Hong Kong Occupy protests

Occupy protests now at a crossroads

October 13, 2014 by Kevin McSpadden

The Pearl of the Orient is at a crossroads, and Occupy Central has shone a spotlight on the diverging paths facing Hong Kong. Where now for the protesters who have caught the imagination of the world?

Occupiers say that they are fighting against a future that, for a large segment of the population, does not feel sustainable: “My parents had a very good environment to raise me, and now, as a mother, I want to protect the future for my children. I love Hong Kong, and when you love someone, or something, you give it everything you’ve got,” Ching, a working mother of two and member of the pro-democracy group Civic Passion, told China Outlook.

The anti-Occupy supporters, some of them who are pro-Beijing, are a diverse group of people, including some of those who remember 1989 and fear a Tiananmen-style crackdown. Added to which is a large group of business owners, angry about losing income. There were also persistent media reports that some anti-occupy protesters were members affiliated with, or paid by, Hong Kong’s triad groups – the city’s organized crime entities – although the evidence was slim.

Finally, some are long-time residents worried about upsetting the status quo. The argument about “upsetting the status-quo” is particularly interesting because the majority of protesters are young, and all face a very serious issue concerning their desire to continue living in Hong Kong – an increasingly expensive real estate market.

Housing prices in the city continue to hit record highs. To rent a small one bedroom apartment on Hong Kong Island expect to pay over US $2,000 per month and even with a longer commute the average is US$1,300 per month.

The Demographia International Housing Affordability Survey found the city boasts the highest median house price to household income rate in the world. This suggests that, even though the city’s unemployment rate is a very low 3.3%, wages are not rising in concert with astronomical property prices.

The real-life impact of these statistics is that many young Hong Kongers have little choice but to live at home throughout their 20s, struggle to afford to get married, and even if they do get married, find it extremely difficult to afford a place large enough to raise a family.

In a city that values respect and politeness, it speaks to how bleak the future looks for the youth when the argument of “upsetting the status quo” falls on deaf ears. They see the status quo as the system that allowed the previous generation to make huge gains in living standards as China expanded, but which condemns them, as China’s economy slows down, to a very different lifestyle.

The real estate dilemma directly ties into pro-democracy rhetoric; many of the city’s elite – with multi-billionaire Li Ka-Shing being the most notable example – are real estate tycoons. For them, a drastic change in the political system means upsetting the system that led to their success, and their subsequent relationship with Beijing.  Pro-democracy advocates hold the opposite view, hoping that universal suffrage can be a tool that will level the playing field for the next generation.

Which brings us to the 31st August decision by the Standing Committee for the National’s People Congress to offer Hong Kong its version of democracy. Under the new legislation, the Communist Party would vet two or three candidates, each of whom “loves the country and loves Hong Kong” and the city would vote between those candidates. Not to put too fine a point on it, as everyone now realises, the candidates would essentially be stooges of the Communist Party.

As it became clear that this was what was on offer, the protests gathered momentum and Occupy began, allowing the protesters to clarify their short-term goals. Their first goal – of convincing Beijing to back down and to allow universal suffrage – was optimistic, and demonstrators seemed to understand it was likely to be too ambitious.

“Maybe at the end there is no result, but that doesn’t matter, we have strength for (the protests). If we sit and do nothing we will regret it. That is our motivation, to show passion for the cause,” said Mr. Chan, a 20-year-old student at Hong Kong Polytechnic University who wished to use his surname.

The second objective was to impeach the city’s leader, Chief Executive C Y Leung. Pro-democracy advocates have dug in and this is a goal with less room for compromise.

Wong Yeung Tat, who founded Civic Passion three years ago, said, “The people on the streets here have the same point of view, for CY Leung to quit. I think if you asked, most people would admit that.”

For C Y Leung, when it rains it pours. Fairfax Media, which owns major media across Australia and New Zealand, broke a story on 8 October that, shortly before taking office, he received £4m in secret fees from his previous employer, an Australian engineering firm. In response, opposition politicians have vowed to have him impeached.

The debacle around CY Leung is why protesters hold onto the ideal of democracy, even though it is a political system Hong Kong has never experienced. “If C Y steps down it’s not good for us unless we get rights. There are so many C Y’s for the future,” 42-year old Ching told China Outlook.

Even though some rhetoric coming from anti-occupiers during their rally was pro-democracy, they just disagreed with the tactic of shutting down Hong Kong’s major arteries.

One of the major complaints, even by those sympathetic towards Occupy, was the impact the protests had on the economy. A week later, we can look back on the economic impact of the protests and spot one area where it certainly did hurt – retail. According to the Hong Kong Retail Management Association, most of its members recorded a “mid double-digit drop in retail sales” during the Golden Week holidays that are usually their most busy period.

Watches and jewellery, fashion and catering industries were the worst affected, particularly the small and medium-sized companies, whose sales fell by as much as 80%.

Over the last few years fewer tourists have been coming to Hong Kong, but the crippling of the major shopping centres in Mong Kok and Causeway Bay further dented retail sales. Government reports claimed sales dropped anywhere from 15 to 50% depending on the sector.

The other part of the economy, Hong Kong’s status as Asia’s financial hub, appears to have been minimally affected. As the protests died down, the government issued a statement saying, “Hong Kong’s stock and foreign exchange markets are functioning well and the financial system is in good order.”

Hong Kong’s benchmark index, the Hang Seng, peaked in August and was already dipping in September before the protests started. And as of publishing, the markets were slightly above where they started the year.

Further analysis of the impact of the demonstrations will become available in the next month, following the decision of the state council to commission a report into the impact of Occupy Central on Hong Kong’s economy.

What happens now? We appear to be entering a period of stalemate which ultimately favours the status quo ante. The Occupy protesters don’t want to give up until they have had what they refer to as ‘constructive discussions’ with Hong Kong officials. At the same time, the longer that Hong Kong is crippled, the more frustrated the general public will get with the protesters.

Discussions were scheduled for 10 October, but the Hong Kong government backed out of the talks.

This has been a problem; both sides are talking at each other, but they are not talking with each other. Since the start of Occupy the only form of communication between the two groups has been statements and press conferences.

Unless one side compromises, or use aggressive tactics, the protesters will continue to block the roads and the government will grapple the problem.

At the same time, the party leadership in Beijing is upping the pressure on the protesters, whom it has firmly denounced from the beginning, usually referring to the ‘illegal movement masterminded by a few hotheads’ or something similar.  Official media reports from Beijing say that the protests have cost in the region of HK$350bn and that if they continue will have a long-term effect on the economy of the former colony.

The reality is that the movement has put Beijing in an uncomfortable position. On one hand, President Xi Jinping can’t acquiesce to the protesters’ demands because it might embolden separatist movements in Xinjiang, Tibet and elsewhere.

Even more worrisome for Beijing is the possibility that the protests may inspire similar movements in parts of China  with a less contentious history. On 8 October acclaimed poet Wang Zang was arrested for “possession of an umbrella,” according to media reports.

On the other, the amount of support from the international community for Hong Kong has been immense. Suddenly, a powerful leadership that demands a significant role in international politics has egg on its face. President Xi Jinping surely faces some difficult choices in the next few days as the outcome of the protests is decided.

That’s quite an accomplishment from a group of activists who “just want to play hero.”

Hong Kong’s pro-democracy movement started years before, and will continue long after, the international media arrived. And when they shift their attention to other dramatic events, the city will debate its inner political turmoil. But Hong Kong has proven itself to the world. It is clear now to everyone that tens of thousands of people are capable of shutting down a city, grabbing the world’s attention and challenging China’s leadership; all through truly peaceful civil disobedience.

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