How Capitalism Created a Bulwark Against Chinese Repression
As of this writing, on June 18, it appears that Hong Kong authorities have blinked. That is, a proposed new extradition law, urged on Hong Kong by the government of China—and opposed by the masses in the Hong Kong streets—has been postponed. In other words, at least for now, we’re seeing a victory for people power.
The proposed law—technically legislation calling for “mutual legal assistance in criminal matters”—would have been one more step towards the full integration of Hong Kong and China.
Hong Kong, of course, has been part of the People’s Republic of China since the United Kingdom gave it back in 1997, and yet, so far at least, the former colony has been able to retain the procedure-bound legal system of the British. This, of course, the Beijing regime doesn’t like.
Street protesters, estimated to number a total of two million—that’s a quarter of Hong Kong’s population—seem to have stymied the bill. In fact, the Beijing-friendly chief executive of Hong Kong, Carrie Lam, has apologized for putting it forward, even as the demonstrations continue. And the repercussions could reach even higher: in the words of The Sun, published in Malaysia, “China’s powerful President Xi Jinping has been dealt a rare setback.”
So as things stand now, the freedom-loving people of Hong Kong have won a victory. It’s a victory, we might add, for freedom-loving people everywhere.
Of course, the situation could change at any moment. That is, the PRC could send in tanks and troops and simply take over. Or it could engage in more subtle pressure tactics, such as turning off the water and electricity.
Or maybe the PRC will bide its time—until, say, after maximum leader Xi meets with the G-20 in Osaka on June 28—and then make its move.
After all, the same PRC government has shown no hesitation in its tough tactics elsewhere: it continues to arrest and detain dissidents, Christians, and other non-conformists in the Chinese heartland. Moreover, the oppression of Chinese citizens in more distant places, such as Tibet and Xinjiang, seems to be even worse.
Indeed, since the Chinese regime is building up a Maoist personality cult around Xi, complete with quasi-deification, it’s hard to believe that the PRC will simply say “never mind” in regard to Hong Kong.
Yet still, as of now, the crackdown in Hong Kong hasn’t happened. And so it’s worth pausing to consider what might be staying China’s heavy hand.
One factor, of course, is the optics of repression. Yes, the Chinese are ruthless, but they also seem to be sensitive, at least tactically, to international public opinion. If, as Marshall McLuhan once said, we all live today in a planetary “electronic village,” then what some of the Hong Kong signs say is true: “the world is watching”—and that scares China.
In addition to world opinion, another factor is business opinion. As The New York Times explained, “Mrs. Lam’s bill exposed not only Hong Kong citizens to extradition to the mainland but also foreign citizens. That horrified the influential chambers of commerce that represent the West’s biggest banks, which almost all have their Asia headquarters in Hong Kong, as well as some of the West’s biggest manufacturers, which keep staff in Hong Kong while overseeing factories on the mainland.”
Not surprisingly, business people don’t want to live in a place where they can be snatched off the street by secret police, for reasons political, financial, or personal. There’s been a lot of that legalized kidnapping and extorting in Saudi Arabia in recent years, one more reason why the Kingdom is a place for executives to visit, not to build headquarters.
Similarly, as they say, “capital is a coward.” The safety of their physical persons aside, people don’t wish to put their money in a place where a dictatorship can simply confiscate it. As Reuters reported of the current tumult, “Some Hong Kong tycoons have already started moving personal wealth offshore.”
So if—again, if—the Chinese government really has been thwarted on this extradition bill, then that would seem to bolster the optimistic argument that’s been made by libertarians and neoliberals over the past three decades: the enrichment of China will lead at least to the beginnings of freedom.
Yes, it’s true that heretofore, China has managed to grow rich and powerful without notably liberalizing—even as, of course, repression is not nearly as severe as it was in the mass murder days of the ’50s and ’60s. Over the last few decades, wits have coined the phrase “Market Leninism” to describe China’s blend of economic liberalism and political control.
And yet the question is whether that economic liberation has started to seep into politics. As one cultural indicator, we might consider the 2018 movie Crazy Rich Asians. Yes, that film about fun-loving plutocrats was set in Singapore. Yet the characters are all ethnically Chinese, and their wealth specifically traces back to their business relationships with China.
Crazy Rich Asians was a hit, and as such, it deserves due consideration for what it might reveal about the zeitgeist. Short version: Asians, too, love glitzy romantic comedies. And rom-coms, brimming with presumptions about wealth, status, and sex, are, well, counter-revolutionary. Or maybe they are, in fact, revolutionary; that is, they are a part of the overall surging tide of fun and frivolity—some might say decadence—associated with peacetime capitalism.
Interestingly, “Crazy Rich Asians” did poorly at the box office in China. Yet the mere fact that it opened there at all tells us something, and the fact that the sequel is to be filmed in Shanghai tells us even more.
More broadly, we can speculate as to the ultimate effect on China of the Chinese diaspora. According to one estimate from 2012, some 50 million Chinese live overseas, and it’s hard to believe that seven years later, the number is not substantially larger. As for tourism, The South China Morning Post reports that in the first half of 2017, mainland Chinese made more than 71 million foreign trips—a 15 percent jump from the year before.
So what are all these Chinese seeing? Answer: everything. And so one has to wonder about the ultimate impact back home. Maybe there will be a puritanical anti-Western backlash of the sort seen, for example, in Iran, as it reacted to the pro-Western Shah. Or maybe not. In fact, there’s plenty of evidence that many Chinese like being crazily rich—and that they want freedom, too.
In the meantime, perhaps we should re-familiarize ourselves with arguments about the irenic potential of capitalism. As Montesquieu wrote in The Spirit of the Laws, “Commerce is a cure for the most destructive prejudices; for it is almost a general rule, that wherever we find agreeable manners, there commerce flourishes; and that wherever there is commerce, there we meet with agreeable manners.”
Two and a half centuries later, in 2006, Milton Friedman addressed directly the liberalizing potential of capitalism: “I think that nothing is so important for freedom as recognizing in the law each individual’s natural right to property, and giving individuals a sense that they own something that they’re responsible for, that they have control over, and that they can dispose of.”
In recent years, on the right as well as the left, such cheery thoughts about markets have often been dismissed as naive—or worse, as just a sweet-sounding cover story for the depredations of capital—yet in Hong Kong, we’re seeing evidence that capitalism and freedom have combined to create a pluralistic bulwark against totalitarianism.
In fact, just on June 17, Hong Kong authorities released Joshua Wong, one of the key figures in an earlier round of street protests, the so-called “Umbrella Movement” of 2014. Once released, Wong immediately vowed to rejoin the protests and called for Lam to step down.
Interestingly, Wong was actually let go early from his two-month prison sentence stemming from those protests five years ago. That’s an occurrence that could speak to creeping liberalization, or perhaps to bureaucratic randomness—or perhaps to something else altogether.
Speaking of something else altogether, we might recall that the U.S. and China are in the midst of a trade dispute. Most Western observers probably think that the Chinese mercantilists will do fine in their struggle against President Trump and his trade hawks—and many experts, of course, don’t wish to see Trump succeed, in any case.
Yet others aren’t so sure that Trump will lose. Here, for example, is the Australian expert Salvatore Babones writing in Foreign Policy: “The simple fact is that China needs the United States more than the United States needs China. In itself, that’s no reason to start a trade war. But if the trade war really does heat up, there’s little doubt who will win.”
Once again, Babones’ assessment that the U.S. has the upper hand is probably in the minority. And yet the fact remains that it’s the Chinese who just backed down in Hong Kong. Maybe Beijing’s reticence over repression stems from the assessment that it can’t afford to further rock a boat that might be unsteadier than most people realize.
Of course, we shouldn’t expect that many American pundits will even entertain the possibility that Trump’s pressure on China is doing any good. If China does relent, or even open up, the one unbreakable rule is that the Dreaded Trump can’t get any credit.
James P. Pinkerton is an author and contributing editor at The American Conservative. He served as a White House policy aide to both Presidents Ronald Reagan and George H.W. Bush.