Taiwan and Chen Shui-bian: How they are viewed from Hongkong three years after the handover

(Taipei Review September 2000)

The election of Chen Shui-bian has significantly raised the profile of Taiwan among Hongkong people. However, this has been more the result of Beijing's reaction to the election than to Taiwan's practice of direct election of its leader, or of its implied support for the principle of self-determination.

Indeed, for the first time ever the government of Chief Executive Tung Chee-hwa has been forced into publicly taking issue with a Beijing official. This followed remarks by the deputy head of the central government's liaison office in Hongkong warning Hongkong businessmen would suffer if they did business with Taiwanese businessmen who supported Taiwanese independence. Tung expressed "concern" to Jiang Enzhu, the senior diplomat who is Beijing's chief representative in Hongkong and the Chief Secretary, Anson Chan Fang On-sang, said that the remarks has caused widespread concern among businessmen. "The SAR government has consistently stressed that business decisions are best left to businessmen and should not invite the interference of any official of whatever status".

The irony of this incident is that there is very little interaction between Taiwan and HK business. For sure, HK is an indispensable conduit for Taiwan-mainland trade and investment. Taiwan provides some 18% of HK visitors, most of whom are en route the mainland. Likewise 7% of the origin of HK re-exports is Taiwanese goods en route to the mainland, and the percentage of transit trade is even higher. But a mere 3% of HK's retained imports come from Taiwan, and only a similar percentage of domestic exports go there. Portfolio investment flows have increased sharply in recent years as Taiwan's markets have liberalized, but there is little direct investment in either direction.

In many ways, Taiwan and HK have been growing further apart for years, despite the flowering of cross straits trade and investment through HK. There was a time when refugee business families in Hongkong, mostly from Shanghai, kept in close touch with the island and its KMT rulers, many of whom were from Shanghai/ Zhejiang/Jiangsu. Hongkong's current chief executive Tung Chee-hwa's family was one such. Indeed Tung had hoped to be rescued by Taiwan when his shipping empire nearly went bust in the early 1980s. But it was Beijing which came to his aid, symbolically representing the mainland's claim to HK. Subsequent political developments and the rise of new economic power centers in both HK and Taiwan

The strong reaction to Jiang Enzhu's remarks reflected the susceptibility of the HK government to business influences in general rather than any particular concerns about Taiwan trade. If there was any sympathy with Taiwan's belief in freedom of choice, it lay well buried. Indeed Hongkong's official reaction on this occasion contrasted with the lack of reaction in April when another Liaison Office official said that the Hongkong media should not report the views of those advocating independence for Taiwan. The silence on this occasion led to concerns in the media not merely that informal pressure would be brought to bear on reporting pro-independence views but that it would in future come within the scope of laws relating to promoting treasonable activities.

At present there are no such laws, but according to the Basic Law the SAR is supposed to enact such legislation. Article 23 states: that the SAR "shall enact laws on its own to prohibit any act of treason, secession, sedition, subversion against the Central People's government". But Hongkong has not yet addressed the issue because of its extreme sensitivity.

The official view in Hongkong is that all business links between the mainland, the SAR and Taiwan be encouraged as a step towards reunification. This ignores the fact that the past ten years of steadily increasing interaction has actually been accompanied by a widening of the political gap as a result of the flowering of democracy and liberalism in Taiwan. But it makes obvious sense for Hongkong to underline to Beijing that it is only concerned with business, and that business will bring ultimately all sides closer together. However the Tung administration has also sought to score political points by holding up the grant of a visa to Taiwan's chief representative designate in the territory, Chang Liang-jen by insisting that he will abide by the One China policy and refraining from promoting Lee Teng-hui's "two states" theory. Last year the head of the government-controlled RadioTelevision Hongkong was removed after allowing an interview with Mr Chang's predecessor to be broadcast.

These events have caused considerable unease in Hongkong as examples of threats to the One Country Two Systems principle. However, they do no indicate much sympathy for Taiwan itself. Hongkong people tend to view Taiwan's situation as rather akin to that of Hongkong, assuming that eventually it too will have to agree to a One Country Two Systems formula. There is little appreciation of the extent to which Taiwan's history has long been very different from that of the mainland. This leads to the conclusion that resolution of the Taiwan question is simply one of eventually resolving an issue left over from the era of colonialism, and the Chinese civil war.

Because independence has never been an option for Hongkong, there is a reluctance to acknowledge that it could be for Taiwan. Few, even those most willing to criticize Beijing on human rights and democracy issues, want to appear "unpatriotic" by seeming to appear sympathetic to the idea of independence. In May the Legislative Council passed a motion, sponsored by the main pro-Beijing party, opposing Taiwan independence. Some liberals spoke sympathetically of Taiwan's democracy and desire to preserve its freedoms, but they then failed to vote. There was one abstention, no noes. Hongkong's democratic forces have in the past tended to view Taiwan as inward-looking and unwilling to commit to promoting mainland democracy. They can be critical of the relatively subdued reaction of Taiwanese people to the June 4 massacre. Whereas Hongkong's democratic forces have tended to see themselves as having a duty to foster pro-democracy dissidents on the mainland, while Taiwanese have been more preoccupied with building their own democratic institutions.

In addition to lack of sympathy for the independence movement, there is general concern that Taiwan's ambitions and self-confidence will lead to tensions which will be especially negative for Hongkong - politics upsetting sacrosanct business. There is less discussion of how badly Hongkong would be damaged if cross-straits relations were to improve to the point of direct air, sea and banking links. Indeed, academic or private sector study of this issue is conspicuous by its absence. That may be no surprise in the context of Hongkong's political situation. However, given that direct links would probably also coincide with the mainland and Taiwan joining WTO it is important.

To date HK has preferred to emphasise the positive aspects of WTO in spurring China trade and investment and not worry about whether its own relative position would be undermined. In principle Hongkong has to believe that what is good for the concept of Greater China must be good for Hongkong. However, given the northward shift of gravity of the mainland's growth and the increasing attraction of Shanghai as a base for foreign enterprise in China some believe that the status quo - plenty of cross straits trade and investment but no direct links - serves Hongkong well.

Generally it is believed that the election of Chen Shui-bian is more likely to delay direct links, whereas the other Lien or Soong would have pursued a more accommodating stance to Beijing than Lee Teng-hui. At the domestic political level in Hongkong the example of direct election of President Chen and the orderly transfer of power from the KMT is something of an embarrassment to the Hongkong government which has been so keen to limit democratic participation and play down the role of the legislature in policy making. There was a time when establishment figure in Hongkong would claim that democracy in Taiwan simply led to corruption, ugly scenes in parliament and the unleashing of labor and environmental demands which damaged the economy. Those now look as self-serving as they always were.

Hongkong's economic record in recent years has proven much inferior to that Taiwan, and Hongkong is now suffering from refusing to take seriously the environmental problems which democratic pressure have forced Taiwan to confront. Hongkong's "executive-led" government has proved less effective in many areas than Taiwan's. Hongkong lacks political corruption of the sort which has tarnished Taiwan. On the other hand, Hongkong people have the (correct) impression that wealth is more evenly distributed in Taiwan, and economic power is dispersed. Probably even the KMT does not control as much of the Taiwan economy as Li Ka-shing's family does of Hongkong.

Hongkong is more than ever aware that Taiwan's manufacturing technology achievements have been remarkable. Hongkong senses a need to be in the same game, but has fallen too far to catch up so may have to be content with its traditional middleman role. Hongkong is aware that Taiwan keeps an eye on it to see how One Country Two Systems works in practice. Taiwanese will have noted that thus far the judiciary and media have both proved robustly independent but the executive has been the opposite.

The main assault on judicial independence has come from the government itself, which last year went to Beijing to use the National Peoples Congress to overrule a Hongkong Court of Final Appeal judgement on rights of abode in Hongkong which the administration found inconvenient. This is a government which often seems to be more like the old KMT - preferring to rule by bureaucratic fiat than be subject to legislative or judicial constraint. The SAR government has also allowed mainland authorities to bypass Hongkong extradition procedures in seizing those suspected of mainland crimes. The local courts ability to implement the Basic Law as they see fit is thus being eroded. The Court of Final Appeal's stature has been eroded by its treatment on the right of abode issue . Two of its members are retiring this year and the choice of their replacements will be studied for an indication of whether they are chosen for legal abilities or willingness to second guess Tung Chee-hwa.

The quality of the Hongkong judicial system has often been exaggerated. Even if outright corruption has been relatively rare, it has a record of bizarre decisions. It has retained several costly and archaic British practices long ago abolished in Britain itself. However, it has been seen as generally fair, and this remains the case. Foreigners still play a major role in the judiciary as well as legal profession. The role of Hongkong as a center for international commercial litigation and arbitration helps retain legal quality and this provides something of a shield for the rule of law and against arbitrary government. Hongkong people generally believe that the legal system is still much superior to that on Taiwan. However, it looks increasingly subject to political pressures on issues concerning "executive led government" which appears not to understand the concept of separation of powers and that government itself must obey the law.

So despite its lack of sympathy for Taiwanese independence, there is a growing perception that Taiwan's political development, economic achievements and social progress make it the best example of modern Chinese society. If only it were more Chinese!

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