THE CITY OF MATERIALISM
My friend Yick Wai-lun, then professor of political theory at the Hong Kong Polytechnic, first introduced me to Chinese culture. Wai-lun obtained a PhD in philosophy from Harvard and he did his thesis with John Rawls, perhaps the greatest liberal philosopher of the twentieth century. But Wai-lun became dissatisfied with liberalism; he said that you can have the right political institutions but people may still be leading bad lives. Hence, he turned to communitarianism, a political philosophy that could inspire concern with values such as communal well-being and social responsibility. I had similar ideas, and we both spent the academic year 1988–89 at McGill University studying with Charles Taylor, one of the “founding fathers” of communitarianism. Wai-lun seemed possessed by his hometown, Hong Kong. On the one hand, he was a sharp critic, fiercely denouncing the “shallow consumerism” of Hong Kong’s youth, the attention they devoted to fancy haircuts and fashionable clothing even when they lived in shabby public flats and could barely afford such “luxuries.” But when it came to Hong Kong–style Cantonese food, Wai-lun was a true Epicurean: he would spare no time or expense introducing me to the best of Cantonese cuisine in Montreal. The more time I spent with Wai-lun, the more fascinated I became with Hong Kong, and when I returned to Oxford to pursue my doctoral work I would go to Cantonese restaurants for take-away, secure in the knowledge that I could make relevant culinary distinctions. Shortly thereafter, I met a Chinese graduate student named Song Bing. We fell in love, and two months later I phoned Wai-lun to ask if he could help make arrangements for our wedding in Hong Kong. He seemed surprised but kindly offered his services. But there was no need to follow through with the plan; Bing and I married the following year in Oxford. We invited Wai-lun, of course, but he couldn’t attend, and he sent a couple of Cantonese cookbooks as a wedding gift. He died tragically of cancer the next year, and I never did get to see him again.
The term materialism is pejorative in English. Applied to social life, it refers to people who care more about the accumulation of material goods than “higher” pursuits like religion, culture, politics, or philosophy. Needless to say, such associations stem from the educated classes who create and refine our language, theorists such as John Stuart Mill, who denounced “lower” forms of happiness, saying that he’d rather be a sad Socrates than a happy pig. But perhaps it’s too easy for people with money to denounce the “materialism” of those working to secure the means of subsistence. And what if the “materialists” work hard with the aim of securing a stable future for their children and grandchildren? If it’s all work and no play, are they perhaps leading more other-regarding lives than what Maoists used to call “reactionary intellectuals”?
This chapter opens with a historical account of the development of modern Hong Kong. Hong Kong was a British colony from 1842 to 1997, and the strange part is that British rule was often regarded as a relatively benign form of colonialism, even though the British resorted to egregious practices such as institutionalized racism. A key explanation is that Hong Kongers regarded the alternatives to British rule as worse: they saw other rulers as likely to undermine Hong Kong’s economic prosperity.
Colonial Hong Kong became a global byword for the spirit of free enterprise, but the reality deviated substantially from the ideology. The second part of this chapter will explain the distinctive features of Hong Kong’s economy that allowed the government to maintain low tax rates. The key explanation is not low levels of spending on welfare, but rather the fact that the government derived much of its revenue from land sales. The British government also implemented a kind of welfarism that was accepted by the population partly because it resonated with widely shared Confucian values. After the handover to China, the government maintained and reinforced the key features of Hong Kong–style capitalism, despite fears of a “Communist takeover.”
The third part of the chapter will show that the ethos of materialism in Hong Kong is embedded in and constrained by Confucian values that prioritize care for family members and other communities over self-satisfaction. The capitalist ideology is still a source of pride that distinguishes Hong Kong from cities in mainland China, but Hong Kong–style capitalism is not founded on self-interest or hedonism.
COLONIALISM AND MONEYMAKING
I was happy to be offered a job teaching political philosophy at the University of Hong Kong in 1996, shortly before Hong Kong’s return to “the motherland.” The academic salaries were the highest in the world, and I was also offered a beautiful flat on Hong Kong Island overlooking the ocean. But I felt a bit embarrassed about the flat. Two of my colleagues from Hong Kong—friends from my Oxford days—were not eligible for the housing benefits, which were offered only to expatriates at my (low) rank. My friends had to pay exorbitant rates for tiny flats, and could barely conceal their resentment when they visited my flat. The university recognized that such colonial privileges were unfair and planned to do away with them. The idea was to build more flats and give everybody access to subsidized university housing. But the economy nose-dived the following year and the university decided to equalize by downgrading the expatriates instead.
Modern-day Hong Kong, as every Chinese person knows, had dubious origins. In 1839, the refusal by Qing dynasty authorities to allow the import of opium resulted in the First Opium War between China and Britain. China lost the war and it ceded Hong Kong Island to Britain in 1842. The colonizers were not particularly enthusiastic about their new prize—Lord Palmerston, the British foreign secretary at the time of possession, described Hong Kong as “a barren island with hardly a house on it.”1 But the British rulers soon turned the island into a haven of free trade, with opium as the key commodity. Profits from the trade enriched the great British trading companies—Jardine Matheson, Hutchison Whampoa, and Swire—that would come to shape the economy in Hong Kong for subsequent decades. All three companies still have buildings that dominate Hong Kong’s skyline.
In 1988, my wife-to-be, Song Bing, was among the first batch of students from mainland China to receive scholarships from the Swire group. With the handover to mainland China looming in ten years, Swire went out of its way to establish good ties with the mainland Chinese government, unlike Jardine, which moved its headquarters out of Hong Kong before the handover. Today, Swire has been rewarded with lucrative real estate deals in the mainland, including a luxury shopping complex in central Beijing.
The Second Opium War was fought in 1856–60 and China lost again. The 1860 Convention of Peking legalized opium and ceded the Kowloon Peninsula to the British. The legalization was supported by John Stuart Mill in his classic text On Liberty on the grounds that Chinese people should have the freedom to buy the drug.2 Along the same lines, the merchant William Jardine said that the drug is “not an evil, but a comforter for the Chinese people.”3 Neither discussed the impact of the drug on family members of the addicted. By 1883, more than one-quarter of Hong Kong’s male Chinese population of 160,000 was estimated to be addicted to opium, along with a similar proportion in mainland China.4 As revolutionaries in the mainland campaigned against opium, revenues in Hong Kong rose, accounting for nearly half of government revenues in 1918 and thus establishing the pattern that the relatively open economy of Hong Kong benefits from restrictions in the mainland. But the British elite became concerned about the drug’s impact as mass addiction beset American and European cities, and the drug was gradually phased out of Hong Kong’s economy.
Shortly after I arrived in Hong Kong, a colleague took me on a drive to Victoria Peak on Hong Kong Island, a stunning drive along a winding road. The higher you go, the more prestigious the real estate, and the old colonial homes at the peak command some of the world’s highest prices.
In the early twentieth century, Rudyard Kipling visited a taipan (head of an English firm) in Hong Kong and later wrote a paean to the wealth of colony, noting, “when I die I would be a Taipan at Hong Kong.” But it was a segregated society, with institutionalized privileges for the foreigners (who never accounted for more than 5 percent of the population). Until 1870, Chinese manual laborers could not move at night without carrying lanterns and identity papers. And the only Chinese admitted to visit the residences at the peak were the servants of persons authorized by the governor. Even Kipling could sense the problems ahead, asking, “What will happen when China really wakes up, runs a line from Shanghai to Lhasa, starts another line of imperial Yellow Flag immigrant steamers, and really works and controls her own gun-factories and arsenals?”5
My office at the University of Hong Kong was located in the main building, one of the few colonial buildings still standing in Hong Kong. On the weekends, fashion models and newlywed couples would often go there for photo shoots.
A recent Chinese-language book on the first generation of Chinese architects in Hong Kong notes somewhat bitterly that although there were few foreign architects in the 1930s, they had political influence and therefore could easily get all the commissions in Hong Kong.6 Yet many people in Hong Kong seem not to agonize much over the colonial past. In Beijing, the legacy of the “century of humiliation” at the hands of foreign powers, from the First Opium War till the Chinese Communist Party victory in 1949, still seems fresh in people’s minds and helps to explain the resentful nationalism that often puzzles foreigners. But colonial resentment seems relatively tame in Hong Kong. What explains the Hong Kong “exception”? Western support for the anti-Qing Nationalist Revolution, which gave rise to a new republican government in the mainland in 1911, may have softened resentment. School textbooks that portrayed the British in a positive light also helped. Perhaps the land of Hong Kong made it more difficult for the conquerors to build major axes that could serve as daily reminders of colonial rule.7 But I’d argue that other factors are more important, starting with the fact that some Chinese collaborated with the British and benefited economically from colonial rule.
China is a large country with sharp regional variations that are largely shaped by geography. Marie-Claire Bergère distinguishes “between the China of the South, looking out to the sea and dominated by forces of change and the China of the North, open to the steppes, symbol and refuge of the imperial ideology of hegemony and centralization.”8 Revisionist historians now argue that enterprising southerners were willing to collaborate with foreign powers even before the British takeover of Hong Kong: “Research on the relation between Southeast Asian business and the opium trade has uncovered evidence that … challenges the conventional convention of uni-directional imperialist intrusions. According to these studies, commercial contacts and cooperation among European merchants and the Chinese dated back to the eighteenth century, well-before the take-over of Hong Kong by the British.” Such collaboration may also help to explain why the British cared about the “barren rock” in first place: “When the Qing navy was defeated, Captain Charles Elliot, the British superintendent of trade, persuaded the Royal authorities to make the cession of Hong Kong Island a part of the requested compensation package. He argued that the British crown had an obligation to retain Hong Kong ‘as an act of justice and protection to the native population upon whom we have been so long dependent for assistance and supply.’”9 The collaboration intensified once the British did take over. The seafaring Tankas provided pilots for colonizers and some grew rich from their collaboration with the British in the Opium Wars. Compradors (Chinese middlemen for European merchants) parlayed their positions as intermediaries in business and culture into new status and power. By 1858, sixty-five Chinese hongs (Chinese-owned trading companies) complemented the British elite trading companies.10 The Chinese also began to compete directly in the opium trade, and Hong Kong served as the entrepôt for opium imported into China and exported to overseas Chinese communities in California, Australia, and elsewhere. The Hong Kong administration leased the local opium monopoly to a local trader, whose fee constituted a major source of government revenue for decades.
But most Chinese in British-ruled Hong Kong worked as poor manual laborers, and collaboration by a Chinese elite would not have been sufficient to soften resentment against the colonizers. Perhaps the key explanation for the apparent acquiescence with British rule is that the alternatives seemed even worse. Hong Kong is largely composed of immigrants who fled persecution in the mainland, and Hong Kong was viewed as a relative oasis of freedom from persecution and a land of economic opportunity. The first influx of refugees was prompted by the 1850 massacre by the Taipings in Nanjing. They were followed by reformist intellectuals oppressed by the empress dowager and those fleeing the bloody struggles among warlords.11
The worst period in Hong Kong’s history was the Japanese occupation in 1941–45. The Japanese had captured southern Chinese cities in the late 1930s, forcing massive waves of refugees into Hong Kong and doubling the territory’s population to 1.6 million, with a half million sleeping in the streets. With the British tied down in Europe and elsewhere and no provisions to include Chinese in plans for defending the colony, the British and their allies folded quickly when the Japanese invaded. The British were interned in camps at Stanley (in the southern part of Hong Kong Island, now a tourist resort), and they lost the aura of invulnerability in the eyes of the local population.12 The Japanese renamed streets and monuments to erase their British identities and took over colonial homes on Victoria Peak. But life (especially obtaining food) also grew harsher for the local population as Japan began to lose the war. For the first time in Hong Kong’s history, there was massive emigration from the territory, and Hong Kong lost more than half of its population in the period between the Japanese invasion and Japan’s surrender in 1945. After the surrender, Britain resumed sovereignty in Hong Kong, and Japanese goods and companies would not regain popularity in the colony for decades.13
Back in Hong Kong for research, I ask about a Chinese-language academic bookstore named San Lian, and I’m told it’s on Queen Victoria Street: the same queen who is depicted in the mainland Chinese film The Opium War as stating, “We must teach them a lesson in free trade.” I notice that several of Hong Kong’s main arteries are named after former British governors, and even the People’s Liberation Army’s building in Central Hong Kong is still referred to by locals as the Prince Charles building.
In the post–World War II period, the British dismantled most forms of racial segregation and the Chinese had more opportunities for enrichment, which attracted hundreds of thousands of refugees from the mainland. Most refugees were fierce anti-Communists who fled the mainland in rickety boats, even swimming in shark-infested waters, to reach Hong Kong, the “city with streets paved of gold.” Between 1945 and 1950, the population grew to 1.8 million, eventually swelling to more than five million in 1981 as refugees fled the famine that followed the Great Leap Forward and the insanity of the Cultural Revolution. Economically, the most influential refugees were the Shanghainese capitalists, including the father of Tung Chee-hwa, the first Chief Executive of Hong Kong after the return to the “motherland” in 1997. Their capital and know-how helped to propel Hong Kong’s economic boom.
The largest-scale protest against British colonialism in Hong Kong took place in 1967, during the early days of the Cultural Revolution. Agitators inspired by Red Guards set off bombs and organized strikes and demonstrations against British imperialism. But the movement was short lived: most Hong Kongers were put off by the organized chaos, which killed fifty-one people. More unexpectedly, the Communist leaders in mainland China were not keen on the protests either: the Chinese premier Zhou Enlai himself reined in the protesters because Hong Kong was useful as a limited gateway to enable China to evade international boycotts.14 China was not yet ready to resume sovereignty over Hong Kong.
In short, the British colonizers were not loved, but they didn’t seem as bad as the Japanese invaders or the Chinese Communists. Such invidious comparisons help to explain the relative lack of colonial resentment in recent Hong Kong history. Even the pejorative Cantonese term gweilo (ghost) for “foreigner” has come to be appropriated by foreigners in Hong Kong as a self-appellation.15 In 1982, Hong Kongers avidly followed the Falklands War, some hoping that the British would similarly rescue Hong Kong from the Communists in the future.16 But it was not to be. Margaret Thatcher’s efforts to retain Hong Kong beyond 1997—the expiry date of the treaty that leased the New Territories to Britain for ninety-nine years—were rebuffed by Deng Xiaoping. The British and the Chinese agreed to a treaty that would return Hong Kong to China in 1997 under the famous “one country, two systems” formula which guarantees that “the previous capitalist system and way of life shall remain unchanged for fifty years” (Hong Kong Basic Law, Article 5). Under that arrangement, China has control over defense and foreign policy, and Hong Kong can continue to manage its domestic affairs as though it were a separate economic entity. The treaty led to fears that Communist rule would lead to political oppression, fears that were magnified after the bloody crackdown against the Tiananmen Square protests on June 4th, 1989. Such fears led to an exodus from Hong Kong between 1984 and 1994, with about six hundred thousand Hong Kongers leaving for countries such as Canada and Australia.17
Nerves in Hong Kong were further rattled by British-Chinese tensions in the run-up to the handover. Under the stewardship of Percy Cradock, the British ambassador to the People’s Republic, Britain had established a policy of cooperation with China on the grounds that Hong Kong’s reversion to China was unavoidable and that confrontation would simply leave China a free hand. Cradock negotiated the 1984 Joint Declaration between China and Britain in Hong Kong, as well as the 1990 agreement on directly elected seats to the Legislative Council, which provided for partial democratization of Hong Kong.18 But when Chris Patten was appointed governor in 1992, the British abandoned this policy of cooperation, opting instead to push for faster democratization in Hong Kong, with or without Chinese agreement. Patten proposed changes that would have the effect of enfranchising almost the whole working population. Not surprisingly, China was suspicious of this last-minute conversion to democracy.19 The Chinese objected strongly to Patten’s plans, seeing them as a breach of previously agreed-on constitutional and political settlements. Chinese government officials were particularly incensed by the public nature of his proposals and the refusal of their request for private consultation before he went public. They made it explicit that Patten’s reforms would be repealed if he proceeded unilaterally, but his reforms were still pushed through the Legislative Council. After the handover, the Chinese replied to Patten’s proposals as promised: they disbanded Hong Kong’s legislature and appointed a provisional legislature dominated by pro-China businessmen. Nonetheless, the mood in Hong Kong was largely positive due to the booming economy, with the stock market at an all-time high.
The world’s attention was focused on Hong Kong on July 1, 1997, the day of its historic handover to China. We lived in a large university flat on Pokfulam Road and several former students from Singapore, along with a friend from Canada, came to stay with us to witness the momentous event. But for me it turned out to be the biggest nonevent in recent history. I had a bit too much to drink and fell asleep before the fireworks display at midnight.
A decade later, Hong Kong has an executive-led government headed by its Chief Executive, Donald Tsang, a former civil servant; the weak legislature consists of a mixture of directly elected seats and seats allocated to various interest groups, similar to the system under British rule before Chris Patten. There have been repeated calls in Hong Kong for direct elections of the chief executive and the legislature by universal suffrage, but such reforms have been deferred by the Chinese government until 2017 at the earliest.
My son attended the Canadian International School from 1999 to 2003. More than 90 percent of students at the school were children of Hong Kong emigrants who had returned to Hong Kong once they had secured Canadian passports. According to one estimate, sixty out of every hundred Hong Kongers who left later returned, often after having established dual residency.20
The good news is that fears of political oppression and widespread human rights violations proved to be unfounded. Notwithstanding stalled political reform, Hong Kong is still the freest territory in China. The rule of law in Hong Kong is the envy of mainlanders, the press is vibrant and critical, peaceful demonstrations proceed as before, academics write harsh denunciations of the status quo, and yearly commemorations of the June 4th killings still take place at Victoria Park.
Perhaps the relative success of the one country, two systems formula should not have come as a surprise. The mainland Chinese government has an incentive to refrain from political oppression because it wants to assuage fears in Taiwan about what would happen once (if) it is officially unified with the mainland (although the one country, two systems model is highly unpopular in Taiwan itself). Jiang Shigong argues that the one country, two systems idea is rooted in Confucian values such as rule by morality and filial piety (with the implication that exemplary persons should not venture too far from home) that justify a “hands-off” approach to the rule of outlying territories. The model was implemented in Tibet during the Qing dynasty and in the early days of Mao’s rule, and Jiang suggests that the same model can be used to govern Tibet in the future.21 (The Dalai Lama’s proposal for Chinese rule is similar.) So the question is not why China has for the most part refrained from interfering with Hong Kong’s civil liberties after the handover, but rather why the one country, two systems model has yet to be exported beyond Hong Kong (and Macau).
What did happen after the handover—and here’s the real surprise—is that Hong Kong became more capitalist once the Communists took over.
A CAPITALIST CITY IN A COMMUNIST COUNTRY
For urbanites like me, the best view in the world is Hong Kong’s skyline. The view from Kowloon of Hong Kong Island, with its skyscrapers across the harbor competing for height advantage and Victoria Peak in the background, is nothing short of breathtaking. Two of the most visible buildings—the architect Norman Foster’s headquarters building of the Hongkong and Shanghai Bank and I. M. Pei’s Bank of China (both of which appear on Hong Kong’s currency)—crowd out the tiny political buildings nearby (the Legislative Council Building and the former Governor’s House), as though to symbolize the power of capital over politics. The buildings are lit up with company logos and the scene is even more spectacular during the Western and Chinese New Year’s celebrations, when the buildings put on light shows (the better the economy, the more spectacular the light shows). Who can object to capitalism in the midst of such manmade beauty?22 Even the “losers” have nothing to be ashamed of.23 In April 2009, I notice that the AIG logo is still prominently displayed on the company’s building, unlike company headquarters in New York, where shame about AIG’s near bankruptcy and multibillion-dollar tax-funded bailout, and public anger about tax-funded bonuses to its executives, caused AIG take down its logo.
Hong Kong skyline, with the Legislative Council building dwarfed by nearby commercial buildings. Photograph © Leungchopan. Courtesy of Shutterstock.
Colonial Hong Kong became a global byword for the spirit of free enterprise. Even more than Reagan’s America or Thatcher’s Britain, the territory was touted as the paradigmatic case of a laissez-faire economy favored by neoclassical economists. As Milton Friedman put it, “To see how the free market really works, Hong Kong is the place to go.”24 There is some truth to this view. The colonial government firmly opposed the idea that taxpayers’ money should be used to subsidize unprofitable firms and sunset industries (or to bail out banks). There was no general sales tax or capital gains tax, and Hong Kong was perhaps the world’s easiest place to register companies (even political parties, to this day, register as companies). There were no tax holidays, tariff incentives, antitrust or fair competition laws, or privileged access to transportation facilities designed to lure foreign investors. There were no public pensions, child allowances, maximum working hours law, or unemployment insurance. Most of these features have been maintained since the handover to China in 1997, and the Heritage Foundation, a U.S.-based conservative think tank, continues to rank Hong Kong’s economy as the freest in the world.25
The most widely celebrated feature of Hong Kong’s economy, the strikingly low tax rates, requires some background explanation. Libertarians abroad look with envy on Hong Kong’s tax rates, but a closer examination of the “Hong Kong system” might temper this enthusiasm.26 In 1996, just before the handover, profits of corporations in Hong Kong were taxed at 16.5 percent, and salaries were taxed at a maximum of 15 percent. Moreover, there were many generous personal allowances under Hong Kong tax law, with the effect that 53 percent of the territory’s workforce did not pay any income tax. The main explanation for the low tax rates—which have been further lowered since the handover—is not low welfare spending. One important reason is that Hong Kong does not have to support a defense industry (one of the advantages of being a colony and a “special administrative zone” of sovereign overlords). The most crucial explanation, however, lies in the fact that the government does not rely solely on direct taxation for its revenue.
My first year in Hong Kong was memorable. Every weekend, I’d travel with my wife, child, and friends to a different park, island, or beach. Hong Kong is not a city in a strict sense: 40 percent of the land is set aside for country parks, recreation, and environmental preservation and only 17 percent of the land is actually built on.27 Hong Kong is one-third less densely populated than neighboring Macau, the “small” town next door.28 The urban area of Hong Kong consists of the land that is set aside by the government for development.
The Hong Kong government actually derives about 30 percent of its revenue from land sales.29 The territory’s land is legally owned by the government—what Ling-hin Li terms a “socialist land tenure system”—and the government fills its coffers by selling long-term leases, ranging from 75 to 999 years, to developers.30 The higher the price of land, the greater the government’s revenue. The government, in other words, has an interest in maintaining high property values—among the highest in the world—if it is to maintain its policy of low taxation. It does this by carefully controlling the amount of land that is released for sale: if land were to be released too quickly, property values would be reduced and the government’s revenue would be affected. It is, of course, those buying new homes and renting from the private sector who pay the price for this policy. Many Hong Kongers live in tiny spaces, and the need to pay astronomical residential property prices is widely viewed as an indirect form of taxation.
Most government land is sold in a competitive bidding process to three real estate developers: Henderson Land, Sun Hung Kai Properties, and Cheung Kong. These developers sit on huge tracts of land, drip-feeding apartments onto the market so as to maintain high property prices. Between 1992 and 1996, the number of units sold each year by the big three developers decreased, prices increased fourfold, and profits doubled. Meanwhile, potential new entrants to the market are restricted by the huge cost of paying land-conversion premiums that are the bedrock of government revenues. In the ten years since the handover, the positions controlled by property tycoons on advisory and statutory bodies have increased threefold.31
The handover has not severed ties between the government and big developers. In fact, the Chinese government aligned itself with the developers when China first prepared for the handover in the 1980s. At the time, Chinese officials felt uncertain whether locals would support a reversion of sovereignty. Xu Jiatun, then serving as Beijing’s top man in Hong Kong, explained in his memoirs that a general fear of the end of the world prevailed and that everyone wanted to flee with their money (Xu himself defected to the United States in 1990). In response, China adopted the strategies of pumping investment into the territory and aligning itself with local capitalists, steps that were seen as necessary to maintain Hong Kong’s economic viability. To earn the support of corporate bosses, the Chinese government organized timely interventions on behalf of Hong Kong companies. In one notorious example, the Bank of China helped to save the Tung Shipping Group and its public arm, Orient Overseas, from collapse. The president of Tung Shipping was Tung Chee-hwa, who was appointed chief executive of the Hong Kong government after the handover. China also reached out to many onetime enemies when forming advisory bodies to lay down policies for post-British Hong Kong. Members of the powerful Preparatory Committee, for example, included nearly all of Hong Kong’s twenty richest people.
In 1999, having lost the right to university housing, we rented a flat in lower Baguio Villa on Hong Kong Island. There was a good view of the ocean, but I couldn’t stand to spend any time there during the day. My reveries were interrupted by the sound of loud drilling—local wits refer to the noise of the jackhammer as Hong Kong’s national anthem—because the Cyberport project was being created out of nothing just below our apartment. Originally meant to be Hong Kong’s “Silicon Valley,” the government abandoned plans to turn it into a high-tech park after the collapse of Internet companies’ stocks in the real Silicon Valley. So the whole project ended up as a special favor for Richard Li, the chairman of the telecommunications and information technology giant PCCW and son of the billionaire property tycoon Li Ka-shing. Richard Li was given special access to an expensive piece of premium land by the government for development without having to go through the usual bidding process.
It should come as no surprise that the ties between the government and the property developers have not been severed since the handover. Quite the contrary: the government has intervened in the economy whenever the core interests of the developers are at stake. One highly publicized example is its intervention in the stock market in 1998, when billions of taxpayers’ dollars were used to buy the stocks of major blue-chip companies, most of which have substantial property interests (the Hong Kong government was widely criticized at the time, but the intervention was successful at stabilizing the stock market and arguably set a model for the U.S. government’s intervention ten years later). An intervention more clearly designed to boost property prices “is the ceasing of the Home Ownership Scheme in 2003, one of the major public housing programmes which targeted the marginal income group sandwiched by the middle and lower classes. This attempt at stabilizing private housing market prices has an effect of protecting the interests of the big property developers.”32
But who really believes that capitalism is about an open and competitive market where talent and hard work alone determine the economic winners? To the extent that the Chinese Communists are inspired by Marxism,33 they should view the state in a capitalist society as an organization that serves the interests of the capitalist class: “The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie” (Karl Marx, The Communist Manifesto). In that sense, the Communists are faithfully implementing the capitalist model in Hong Kong, just as they promised. Additionally, one might expect cozy arrangements between big business and government to be even cozier in small territories. As the distinguished American sociologist Daniel Bell (no relation) put it: “I always assume—this is the latent Marxism in me—that when sizable fortunes are built in a small city-state, it is because of an interlocking arrangement between the oligarchies and the government.”34
Still, it could be argued that Hong Kong provides a more level playing field for enrichment than Singapore does, where the Lee family holds political power and controls the key levers of the economy (see the chapter on Singapore). And the end of colonialism has equalized opportunities by ending political patronage for British interests that was so conspicuous during colonial rule. The British corporation Cable and Wireless held the local telephone monopoly until 1995, and its international call monopoly franchise was ended after the handover. All the buses in the city were made, in the words of the Hong Kong real estate tycoon Ronnie Chan, “by a British company almost unknown anywhere else in the world.”35 Cathay Pacific, then owned mainly by Swire, held all landing rights at the Hong Kong airport. In colonial times, British workers had the automatic right to work in Hong Kong.36 And collusion between British big business and the government was endemic: “The chairmen of Hong Kong Bank and a few major British companies sat on the highest governmental body of Hong Kong, the Executive Council. They always received policy and other important information first and easily acted on them, while the local Chinese businessmen were left to be second class citizens. In business, time is money—you get information first and you win. How clean or fair is that?” Of course, what seems like the opening of markets and social institutions with fair participation for all may simply mask the appearance of a new Chinese elite. But Chinese economic interests in Hong Kong are not monolithic: various “red capitalists” jockey for position and influence in Hong Kong. Chan claims, “When one compares the situation before and after 1997, the HKSAR government [the post-handover government of Hong Kong] did much more [to remove itself] from the business community.”37
In short, Hong Kong has become more capitalist since the handover in the sense that the playing field has become more level for Chinese business owners and managers, and perhaps more level for capitalists in general. If so, such developments should be viewed as desirable corrections of the distortions of colonial rule. But Hong Kong’s “transition to capitalism” also has a darker side: since the handover, there has been a steady erosion of social welfare rights and the gap between rich and poor has substantially increased.
I was brought up in a humble middle-class home in Montreal, and I never would have dreamed that I’d end up as the employer of a domestic worker. But that’s what happened when I moved to Hong Kong. There is no state-sponsored day care and most middle-class and professional families hire foreign domestic workers to help with housework and child rearing: in 2008, there were more than 251,000 foreign domestic workers in Hong Kong,38 mainly from Indonesia and the Philippines (another legacy of the colonial days). We hired a live-in helper to assist with caring for our young child. After the handover to China, the minimum wage for domestic workers, perhaps the worst-off workers in the territory, was cut twice by the Hong Kong government in response to pressure from political parties and employers’ interest groups. Both my wife and I had stable jobs and we could afford to maintain the “colonial” rates, but many Hong Kong employers suffering from economic difficulties cut the wages of their domestic employees.
The most distinctive part of Hong Kong’s social welfare system is its housing policy launched in 1953, following the Shek Kip Mei squatter fire that made fifty-three thousand people homeless. The government responded by providing homes for the fire victims in resettlement blocks.39 Government-subsidized housing was radically expanded by Murray MacLehose, the first diplomat with a socialist background sent to the colony.40 One year after assuming the governorship in 1972, Lord MacLehose launched a public housing program that was meant to provide permanent public rental housing for the 1.8 million people still living in squatter huts or temporary housing. Fortunately, it was the start of Hong Kong’s economic boom and the government had a lot of money to spend, though the economic recession of the mid-1970s frustrated many of the plans to achieve a fair and caring society. By the time of the handover, the Housing Authority was the largest landlord in the world. More than three million Hong Kongers, or 52 percent of the population, lived in subsidized housing, mainly rental flats from the Housing Authority with rents set at one-fifth the market level (the rest bought subsidized flats under various home-ownership schemes, with prices discounted 50 percent from those in the private sector).
As a Canadian, I always took great pride in our health care system, which secures free health care for all our citizens, the sort of system that Americans could only dream about. But we still have to pay market rates for medicine prescribed by doctors. In Hong Kong, to my surprise, not only was health care nearly free but prescription drugs were also heavily subsidized!
Beyond public housing, Hong Kong also had several of the standard features of welfare states in Western Europe. There was an excellent public health care system, with the government paying 97 percent of the costs (private hospitals actually went out of business because they couldn’t compete). Hong Kong had an affordable and efficient public transportation system that covered nearly every nook and cranny of the territory (the buses and subways are technically privately owned, but the government has substantial equity in most transportation companies and it has the power to make or break companies by granting franchises and monopolized routes). In addition, a 100 percent tax on new cars strongly encourages use of public transportation. The large majority of primary and secondary schools were either free or heavily subsidized, and the territory’s eight tertiary educational institutions received nearly all their funding from the public coffers. The government provided flat-rate allowances for vulnerable groups, such as the elderly and the disabled, and means-tested aid to raise the incomes of individuals and families to a level at which basic and “special” needs (including spectacles and dentures) could be met. Colonial Hong Kong even provided some welfare aid “with Chinese characteristics”: in accordance with the traditional Confucian norm of filial piety, taxpayers received allowances for taking care of elderly parents at home.
In the last six years of the colonial government, welfare spending increased at a real, inflation-adjusted rate of at least 10 percent annually and the government boosted spending on the environment by 60 percent, leading many businesspeople to worry that Hong Kong was heading for welfare statehood. The fact of the matter, however, is that Hong Kong already was a big spender on welfare: in 1995–96, Hong Kong’s government devoted 47 percent of its public expenditure to social services, more than Singapore and Taiwan and only slight less than the United Kingdom.41
But these welfare achievements have been undermined by the Chinese Communist Party (CCP) and its allies in Hong Kong’s business community. In the build-up to the handover, the CCP consistently opposed the expansion of social and economic rights in Hong Kong. One of the last acts of the outgoing legislature was to pass five laws significantly boosting workers’ rights in Hong Kong, including one that gives unions the right to use collective bargaining to negotiate workers’ salaries and another that protects workers against unfair dismissal for taking part in union activities. These laws were immediately condemned as dangerous by the chairman of the Federation of Hong Kong Industries, Henry Tang Ying-yen, who was appointed to Tung Chee-hwa’s executive council. Following the handover, the Beijing-appointed Provisional Legislature voted to suspend those laws, with the exception of two relatively trivial ones that increased compensation for victims of occupational deafness and declared May 1 a legal holiday.
Chinese suspicions of British intentions may have played a role: new welfare initiatives by the Hong Kong government were perceived as part of a British plot to denude the Hong Kong treasury of money and leave the territory in disarray with mounting debts. But the post-handover government was actually left with huge cash hoards (more than U.S. $46 billion in fiscal reserves, with an estimated surplus of U.S. $18 billion in 2010–2011). Some opposition may have been driven by political concerns: much of the impetus for increases in welfare spending came from prodemocracy parties in the legislature that were opposed to Chinese rule. But the main explanation for the CCP’s antiwelfarism was its strategic alliance with Hong Kong’s business class.
After the handover, social welfare was further cut back as economic conditions took a turn for the worse. Hong Kong was hit by three major economic crises, and the territory was the worst economic performer in East Asia between 1997 and 2007.42 Even for a territory used to the “creative destruction” of capitalism (including a one-day drop in the Hang Seng index from around 1700 to 450 in 1973), the apparent collapse of the “economic miracle” came as a shock. It was tempting to blame the “takeover” of the Communist Chinese, as the U.S. senator Alfonse D’Amato put it, but Hong Kong’s unlucky streak was actually rooted in a clause in the 1984 Sino-British Joint Declaration restricting the annual lease of land to fifty hectares. As Yun-wing Sun explains, “The clause was inserted by China to forestall a possible pre-emptive attempt on the part of the departing British colonial administration to lease excessive amounts of land, leaving too little land for the post-1997 HKSAR government. The clause was inserted to ensure a smooth transition. Ironically, it led to a huge real estate bubble, which proved to be a most destabilizing factor in Hong Kong’s reversion.”43 The bubble burst when Hong Kong was hit by the Asian financial crisis in late 1997, and it would have burst whoever the rulers happened to be.
Before I came to Hong Kong, I typically read the political news and the sports pages and threw out the rest of the newspaper. But my preferences changed. For one thing, my academic friends in Hong Kong spent much of their time talking about real estate and the stock market. And it soon became obvious that those seeking to understand politics in Hong Kong must begin by reading the business pages. By early 1998, I was an avid follower of the stock market, and I’d follow the ups and downs of the Hang Seng index on my office computer in my spare time. Finally, in February 1998, I decided that the markets had overreacted with pessimism and I invested thirty thousand U.S. dollars in various stocks. I made fourteen thousand dollars in one month and prided myself on having successfully predicted the bottom of the market. I told my friends that serious investors can make money if they have a basic understanding of economics, people’s psychology, and international politics. Eventually, I ended up losing my gains (and more). And since moving to Beijing, I rarely read the business pages and I let my wife take care of family finances.
After regional currencies collapsed in the early days of the Asian financial crisis, currency speculators attacked the Hong Kong dollar. The Hong Kong government, however, could not afford to devalue the dollar: the local currency had been pegged to the U.S. dollar for the previous fourteen years, and the peg provided an important source of stability. Removing the pegged exchange rate would have undermined the credibility of the Hong Kong government (after multiple assurances that the peg was “sacred”) and could have led to massive capital flight. The government, however, had to pay a severe price for defending the currency. It spent billions of dollars of Hong Kong’s reserves battling speculators, and it raised interest rates to sky-high levels to protect the value of the Hong Kong dollar. High interest rates decimated Hong Kong’s property sector, and since seven out of ten listed companies in Hong Kong invest in property, the stock market took a nosedive. Hong Kong had five consecutive quarters of negative growth, and the brief boom fueled by the tech bubble in 1999–2000 was followed by a second recession.
As elsewhere, Hong Kong experiences increased hardship when the economy nose-dives. Keynesian economics would prescribe increasing spending to boost the economy and provide more social welfare for the needy. But the Hong Kong government did the opposite: it tightened expenditure, including slashing welfare benefits for families of three and four by 10 and 20 percent, respectively, and forcing more than twenty thousand jobless people to do community work or lose their benefits.44 For the business community, however, it sweetened the pot by cutting the corporate tax rate to 16 percent. Such measures were justified in Hong Kong by the probusiness conservative ideology of fiscal management, which favored balanced budgets, an ideology that was codified in Article 107 of the Basic Law, the miniconstitution of Hong Kong. But the government still ran a deficit budget for a few years, mainly because revenue, particularly from land sales, dropped substantially.45 Not surprisingly, the Gini index that measures income inequality rose from 0.518 in 1996 to 0.525 in 2001, ranking the city below only sixteen developing countries in South America and Africa.46 In 2010, the U.N. Development Program reported that Hong Kong had the widest rich-poor gap among the thirty-eight “very high human development” economies it had studied. An even more alarming statistic is that 30 percent of Hong Kongers now earn less than in 1996 (even though GDP rose by 34 percent during that same period), with nearly 20 percent of the population living below the poverty line, including one-third of Hong Kong’s elderly residents.47 Ming Chan summarizes the effect of the economic downturns on different social groups: “During the first post-handover decade, while many middle-class elements were reduced to negative-equity homeowners, the working class endured the pains of reduced wages and unemployment, and the disadvantaged suffered severe reductions in welfare benefits and public assistance due to budget deficits…. In contrast, the tycoon-dominated economic upper echelon managed to grow by leaps and bounds, in part due to their high-yield investments in property development and other lucrative undertakings in mainland China.”48
Shortly after the handover, the Hong Kong government announced plans to cut funding for higher education by 10 percent over the next three years, followed by another 10 percent cut after that. By 2003, our department meetings were mainly about how to cut spending and who were going to lose their jobs. In February, I had to rush back to Montreal because my father’s respiratory ailment—which had never been properly diagnosed—had taken a sudden turn for the worse; he was no longer able to breathe. He died on March 8. Upon my return to Hong Kong, I was informed that my salary would be docked by ten thousand Hong Kong dollars (the university had no provisions for paid leave following the death of an employee’s parent). On March 11, Hong Kong reported an outbreak of a mysterious respiratory disease, and the territory soon became the epicenter of the SARS epidemic. Few dared venture outside without a mask, and people were dying in nearby buildings. At least, I thought to myself, SARS kills people faster than whatever had afflicted my father. Over the next four months, SARS infected 1,750 people in Hong Kong, causing 299 deaths.
Unemployment rose from 2.2 percent in 1997 to 8.3 percent in 2003, the highest figure since 1981, and housing prices reached historic lows in the dark days of the SARS outbreak. But the spread of the disease ended just as suddenly as it had started, and Hong Kong resumed another good economic run, helped by the weak U.S. dollar and various measures taken by the PRC’s central government to boost the Hong Kong economy, such as increasing tourism from the mainland. By May 2007, Hong Kong’s stock prices were setting new records, restaurants were bustling, unemployment had dropped to 3 percent, real estate prices had recovered to their 1997 levels, and it seemed that Hong Kong had finally resumed its status as a “dragon economy.” But the good times did not last long, as Hong Kong was soon battered by another financial crisis triggered by the bursting of a housing bubble in the United States in 2008. Given Hong Kong’s dependence on finance and services, the city is particularly vulnerable to external shocks, and it was badly hit by the most severe global financial crisis since the 1930s.49
In April 2009, Hong Kong’s chief executive Donald Tsang said that the city’s economy faced its biggest challenge since World War II. How will it deal with the challenge? And can the state avoid further cutbacks to social welfare? Even public housing for the needy can no longer be taken for granted: public expenditure on housing as a percentage of total government expenditure was cut from 3.68 in 1999–2000 to 1.52 in 2004–5, with the government retreating “to a much narrower and more limited housing policy, leaving the ground clear for the private sector…. The changes amount, in fact, to a significant residualisation of government responsibility in housing.”50 Can disadvantaged Hong Kongers cope with the suffering? One might expect the society to be splitting apart, with the economic “losers” hitting the streets and intellectuals questioning the whole idea of maintaining capitalism as a “way of life.”
April 6, 2009. As I step out of the MTR stop at Admiralty, my way is blocked by a group of domestic workers protesting cuts to their salaries. Their chants are led by a university professor who has written a pamphlet on the rights of domestic workers. A few minutes later, in front of Hong Kong’s Hongkong and Shanghai Bank of China building, I run into middle-class demonstrators protesting against bank gambles that caused huge losses to their portfolios. The police block off the streets for a few minutes, but the protesters are largely ignored by the passers-by; I seem to be the only one paying any attention. Later that evening, I have dinner with an old friend. He has just launched a hedge fund at what might appear to be the worst possible time. But he’s optimistic; he expects that the crisis will soon blow over. Property prices haven’t collapsed as they did in 1997, the banks are well capitalized (mortgage rules in Hong Kong are stricter than in many other jurisdictions; for example, mortgages cannot be issued for more than 70 percent of the property’s value),51 and the low rate of taxation is still Hong Kong’s big draw. His wife criticizes the government for giving small one-year grants to help university students cope with the downturn (I had recently returned from Denmark, where students went on strike because the government had proposed cutting from six years to four years the free grants of about one thousand U.S. dollars per month that are offered to all young adults).
One recent survey found that Hong Kongers harbor more consistently anti-welfare attitudes than their counterparts in the United Kingdom: for example, the large majority oppose unemployment insurance unless the recipients are actively looking for work. The survey found that Hong Kongers uphold “Confucian values” that favor self-reliance and a strong work ethic.52 Even progressive intellectuals in Hong Kong are skeptical of the idea that people are “naturally” entitled to welfare from the state. Joseph Chan has put forward a model of social welfare grounded in Confucian values that prioritize the family as key to the good life: welfare responsibility lies first with the family, the local community serves as the second tier of help, and the state plays the role of last resort, providing direct help to people who cannot help themselves and lack adult family members to turn to.53 Betty Yung argues that the Confucian ideal of social justice involves a private-property market economy, but with government control over the distribution of land and government aid to reduce the suffering of the people, especially in times of disaster.54 Perhaps the longer-lasting aspects of social welfare policy in colonial times, such as the provision of public housing to those victimized by natural disasters, were effective because they cohered with such beliefs.55 In the post-handover era, the privatization of housing and other policies such as means testing in housing subsidies and abolition of the right to inherit public-housing tenancies may also be “in line with the spirit of the Chinese conception of justice.”56 So perhaps it’s a mistake to promote the ideal that the government should provide for people’s fundamental needs largely by means of free services to all, regardless of family or social circumstances. Such an ideal may be appropriate in Northern European countries, given their particular histories and cultures, but not necessarily in Hong Kong. Murray MacLehose may have been Hong Kong’s most caring governor, but he was still on the wrong side of history. It’s not that Hong Kongers don’t care about the needy; they just don’t believe that state welfare is always, or even usually, the best way of securing their interests. Not only will excessive state welfare damage economic growth, but also there are alternative ways of securing the interests of the needy that make use of (and do not undermine) valued family and social relationships. In that sense, perhaps, Hong Kong’s deepening of the “capitalist system and way of life” since the handover to the Chinese Communists may be consistent with Hong Kong’s dominant ethos.
And why worry so much about the ups and downs of capitalism, even if the roller-coaster ride has become more unnerving since the handover?57 Hong Kong is composed largely of immigrants who fled the chaos of mainland China seeking a better life; they’re not about to throw in the towel at the first sign of an economic downturn. Yes, the manufacturing sector has been almost entirely transferred to Guangdong province (where labor and land are cheaper), and Hong Kong may be losing its comparative advantage to modernizing cities such as Shanghai and Shenzhen.58 But Hong Kong does have one factor that gives it an edge: the world’s strongest work ethic. That’s the real secret to maintaining Hong Kong’s capitalist system and way of life. As a recent Hong Kong government report put it, “Hong Kong is known for its resilient, hard-working spirit and will endeavor to turn crisis into opportunity.”59 But who can guarantee that the “hard-working spirit” will last?
MATERIALISM WITHOUT HEDONISM
Walking the streets of Mongkok, I feel tense. The streets are packed with people, mainly unsmiling,60 walking fast and talking loudly on cell phones, each one busily doing his or her own thing, in the midst of street markets and small stores, with elderly residents hanging clothes from the top floors of tall buildings. Flashing neon signs protrude in all possible directions (in Chinese, characters can be written horizontally or vertically, and commercial establishments make full use of the language’s versatility), air conditioners leak on passers-by, and double-decker buses narrowly miss pedestrians, who sprint across the street the second the light turns green. Tired and hot, I pop into a restaurant for a break. The restaurant is located on the third floor of a mixed-use building. I get into an elevator and immediately press the close button, a habit I’ve picked up in Hong Kong (in relatively easygoing Montreal, by contrast, many of the elevators do not even have close buttons).
Mongkok (located in Kowloon, on the mainland part of Hong Kong) is the world’s most densely populated place, with 130,000 residents per square kilometer,61 not counting the illegal immigrants and throngs of visiting shoppers. By objective measures, it should be at the bottom of most estimates of human well-being. Recent research has demonstrated that the increased “cognitive load” of being in a city triggers lapses in attention and memory, negatively affects mood, and interferes with self-control. In one recent study, people who had walked through the streets of downtown Ann Arbor, Michigan, were in a worse mood and scored lower on a test that involved repeating a series of numbers backward compared to others who took a stroll in an arboretum.62
An administrator friend at the University of Hong Kong has recently returned from a vacation in Australia. I ask about her vacation. She enjoyed herself, but she’s glad to be back. Australia is “too spacious,” she explains.
Yet somehow it seems to work in Hong Kong. At the street level, there is an underlying order to the fragmented and disconnected forms: the term “structured turbulence,” as Peter Cookson Smith notes, “is an apt description of the Hong Kong streetscape.”63 For one thing, the city has remarkably low crime rates: even Mongkok, reputed to be one of the centers of triad activity in Hong Kong, is safe for single women walking alone late at night. Alcoholism and drug addiction are rare. The life expectancy of Hong Kongers is sixth highest in the world: seventy-nine for men, and eighty-five for women.64 And far from seeking to escape their urban culture, Hong Kongers often seek to recreate it when they immigrate abroad: Chinatowns in cities such as New York and Toronto approximate the frenetic environment of Hong Kong’s streets to the extent possible within more highly regulated urban environments.
Hong Kong’s tallest building is the eighty-eight-story Two International Finance Center, designed to house financial institutions.65 According to the company website, the building “culminates in a sculptural crown that celebrates the height of the tower reaching to the sky,”66 but everybody I’ve talked to in Hong Kong tells me it’s supposed to look like a hand grasping for money.
The secret to the “structured turbulence” in Hong Kong is not mysterious. Everybody is busy doing one thing: making money. People work hard to make money, and densely populated urban environments make communication and exchange easier.67 Yes, the packed living environment reflects policy decisions as well as the limits of building on hilly terrain. But it also reflects what most people care about: who wants to waste time traveling from suburbs to the workplace?
As a young kid in Montreal, I looked forward to seeing my wealthy grandparents. My grandfather ran a children’s clothing factory named after my designer grandmother. I enjoyed being with them, and I enjoyed the fancy restaurants. But my grandfather’s cars were a source of embarrassment to me: he came to pick me up in gold Lincoln Continentals and flashy white Cadillacs. On the way out of my neighborhood, I’d fake a stomachache and bend down so my working-class and immigrant friends wouldn’t see me in those cars. Twenty-five years later, an academic colleague in Hong Kong offers to sell me his BMW. It’s fourteen years old, but it still looks impressive. I never would have dreamed of owning a BMW, but everyone around me seems to own a Mercedes or a BMW. I buy it with pleasure.
A famous anecdote about Hong Kong is that a rich man parks his Rolls Royce in the poorest neighborhood and he is immediately surrounded by admiring people (in poor parts of American cities, the story goes, the car would be vandalized). The point of the anecdote, of course, is to suggest that there is little resentment against the rich in Hong Kong. Everybody works hard, and differences between people are not so pronounced (the billionaires of Hong Kong are rarely praised for their ability), so the winners are just luckier than most. Why feel resentful against the lucky? It makes no more sense than resenting the winners at Hong Kong’s Jockey Club. A little jealousy, maybe, but no resentment, certainly not to the point of wanting to harm the lucky winner. Next time, or next generation, it will be somebody else’s turn to win.68
My family is invited for lunch at the Hong Kong Jockey Club by one of Hong Kong’s most successful corporate lawyers. Though our host hired my wife many years ago, the conversation does not touch on work. We have a delicious dim sum meal, finishing every scrap of food as our host’s wife explains that she never leaves any food on her plate (in contrast, I’m reminded of a wealthy American friend who tells me that he always leaves something over to remind himself that he’s not eating out of necessity). She notes that Hong Kong never had a landed aristocracy, which helps to explain the lack of high culture as well as the more egalitarian work ethic. Our host worries that the new generation is losing the work ethic and can-do spirit that powers the Hong Kong way of life (my teenage son replies that our generation should be criticized for ruining the environment and contributing to global warming).
A famous statistic from Hong Kong is that it has more Rolls Royces per capita than any other city. What does that tell us about the Hong Kong work ethic? Hong Kongers are supposed to work hard rather than play hard, so why are they spending money on brand names and luxury goods? Does it mean that Hong Kongers are losing the drive that makes their community so economically successful, that they are turning into self-indulgent hedonists who care more about playing hard than working hard?
One reason Hong Kongers care about fancy cars is that their apartments are so small: they must show off wealth in other ways, such as buying fancy cars. And it doesn’t mean that people are self-indulgent hedonists. In fact, the whole idea of showing off wealth is more other-regarding: the aim is to influence what others think rather than to experience pleasure oneself, except as a by-product of having influenced what others think.69 Plus Hong Kongers do not spend extravagantly, the personal savings rate is still high and the government’s reserves are among the world’s highest. It’s as though Hong Kongers spend just enough to keep the wheels of capitalism turning, and no more than that.
Still, things do change. The great Islamic thinker Ibn Khaldun (1332–1406) proposed a theory explaining the fall of dynasties that may also foretell Hong Kong’s future. According to Khaldun, asabiyah (group feeling), the tribal loyalty that makes the individual devote himself to the tribe, is the key to political power. The stronger the attachment to the tribe, the more the tribe is capable of fighting and conquering others: “It should be known that since … desert life no doubt is the reason for bravery, savage groups are braver than others. They are, therefore, better able to achieve superiority and to take away the things that are in the hands of other nations.”70 Eventually, however, nomadic conquerors will succumb to the temptations of luxurious city life, and that is the beginning of the end. The once brave nomads become soft, flabby, and docile toward outsiders, and the dynasty eventually falls to new tribes bound by strong asabiyah. In the case of Hong Kong, the brave nomads from the mainland are dying out. As the immigrant experience recedes from collective memory it won’t have the same motivational power, and elders worry that the next generation may be succumbing to the temptations of luxurious city life. But is the asabiyah that binds Hong Kongers really weakening? Or is it getting stronger?
The Qingming Festival, or Tomb-Sweeping Day, has been a statutory public holiday in Hong Kong since British colonial times (its observance was suppressed by the Communists on the mainland, but it was reinstated as a public holiday in 2008). To my surprise, people really do take it seriously. The cemetery close to my former home on Pokfulam Road is jam-packed with tomb sweepers during the holiday, and the streets are filled with people who burn paper money and paper replicas of material goods such as cars and cell phones for the benefit of ancestors in the other world.
Chinese-style asabiyah, of course, is family centered. Lee Kuan Yew, the former prime minister of Singapore, put it well: “History in China is of dynasties which have risen and fallen, of the waxing and waning of societies. And through all that turbulence, the family, the clan, has provided a kind of survival raft for the individual. Civilizations have collapsed, dynasties have been swept away by conquering hordes, but this life raft enables the civilization to carry on and get on its next phase. The family and the way human relationships are structured do increase the survival chances of its members. That has been tested over thousands of years in many different situations.”71
So long as the family is stable, the group will survive. In the case of Hong Kong, it is inaccurate to say that people are individualistic. They typically do not work hard for their own self-fulfillment. They work hard for family members, ancestors, and future generations that will carry on the family line.72 The problem, however, is that Hong Kong now has the world’s lowest birth rate: in 2009, it was 0.742 per woman of child-bearing age, far below the replacement rate of 2.1.73 On the basis of such trends, it is estimated that 26.8 percent of the population will be age sixty-five or older in 2033, up from 12.1 percent in 2005. But it is a mistake to project on the basis of current birth rates. For one thing, the Hong Kong government can easily open the doors to more immigrants from the mainland to increase the proportion of productive workers, if need be. Second, the statistic itself is questionable. Across the border from Hong Kong, whole neighborhoods of “second wives” (er nai cun) are supported by Hong Kong businessmen. Arguably, the aim is not so much to fulfill sexual needs outside the strictures of monogamous marriage—that could be done via legalized prostitution in Hong Kong—but to increase the odds that family lines get transmitted from one generation to the next.
April 2009. Along with my wife and son, we meet our old friend Zhu Er, a longtime Hong Kong resident originally from Taiwan, who writes perceptive essays on Hong Kong culture and cuisine. In the past, Zhu Er has prepared magnificent feasts requiring days of advance preparation. This time, we settle for a Hangzhou restaurant on the third floor of a building in bustling Wanchai. It’s the depths of Hong Kong’s worst downturn since World War II, but the restaurant is packed. The elevator door literally opens into the restaurant; no space is wasted for frivolities such as a lobby or entryway. We are greeted by the owner, who proudly tells us about his cuisine and differentiates between people who eat to fill their stomachs (chi bao) and those who really appreciate food (chi hao). I’m reminded of the distinction between Epicureans, who lead austere lives and limit their indulgence of desires in order to seek higher goods in social settings (such as conversation among friends, or haute cuisine), and hedonists, who simply seek to gratify their bodily pleasures. Over dinner, I ask Zhu Er what’s most distinctive about Hong Kong, and she says it’s the highly localized nature of communal life. People rarely move around; they stick to their neighborhoods and develop rich ties with people around them. My wife remarks that this seems to be true even of Hong Kong taxi drivers: the ones from Kowloon seem to panic when they are asked to venture to Hong Kong Island, and vice versa.
According to Confucian ethics, morality does not end with the family. Quite the opposite: it is learned within the family and then extended to other social relationships. As the famous opening passage of the Great Learning puts it, “When the family is regulated, the state will be in order; when the state is in order, there is peace throughout the world.” Concern for people should be extended from intimates to others, from the family to other forms of communal life and eventually to the whole world, though with diminishing intensity as love extends further and further from the family.
Our son Julien has spent most—eight years—of his life in Hong Kong. For him, it’s home, and he constantly presses us to allow him to return to Hong Kong during his school breaks. The past couple of years, we’ve sent him alone by airplane; in Hong Kong, he stays with his cousin Lynn.
Since the handover, Hong Kongers seem to be extending ties beyond the family and the neighborhood: they have shown a genuine civicism that seemed to be lacking in the past. Between 2001 and 2009, Hong Kongers doubled the annual amount of volunteer work they did.74 In the 1990s, observers of Hong Kong’s urban culture such as Ackbar Abbas could argue that “prolonged periods of temporary and transient living conditions experienced by many of Hong Kong’s postwar population, with the inevitable cycles of dislocation and rebuilding, have fashioned a cultural and social identity free of nostalgia for the disorienting and unstable patterns of the past.”75 Yet today there is a deeper sense of rootedness in Hong Kong, as well as concern for continuity with the past.76 Reasons include the end of colonialism, an increased proportion of property owners and educated people in the population, and decreased emigration out of Hong Kong. People are fighting to protect their way of life. Since the handover there has been a blossoming of civic groups, such as green groups taking up issues like harbor protection, clean air, conservation, and climate change,77 as well as less coordinated actions led by idealistic young people about specific issues like a planned railway that could threaten environmental and human habitats in the New Territories.78 An uproar from concerned citizens and NGOs followed the government’s proposal to destroy the much-loved Star Ferry Hong Kong terminal in order to make room for a harbor-front highway, and 150,000 protesters gathered to watch the Star Ferry’s last trip from the terminal.79 In 2003, a half million Hong Kongers engaged in a peaceful demonstration against the proposed national security law that, it was feared, would undermine Hong Kong’s cherished civil liberties (the government lost; it was forced to withdraw the legislation, and the secretary for security resigned).80 Talented filmmakers such as Wong Kar-wai express the yearning for stability and community, as in the scene from Chungking Express in which the plainclothes policeman protests against the expiration date on everything.81 Recent architecture is responding to an increased sense of identification with Hong Kong’s heritage (for example, the Central Library in Causeway Bay, which mixes Western and Eastern styles of architecture), and the city displays an increased tendency to renovate and refit rather than demolish old buildings.82 Chinese and other historians have worked hard to refute the image that “Hong Kong has no history prior to its occupation by the British,” as a 1924 British guidebook put it: today, the ground floor of Hong Kong’s refurbished history museum offers a long saga of the area’s formation from the geological processes through the Qing dynasty, along with depictions of Hong Kong folk life.83
In the dark days of the SARS crisis, the health-care workers of Hong Kong made the city proud. In Taiwan, there were widespread reports of medical staff refusing to show up for work, some even jumping out of hospital windows for fear of being contaminated by SARS patients. In Beijing, health-care workers were basically locked in their workplaces. Yet in Hong Kong, medical staff showed up for work out of a sense of professional duty and service to the community. Nobody seemed to let fear of death get in the way of caring duties, though several health-care workers did pay the ultimate price.84 After the crisis ended, I expected some sort of parade or public ceremony of thanks. Yet nothing happened; they were just doing their jobs, I guess.
The only real way to show commitment to the community is willingness to suffer harm on its behalf. Hong Kong’s health-care workers proved that Hong Kong people work hard not only for themselves or family members.
In Hong Kong, vigils to commemorate the people killed on June 4th, 1989, in Beijing have taken place every year since 1990. In 2009, my wife had a business trip to Hong Kong and I took the opportunity to pull my son out of school and send him to Hong Kong to attend the vigil. I phoned my son that evening, and he said that he had been too far away to see anything; the crowd had been bigger than expected. But he said that the vigil was moving, nonetheless. Tens of thousands—150,000, according to the organizers—gathered to mark the twentieth anniversary of the killings, dwarfing every vigil held since 1990. Many families attended with their young children.
On June 5th, 1989, one million Hong Kongers braved a typhoon and took to the streets to protest the killings. Arguably, they were expressing fears about their own future. Twenty years later, however, civil liberties in Hong Kong are relatively secure; the worst fears of Hong Kongers in 1989 proved to be overblown. So why did so many people turn out on June 4th, 2009? The main reason, I would surmise, is to encourage the rest of the country to adopt a more humane system of government, starting with an official apology for the wrongs committed twenty years ago. It was about the good of the whole country, not just the good of Hong Kong. The huge outpouring of goodwill in Hong Kong following the Sichuan earthquake in May 2008 also suggests that Hong Kongers have extended ties to the national community. Just about every major celebrity in Hong Kong participated in fund-raising concerts, and ordinary people seemed genuinely shocked by the tragedy. What about concern for the whole world (tian xia, to use the language of Confucianism)? Skeptics will point to the relatively tepid response in Hong Kong to the Burmese cyclone that killed at least twice as many people a few days before the Sichuan earthquake. But the sphere of moral concern may be expanding. In 2009, restaurants across Asia organized to take part in a charity project that gave food aid for children in East Timor, and Hong Kong had the largest number of restaurants involved.85 The University of Hong Kong runs a successful program that sends students to teach English to Burmese children in refugee camps along the Thai border.86
We are invited for lunch at the exclusive Hong Kong Country Club by Denis Chang and his wife, Agnes. Denis, one of Hong Kong’s leading senior counsels, is busy with a court case involving the inheritance of Nina Wang, one of Hong Kong’s richest billionaires. Mrs. Wang, despite her reputed personal frugality, made a will in which she left practically her whole multibillion-dollar estate to charity. The will is contested by an eccentric fortune-teller named Tony Chan, who named one of his children Wealthee Chan. The case is reported in the newspaper that is delivered to our hotel room, and the whole of Hong Kong seems to be cheering for Denis, who represents the estate of Mrs. Wang.87 Denis tells us that Hong Kong is one of the best places to raise money for charity; it is a growing center for philanthropy.88
Wai-lun, my friend, here’s what I’d say if you were still around to argue with me. Maybe you should have looked at your own community with a more charitable eye instead of going to Montreal to study communitarianism. Yes, Hong Kongers are materialistic. But why do they care about money? After all, they don’t seem to be enjoying themselves as much as people from other cities. Partly the moneymaking drive is other-regarding in the sense of wanting to impress other people with what money can buy. Agreed, that’s not an admirable trait. But there’s also a moral aspect to the Hong Kong ethos: people work hard to benefit others, starting with family members and extending to the neighborhood, the city, the country, and eventually the whole world. To be fair, it could be that things have improved since you left us; perhaps it was harder to detect the underlying morality of Hong Kong’s ethos in your day. But I suspect you still wouldn’t be persuaded by my argument. You’d say that I’m romanticizing Hong Kong and you’d criticize me for spending too much time talking to rich people who seek to sugarcoat the class structure. You’d encourage me to learn proper Cantonese so I could talk with people from different walks of life in their own native tongue (as opposed to English or Mandarin). In my next life, maybe. Here’s what I’ll do: next time I go to Hong Kong, I will burn a copy of this essay for you, and we can argue in the other world when it’s my turn to go there.