The youth are angry, but it’s business as usual for Hong Kong’s corporate elite as they embrace national security law

When U.S. Secretary of State Mike Pompeo declared that Hong Kong is no longer autonomous from China, many people in Hong Kong reacted with quiet satisfaction. If China was going to impose its sweeping and arbitrary national security legislation on the city, then at least Chinese and Hong Kong elites would suffer alongside the rest of the population.

But after the initial plunge in the Hang Seng Index the day after China’s National People’s Congress (NPC) dropped its bombshell announcement, the stock market has more than recovered its losses. Many business leaders in Hong Kong have welcomed the national security legislation in the hope that it will finally put an end to protests, which they view as a serious drag on the city’s economy.

The threat of American sanctions has largely been greeted with equanimity in the belief that they will not seriously affect Hong Kong’s status as an international financial center. In other words, the city’s commercial elite seem to think that Hong Kong’s future will resemble that of Singapore — more politically repressive, but nonetheless an attractive destination for foreign capital and expatriates.

The end of the cross-class coalition that opposed the extradition bill

While Hong Kong’s business establishment has long been pro-Beijing, it was not inevitable that it would so enthusiastically support China’s latest move. Last year, much of the business community was deeply skeptical of the (now-shelved) extradition bill — a piece of legislation that originated from the Hong Kong government, was subject to scrutiny from the Legislative Council, and was much less sweeping in scope than the current national security legislation. But after months of unrest in the city, senior business leaders appear to have grown weary of seemingly unending protests, prompting them to support China’s move with various degrees of reluctance as a painful but necessary step.

The fracturing of the cross-class coalition that forced Beijing to retract the extradition bill last summer has had tragic consequences for Hong Kong. As the protesters feel ever more beleaguered and embittered, their explicit embrace of a nihilist approach — best captured by the slogan “If we burn, you burn with us” — has alienated a large segment of moderates who do not desire the demise of Hong Kong as an international financial center. The rising popularity of secessionist rhetoric in Hong Kong, as epitomized by the slogans “Hong Kong independence, the only way out” or “Hong Kong people, build a state” — both frequently heard in the latest wave of protests over the past month — is almost as off-putting to the local business establishment as to party apparatchiks in Beijing. From the perspective of many business leaders, Hong Kong independence is a disastrous idea, one that threatens to eliminate the city’s raison d’etre and competitive advantage.

Chinese tourists and expatriates might be unpopular with Hong Kong’s youth, but the business sector recognizes their importance to the city’s economy and their own continued prosperity. Ironically, although the city’s business elite is overwhelmingly educated in the West, many of its members are genuinely convinced that China is destined to become the economic superpower of the 21st century. Despite their cosmopolitan upbringing and lifestyle, they have adopted a distinctively Chinese worldview in recent years. For them, Hong Kong’s future lies in ever-closer union with the mainland even at the expense of authoritarian backsliding and a curtailment in political liberties. The shift in the protest movement toward permanent defiance and perpetual confrontation with the CCP, let alone outright secessionism, threatens both the material interests and the worldview of Hong Kong’s business elites.

Seen from this perspective, it was perhaps inevitable that Hong Kong’s business leaders would — even in the absence of overt Chinese pressure — be at best ambivalent, at worst overtly hostile to the protests as they dragged on. And as HSBC’s current travails illustrate, the Chinese government has been placing immense pressure on both local and multinational businesses in Hong Kong to publicly support its policies. Given that Hong Kong’s populace has historically had a (sometimes undeserved) reputation for being focused on material advancement, though, the question remains as to why millions of ordinary citizens have expressed their willingness to “burn down” the city’s economy in their fight for freedom over the past year.

To be sure, there are many answers to this apparent conundrum. The role of rampant police brutality and lawlessness in radicalizing Hong Kong people beyond the relatively small hard core of “frontliners” has already been extensively covered elsewhere. But one often neglected factor is the glaring social divide between the city’s business elite and ordinary citizens. Millions of working-class and middle-class Hong Kong citizens feel that they have borne a disproportionate share of the social burdens generated by rising economic integration with China over the past decades, including unaffordable housing, competition for public schooling and healthcare, and the displacement of local businesses by ones that primarily cater to Chinese tourists. Shielded from the consequences of these disruptive social changes by their wealth, which allows them to pay for world-class private healthcare and top British or American boarding schools, Hong Kong’s elite has blinded itself to the depth of discontent simmering in the city over the past few years.

The most unequal society in the developed world

Before the anti-extradition protests evolved into a wider popular uprising, there were already signs of this discontent bubbling away under the surface. The 2016 Mong Kok fishball unrest, superficially sparked by a government crackdown on street hawkers, signaled popular anger at a government that often seemed contemptuous of Hong Kong’s cultural heritage in the drive for “progress.” In this, there are clear parallels to anti-gentrification protests in other developed economies. When activists in New York protested against Amazon’s proposed new headquarters, they argued that the needs of longtime residents should trump headline economic statistics — a sentiment that many protesters in Hong Kong would embrace. Faced with an economy that does not seem to work for them — Hong Kong is the most unequal society in the developed world — millions of ordinary citizens see no reason to refrain from more confrontational tactics in the name of oligarchic business interests.

The 2014 short film “Hong Kong Will Be Destroyed After 33 Years,” which briefly attracted media attention after it incurred the wrath of Chinese censors, offers a revealing insight into what many younger Hongkongers want. Far from embracing their city’s status as an international financial center, a generation brought up in an affluent but notoriously high-pressured society simply wants to be left alone to pursue a modicum of quiet prosperity. Their utopia is a Hong Kong that is liveable, one that is not dominated by large, oligarch-owned conglomerates that divide up much of the local economy in de facto cartels, and where housing is genuinely affordable. The late Sir David Tang (鄧永鏘 Dèng Yǒngqiāng) won the approval of local activists for his caustic remarks on the Belt and Road Initiative much touted by local elites seeking to win Beijing’s approval, precisely because he pointed out that grandiose Chinese initiatives did little to address popular grievances in Hong Kong itself and had next to no impact on the lives of most citizens.

Since last year, protesters have championed a “yellow economy” of small, independent businesses that support their cause as contrasted to the oligarchic conglomerates, which are seen to stand on the side of the Chinese government. In some ways, this was foreshadowed in the “Local Egg” scene of Ten Years, the 2015 dystopian film on the city’s future (available on Netflix) that now appears oddly prophetic. The current localist turn in Hong Kong politics first emerged more than a decade ago in the form of disjointed grassroots campaigns focused on the preservation of local monuments (e.g., the iconic Queen’s Pier in Central) and neighborhoods, with their distinctive small businesses and characteristics, from redevelopment. Then and now, officials and their business allies justified their decisions in the name of economic progress. What the past year of turmoil in Hong Kong has revealed is that when faced with a choice between unequal economic progress and being left to their own devices, a great many people in the city would happily choose the latter.

In many ways, the desire of Hong Kong people to be simply left alone is profoundly conservative, albeit a Burkean sense. For many protesters, what they are striving for is the preservation of Hong Kong’s distinctive cultural heritage, which encompasses everything from the use of Cantonese in the public sphere to the ubiquitous Hong Kong–style cafés, or cha chaan teng (茶餐廳 chácāntīng), dotted around town. In the West, we are no stranger to political movements that stand for the defense of an established way of life — of traditional communities and lifestyle — in the face of unsettling and dislocating socioeconomic changes imposed from above.

Hong Kong’s business elite may dismiss these sentiments as naïve, misguided, and foolish, but it is scarcely surprising that a generation of youth who face the prospect of growing up in an increasingly unrecognizable city should resist these changes so strongly, especially when they have largely been excluded from any benefits that Hong Kong’s “mainlandization” might bring. Part of the current anger in the city is directed against an elite who are insulated by their foreign passports and investments from a worst-case scenario. For many protesters, who by and large lack an immediate exit option, the cosmopolitanism of a business establishment that is vocal on the Black Lives Matter movement in America but also embraces national security legislation in Hong Kong is a sign that they have simply stopped caring about their home.

For almost as long as the city has existed, Hong Kong’s impending doom has been prophesied. Few thought that the crown colony could survive China’s political upheavals of the 20th century, but against all odds, it has prospered and thrived. Already, there are signs that the national security legislation may not spell the city’s end after all — after an initial plunge, the Hang Seng Index has more than recovered its losses, while analysts predict that U.S. legislation targeting Chinese companies listed on American stock exchanges may benefit Hong Kong’s stock market instead, with Baidu already contemplating a secondary listing in the city. But in many ways, this is a cause for sorrow, not celebration, as these developments will only deepen Hong Kong’s dependence on the Chinese economy and accelerate its “mainlandization.” In other words, Chinese state-owned enterprises and Hong Kong’s tycoons will continue to profit while inequality deepens.

The harsh reality is that even as thousands of protesters face years behind bars, the city’s oligarchs — the very people whom the protesters want to “burn with us” — look likely to escape with little more than a light brush with the flames.