18 Mar Why ASEAN treads cautiously over Hong Kong

Hong Kong has been accustomed to – even thrived on – political upheaval. Ever since China ceded
Hong Kong island in perpetuity to the British in the “unequal” Treaty of Nanking at the close of the First
Opium War (1842), the territory has faced down challenges and grown commercially. Hong Kong
expanded into the Chinese mainland, Kowloon, in 1860 and then further inland to the New Territories
under a 99-year lease granted in 1898. Hong Kong’s colonial century had begun.
All this changed on expiry of the New Territories lease in 1997, when the entire territory was transferred
back to China. Under the Sino-British Joint Declaration, Hong Kong citizens became subject to the Basic
Law under an agreed principle of “One country, two systems”. On the night of 30 June 1997, the last
British Governor of Hong Kong sailed off in Queen Elizabeth’s Yacht, Britannia, accompanied by her
eldest son, Prince Charles; and Hong Kong became a Special Administrative Region (SAR) of the
People’s Republic of China.

Post-1997

By this point Hong Kong had developed into a successful global city-state, trading port and financial
centre with its own traded currency. Its 6.5m citizens at that time had never known “one person, one
vote” democracy but had benefited from improving public services, including education, rising wealth and
GDP. More than during the colonial era, Hong Kong citizens in the new millennium began to assert their
democratic principles, however limited under the Basic Law, causing increasing friction with Beijing.
There were (and are) cultural issues, too. Many Hongkongers are proud of their own identity, history, and
international exposures. With their distinct Cantonese dialect, they could easily differentiate visiting
“mainlanders” who were perceived as often flaunting more money than manners. Tourist arrivals from the
mainland rose to 43.77m in 2019, compared with just 2.3m in 1997.
Mutual distrust between Hong Kong and China exploded politically during the 2019-20 Hong Kong
protests. There had been tremors previously, including the “Umbrella Revolution” in 2014 against

proposed reforms to the Hong Kong electoral system. But 2019 saw a political earthquake of
widespread, extended demonstrations and some lawlessness in Hong Kong, culminating in Beijing
enacting the Hong Kong National Security Law on 30 June 2020. Numerous high-profile arrests followed,
and China’s clampdown has been strictly applied since. 23 years to the day since Royal Yacht Britannia
had sailed off in 1997, many Hongkongers are still unable to identify themselves with China. They are
convinced that China had formally broken its commitment to Basic Law and “One country, two Systems”,
while China maintained that Hong Kong people continue to enjoy a high degree of autonomy on the basis
that the One Country principle is upheld.

Hong Kong and China within Asia

Beneath the political headlines, China’s rapid growth post-1997 meant that Hong Kong’s relative
economic significance was declining. Hong Kong was China’s “golden egg” in 1997, contributing 18.4%
of its GDP (10 times more than Shenzhen). But this had reduced to 2.8% by 2015, in line with Shenzhen
and Guangzhou. Similarly, Hong Kong’s economic dependence on China had risen over the same
period, the territory’s trade with China rose from just one-third of total imports and exports to well over
half. Today the ports of Shanghai, Shenzhen and Ningbo all ship more containers than Hong Kong.
Financially, too, Hong Kong’s significance was diminishing losing trading, listings and expertise to
Shanghai in China and Singapore in ASEAN while Hong Kong broadcast globally images of urban
disorder.

The view from ASEAN

The 10 countries of ASEAN are geographically and politically removed from unfolding events in Hong
Kong, yet some impact is shared. ASEAN states have themselves felt China’s new political
assertiveness in the South China Sea. Brunei, Indonesia, Malaysia the Philippines and Vietnam are all
competing claimants – partly with each other but mostly with China itself. China Belt and Road initiatives
have also been controversial, with China exacting heavy commercial and financial concessions for
infrastructural development in ASEAN states which is driven by Chinese commercial and political
interests.
Hong Kong’s challenges with China elicit mixed responses in ASEAN. Observers are wary of China’s
growing influence there and throughout Asia. ASEAN trades willingly with its north Asian neighbours, yet
also competes with them economically, both regionally and globally. While Hong Kong and Singapore
(like Dubai) have both benefited from globalisation, Hong Kong’s commercial losses have been
Shanghai’s and Singapore’s gains. ASEAN is hardly a collective beacon of democracy itself: on an
informal “democracy index” some members score quite highly (Singapore, Indonesia); others less so
(Thailand, Philippines); but for half of ASEAN’s member states democracy – albeit for different reasons –
seems a remote concept (in Vietnam, Brunei, Myanmar, Laos, Cambodia). This also partly explains why
ASEAN has failed to say much of significance about Myanmar’s recent military coup – even against one
of its own.

The way ahead

Hong Kong’s economic strength and sense of identity have diminished since 1997 whilst China’s have
grown – at least relative to each another. Developed northern Asia, including Hong Kong, Taiwan, South
Korea and Japan as well as China itself, has historically held economic sway over South East Asia. But
this is changing despite China’s continued growth. ASEAN’s collective population (650m), domestic
markets and GDP ($2.8tn) increasingly compete with China, and demographics are trending clearly in
ASEAN’s favour. Hong Kong’s comparable statistics (7m, $0.4tn) are tiny. For all its political challenges,
ASEAN commands the economic heft to navigate its own path under China’s long shadow.