Can you imagine what would happen if China and Japan became an item in East Asia? What would the process be and the consequences? It’s tough and you’re not alone – for more than a century these two have been Asia’s least happy pair of neighbors. However much each might want what the other has, the only way to get it seems to be through rape, pillage, mutual insults and hapless confrontation.
That Friday night date is never going to happen. If it did, China, with Japan’s help, might establish a genuine East Asian community representing one-quarter of global gross domestic product. Two things both countries have talked about, an alternative to the “Washington consensus” representing an Asian path to rapid economic growth might become accepted wisdom. Together, it’s highly possible that they could present alternative models of global governance to help countries at the bottom of the economic ladder follow in their footsteps. Asian-style civil liberties might be less popular, but they could teach the world a thing or two about growth with equity.
So why is this so unlikely? One reason is that both countries have come close to superpower status while rejecting steps they need to take to be mainstays of the current world order. David Shambaugh, the political scientist and China expert, calls China “the partial power” in his recent book, China Goes Global (Oxford, 2013) but the same could be said of Japan both at the height of its economic ascent in the late 1980s, and today, when it uses economic decline as excuse for a multitude of nationalistic sins. Japan is still the world’s third-largest economy in nominal GDP terms, and yet its policies tend to be framed around economic revival at all costs, as though the March 2011 tsunami was a warning that it might soon sink into the Pacific Ocean.
There are big differences in the global ambitions of one and the insularity of the other, of course. China explicitly rejects subordination to global standards that were crafted in the post-World War II period by the United States. It wants to erect standards of its own. Japan accepted self-immolation of its foreign policy and defense as part of its post-defeat alliance with the US, but that alliance has given it the ability to take terrible risks in its relationships with the rest of Asia. The current policy of Abenomics has risked setting off a currency war with Asia’s export economies and created volatility in Asian bond markets at a time when the region least needs it. The Japanese government’s obtuse handling of its island dispute with China has risked setting off a shooting war that could drag an unwilling US into the fray.
China, meanwhile, possibly hitting a peak much as Japan did in the late 1980s, is insisting on superpower parity without the US without a remotely comparable contribution to global growth or global security. The reason is obvious – as long as the US sets the rules, China is reluctant to play the game.
Their views towards the US aside, what kind of process might lead to reconciliation or even a regional condominium of some kind? First, they would have to be very stern in restraining themselves from the abuse of nationalism in their dealings with each other. China would need to stop harping on bai nian guo chi, its hundred years of national humiliation, and its flip side, the overblown Chinese renaissance. Japan would need to abandon the deep-seated conviction that its only sin was defeat in the collapse of its short-lived and ill-run regional empire in China, Korea, Southeast Asia and the Pacific after 1945. Pragmatism should replace resentment and lead to a round of low bows, apologies and symbolic compensation for those long-ago disasters.
That something like this does not happen is as much the fault of the US as of China’s ambitions or Japanese stubbornness. Washington has come to take for granted its power over Tokyo, and needs its geographic platform for military projection in the Pacific – its vaunted “aircraft carrier”. Where China was once the main focus of US policies of strategic ambiguity, now it is Japan. In the island dispute, the US has tried to play both sides of the fence, warning China that the islands are part of Japan’s “administered territories” and hence fall under terms of the alliance, while cold-shouldering Prime Minister Shinzo Abe in his February trip to Washington to show its displeasure in its handling of the dispute.
Meanwhile, the US has moved into a posture increasingly reminiscent of the Cold War in its relations with China, lecturing it on cybercrime while revelations of US cyber snooping by former contractor Edward Snowden are still fresh. Chinese Premier Xi Jinping offered the US a relationship of parity during his June 7-9 meeting with President Barack Obama in Palm Springs. But neither the Snowden expose nor the body language of the leaders suggested that anything warmer than détente was on the table.
Asia has been at peace for so long that you have to be in your 40s to have more than hazy childhood recollections of the miseries of Vietnam, Pol Pot, and the brief Sino-Vietnamese war (travel to Sapa in the highlands of Vietnam and you will find that the border zone with China is still off-limits to the public).
So if there is a major source of instability in the region, what might that be? Look no further than the dispute between China and Japan over the islets called Diaoyus in Chinese and Senkakus by Japan. If Asia’s quiet time is ending, it will be because of three big powers with selective commitment to settling a tricky, minor, but highly consequential dispute. China, Japan and the US have all three become, in their own way, “partial” powers. The danger is not so much a shooting match, but the example these islands set of the inability of Asia’s three major powers to take risks for the greater good.
I’ve just moved from The Hong Kong Note to my new blog, Asia Inside Out. You might wonder why the posts look like old news — it’s because they are. Watch this space for my takes on Asia in the era of globalization.
It’s been 22 years coming, but it seems as though Myanmar’s persistent icon of democracy, Nobel Peace Prize winner Aung San Suu Kyi, will finally take her place in the country’s parliament after by-elections on April 1. “I feel like I want to dance,” the New York Times quoted a 65-year-old painter, Khin Maung Myint. Suu Kyi’s party, the National League fro Democracy, may take as many as 44 of the 45 contested seats in the by-elections, which could be shaved to 41 or 42 by the time the official tally comes out, but will effectively create a tiny, but influential opposition in Myanmar’s capital, the planned city of Napyidaw, where the military-led government moved in 2005.
What does this mean for the current debate about the virtues of authoritarian governments versus democracies? As we read almost constantly these days, go-to authoritarian governments (i.e., China) are showing up messy democracies created after the image of the United States (the Philippines being a leading example). Myanmar’s by-election is evening out the score to some extent. The Myanmarese have had it with their authoritarian government, which has been both cruel and incompetent. Its vulnerability has been starkly apparent over the last few months, with governments in Europe and North America essentially withholding benefits until they could see proof that the by-election was conducted fairly.
Although election monitors reported at least 50 “irregularities,” election monitors from outside the country were allowed, together with foreign journalists. Technically, the military and the government are not threatened by this development – even 44 seats out of 1,160 seats will have negligible voting power. But, with nearly every one of Myanmar’s 54 million people revering Suu Kyi as a goddess and technocrat rolled into one, the days of military rule seem numbered.
On a brief visit to Yangon and Bagan in early March, it seemed clear that money laundering was being conducted as a state enterprise. The generals are getting their money out. In a country without ATMs and credit cards, dollars are accepted everywhere – as long as they are perfectly crisp and unmarked. The most likely destination of all these dollar bills are to the Swiss bank accounts of the generals, who can see their power bases crumbling, if not now, within the next few years.
Suu Kyi’s rallying power is so extreme it would certainly operate effectively from beyond the grave, even should the Tatmadaw have the bright idea of getting rid of her permanently. Every newsstand carried half a dozen magazines with her photograph on the front page; one newsstand I passed created a collage of these. Every Myanmarese I talked to had something good to say about her – she understands finance; she understands trade; she can talk to the leaders of the world; she can lead us out of poverty. Everyone equally had a bad word for the generals, who have left Myanmar so far behind the general Asian level of prosperity that only North Korea, with its regular bouts of starvation outside Pyongyang, the manicured capital, is a serious rival.
Walking through downtown Yangon is a charming exercise in historical preservation – except that most of the gorgeous Victorian, Edwardian, and modernist structures have been preserved because there has virtually been no new construction since the 1960s. People make do with what they have got, together with ancient motor vehicles, typewriters, and food grinders that would have looked at home in a kitchen of the 1890s. Updated equipment such as mobile phones or new cars cost fortunes — far beyond the roughly $390 in gross income per capita income. People in Myanmar are so poor that they see Bangladesh as a land of promise, and crowd across the border seeking jobs.
So what does this say about the relationship between electoral democracy and economic growth? Perhaps nothing, but it does say that the flaw of the theory of authoritarian rule – often used interchangeably with Asian values – is that bad rulers are far more difficult to dislodge than under a democracy. And they can do extreme damage. To return briefly to the Philippines – it became a basket case after 1972, when former President Ferdinand Marcos imposed martial rule and launched a 14-year effort at extracting everything of value that wasn’t nailed down for his and Imelda’s own Swiss bank accounts. The country was impoverished and its credibility ruined, like Myanmar today. Who knows how well Suu Kyi will do as a parliamentary gadfly, or as president? Expectations are so high for her that it is difficult to see how a mere human being could meet them. But she has shown that one of the fires that lights democracies is bad and brutal government, and authoritarians everywhere should take note.
Some people are released by history, others are caught on its horns. Wang Xiangwei, the controversial editor in chief of the South China Morning Post as of two months ago, is among the latter. A Tian An Men liberal who has built a career in journalism outside China, he has been unable to shake the impression that he is little more than a company stooge and undercover agent for the Chinese Communist Party. In Hong Kong, where he has worked since 1994, he is one of a growing community of mainland professionals and expats who, like many of their non-Chinese counterparts, live in the city but not of it.
Wang gave a talk at the FCC yesterday that, among other things, underlined this social and political gulf. Part of this was due to an honest attempt on Wang’s [art to preempt the attacks against him that he said had been going on for more than a decade. These started when he was appointed the SCMP’s China editor in 2000, after the abrupt resignation/dismissal of gadfly and China critic Willy Lam, a popular columnist who now works for CNN, and continued after he was appointed editor in chief this past February. He framed his talk around what it means to be a mainlander in charge of Hong Kong’s foremost English-language newspaper (officially, the title of the talk was something like, “charting a brighter future” for the SCMP).
This ought to have been fascinating, but unfortunately came across as pablum, partly because Wang is an awkward speaker, partly because of the material he used. First, he laid out a brief bio, including a reference to a longer piece published in the SCMP in 2009 (see below), almost as though he was describing someone else, data bites without emotional resonance. This was followed by a defense of his membership in the China People’s Political Consultative Committee (CCPCC) of Jilin Province, which he said had solely to do with his love of family and desire to give something back to his home province, and emphasizing its status as a non-Party advisory organization (some in the audience laughed). Finally he talked about his commitment to freedom of the press and “balanced” journalism.
Questions, predictably, were aimed at getting underneath this fairly bland persona at the Communist cadre lurking beneath. So, what did he think of using Xinhua as a source for the SCMP (Answer: It’s the principal information source on the Chinese government, and he looks at it every day to “read between the lines” of what really may be happening in China). What does he think of Leung Chun-ying (CE-elect of Hong Kong) and his denial of Communist Party membership (He said Leung’s performance was more important than whether he was a Party member or not). Is Wang himself a Party member (no)? What will he do to push the envelope of press freedom in Hong Kong (Some confusion over the question, since Hong Kong already guarantees press freedom. Answer was he would keep doing more of the same).
In his defense, Wang offered as an example of a sensitive story the paper’s coverage of the Li Peng Diary episode. The SCMP was among the first to publish leaked pages, and Xiangwei went through the entire diary himself. Li Peng, the “butcher” of Tian An Men, was apparently behind the release of the book to New Century Press in Hong Kong. New Century is run by Bao Pu, son of Zhao Ziyang’s personal secretary, and has published a number of controversial titles. The SCMP followed the story to the end, when Bao Pu decided to pull the title under pressure from those who claimed he lacked access to the copyright.
Wang’s presentation was defensive, argumentative, and wooden in its lack of emotional insight, but we learned a great deal about just how hard his life has been. When Wang came under attack in 2000 he was portrayed as someone parachuted into the SCMP from the People’s Daily (the China Daily being considered not governmental enough), and that only one reporter among the many he knew ever called to check details with him. By that time he’d already been in Hong Kong for seven years, first with Yazhou Zhoukan and then the Eastern Express, during its brief term of existence from 1994 to 1996, followed by the SCMP. He also talked about the huge difference between working for a Chinese government publication, China Daily, from 1989-1992, and reporting on China from the outside. On the inside, he has all sorts of things that he knew but couldn’t write. On the outside, he and others are hamstrung by the non-transparency of the system. His description of reading between the lines of Xinhua was little different from the generations of China specialists who have stirred the tea leaves of the People’s Daily, Xinhua, and other government sources looking for grains of information.
Among other factoids, Wang graduated from the journalism school of the China Academy of Social Sciences (most famous alumnus: Bo Xilai) which was shut down when most of its students took to the streets in the 1989 Tian An Men demonstrations, including Xiangwei. Also that he was assigned to the China Daily, which covered part of his tuition. Upon entering the CASS school, he was offered a choice between China Daily and Xinhua and he chose China Daily. His fellowship to the journalism program of Cardiff University was paid for by Thomson, which also funded the China Daily. After graduating, he worked briefly with the BBC Chinese service then was intrigued by accounts of Hong Kong and has been here ever since. He failed to mention, but I surmise, that like many other students on the square in 1989, he had fears about his personal safety should he have returned to China, while Hong Kong was relatively safe and had harbored many of the dissenting students when they fled.
The history of the chief job at the SCMP consists of many, many British, a few Australians, Americans, and four Asians including Wang. I would tend to write off the attacks on Wang as simple racism but of course they are more nuanced than that. One of the Asians, an Indian, Tom Abraham, was seen as a family friend of the Kuoks, the owners, who had no business running a newspaper. The second, C.K. Lau, a Hong Konger, was viewed in the Hong Kong journalism community as a yes-man with long experience but no real ability to stand up to the Kuoks. Reg Chua, a long-time Dow Jones manager, was viewed as a martyr to press freedom when the Kuoks imported a couple of advisors from Malaysia and Singapore who got in his way, leading to his resignation.
Except for Wang, none of the Asians were portrayed in the light of an agenda, let alone a long-term agenda leading to the subversion of Hong Kong rights and freedoms. Nor were any of the non-Asians seriously challenged as being plants of the CIA, MI5, or whatever, and in the context of the Cold War, that might even have been seen as an advantage, in terms of access to intelligence and participation in the South China version of the Great Game. So why the exception for him? In Hong Kong, particularly with the horrendous Bo Xilai scandal swirling overhead, with all its many levels of non-transparency, disinformation, and suggestiveness, perhaps it’s impossible to imagine that a mainlander in a position of influence is more or less what he says he is — a product of the 1980s reform era and a generation that started out in self-exile after 1989.
At the lunch, a woman sitting next to me harrumphed continuously, describing Wang to the Russian reporter sitting opposite as a “how do you say it, apparatchik”. It didn’t help things that he praised Hui Kuok, the 30-something executive director of the SCMP and Robert’s daughter from a second marriage. Hui Kuok’s chief journalistic passions are travel and fashion. The Kuoks are viewed by some as Party lackeys (not necessarily members) and nouveau riche billionaires who have imposed a regime of rigid self-censorship on the Post. To me, Wang’s tenure, however long it lasts, sets up a fascinating series of historical parallels and question marks. As an outsider, is he less likely to fall victim to the easy corruptions of Hong Kong? As an “insider” (to the mainland) will he run the paper the way generations of British editors ran it, as a government mouthpiece? To what extent if any does he have a vision of the SCMP as an instrument of widening press freedom in China? Or is “balance” a code word for propaganda?
In my two years at the SCMP, there were nine editors counting four executive editors, possibly a record in the annals of global media. Perhaps the most interesting question of all is how long Xiangwei will last.
Xiangwei’s 2009 article:
China’s 60 years of changeReflections on China’s 60 years of change A day of celebration and reflection as people mark six momentous decades
Deputy editor Wang Xiangwei reflects on the 60th anniversary of the founding of the People’s Republic
1259 words
1 October 2009
South China Morning Post
SCMP
English
(c) 2009 South China Morning Post Publishers Limited, Hong Kong. All rights reserved.
As I was growing up in the northeastern industrial city of Jilin , my family’s most prized possession was a Butterfly sewing machine. We had to buy everything with coupons, and Spring Festival was the only time of the year when we could afford to have a feast of pork and fish.
Today, as the People’s Republic marks its 60th birthday, China has undergone tremendous change from the backward country of my childhood. Over the past four decades, millions of Chinese like me have witnessed one of the most profound events in modern history – the rise of China. Its impact on Chinese people and the world at large will resonate for many years ahead.
I was born in 1965 – one year before the Cultural Revolution plunged the nation into one of its darkest periods in modern history.
Yet 44 years later, the nation is immersed in the most elaborate and probably most expensive one-day celebration by the Communist Party to laud China’s economic rise and look towards scaling new heights. It is a good opportunity for every Chinese to reflect upon the changes brought by this momentous period of history to their own lives – good or bad, sweet or bitter.
Like many mainlanders my age, my memories are of a happy, playful and inquisitive childhood. I was largely oblivious to the tumultuous changes – the atrocities of the Cultural Revolution, the death of Lin Biao in 1971, the death of Mao Zedong in 1976 and the third comeback of Deng Xiaoping shortly afterwards.
My first hint of those troubled times came from catching an occasional glimpse of my mother weeping. She later told me her father had been badly beaten for being “a well-to-do middle-class peasant” before 1949.
Like most mainlanders, our family lived an austere but contented life in those days of egalitarian hardship.
My introduction to English came in primary school, with the first obligatory text being an English version of The East is Red, the de facto anthem of the country at the time, lauding Chairman Mao. Going to the cinema was one of the biggest joys for us as children, even though the films were usually reruns of black-and-white Soviet films like Lenin in 1918, revolutionary Peking operas, and the tear-jerking North Korean opera The Flower Girl. Before each film, newsreels of current events such as Mao meeting Richard Nixon were shown. Whenever Mao appeared on screen, everyone in the cinema stood up and burst into thunderous applause.
My first sense of a better life in the often denounced capitalist countries occurred when watching newsreels about Chinese delegations on overseas visits as they tended to open with aerial shots of the United Nations buildings and their surrounding areas in New York or Geneva where gleaming office buildings stood along roads full of cars zooming by and pedestrians dressed in smart suits.
My interest in English deepened when I accidentally switched on the shortwave bandwidths of my grandfather’s old transistor radio and came across the Voice of America and became addicted to its popular English-teaching programme called English 900. I did not realise until much later that listening to the programme posed a potentially serious risk for me and my family because “listening to enemy radio” was considered a serious crime for which we could be jailed. Luckily, I was never caught, although the VOA programmes were later constantly jammed, to my annoyance.
My real understanding of the outside world started in 1982, when I was enrolled into what is now known as the Beijing Foreign Studies University, the most prestigious place to learn foreign languages in China. In the name of learning English, we could get the latest issues of news weeklies including Time, Newsweek and The Economist, and novels such as The Thorn Birds, watch videos including The Godfather and even the latest release of Gandhi, supplied by the US embassy in Beijing.
Outside the campus, tremendous changes were also sweeping across the country as the reform and opening up was in full throttle at the time.
My first taste of Western pop music came in 1985, when Wham! became the first Western pop group to perform in China, in front of more than 15,000 young mainlanders under the stern eyes of attendants who tried to shoo everyone daring to stand up and gyrate with the music.
But the two people who have had a big impact on my life were the two Dengs – the petite Taiwanese singer Teresa Teng Li-chun and the diminutive Deng Xiaoping. (Their surnames are the same in Chinese characters.)
Like millions of young mainlanders, I was mesmerised by Teng’s sweet voice and perfect girl-next-door looks despite the government’s initial attempts to ban her music, which it said was decadent and morally corrupting.
Deng’s policies inspired me to become a journalist aspiring to chronicle the momentous changes happening around the country.
As my generation was growing up, we began to hear more and more stories about official profiteering and corruption among high-ranking officials and their family members. When we mourned the death of Hu Yaobang , the deposed Communist Party chief, a swelling anger at a mixture of corruption and runaway inflation led me to join tens of thousands of Beijing students and residents to demonstrate at Tiananmen Square in those fateful months from April to June of 1989. Following the crackdown, I joined the China Daily, the only English-language newspaper, but focused on writing business stories.
I was again indebted to Deng for changing my life in 1993, when I was in London, running out of money and preparing to return to the mainland after two years of studying and working in Britain.
Deng’s famous tour through the southern provinces in 1992 had unleashed a new round of economic development following the trough caused by the 1989 crackdown. With its soaring property and stock markets and – most important of all – a free and thriving media, Hong Kong sounded like an ideal destination for me and an increasing number of mainlanders who went to study overseas.
After joining the SCMP in 1996 as a China business writer based in Hong Kong, my frequent trips to Beijing and other major cities afforded me a front-row seat to witness and chronicle the changes the mainland has undergone in recent years – new highways, gleaming, modern office buildings,
soaring private ownership, sprouting supermarkets and multinationals setting up shop.
As elated as I am about those changes, I am equally dismayed about the rampant official corruption, widening income gap, choking pollution, muzzling of the media and clamping down on political dissent – all issues comprehensively reported and commented on by this paper.
On this historic day, there are many more reasons to be hopeful. China’s reforms and opening up are set on an irreversible path, and the internet is shaping people’s lives and government policies, to name just two examples.
The day that China becomes a stronger, more prosperous and democratic country will come sooner rather than later. Just look at the incredible changes the nation and its people have gone through. I am truly grateful for having the chance to write about these changes and those to come.
It’s not exactly a death in the family, but it felt like one today when Ah Tin retired from the Victoria Recreation Club after 36 years, at the age of 56. The Victoria Recreation Club is Hong Kong’s oldest club, actually founded in Guangzhou in 1832 before it moved to Hong Kong in 1849, seven years after the founding of the crown colony on Hong Kong Island. It had frequent changes of venue, and was the ancestor of at least one other elite Hong Kong membership club, the Royal Hong Kong Yacht Club. But after moving to its present venue in 1954, tucked beneath Island Road and the ocean, it seemed to drift into a timeless warp of its own. Ah Tin was the soul of the club, as its manager and jack-of-all trades. Nobody ever referred to him as Lai Tin, his actual name, or his wife, the cook as Lai Ling, her actual name. They were always Ah Tin and Mrs. Ah Tin to the gwailos who used the club, and it came as a surprise to me this afternoon to learn that their family name was Lai.
The worst part about Ah Tin’s departure is that the club itself decided to put an end to its timelessness and advance a few steps in the direction of Hong Kong’s so-called “recreational” clubs, which are run with the precision of five-star hotels and whose joining fees often cost as much as a luxury car – sometimes a very luxurious car, a Ferrari or a Rolls. Decisions were made, Ah Tin was scrutinized for mistakes, a new general manager appointed over him who was pacing the club with a clipboard this afternoon, and making notes in his laptop computer. So Ah Tin was sacked, together with the gentle Ling. The kitchen has been the source of little more complex than fried rice and sandwiches, but the Lais would take anything that members brought to them and cook it up – so there have been banquets of crab, lobster, steamed fish, and all the requisites of Cantonese banquet fare laid out regularly on tables. Together with the two ex-Gurkha cards who watch the boathouse, the Lais would organize barbecues on the VRC terrace for members – one of the few places in Hong Kong where one can eat outside, on the water, and watch the sunset directly across Deep Water Bay.
The community that uses the VRC is itself an anomaly in Hong Kong – an incomplete but distinct merger of Chinese and foreign “recreational” cultures. The core Chinese membership consists of about 30 swimmers of all ages, but mostly elderly, who arrive at the club in all weather at 6:00 am for their daily swim. The Gurkhas open up the club as early as 5:45, and the swimmers and paddlers help themselves to bottled water and leave change in an old cigar box. The paddlers have a daily run around 7 am, pulling out of the water by 8 to drink coffee and catch their bus into work. During weekdays the daytime is so relaxed that the Lais often pull out chairs and sit with regulars for hours. For many years, since the Hong Kong Island Paddle Club moved formally to the VRC in the mid-1990s, Tuesday and Thursday nights Ah Tin stays late to man the desk until the dragon boats or outrigger canoes have put to sea. Ah Tin is not a paddler, although he claims to have canoed and kayaked in his youth, but he introduced the paddle club operating from the VRC to its general committee, leading to its move across Deep Water Bay from the Yacht Club on Middle Island. He has always been an enthusiastic supporter and sometimes critic of the club, from a sporting perspective. One of his legacies is that the paddling club finally merged with the VRC in 2011, so that now it operates as the VRC’s paddling section.
This was the past. The new regime, inspired by the example of other clubs, plans to ban the use of money and substitute Octopus cards and a debit card machine. During Ah Tin’s time, the food and beverage service was completely outsourced to him. Now it will come back to the club, in order to control profits more directly. New rules will be put in place to control the use of the club by non-members, and to make sure that all available sources of revenue are exploited to the full. New staff will be hired, including a cook, and life will go on. The loss is irreparable. Ah Tin himself was the collective memory of this little piece of Hong Kong, and without him, the memory itself is lost and in its place we have only our impressions of him and Ling, and they will fade quickly.
The arrest on Thursday of billionaire brothers Thomas and Walter Kwok together with former Chief Secretary Raphael Hui was high theater even for a city that is accustomed to drama and thrives on it. Spectacle aside, the fall of three of Hong Kong’s biggest players will be remembered as the event that symbolizes the Hong Kong of the immediate post-colonial period, much as the spectacular bankruptcy of the Carrian Group became a symbol of the corrupt, casino style of Hong Kong business in the years of the Sino-British negotiations. The Independent Commission Against Corruption played a leading role in the collapse of Carrian in 1983, viewed as its greatest triumph until the Kwoks and Mr. Hui were called in for questioning on bribery charges on March 29, 2012. The story line has changed, however, and everyone in Hong Kong knows it. If 1983 was about businessmen running amok as Britain mulled the terms of Hong Kong’s surrender, 2012 is about the corrupt relations between Hong Kong business and government.
It would be easy to say the corrupt relations between Hong Kong government and the property sector, except that the major property companies have complex ownership structures that bear more than a passing resemblance to Korean chaebol or Japanese keiretsu. The property piece creates predictable cash flow – along with utilities – that allows the controlling shareholders, all families in Hong Kong’s case, to engage in risky and usually profit-making business of all sorts. Within Hong Kong, the tycoons appear to have a gentleman’s agreement limiting competition to no more than two per sector, usually with some form of geographic separation made easy by Hong Kong Island’s status as a well, island, against Kowloon and the New Territories. While this may be an over-simplification, it is made possible by a government that looks determinedly the other way. More than 45 percent of the government’s budget comes from land including land premiums paid by the developers, and unlike taxes the use of land revenues is at the sole discretion of the government. No wonder it becomes a huge decision when and how to release government land for bidding auctions whose floor prices are so high that they keep out all but the handful of property companies that already monopolize the market.
Sun Hung Kai, of course, is one of the monopolists, with a market share of 26 percent of new residential property in 2011, trailing only Cheung Kong Holdings with 52 percent. In 2010 it had a 35.7 percent share of the market compared to Cheung Kong’s 39 percent, although its share is predicted to fall to 20.6 percent in 2011 and Cheung Kong’s to 11.7 percent (Data from the South China Morning Post Property Section, 3/28/2012). In the 1980s, it was considered one of the most professionally managed Asian companies, partly because of its three young, western-educated brothers, and partly through ventures such as its partnership with Bear Stearns. Raymond Kwok, 58, is a fixture on the social scene and as likeable and approachable as many others of the city’s big guns of that generation. Thomas Kwok, 59, is a member of the executive committee of the Real Estate Developers Association and holder of a Silver Bauhinia Star.
Everything went along smoothly until September 29, 1997, when Walter Kwok, the eldest brother, was kidnapped by legendary bandit “Big Spender” Cheung Tze-keung. His brothers and mother refused to put up the HK$600 million in ransom money, which was paid six days later by his wife, Wendy Li. Initially he refused to contact his family at all until Big Spender put him in a cardboard box to think about it for a while. About the same time as the abduction, however, Walter took up with an old girlfriend, Ida Tong, and the relationship became ever more central to his affairs. In 2008, the brothers’ mother, Madame Kwong Siu Hing, pushed Walter out of the company when he attempted to gain a board seat for his lover. Now it is widely assumed that Walter tipped off the ICAC and has been providing the crime busters with the internal evidence they need to expose dealings between the brothers and the former chief secretary, Mr. Hui. Among other things being investigated is a 4,000 sq.ft. apartment leased by Sun Hung Kai to Mr. Hui in one of Hong Kong’s most expensive and prestigious buildings, the Leighton Hill.
For most Hong Kongers, the specifics are just detail. My friend Ling Ling says: “Of course there were pay-offs” and the Kwok brothers are far from alone. The Hong Kong system post-1997 has been one that needs a strong hand from government and hasn’t gotten one. Instead, political leadership has been timorous and at the mercy of every special interest group, of which the property sector is merely the strongest. The result has been the creation of a pampered elite, a government that substitutes opinion polls and consultations for accountability, and a public that increasingly feels like losers – unless they happen to own property, in which all they want is for the game to go on, and on, and on.
Patricia Lim, an Englishwoman and classic British dilettante — and I mean that in a good sense — one day began to build a data base on the occupants of Hong Kong’s 168-year-old Protestant cemetery. Relying heavily on an earlier effort by Carl Smith, who compiled index cards on 10,000 Hong Kong and Macau figures, Ms. Lim went through old newspapers, government gazettes and government blue books to fill out the voluminous gaps of knowledge about the deceased. The social history of the 1850s to 1870s she arrives at in her book, Forgotten Souls is starkly different from today. The “Protestant Cemetery” took Buddhist and Shintoist Japanese “karayuki” girls or prostitutes; Chinese revolutionaries, many of whom were indeed fervent Protestants; deceased members of the Russian orthodox church; and of course missionaries, Scots, and high church Anglicans. The social history is strictly colonial — the city was highly stratified, with huge barriers between Chinese and Caucasians, and even British shopkeepers like the Crawfords of Lane Crawford viewed as lower class than merchants, and barred from the Hong Kong Club or owning race horses. But the graveyard itself has had its own history, and one that resonates much more closely with the present day. The dead were the elite of Hong Kong, and were able to afford to keep their neighbors at a distance, with wide plots and massive monuments. In the late 19th century, the Protestant Cemetery was even touted as a “garden cemetery” and the public was welcomed inside to contemplate morality as well as the birds and butterflies. Meanwhile, the neighboring Catholic and Indian cemeteries were overcrowded to the point where visitors must walk on the graves themselves to make their way through.
More recently, the graveyard points out the ongoing conflict between development and historic preservation in Hong Kong. A foundation set up by Ms. Lim to restore the wobbly tombstones is required to obtain permission from descendants of the deceased before they do anything. Meanwhile, when the Aberdeen Tunnel was constructed in 1982, some 2,000 graves were affected and summarily removed to a columbarium. Pressure to remove more of the graves to make room for development remains intense, although in theory the older graves are entitled to a sort of eternal freehold. In Hong Kong, these kinds of arrangements are intentionally left ambiguous so that the government can dip into the kitty of government land as needed to produce the land premiums that generate nearly half government revenues.
The elderly Ms. Lim, in describing her research and her insights on a Wednesday night at the Asia Society’s new headquarters in Admiralty, was sprightly and anecdotal. She relishes the details she has been able to assemble about the 10,000 plots, from numbered tombstones of the victims of a suspicious air crash to the karayuki girls and two young missionary women who worked together and died within a year of each other. The Hong Kong of the 1850s to 1870s was perhaps even more diverse than it is today and attracted expatriates for the same reasons — the hope of getting rich, romance, the beauty of its landscape. I came away thinking that the cultural imprint of a city is set early, perhaps as soon as the first houses or barracks cluster around a river or a port. Foreigners no longer come to Hong Kong for the lure of saving souls, but they come for every other reason and they keep coming. And so, of course, do Chinese, from every part of Greater China, seeking its freedom and opportunities.
See Patricia Lim, Forgotten Souls: A Social History of the Hong Kong Cemetery, (Hong Kong, Hong Kong University Press, 2011)
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