The world’s richest man, Elon Musk, made headlines last week for an interview with The Financial Times in which he suggested Taiwan should become a special administrative zone of China. “My recommendation … would be to figure out a special administrative zone for Taiwan that is reasonably palatable, probably won’t make everyone happy,” he said. “And it’s possible, and I think probably, in fact, that they could have an arrangement that’s more lenient than Hong Kong.”
Besides the morality of his proposal and its claims about what is “palatable,” which have already been extensively critiqued within Taiwanese politics, there are two objective issues with his take. First, the actual autonomy China is offering Taiwan in terms of “one country two systems,” is factually decreasing for anyone who cares to compare its white paper proposals from 1993 and 2000 to its most recent effort this year. The commitment “not to send troops or administrative personnel to be stationed in Taiwan” is no longer present, for instance. But second, more fundamentally, what Musk appears not to care about in this fantasy of a deal plucked from thin air are the mechanisms that facilitated the deal he refers to in Hong Kong, which are absent in Taiwan.
For a brief outline of this major category error, we can go to Perry Anderson, writing in 2004: “As matters stand, the [Chinese Communist Party’s] only hope is that growing cross-straits economic integration will eventually persuade Taiwanese business of the advantages of reunification [sic],” he wrote. “This is a delusion, based on a false analogy with Hong Kong, where a deal behind closed doors with a handful of billionaires, in a city that had never known a breath of democracy under the British, was enough to clinch a political settlement satisfactory to Beijing.” And then most categorically: “No comparable magnates dominate the ranks of Taiwanese capital, which are both less stratified and much more numerous, while the business community as a whole enjoys significantly less political influence in a fully organized democratic system based on large mass parties. The chances of buying separation from a club of tycoons are virtually nil.”
Despite Musk’s proclamation, a run through of the key turning points in Hong Kong’s handover to China bears out Anderson’s point at every stage. And what’s more, we now have the benefit of recently declassified British government documents from the period to further substantiate claims about the process.
From the very beginning, the prompt for the British government in Hong Kong to approach Beijing about the issue came from “inquiries by accountants, insurers and the like.” They had questions over the future of leases, which tended to last 15 years, stemming from the fact that the New Territories in Hong Kong had been leased to Britain for a period of 99 years under the Second Peking Convention of 1898 and by the early 1970s that 1997 deadline was approaching. In 1971, for instance, the Regional Director of Shell wrote to the political adviser to the Hong Kong Government, Arthur Maddocks, requesting assurances over investments.
The responses to that pressure were no more democratic. The British government initially considered making the audacious suggestion that because China had never accepted the original validity of any of the Hong Kong treaties, the deadline contained within the New Territories treaty could simply be ignored, with “the Crown’s prerogative to govern beyond the seas” the proposed source of continued “authority.” However, in the end, when the British Governor of Hong Kong, Murray MacLehose, went into a meeting with Deng Xiaoping in 1979, he framed the issue “as a technical and commercial matter, as a means of sustaining investment.”
Deng in turn rejected that British pitch, but not by invoking the will of Hong Kong’s people either. Instead, he insisted that China already had sovereignty over Hong Kong and would take over its administration, while also offering the message that investors should “put their hearts at ease.” From there, on the British side, internal discussions devolved into a display of imagined imperial exceptionalism, whereby key state actors claimed their right to rule stemmed from the fact that only they could sufficiently appease business interests, as Matthew Hurst charts through analysis of recently declassified documents published in the International History Review journal.
As a quick sample: The British Ambassador to China, Sir Percy Cradock, wrote that “the Chinese have clearly not fully understood the concept, or the basis, of investor confidence” and “have not grasped the essential fact that it is continued British administration that is needed to maintain confidence.” British Home Secretary, William Whitelaw, stated directly that the economic argument in favor of British colonial control was definitive, writing: “the shere [sic] logic of what we were trying to achieve spoke for itself.” And ahead of flying out to meet Deng in 1982, British Prime Minister Margaret Thatcher, who would go on to publicly stress Britain’s “responsibility for the Hong Kong people,” emphasized in a ministerial meeting that “China did not understand that the maintenance of confidence and prosperity in Hong Kong required the continuation of British control and administration,” before offering to “coach” the Chinese on the importance of this message.
This imperial fantasy-enactment did not shift Deng away from his original position, but again it was not corrected with consideration of Hong Kong people on the Chinese side. Rather, ultimately, Deng told Thatcher that Britain could either accept “one country, two systems” or he would use military force to take the territory regardless. Furthermore, British documents show that when Deng did invoke the Hong Kong people in his meeting with Thatcher, it was sandwiched between consideration for “investors.” Note who gets the final say in one declassified British summary of Deng’s position cited by CNN: “The Chinese Government recognised that policies would need to be acceptable not only to the people of Hong Kong but also to investors including investors from Britain.”
So, while negotiations were famously supposed to take the shape of a “three-legged stool,” in the event this metaphor was only accidentally correct: Britain and Beijing made up two legs as advertised, but rather than the third leg consisting of Hong Kong’s population, it was actually the much smaller and narrower group of Hong Kong’s big business players who took its place. The invitation — coming from both Britain and China — for the population to express their views from the sidelines proved entirely hollow. “Both the Chinese and British governments have openly invited the people of Hong Kong to express their views,” lawmaker Wong Lam summarized in Hong Kong’s parliament in March 1984. “Yet how can they express their views if they have very little or no knowledge of what is going on?”
This closed-door process ultimately saw Britain agree to handover sovereignty and administration of Hong Kong to China in 1997, via the 1984 Sino-British Joint Declaration on Hong Kong. But the real culmination of the logic behind the process came in the writing of Hong Kong’s “mini-constitution,” beginning in 1985, as political economist and sociologist Ho-fung Hung explained in a 2010 New Left Review essay:
“In 1985, Beijing set up a Drafting Committee and a Consultative Committee for the creation of the Basic Law, which was to be the mini-constitution of the future [Hong Kong Special Administrative Region] … The Consultative Committee was to keep the Drafting Committee informed of public opinion, and included 180 representatives, all appointed by Beijing, from a wide range of social backgrounds and political orientations. As its name implies, it had no formal power over the Drafting Committee’s deliberations. The Drafting Committee was the sole authorized body in the framing of the Basic Law, and was chaired by Ji Pengfei, former [People’s Republic of China] foreign minister and veteran of the Long March. Of the committee’s 59 members, 36 were Chinese officials and 23 Hong Kong residents. Among the latter, businessmen predominated — millionaire magnates such as Pao Yue-kong and Li Ka-shing were members, as were banker David Li and entrepreneurs such as Ann Tse Kai, Henry Fok and Cha Chi Ming. There were two representatives from CCP-affiliated unions, and just two from the Democrats, Martin Lee and Szeto Wah.”
What were the consequences of this arrangement? Lee and Szeto were both removed after denouncing the 1989 Tiananmen Square massacre. Last-ditch British attempts at democratization proved superficial. While the number of directly elected seats in the The Legislative Council of the Hong Kong Special Administrative Region increased, individual voting for Functional Council members was abolished after 1997. And in 2020 China imposed the national security law, one effect of which was to allow pro-democracy legislators to be disqualified from Hong Kong’s parliament, which was described by the British government and others as a breach of the terms of its deal with Beijing.
Of course, Elon Musk likely won’t care about any of these practicalities (as with so many edgy “pragmatists” who think the world is so simple, he seems not to care much for details). But whatever happens in Taiwan, systematically cutting out the population in favor of appeasing a much smaller group of business interests would be much harder to do off the back of 30 years of democratic engagement. Especially as, even before that, China appeared to know Taiwan would be a more difficult case. It actually borrowed the “Twelve points” that eventually formed its agreement with Britain from the “Nine Points” it had originally written for Taiwan.
Musk lives in the business world, where population-wide democratic accountability is an alien concept, and deals can be forced over the line with money. That happens to be a pretty direct analogue for the way negotiations worked in Hong Kong. That doesn’t make it a universal template.
Image: NASA, Joel Kowsky
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