It’s the Sunday after the Queen’s death, a day of hazy heat in Hong Kong, and two yachts have dropped anchor side by side off the island of Lamma to the southwest. The bay is absurdly pretty — green water, children playing in the sand, rickety restaurant serving clams and lobster. A few other boats idle on the tide, including a traditional wooden junk called Basic Law — a wry nod to the mini-constitution drawn up for the territory by China before Britain handed it back in 1997.
The mood aboard the neighbouring yachts is as jolly as the weather. There is champagne, cold noodles and hot chicken wings. There is swimming and paddleboarding, then mooncake — the dense, salty-sweet egg treats eaten for the Chinese mid-autumn festival. One of the owners is celebrating a significant milestone, so there are rounds of Happy Birthday in English and Cantonese. There is a lusty burst of God Save the King, followed by increasingly raucous renditions of Delilah and Bohemian Rhapsody. Amid the merriment, one of the party gazes across the water to the white residential skyscrapers shimmering in the distance. “You see?” he says, cocking an ironic eyebrow. “This is the hell that everyone is fleeing from.”
Welcome to the lesser-seen side of Hong Kong in 2022. Asia’s world city has been battered by the pro-democracy protests and riots of 2019, Beijing’s imposition of a sweeping national security law and Covid restrictions so tight that at one point they turned it into Asia’s walled city. Opposition politicians have been jailed, newspapers closed and schooling disrupted. Hundreds and thousands of locals and expats have left; the economy is in recession. Hong Kong lost its crown as Asia’s top financial centre to Singapore in a closely watched index published last month.
The boss of Cathay Pacific, Hong Kong’s flag carrier, has said it won’t get back to its pre-Covid flying schedule until the end of 2024 at the earliest. Virgin Atlantic has pulled out altogether. Willie Walsh, the former chief executive of British Airways’ parent company, said last month that Hong Kong had “lost its position” as the region’s aviation hub. A gloomy international consensus has descended over Lion Rock, the crag said to symbolise its can-do spirit and freewheeling culture.
“It’s impossible to argue that Hong Kong hasn’t changed, and changed pretty fundamentally,” says Lord Patten of Barnes, the last governor, who clashed with Beijing over his attempts to bring in democratic reforms in the run-up to the handover 25 years ago. “I think it will steadily become more like [the mainland Chinese city of] Shenzhen, with a few shards of British expatriate influence. But it’ll have more and more people leaving.”
The vast air-conditioned malls are undeniably quieter. Traffic jams have become a rarity. Taxi licences, a key barometer in this previously bustling city, have tumbled in price since 2018 to HK$5.2 million — about NZ$1.1m. In 2013 they touched a record high of NZ$1.5m. (Licences tend to be bought by wealthy investors who then employ drivers.)
Covid rules overlap with the crackdown on civil freedoms. Booming audio messages remind visitors to public places that gathering in groups of more than four is illegal (recently relaxed to 12). Facemasks are worn almost everywhere, adding to the sense that Hongkongers have been muzzled. In a place where lively political debate used to be the norm, people have become wary of crossing an invisible line laid down by the national security law. Sometimes there is a tangible atmosphere of paranoia. “Sorry!” messages one of the few pro-democracy activists not behind bars, as he declines to meet me. “Big Brother is watching me.”
Beijing’s suppression of dissent moved to British soil in shocking fashion earlier this month. A Hongkonger protesting outside the Chinese consulate in Manchester was dragged into its grounds and beaten by staff — including, according to footage posted online, Beijing’s consul-general in the city. Zheng Xiyuan was seen pulling the protester’s hair but denied beating, or allowing beating. The incident prompted outrage. Alicia Kearns, Tory chairwoman of the Commons foreign affairs committee, described it as a “chilling escalation” of Beijing’s attacks on free speech. She called for those involved to be prosecuted or expelled from Britain.
Despite all this, the sentiment towards Beijing is far from uniform in divided Hong Kong. The liberal and the young look on aghast as children’s publishers are jailed for sedition and musicians are arrested for playing protest songs. But many middle-class Hongkongers and expats lost patience with the pro-democracy movement of 2019 as peaceful demonstrations mutated into violence, accompanied by unrealistic demands for universal suffrage — the complete freedom to elect both Hong Kong’s chief executive and members of its parliament — and even independence from China. They quietly welcomed the national security law, or NSL, which they credit with restoring order to Hong Kong’s streets. This section of society has scant sympathy for the media outlets that have been shut down by the government, or those thrown in prison for their roles in the unrest.
“It’s not a fundamental human right to set the MTR on fire,” says Tim Huxley, the chairman of Mandarin Shipping, drily referring to the way rioters targeted the city’s Mass Transit Railway subway system after police went on the rampage against protesters in a sealed station.
The awkward truth is that some British expats prefer a becalmed Hong Kong. Nick Loup, the British chief executive of Chelsfield Asia, a property company with investments in Hong Kong, Shanghai and Singapore, says: “I was delighted when the NSL came in, along with most of the business community, because there was a risk of Hong Kong going out of control. I have absolutely no worries whatsoever [living under the NSL]. I’m not about to start a movement to try and overthrow the Hong Kong government or try and bring down the Communist party in China. I can think of other major cities in Asia where, if you undertook any of those activities, your feet wouldn’t touch the ground.”
The two main factions in Hong Kong’s post-2019 politics are crudely labelled yellow (anti-Beijing, pro-democracy) and blue (pro-Beijing, conservative). Those of a bluer hue are inclined to believe that the easing of Covid regulations will usher in a rapid economic recovery. At their harshest, Hong Kong’s border controls demanded that incoming travellers spend 21 days in hotel quarantine. But last month John Lee, the former police chief who replaced the deeply unpopular Carrie Lam as chief executive in July, cut the quarantine period to zero. New arrivals are still excluded from bars and restaurants for three days, a requirement business leaders are pressing Lee to drop.
Richard Winter, a banker who moved east 37 years ago as an “impecunious” junior accountant, reckons the ingredients for a mini-boom are “all in place”. “Hong Kong is drama central,” he says. “It’s volatile, but it always bounces back remarkably quickly. It happened after the handover in 1997, after Sars, after the global financial crisis. Our assets are our people and our connectivity. The people want to improve themselves, and that’s infectious.”
That view is sharply at odds with what you tend to hear from young Hongkongers. As travel slowly returns and expat life goes on in the bubbles of luxury hotels and private members’ clubs, many mourn the gradual erosion of their identity — and fear further encroachment by China. Yen Wong, an academic administrator, was just 11 at the time of the handover. Yet as she lays flowers in memory of the Queen outside the British consulate, she says Hongkongers “treasured” the governmental structures Britain left behind. “These past few years we’ve seen so much change,” she says. “And something has been damaged.”
Captain Charles Elliot laid the groundwork for those structures when he planted the Union Jack on an island below the Pearl River estuary in 1841. Elliot, the chief superintendent of British trade in China, was attracted by its deep natural harbour — although Lord Palmerston, the foreign secretary, lambasted him for seizing a “barren rock”.
China ceded Hong Kong to Britain the following year as part of the settlement ending the First Opium War. Two more of what China came to call the Unequal Treaties expanded Hong Kong’s territory into the mainland. The third, the 1898 Convention of Peking, secured the New Territories — but only on a 99-year lease.
By the late 1970s, with the lease expiry hoving into view, it was clear that keeping Hong Kong as a British colony would be impossible. The city was nonetheless on the cusp of its explosion into a global financial centre in the go-go 1980s, when it became a honeypot for thrusting young expats lured by plentiful opportunities and a top tax rate of 15 per cent. They were unkindly dubbed the Filth (Failed in London, Try Hong Kong).
Two years before signing the 1984 Sino-British joint declaration that set Hong Kong on the path to handover, the Chinese leader, Deng Xiaoping, reassured Margaret Thatcher that “Horses will still run, stocks will still sizzle, dancers will still dance”. Deng’s ingenious “one country, two systems” formulation squared the circle of integrating a vibrant capitalist entrepôt into a rigidly controlled communist state.
But the Tiananmen Square massacre of 1989 sent a jolt of horror through Hong Kong. Patten, who was made governor after losing his seat — Bath — in Britain’s 1992 general election, spent the five years up to the handover rowing with the Chinese as he tried to install democratic reforms at the 11th hour. He managed to push through a watered-down version of his plans, only to see Beijing disband Hong Kong’s Legislative Council (or Legco) as soon as it took over.
Patten says negotiating with “Chinese hacks” was “like shaking hands with a bacon slicer”. “They went back on the promises they’d made very explicitly about the development of accountability and democracy,” he says. Regina Ip, a senior pro-Beijing politician who was made security secretary shortly after the handover, counters: “Don’t forget, the British only tried to push democracy when they knew they were leaving. Why didn’t they give it to us much earlier? Hong Kong was a bureaucrats’ paradise. It was an autocracy.”
The run-up to the handover was marked by headlines warning that Hong Kong was finished. The territory was in a “wary dance with destiny”, warned The New York Times. On July 1, 1997, Patten bowed his head as the emollient strains of Elgar’s Nimrod floated from the strings of Hong Kong Philharmonic Orchestra and across Victoria Harbour. Patten, his wife and their tearful daughters boarded HMY Britannia with Prince Charles, and the last of the British Empire sailed into the rainy night. The Royal Navy decamped from the Prince of Wales barracks in Admiralty, near the city centre, and the People’s Liberation Army marched in.
And then nothing much happened. Two weeks after the handover, Time magazine’s front cover carried the headline “New guard in Hong Kong”, with a picture of a Chinese soldier staring sternly ahead. A decade later Time coined the term “Nylonkong”, putting Hong Kong in the same bracket as New York and London. “How three connected cities drive the global economy,” it gushed.
Hongkongers sympathetic to Beijing marvel at the way China allowed it to continue as a financial “playground” for almost a quarter of a century. It enjoyed largely the same freedoms as before, with a lively media and politics, and a hedonistic expat scene that came with a dark side — as exposed by the conviction of British banker Rurik Jutting for the cocaine-fuelled torture and murder of two prostitutes in 2016.
The Basic Law always envisaged the enacting of a national security bill. An early version of that bill had to be pulled in 2003 after huge demonstrations and a split in Legco. Christine Loh, then a centrist member of the council, now a government supporter, regrets her part in killing it off. She suggests that implementing it would have helped avoid the turmoil of 2019 because Beijing would already have had a tighter grip on the city. “I objected to that bill in 2003,” she says. “But my God, I wish we’d passed that bill. I was definitely in the school of, ‘Let’s try and resist this.’ Now we’re all crying over spilt milk.”
The ascent of Xi Jinping in 2012 changed Hong Kong’s future, as it did China’s. In August 2014, responding to demands for more democracy in the selection of the chief executive, Beijing declared that two or three candidates could be put to a vote, provided it vetted them first. Legco rejected the offer: the vetting was unacceptable.
“We really made a huge mistake,” Loh says. “I mean, this was Xi, willing to take the risk of allowing Hong Kong to directly elect the chief executive. Now that we look back, it was really big. But we said, ‘Stuff that — we don’t want it.’ And Beijing said, ‘OK. You don’t want it? Fine.’ "
After that, the political weather darkened. The 2014 umbrella protests — so called because demonstrators used them as shields against the police’s tear gas — were followed by the state kidnapping of five booksellers who peddled gossipy titles about China’s elite. In 2016 six pro-independence candidates were disqualified from Legco elections, prompting more protests. Lam’s attempt to bring in a law allowing extradition to China — ostensibly in response to a Hongkonger’s alleged murder of his girlfriend in Taiwan — sparked the mass movement that turned into pitched battles with the police and culminated in a siege at Hong Kong Polytechnic University.
There were allegations of police brutality and state-sanctioned thuggery by triad gangs on one side, indiscriminate violence and vandalism on the other. With her tone-deaf leadership, Lam fanned the flames. By the end of 2019, Hong Kong was slipping into chaos. The unrest continued into 2020, even as Covid swept in. More than 10,200 people were arrested; more than 2800 were prosecuted.
Cool heads called for an amnesty for offenders of all stripes and an independent inquiry. Instead, Beijing imposed the NSL, criminalising acts of secession, subversion, terrorism and collusion with foreign forces in what a leading barrister describes as “fantastically vaguely defined” terms. The maximum sentence? Life in prison.
When it came into effect at 11pm on June 30, 2020 — an hour before the 23rd anniversary of the handover — the Hong Kong paradigm shifted.
Claudia Mo was looking forward to becoming a grandmother and spending more time teaching when the police smashed through the door of her flat in Repulse Bay, a smart beach enclave on Hong Kong’s south side, early one morning in January last year.
Mo was among more than 50 political figures arrested for their part in organising unofficial primaries ahead of the September 2020 Legco elections. The primaries were designed to whittle down the list of pro-democracy candidates to the strongest, to increase their chances of a majority. In the event, the September plebiscite was postponed on Covid grounds. Mo resigned from Legco, alongside 14 other opposition council members, and planned to retire from politics. But at the start of 2021 she and 46 others — known as the NSL 47 — were charged with conspiracy to commit subversion. Prosecutors said their bid to get a pro-democracy majority was an attempt to “undermine the proper functioning” of Legco and “paralyse” the government.
Mo’s husband, the 79-year-old British journalist Philip Bowring, is allowed to visit her for 15 minutes a day at the Lo Wu Correctional Institution near the border with Shenzhen. Separated by a screen, they speak using phones. Mo can read books and is studying French, but prisoners can be put into solitary confinement for apparently trivial offences. She was denied bail on the basis that she had exchanged WhatsApp messages with western journalists.
The NSL’s reference to collusion with foreign forces reflects Beijing’s belief that the 2019 protests were whipped up by the CIA and Taiwan. In practice it can mean anyone from abroad, including the press. Hong Kong’s high court said it could not be satisfied Mo would “not continue to commit acts endangering national security”. Mo and ten of her co-accused have pleaded guilty. The NSL 47 face trial without a jury.
More than 200 people have been arrested for national security offences since summer 2020. More than half have been prosecuted, including big fish such as Benny Tai, the former Hong Kong University law professor who helped initiate the 2014 protests and co-ordinated the unofficial 2020 primaries, and Jimmy Lai, who entertained, informed and scandalised for two and a half decades with his Apple Daily newspaper.
Smaller fish have also been caught in Beijing’s net. Five speech therapists were jailed under a colonial-era sedition law for publishing a series of books depicting a village of sheep struggling to fend off wolves (a judge condemned them for “brainwashing” children with anti-China allegories). A man with a harmonica was arrested for playing Glory to Hong Kong, a 2019 protest song, at a vigil for the Queen outside the British consulate. This month, a group of five became the first teenagers to be sentenced under the security law. They will spend up to three years at a correctional facility.
Emily Lau, one of the few pro-democracy figures still at large, says she advises the students she mentors: “In these difficult times, be wise, be brave and be careful. When they say, ‘Oh, those are contradictory!’ I say, ‘That’s life.’ So that’s what we need to do. We won’t lie flat — that’s the expression on the mainland: just lie flat, do nothing … The game is not over, and we still have to do our best to fight for what we believe in, which is the freedoms guaranteed under China’s policy of one country, two systems.”
In the bar of the Foreign Correspondents’ Club (FCC), which resembles a country pub, a pro-democracy politician who gave up his role after the NSL is more defeatist. He says the law’s potentially limitless scope makes it difficult to know what can be said. “It’s like shifting sands,” he says. “I’m keeping my mouth shut like everyone else, because it’s all-encompassing. The social media debate we used to have is dead. Lots of my friends are in jail. It’s just f***ing weird, visiting your friends in jail. These aren’t bad people — they just expressed a different view.”
Even the FCC, the backdrop to booze-soaked scenes in John Le Carré's The Honourable Schoolboy, is no longer a refuge for the provocative. The club scrapped its human rights awards in April for fear of transgressing the NSL — and when a motion was passed reaffirming its commitment to press freedom a month later, more than half the board abstained.
The British expat and property executive Nick Loup is enthusiastic about the national security law. The 62-year-old arrived in Hong Kong at the end of 1992. He says he never thought he’d see anything like the events of 2019 in his law-abiding adopted home. “Hooligans came marauding, vandalising buildings in the middle of Central,” Loup says. “I saw disgraceful, unprovoked violence by these people on normal Hong Kong citizens, for no good reason.”
Loup tells a story about an incident he witnessed outside the Landmark Mandarin Oriental hotel in November that year in which a young Chinese man who was clearing bricks off the road to allow a bus to go through was set upon by “a bunch of black-clad thugs — about half a dozen of them, obviously quite young … This is the sort of incident that was going on all over Hong Kong. The girls in my office were scared to come to work by public transport. As for police brutality, I’ve never seen such kid gloves used by a police force.”
Hong Kong’s chief executive Lee, however, is now pledging to bring in yet stricter national security legislation.
Stand on the Kowloon side of Victoria Harbour, look across at the main island and you can savour the skyline that launched a thousand deals. Barring typhoons, at 8pm every night a spectacular laser show lights up the skyscrapers. Among the grandest are Jardine House, home to the Jardine Matheson conglomerate, HSBC’s Norman Foster-designed headquarters and the Standard Chartered building.
In one sense, Hong Kong has declined in economic importance to China. In 1997 it accounted for 18 per cent of the motherland’s GDP. Last year that figure was 2 per cent. But with its dollar-pegged currency and western-style regulatory system, it remains a unique gateway between the mainland and the outside world, channelling two-thirds of China’s foreign direct investment.
For companies such as Jardines, HSBC and Standard Chartered, Hong Kong is crucial. HSBC may have 15 million customers in the UK, but Hong Kong alone accounts for almost a third of its profits. Two years ago the trio attracted ire in the West for publicly backing the NSL. There was an element of menace from Beijing. Chinese media had warned that HSBC would “lose all its clients” if it stayed silent.
Behind the scenes, China has been more concerned about the NSL’s impact on confidence. A few months after the NSL’s publication, officials from the British Chambers of Commerce (BCC) were invited for an audience with the deputy commissioner, where they were assured, in English, that the law wouldn’t touch the commercial sphere. “The message and mood changed completely,” a source says.
China likes to position the NSL as a prerequisite for Hong Kong’s involvement in the Greater Bay Area, a planned network of 11 cities with a combined population of 86 million and GDP of $1.7 trillion. The ambitious but vague vision is to knit together an area stretching from Zhaoqing in the west to Huizhou in the east, turning it into a finance and tech megapolis to rival Silicon Valley. The BCC, whose members include BT and the accountancy giant KPMG, has become supportive of the national security law, partly for that reason.
There are signs, though, that China’s fiercer nationalism, if not the NSL itself, is already affecting the domain of Mammon. The boss of Cathay Pacific stepped down in 2019 after the airline initially said it would not stop staff taking part in protests. It is majority-owned by the Swire conglomerate — like Jardines, one of the original colonial-era trading houses known as “hongs”. HSBC has become the first foreign bank to install a Chinese Communist Party (CCP) committee in a Hong Kong subsidiary. The Swiss bank UBS is hiring “content reviewers” to make sure that Chinese-language research published by its analysts is free from “sensitivities”.
Gweilos — Caucasians, or literally “white ghosts” — still enjoy a privileged position. Their children tend to go to international schools, which have so far been spared the introduction of “patriotic education” that has caused an exodus from state schools. (There, teachers have been told to study Xi’s speeches; textbooks have been revised to say that Hong Kong was not a colony but an occupied territory under the British.) Access to western media remains unrestricted for all. No executive or their children has fallen foul of the NSL for an ill-judged post on Facebook — at least, not yet.
Hong Kong’s economy desperately needs something resembling glasnost. GDP fell by 3.9 per cent in the first quarter of this year and 1.4 per cent in the second. Once-buzzing strips such as Staunton Street in Soho are pockmarked with closed bars and restaurants, the scars of almost three years’ stringent Covid controls. The population declined by a record 1.6 per cent in the 12 months to June, to 7.3 million, as a net 95,000 people left. New luxury flats are going unsold. The Hong Kong General Chamber of Commerce surveyed 4000 of its members and found that 30 per cent of big companies were either considering quitting or had already gone in the first half of the year. Ten per cent said they weren’t coming back.
Hong Kong’s chief executive Lee has vowed to “trawl the world for talent” in a bid to revive the city. He has rustled up sweeteners ranging from tax and visa concessions for foreign workers to a plan to give away 500,000 free air tickets.
Long term, Hong Kong faces deep structural problems. At an average cost of 23.2 times the median income, its housing is by far the most expensive in the world, with a generation all but locked out of ownership. Some 220,000 people — about 3 per cent of the population — live in subdivided flats and cage homes, tiny boxlike units stacked floor to ceiling and separated by thin wire mesh. There is a six-year wait for social housing.
Above all, Hong Kong is profoundly socially fractured. You can find people who think it is going to roar back and people who think it is moribund. You can find Tiananmen Square deniers and Uighur concentration camp deniers, and people who think Xi is this century’s Adolf Hitler.
Sometimes, the dotted line runs through individuals. Christopher, a polite, bespectacled 22-year-old, was arrested in the 2019 protests and charged with unlawful assembly. With the help of Project Change, an apolitical group set up to rehabilitate offenders, he got a lawyer and did several internships before his trial last year. The magistrate looked leniently on him, so he served a few weeks in jail rather than the typical six months. He is now back at university. He says his commitment to democratic values is undimmed by his prosecution and that the “state’s desire for me to love communism has not changed me a single bit”. A lot of his friends are “still suffering” because of their pro-democracy activities, he says. “There are changes happening that are making Hong Kong become more like China. Those changes are pretty hard for a Hongkonger to accept.”
Christopher doesn’t plan to join the outflow of young people: he feels it is his duty to stay and keep speaking Cantonese. “It may not be very good for me, but it’s my home,” he says. “The worst scenario is that Hong Kong just becomes a Chinese city. What I need to do is maintain my identity.”
It seems likely that Hong Kong’s future will be similarly partitioned. If the final Covid restrictions are dropped and a sense of normality returns, travellers should be back in their droves. The economy may well judder back onto its pre-2019 path. The splashing and whooping will continue on the beaches of Lamma. But that exuberance has to coexist with a churning mass of angst and opposition to Beijing among many Hongkongers. The question is whether it will ever burst to the surface again and jeopardise the whole edifice.
Written by: Oliver Shah
© The Times of London