LI XUEYING, HONG KONG CORRESPONDENT

HK crisis: Joint effort needed to break impasse

Both Hong Kong and Beijing share responsibility for the current crisis and need to work towards an equilibrium.

Unlike in many other societies, Hong Kong does not have a party finance law prohibiting external donations to pre-empt outside influence on domestic politics.

And if it did, one tricky question is: Would contributions from mainland China fall under this category? Should, say, the Chinese Communist Party (CCP) be disallowed from donating to pro-Beijing parties in Hong Kong?

That unsettled issue illustrates the swathe of grey that exists in the "one country, two systems" (1C2S) model, which has governed the relationship between Hong Kong and mainland China over the past 17 years.

Deng Xiaoping's formula - with its reassuringly vague tenets such as "a high degree of autonomy", "Hong Kongers governing Hong Kong" and "no change for 50 years" - was a political masterstroke, calming the city and global investors ahead of its 1997 handover from British to Chinese rule.

"The horse races will continue, the dances will continue, and so too, the stock market," Deng famously declared at the time.

But what happens when Hong Kongers want more than horse racing, dancing and punting on the market - as evidenced in the ongoing protest to demand for greater democracy?

Though the Basic Law seeks to delineate the exact scope of autonomy that Hong Kong enjoys, the fact is there is room for negotiation, within certain boundaries.

As historian Steve Tsang observes, China's policy is one of "exercising maximum flexibility within a rigid framework".

Beijing has its non-negotiable red lines, including not tolerating any moves towards independence or any developments seen as subverting or challenging fundamentally the CCP's rule. "But within such confines, Beijing will exercise as much flexibility or pragmatism as possible. The definition of 'a high degree of autonomy' is therefore inherently open to interpretation," Prof Tsang says.

What the current political crisis - Hong Kong's worst since 1997, if not 1967 when riots gripped the city - has thus shown is both sides' failure to find an equilibrium within that grey area.

Both have to bear their share of the blame for this.

Beijing started out well in the initial years after the handover. At the 1997 handover ceremony, then Chinese President Jiang Zemin stressed that "no central government or locality may or will be willing to interfere in the affairs" of the Hong Kong Special Administrative Region.

When the city's pro-Beijing loyalists lobbied the central authorities in 1998 to get the taxpayer-funded broadcaster RTHK to toe a more conservative line, Beijing's reply was that "under 1C2S, we won't interfere".

In 2003, when half a million Hong Kongers marched in opposition to an anti-subversion law - mandated by Article 23 of the Basic Law - it was dropped, albeit unhappily so, illustrating a certain deference to the 1C2S model.

Behind the scenes, however, doubts were creeping in.

"Beijing kept asking, why have we not won the hearts and minds of Hong Kongers, given that we have worked in their best interests?" recalls constitutional law expert Johannes Chan, former law dean of the University of Hong Kong.

For various reasons - inadequate information fed to Zhongnanhai likely among them - Beijing drew certain answers and a certain narrative gained traction: Hong Kong was "a spoilt child" who had to be taught to toe the line.

There appeared to be little understanding of the Hong Kong psyche in the capital. Beijing tightened the screws over the years, with increasingly visible interventions such as those regarding the media and elections, which simply led to growing alarm in Hong Kong.

The latest was the Chinese Parliament's unnecessarily ham- fisted ruling on the chief executive election announced in August, which precipitated today's state of affairs.

But Hong Kong is culpable too.

To maximise its space, it has to do two things in tandem - reassure Beijing that it has no intention of going rogue, while quietly pushing the boundaries for its freedoms, says Prof Tsang.

Besides Article 23, the people protested against the implementation of national education in 2012. But while the protests were triumphs in overturning unpopular government policies, they were unhealthy for the 1C2S relationship in the long run.

"Relying on mass movements is a bad move as it causes concern in Beijing and thus a more conservative interpretation of how the red lines must be upheld," observes the academic.

Successive Hong Kong administrations, meanwhile, failed to protect the city's autonomy.

In a politically expedient move, the first chief executive Tung Chee Hwa sought a National People's Congress reinterpretation to overturn a Court of Final Appeal ruling that children of mainland migrants were entitled to the right of abode. This had two effects: It undermined the independence of the city's judiciary, and the government's then campaign to drill into the populace a fear that mainland migrants were going to gobble up resources certainly did nothing to cultivate any love among Hong Kongers for their mainland brethren.

Grandstanding pan-Democrat politicians did little better. Radical politicians understandably have their constituencies to play to. But so-called moderates from parties such as the Democrat Party or Civic Party, by gratuitously boycotting trips to Shanghai and Shenzhen to meet mainland officials, have failed to build up any modicum of trust with the central government - and now decry that they are being shut out of the chief executive election process.

The missteps on both sides meanwhile come amid broader winds of change: the internal politics of China where competing cities from Shanghai to Tianjin are clamouring for preferential treatment, tensions on the country's periphery, and Hong Kong's dwindling economic influence vis a vis a more confident if not arrogant central power.

That said, the 1C2S model, while in crisis, is not dead. Hong Kong certainly needs it, and so does China - still. Under Mao Zedong, Beijing saw the need for Hong Kong to be kept separate, surmising correctly that a socialist China requires Hong Kong as a window to the world.

Today, that utility remains.

So long as the Chinese capital account remains closed, Hong Kong's rule of law, institutions and open economy mean that it fulfils a valuable role as an offshore centre that helps capitalise state-owned enterprises and yuan internationalisation. Last year, investment from Hong Kong made up two-thirds of all foreign direct investment inflow into China, amounting to US$78.3 billion (S$101 billion).

There is also the matter of "face" and prestige in ensuring that the 1C2S model does not collapse in a heap of ignominy. And although Taiwan has long rejected it as a formula for any reunification, it remains a useful tool for political rhetoric - as President Xi Jinping illustrated when he declared in September that 1C2S was the only platform for dialogue between Taipei and Beijing.

So, the question is, where does it go from here, and how can the pieces be picked up?

The overwhelming fear is that the vicious circle will continue.

However the current crisis ends, many believe Beijing will take away from it the lessons it has drawn from past social movements, viewing the young protesters as mere idealists, believing that a more hardline crackdown is the way to go and narrowing the space for Hong Kong.

Meanwhile, it is not clear how a polarised Hong Kong can move ahead, with a distrusted chief executive and no clear leadership vision, further disenchanting the populace.

The one good thing, says Prof Chan, is that long-festering tensions have been brought out into the open. At least, he notes wryly, "we know that we have a crisis".

xueying@sph.com.sg