Whether or not you’re invested in Asia, what happens in Hong Kong will affect markets around the world. Of course, there’s more than just money at stake. Lives are on the line. Many thousands of lives.
On Sunday, it looked like Hong Kong was on an irreversible path to violence. Fortunately, that didn’t happen.
By Sunday night, the protest lost steam. Student protesters started to abandon some of their strongholds. It looked like the government’s warning that it would take actions to stop the protest by Monday had worked.
Some protestors believed this was not over and they needed to regroup.
Others believed the first stage of this protest might be close to an end, but that the long term ‘struggle’ had just begun.
What all sides have in common is concern for Hong Kong’s future.
There are a few core issues you need to be aware of.
Let’s start here.
Hong Kong residents, particularly the younger generation, suffer from an identity crisis. Put simply, the youth don’t believe they are Chinese.
So what are they? They don’t really know. Perhaps they are just that — Hong Kong youth.
Then what is this protest all about? Is it still about democracy? Is it about freedom? Is it about the welfare of Hong Kong?
In truth, it’s about all these, and more. The protesters want Beijing to fulfil its end of the bargain. They want democracy. They want freedom of speech, the freedom to protest and the freedom of choice.
But is it also about the welfare of Hong Kong? The protesters believe so. They believe Hong Kong will be better with universal suffrage.
In principle, they may be right. They don’t want Hong Kong to be like China, and they don’t consider themselves Chinese.
Except there is one problem, Hong Kong IS part of China.
Hong Kong is a ‘Special Administrative Region of the People’s Republic of China’.
With a population of seven million and GDP of $405 billion, Hong Kong is, after all, just a small city in China.
The current dilemma for Hong Kong’s people is whether they should consider themselves Chinese. Or should they perhaps declare independence? Because they are so different from China, some say. Like Tibet, Xinjiang and Taiwan.
The Western media portrays Hong Kong protesters as freedom fighters and democracy champions. You’re lead to believe that on the opposite side there must be fascism, right?
But it is not. The opposite of the Hong Kong protest is not fascism; it is patriotism.
How can this be? Well, it’s because the protesters don’t know who they are.
Patriotism in China is no different from patriotism in Japan, Britain, the US or Australia. Generally speaking, as patriotic citizens, we want to keep our people all together. We want our countries to be strong and united.
But different people may have a different idea on how to make that happen.
The Hong Kong protesters seem to believe it is all about Hong Kong. What they keep forgetting is that it is not about Hong Kong. It is about the national interest of China.
There are a lot of people they shouldn’t forget about, some 1.3 billion of them.
But we can’t blame the protesters for who they are. The ‘one country, two systems’ model allowed a lot of freedom of thought in Hong Kong. These students have not been filled with ‘red’ thoughts. Instead, the British tradition and the force of globalisation are very strong in Hong Kong.
The more freedom they got, the more problems they saw in an authoritarian model.
And with the freedom to protest, they naturally took to the streets with, perhaps, more questions than answers.
Actually, they were looking for an answer.
And in the most peaceful way possible, they got it.
The angry child now learns its place.
Democracy symbolizes freedom, justice and choice, but it is not those qualities. Democracy is an idea, a structure of government, law and society.
Communism and socialism, on the other the hand, are also ideas, ways of governing a society. It was popular for a time. But today only a few countries still adopt this form of government.
There is no need to get into a debate about which one is right or wrong. At different stages of civilizations, one may be more suitable than another.
Hong Kong has been an open society for a long time. It is very westernized and very British for obvious reasons. The problem is China does not operate on those values.
It is hard for the protesters to accept this new arrangement.
Your long lost mother takes you home to a completely new family. It is poor and dirty, and everything you see sickens you. Nobody wants to be that kid. That kid is Hong Kong.
Now, in the face of violence and war, even the students’ stark determination is shaken.
They’ve heard about Tiananmen Square. BBC did a really good documentary on it.
They have no doubt also heard one of the most quoted sayings in China: ‘Political power grows out of the barrel of a gun’— Mao Zedong.
They don’t want to be Chinese, yet there is no turning back.
What will happen?
Some believe this is just the beginning of a long term struggle against Beijing. I believe they are right. I believe this is the beginning of a reckoning.
But this will not be the start of a democratic revolution filled with glorious heroes. This will be the beginning of an understanding in Hong Kong.
This is really about China. This is really about being Chinese, and Hong Kong being a part of that.
To Beijing, this poses a difficult problem. China cannot let Hong Kong become more and more unstable and disobedient.
That is simply not on the agenda.
Outside of China, there is broad global support for the movement in Hong Kong, whereas most Chinese in China are quite disappointed with the Hong Kong locals. They thought Hong Kongers were smarter than this.
But I recognise that the uprising is mostly limited to the young generation in Hong Kong, driven by their identity crisis.
At the height of the protest, I was in a conversation with a friend.
I said to him, ‘Obviously, this “one country, two systems” thing has failed. So the real problem with Hong Kong has just begun.’
My friend simply replied, ‘Then, let’s start the one country, one system.’
‘You know, I never thought about it that way. But that won’t be good for Hong Kong or China,’ I replied.
My friend remarked, ‘Why not? It would work...’
It’s hard to say how this will all end. The Chinese government is unlikely to change the way they run things. And it’s hard to say what measures they will take to ensure these types of protests don’t happen again.
But I am pleased see that there was no major crackdown, no violence and no death.
And as an investor, I believe that Hong Kong and China will continue to offer excellent opportunities in the future.
Emerging Markets Analyst, New Frontier Investor