The Chinese government State Council has just issued a White Paper on Hong Kong and the One Country, Two Systems issue. Over the last decade or so, White Papers issued in this way have been broad statements of central government thinking on a range of issues from relations with the European Union to issues of human rights, and those relating to defence or domestic issues. They are useful ways for outsiders to find in one place a general statement of government policy on specific, important issues.

 

　　The Hong Kong related paper is timely because of the consultations in Hong Kong since the end of last year over how best to elect future Chief Executives from 2017, and what other changes might be necessary to reform and change political and economic systems in the Special Administrative Region. The paper states almost from the start that the role of the Central Government in Beijing cannot be forgotten. 1997 saw the reversion of Hong Kong to Chinese sovereignty, allowing for a system which in some areas allowed for a high degree of autonomy. But as the latter part of the paper states very clearly, this was not something that Hong Kong inherently by right, but something granted by the Beijing government. And the paper goes to some lengths in restating the ways in which the National People's Congress, the Central Military Commission and the Constitution of the People's Republic of China are the core entities conferring legitimacy on those in the Special Administrative Region.

 

　　This stark political message is accompanied however by an admission that perhaps in two very important areas there remains conceptual confusion. One of these is about the very issue of `One country, two systems'. Anyone looking at China and Hong Kong today would see a system calling itself socialist running against one that is evidently extremely capitalistic, and feel that these are highly contradictory and cannot fit in one framework. The second is about the future direction of the country. Hong Kong as a finance centre, a logistics hub, and a major regional and global economy needs confidence to prosper. But at the moment there is lack of clarity about what will happen in the short to mid term future over the system to be used to appoint both the next Chief Executive and the Legislative Council.

 

　　There are also broader problems based on identity. Hong Kong, as the paper states, is now open to visitors from provinces with combined populations of 300 million. It has many millions of mainlanders visits each year, and over 50 per cent of its trade is with the People's Republic. This deeper integration has led to a panic in some quarters, with many locals feeling that they are no longer sure who they are and sensing vulnerability over their cultural and social identity.

 

　　Confusion and lack of confidence are important issues for the Central government in Beijing to address because they strike at the heart of what makes Hong Kong special - it's truly remarkable continuing importance as a finance and trade centre. On almost every measure, whether it is volumes of foreign exchange trading or banking or securities, Hong Kong ranks in the top ten globally. It is judged to be one of the world's most open economies, one of the most transparent, and one of the easiest to do business. The White Paper ends with an impressive list of Hong Kong's logistic, economic, and finance attributes. These are the things that have to be protected and nurtured.

 

　　The simple fact is that for much of the last half century, Hong Kong has been an enormously important economic asset. This is why it mattered so much to the British during their colonial rule, it is why the negotiations over the area before its return to Chinese sovereignty in 1997 were so important, and it was why the central government was, and continues to be, willing to grant Hong Kong unique status. It is in no one's interests, inside or outside Hong Kong, to see this position jeopardized.

 

　　The White Paper therefore restates a fundamental approach which is evidently feels still works and needs to be supported: this is that the One Country Two Systems philosophy offers the best general framework for preserving Hong Kong's remarkable attributes, but also ensuring that the issue of sovereignty is never is question. This framework however also recognizes that rule of law has to be maintained in Hong Kong, that power has to be exercised through local people, and that confidence has to be maintained. It also has to tie this with a consistent approach from Beijing, which can show that these two seemingly widely different systems do have a form of compatibility. The trick to this, at least as it appears in the White Paper, is to ensure that the principles Beijing has granted Hong Kong are broad enough and flexible enough so that there is enough space for Hong Kong to be truly able to function in the areas where it preserves its key economic strengths without disruption, doubt or threat. This is even more in Beijing's interests now, because of the huge important Hong Kong is now acquiring as an investment hub between the Mainland and the rest of the world, and as a place of Renminbi trading.

 

　　The consistency can be most easily located in the simple sentence that the White Paper uses that `The Central government supports the economic development and improvement of people's livelihood' in Hong Kong. This line would be the same as that the Central government says is its core mission in China itself. The main difference of course is that the means deployed to achieve this in Hong Kong are very different to those in the rest of the People's Republic.

 

　　There is a key issue however that a focus purely on economic outputs alone won't help much with. This is simply the question of a Hong Kong which is now becoming more diverse, pluralistic and sophisticated, and which might want a system within the rubric granted it by the Basic Law and the Chinese Constitution which is very different to that it has now. The White Paper proudly states that even since 1997, the franchise in electing Chief Executives has reformed and changed, from 400 in 1997 to over 1200 in 2012. The issue those is that this is still a pool of elites, and like elsewhere in the world, Hong Kongers are as exercised by elites and their perceived increasing powers and wealth. Hong Kong is afflicted by inequality like many other developed areas, and the wide distance between the haves and have nots is causing the same social frictions as in the US and EU. There is almost certainly a desire in Hong Kong to see the franchise for participation in political decision making expand. This is not the same as saying people want wholesale political change. But it does mean that there is a desire to see a wider franchise and a broader group that representatives might come from.

 

　　The framework of One Country Two Systems stresses the need to allow beneficial integration with the Mainland where it works, but to accept and encourage powerholding and responsibility by locals. It also gives a general framework, but it leaves plenty of space for the detail to be added, or, where it exists, to be changed. Hong Kong's competitiveness and prosperity are the key things to protect. For Hong Kong people, therefore, they have to come up soon with a solution to their anxieties about identity, and a more workable political system within the framework they are operating in. For so long it was either the British before 1997 or the Beijing government that was negotiation and speaking for them. Now they have the chance to speak for themselves. It is not an easy task. But they cannot walk away from it, or shrug their shoulders and complain. They need to use their immense economic and finance importance and show how the best preservation for this would be a system where confidence would be strengthened, more participation beyond a narrow elite countenances, and local identity respected and seen as the core to what makes Hong Kong special. The rest of the world should wish them good luck with this task. It is important, and it matters, for them, for China, and for the rest of the world.

 

　　Professor Kerry Brown