(This essay was published in the South China Morning Post on 15 October 2014.)


The student protest and Occupy movement is, on the surface, motivated by democratic ideals. But more fundamentally, it is a sign that the deepening economic and social contradictions in Hong Kong brought about by China’s opening and economic globalization have reached a tipping point.


For many years, there was a balance between two narratives on Hong Kong’s future development – the “establishment narrative” and the “bottom-up narrative.” This balance emerged in the aftermath of the 1966-67 riots, which had many origins including the critical underlying issue of a rapidly rising industrial economy. The government sought to deal with the deep contradictions that emerged back then by healing rifts in society and giving industrial capitalism a kinder face.


The social sector received funding support and a greater role in public policy, while the business and economic sector continued to play the dominant role in policy matters. This political narrative became embedded in the Basic Law, which was promulgated in 1990.


But in the 1990s, the Hong Kong economy underwent another colossal transformation, into a service economy. A new political narrative was needed to articulate the economic and social challenges of the new era. It became imperative that both sides worked together to resolve these challenges. Unfortunately, this failed to happen.


Adherents of the “bottom-up narrative”, who were associated with the social sector, had little understanding of the challenges of economic transformation and were not interested in articulating an economic policy agenda. For them, democratic elections became a political means to advance their social policy agenda.


Fears of populist encroachment from this approach drove supporters of the “establishment narrative”, associated with the business and economic sector, closer to Beijing, which had fallen out with the adherents of the “bottom-up narrative” over the June 4, 1989 crackdown and the attempted enactment of Article 23 in 2003.


Beijing attempted to undercut the latter group’s success with voters by relying on sympathetic organizations to reach out to the grassroots and compete in setting the social policy agenda and securing resources. But this unsettled the old modus operandi that had been in place since the 1970s.


The “bottom-up narrative” was not the only one straining in the face of Hong Kong’s socio-economic transformation in the 1990s. Ongoing political gridlock and the perception of growing inequality and diminishing opportunities for the middle class led the public to become increasingly persuaded that there were deep flaws in the “establishment narrative.”


The “establishment narrative” had worked well under British rule because Hong Kong was not a democracy, but ruled by a governor sent from London who could both befriend the local business and professional elite and hold them at bay.


But with the coming of 1997 came the need to elect the Chief Executive from within Hong Kong. This changed the rules of political engagement in a very fundamental way.


Beijing allowed the local elites to play a larger and important role in the political process – despite the central government’s own practice, dating back to Han times, of rotating regional administrators to ensure justice and minimize corruption opportunities. In effect, this strategy has entrusted the governance of a capitalist system to the capitalists.


Government in capitalist societies is meant to be a neutral referee and maintain a level playing field for all. Limited government reduces the potential benefits from rent-seeking activities and makes the capitalist system more robust. When capitalists are put in charge of creating wealth they contribute to prosperity, but when they are put in charge of running government they contribute to instability.


Since 1997, the business and professional elite who support the “establishment narrative” have increasingly appeared to be defending their own interests rather than those of society.


Adherents of the “bottom up narrative”, for their part, have made the fatal mistake of antagonizing Beijing excessively and unnecessarily without accomplishing any political objectives. They also have become increasingly fragmented. Their main achievement has been to discredit the “establishment narrative” with political rhetoric, which has helped their radical wing to recruit frustrated youths.


But it is not surprising that Beijing is taking the larger share of the blame for the conflict between the two narratives. Beijing’s failure has been to tilt so heavily in favor of one side. Only a Chief Executive elected through universal suffrage and accountable to the broad public can hope to bridge the gap between the two political narratives.

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