As an important international financial center in Asia, regardless of the political climate, Hong Kong has been a special window to the outside world for China. Hong Kong's importance to China goes far beyond its economy. As Mainland China's economy continues to grow, Hong Kong will become an increasingly important political model. If Hong Kong can sustain its prosperity and vitality, it will serve as an important benchmark for the successful implementation of the "one country, two systems" policy in China.
In recent years however, Hong Kong, which has been reunited with China for more than 20 years, has undergone significant changes. As its economy continues to grow, China has begun to play a significant role in the world economy, and the world's attitude towards China has also begun to change. Hong Kong, a free and prosperous cosmopolitan city has therefore become a "battleground" for geopolitical friction between China and the Western world.
There are many seemingly complex historical and political issues that are difficult to resolve in the short term, and indeed it seems difficult to get rid of them. In this regard, Chan Kung, founder of ANBOUND, offers an alternative approach, that is to look constructively at Hong Kong's future from its history. In a recent internal geopolitical round table forum, Chan Kung divided the development cycle of Hong Kong society into four historical stages: Hong Kong under Qing Dynasty, British Hong Kong, Hong Kong Special Administrative Region, and China's Hong Kong, so as to make a comparative study of the social development of modern Hong Kong. By looking at the development of Hong Kong in its historical stages, perhaps we will be able to get a clearer picture of its future direction.
The term "Hong Kong under Qing Dynasty" refers to the history of Hong Kong before it was ceded to the British Empire. Since the unification of the six kingdoms by Emperor Shi Huangdi, the area that became Hong Kong later was incorporated under the jurisdiction of Panyu County. From then on, Hong Kong was under the jurisdiction of the Chinese central government until the Qing Dynasty. In 1662, the Qing Dynasty sent troops to what is New Territories today and imposed the local Han Chinese villagers to wear the Manchurian-style queue. During the Qing Dynasty, Hong Kong played an important role in foreign trade, as it was geographically close to Guangzhou, which has the only commercial port open to the outside world in the Qing Dynasty. On January 26, 1841, after the First Opium War, the British occupied Hong Kong Island. While Emperor Daoguang attempted to recapture Hong Kong, the Qing Dynasty ultimately failed to defend its territorial integrity. On August 29, 1842, the Qing government signed the unequal Treaty of Nanking with Britain, ceding Hong Kong to the latter.
The term "British Hong Kong" refers to the period during which Hong Kong was under British rule from 1842 to 1997, which lasted more than 150 years. Following the cession of Hong Kong Island in 1842, China and Britain signed the unequal Treaty of Peking on October 24, 1860, ceding the part of Kowloon Peninsula south of present-day Boundary Street to Britain. On June 9, 1898, the British forced the Qing government to sign the "Convention for the Extension of Hong Kong Territory", which forcibly leased the territories north of what is now Boundary Street and south of the Sham Chun River, as well as more than 200 islands, for a period of 99 years (until June 30, 1997). Through three treaties, Britain occupied a total of 1,092 square kilometers of Chinese territory, including Hong Kong Island, Kowloon, and the New Territories, which is now the entire area of Hong Kong. During British rule, Hong Kong experienced great economic boom, and developed from a small port to a prosperous city in Asia. In particular, Hong Kong's economy and society developed rapidly after World War II, becoming the third-largest financial center in the world after New York and London. It has become not only one of the "Four Asian Tigers", but also the financial, service, and shipping center of Asia. It was during this period that Hong Kong became the "Pearl of the Orient".
The term "Hong Kong Special Administrative Region" refers to the period between the handover of Hong Kong until the enactment of the "Hong Kong National Security Law" (July 1, 1997 to June 30, 2020). During this period, Hong Kong's economy grew from USD 159.717 billion in 1996 (accounting for 0.5059% of the global economy) to USD 365.712 billion in 2019 (accounting for 0.4165% of the global economy), representing an increase of about 129%. After the end of the British rule and became a special administrative region of China, Hong Kong saw high degree of autonomy and relatively greater economic and administrative independence under the Chinese central government.
The term "China's Hong Kong" refers to Hong Kong with the enactment of the Hong Kong National Security Law. The National People's Congress (NPC) enacted the Hong Kong National Security Law on June 30, 2020. Since then, Hong Kong has entered a new historical period. The biggest difference between today's Hong Kong and the past is that the Chinese model has been introduced into Hong Kong in a comprehensive way. Hong Kong has been completely turned into "China's Hong Kong" not only in the sense of sovereignty and jurisprudence, but also in terms of governance and administration.
The key question for the future is how to build and manage China's Hong Kong well.
The changes that Hong Kong has experienced during this recent period have combined with the effects of the COVID-19 pandemic, which has undoubtedly had an impact on Hong Kong. In 2020, Hong Kong's GDP fell 6.1% in real terms, the fourth negative GDP growth since 1971. Between November 2020 and January 2021, Hong Kong's unemployment rate reached a 17-year high of 7.0%. Hong Kong now is facing many painful challenges.
There are two typical examples. First, the net migration rate for Hong Kong has increased. According to data released by the Census and Statistics Department of the Hong Kong Special Administrative Region, the provisional figure for Hong Kong's population at the end of 2020 was 7.4742 million, a decrease of 46,500 (0.6%) from 7.5208 million at the end of 2019. During the period, 49,900 residents moved out of Hong Kong, while 10,100 people moved in with one-way permits, resulting in a net outflow of 39,800 people. A spokesperson for the Hong Kong government explained that the migration of 49,900 Hong Kong residents in 2020 may be for various purposes such as work and study, which is not conceptually the same as immigration.
In addition, there is now a great deal of uncertainty about the development environment in Hong Kong. The UK has imposed disguised sanctions on Hong Kong. The UK Foreign Office has recently updated its guidelines on doing business in Hong Kong, removing the reference to the city as an international financial center. It has also made changes in delineating Hong Kong's business environment, human rights, and political situation, describing Hong Kong as a regional hub and a highly competitive global business hub. At the same time, the UK also stated that Hong Kong, as an international financial center, remains a target for "illegitimate and legitimate money laundering".
Chan Kung pointed out that in the four historical stages of Hong Kong's development, the focus of Hong Kong's change was mainly reflected in jurisprudence and governance. Looking at Hong Kong from a vertical perspective, the remarkable development of Hong Kong during the period as a "special and independent special administrative region" may also have been unexpected by the Chinese and British decision-makers who decided the fate of Hong Kong back then. Therefore, it is not surprising that Hong Kong is now experiencing a population exodus and facing various sanctions from Western countries. As for the future of Hong Kong, Chan Kung believes that it is important to look forward positively, and grasp the future development of Hong Kong. Hong Kong's future development will depend on the outcome of the fourth stage of development, i.e., the aforementioned "China's Hong Kong". This is a subject of great concern to China itself and to the rest of the world.
Final analysis conclusion:
Hong Kong's development over the past century is a unique mirror where its four historical stages show the ups and downs of modern China's history. All in all, the future of Hong Kong depends on the development of China and the world, and in particular on the development of the "China's Hong Kong" stage.
