(This essay was published in the South China Morning Post on 24 September 2014.)


One of the political narratives that have emerged around the concept of “one country, two systems” is the “establishment narrative”, which sees populist democracy as the greatest threat to preserving Hong Kong’s capitalist way of life.


The narrative is premised on the fact that for decades, economic and civic freedoms and the rule of law thrived in Hong Kong without democracy, and without the divisive political life experienced by numerous mature capitalist democracies.


This narrative appealed to the capitalist “can-do” spirit that was embraced by all income classes in the postwar period. It was a spirit nurtured by a free capitalist society offering equal opportunities and fair treatment for all. The fear that populist democracy could threaten Hong Kong’s capitalist way of life had support on both economic and moral grounds.


The “establishment narrative” was much more concerned about populism than the threats posed by a non-democratic, non-capitalist Chinese sovereign to Hong Kong’s capitalist way of life. Why was so much trust placed in this sovereign?


One common explanation is that the “establishment narrative” is merely a veil for protecting established interests. Business had little choice but to aligning with Beijing. But this cannot be a complete explanation. Why bother with an elaborate narrative if it is ultimately only disguised self-interest?


The “establishment narrative” was premised on the belief that Hong Kong had already found the proper practices and arrangements for making things work, without democracy. Key parts of the Basic Law, therefore, simply codified existing practices and arrangements.


The confidence of the business and professional elites in their own ability to continue make Hong Kong work probably encouraged Beijing to put its faith in them. There was also a lack of any other viable alternative at the time. Beijing also appeared to have held the view that capitalism should be run by capitalists.

Still, the 1997 deadline meant that no matter how much was unchanged, the colonial arrangements had to come to an end. This gave opportunity to another vocal part of the educated elite in Hong Kong that wanted democracy.


When the Basic Law was being hammered out between Beijing and Hong Kong in the 1980s, democracy was enjoying an excellent reputation. The number of countries embracing democracy rose from 45 in the 1970s to 120 in the late 1990s. Democracy had become the accepted default form of government.


As a result, local democracy under Chinese sovereignty came to be seen as Hong Kong’s natural post-1997 choice, but with strong constitutional safeguards against populism.


The Basic Law’s safeguards included a commitment to an executive-led government, curtailment of the powers of the legislature, and preservation of the free port, low taxes, and fiscal prudency.


However, by the early 21st century, democracy’s reputation was under attack both in the new democracies and mature democracies, which saw amplified divisiveness, political impasse, and a tyranny of minorities.


These developments reinforced the Hong Kong establishment’s concern about populism, but they could not altogether oppose democracy.


While democracy can sometimes compromise the rule of law, it can also be its guardian by dispersing power and keeping government within the law. For businessmen with large economic stakes, a robust rule of law is immensely important and valuable.


Nonetheless, the business and professional elites were not interested in building democracy from the “bottom up” (in the manner done elsewhere). Building democracy from scratch and getting it right is not without huge risks. The conservative wisdom is never to mend something that is not broken.


They had tried to push the envelope in the drafting of the Basic Law by proposing two chambers with substantive powers in the legislature (similar to a House of Lords and House of Commons). This idea was rejected because, among other reasons, it would have given the local elites too much influence.


However, since 1997, a sort of bicameral system has informally been implemented through private members’ bills and motions that have to be passed by majorities of members from both the geographical and functional constituencies. And the business and professional elites, as well as the Chinese sovereign, continue to exercise influence over the choice of candidates for the Chief Executive.


The “establishment narrative” has been sustained since 1997 and the business and professional elite remains more worried about the possibility of populism than tampering by Beijing.

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