Hong Kong’s crippling protests are the price it pays for being the world’s most free economy

The ‘economic freedom’ Hong Kong has championed gave us stark inequality, no social mobility and unaffordable housing. The result has been fatalism
The protests were decades in the making and won’t be solved without tackling deep-seated issues

Alice Wu

Published: 5:00pm, 22 Sep 2019

Why you can trust SCMP

Another week has come and gone and this city has made it through 100-plus staggering days of unprecedented unrest, with escalating violence on the streets. We have become quite accustomed to the violent clashes, but it’s the spreading collateral damage that I’m not sure we are ready for.

The cancelling of last Wednesday’s horse races due to fears of political unrest, a first since the handover, is symbolically huge. The horses were supposed to keep racing, along with the dancing and the stock exchanges, until 2047. They were part of Deng Xiaoping’s pledge and something the world has taken to be vital signs of “one country, two systems”.

And close to two weeks before the Hong Kong Jockey Club cancelled the races, the Hong Kong stock exchange suspended derivatives trading, another first since 2000, due to a software bug. Before that, the Hong Kong Exchanges and Clearing has seen initial public offerings and stock trading turnover shrink.

I suspect there isn’t much dancing in this city given the massive economic haemorrhaging that is only beginning to be felt as people are forced to cut or put staff on leave to stay afloat – if they’re lucky. Businesses have begun to fold, and it’s not looking good. One in every 10 shops in Causeway Bay, one of the city’s busiest districts, is now vacant.

These are not simply empty spaces – there are people who used to make their living there. Property agents predict the vacancy rate to soar to levels worse than it got in 2003 after the Sars outbreak. This man-made political disaster has such widespread impact that it is going to take years of cleaning up.

Financial Secretary Paul Chan Mo-po has been sounding the alarm for weeks. In a Global Times interview last week, Chan noted that our economy had shrunk on a quarter-to-quarter basis and with the downward trend set to continue into the third quarter, the city “would technically plunge into economic recession”.

Remember the saving for a rainy-day fund that Chan’s predecessor announced in his 2015 budget that almost everyone ridiculed? Well, we have now entered rainy season; the question is whether we can weather acid rain.

Now is not the time for an independent inquiry into the Hong Kong protests

I call it “acid rain” because the total collapse of basic trust in society and political fatalism that has given way to open and widespread aggression is a result of something that was years, if not decades, in the making. Our political issues may be out of our politicians’ control, but there are no excuses for their failure to rein in the devastating effects of runaway capitalism. Twenty-five consecutive years of being the freest economy in the world – something current and previous administrations have been so proud of – has consequences.

The Hong Kong Special Administrative Region government stood by as inequality grew to a point where society has collapsed, public order abandoned and any form of authority hated. When wealth is accumulated by just a few and the poor are stuck in debilitating poverty; when social mobility is non-existent and home prices are beyond the pale; when the free market system has been allowed to impoverish the masses and rob people of opportunities, this is the perfect recipe for fatalism.

This is why protesters are indulging their aggression in reckless abandon. It’s years and generations of pent-up frustrations that we have seen blow up on our streets. Economic inequality, in addition to an increasingly suffocating political environment, ends in social instability, pure and simple.

Can we hold out hope that perhaps this will hurt enough for the government to act and for Hongkongers to rethink our priorities? Can this push the government to finally find the political courage and will to tackle long-standing, deep-seated problems? Can this stop landlords from thinking only of profits? Can this stop us from incentivising greed?

It may be too early for wishful thinking. Our government is still trying to figure out how to hold real and meaningful dialogues with the people.

Alice Wu is a political consultant and a former associate director of the Asia Pacific Media Network at UCLA

This article appeared in the South China Morning Post print edition as: Protests are price for being world’s freest economy

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