopia (depending on your view).

So far, it has picked the best developmental characteristics of the West but deftly omitted liberal democratic politics.

A Clockwork Orange poses the paradox that, if the government could eliminate the ability of a person to choose evil while leaving only good, is this person truly human?

Suppressing dissent may have worked in a less advanced economy, but it runs into direct contradiction about how to encourage the kind of creative, subversive and nihilistic thought needed to innovate breakthroughs and move China’s middle class ahead.

The prospects for China to break out of the middle-income stagnation are daunting. Intellectual property theft is still rampant. Weak rule of law makes it an unattractive venue for technology development.

he Communist Party also does not allow the free exchange of ideas, social media networks and unfettered entrepreneurship needed to gestate high value-added processes and inventions that could change the world.

But what the world has witnessed since 1989 is a China whose government and people are sure about their national direction – improving their economy and standard of living.

This is unlike Hong Kong, where successive administrations since 1997 have failed to articulate and embody an overarching sense of collective purpose.

The city became stranded in the wake of China’s post-Tiananmen development. It was as if Hong Kong was waving to a parade that has passed it by.

Peter Guy is a financial writer and former international banker