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Book Review: Red Flag Over Hong Kong

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Red Flag Over Hong Kong
by Bruce Bueno de Mesquita, David Newman, and Alvin Rabushka (Chatham, N.J.: Chatham House Publishers, Inc., 1996); 196 pages; $17.95.

In 1996, Amnesty International released a report entitled “China, No One is Safe: Political Repression and Abuse of Power in the 1990s.” Whether it is academics desiring intellectual freedom, urban residents or peasants in the countryside running afoul of bureaucrats or party hacks who demand a bribe, Tibetans wanting independence for their long-suffering country, or devoted Christians, Buddhists, and Muslims wishing to peacefully practice their faiths, the state machinery of oppression, imprisonment, and torture in Communist China is ready at any moment to turn a human life into a nightmare.

Many laws or statutes in China that are technically meant to guarantee or protect a person’s rights are frequently abridged or ignored. Other laws or rules have been made intentionally vague or ambiguous precisely to permit the police, the military, and the secret police to twist almost any act or utterance into a “crime against the people,” a “threat to state security,” or a “counterrevolutionary” danger to the authority of the Party.

On July 1, 1997, the British Crown Colony of Hong Kong will change jurisdictional hands and become a part of the People’s Republic of China. One hundred and fifty-five years of Western rule will come to an end, and the five and a half million residents will be handed over to the tender mercies of the communist authorities in Beijing. What fate is in store for them? That is the theme of Red Flag Over Hong Kong by Bruce Bueno de Mesquita, David Newman, and Alvin Rabushka.

What has made Hong Kong the free and prosperous place that it is, the authors argue, has been individual rights; rule of law; private property; a very free market in all production, commerce and trade; low and nondiscriminatory taxes; and a high degree of confidence that freedom and free enterprise would be protected and respected.

This has been in stark contrast to China’s history and present practices. Under the old monarchy, before 1911, the royal power was absolute, favoritism and corruption were rampant, and commerce and trade were controlled and manipulated by the state. From 1911 to 1949, China experienced the period of the warlords, then the authoritarian and corrupt rule of the Kuomintang (or Nationalist) Party, and the destruction of war with Japan from 1937 to 1945. After the triumph of Mao Zedong and the communists in 1949, China suffered under totalitarian rule, central planning, and a reign of terror that culminated in the Great Cultural Revolution.

Since Mao’s death in 1976, China has opened itself up to the West, including returning control over the land to peasant farmers and limited small and medium-size private enterprise. But as the report from Amnesty International shows, individuals still have neither rights nor any legal protections from the heavy hand of the state. And the Communist Party still claims the right to monopoly rule, with any and all dissent crushed and brutalized.

In 1984, the British signed an agreement with Beijing returning sovereignty over Hong Kong to China. On paper, Hong Kong is to maintain a wide range of Western-style institutions of governance and a free market for 50 years.

The authors, however, argue that hard times are ahead for the people of Hong Kong. Hong Kong’s destiny will be dependent upon the path of political change on the Chinese mainland after the death of Deng Xiaoping, who is now over 90 years old. The power struggle in the Party leadership, they suggest, will also become a contest between those elements in the Party who want to keep all power centralized in Beijing and those who have a growing economic interest in decentralization of power at the regional and provincial levels. The provincial and regional Party leaders and their family members are the ones who have extensively used their political power to start up or buy into many of the most profitable of the new market endeavors.

But either way the struggle tends to go, the authors fear, Hong Kong will not maintain its free character. A free-market Hong Kong is not in the interest of Beijing or the provincial powers, because of the threat of the economic competition from a Hong Kong economically freer than other parts of China. The local legislature promised to Hong Kong in the Sino-British agreement will end up a rubber stamp of Beijing’s whims. Nor will the Chinese authorities long permit a judicial system not totally subservient to their orders.

Academic freedom will not long be tolerated either; the fate of those Chinese professors and students who have called for more democracy on the mainland will be repeated in Hong Kong. The Hong Kong press will first try to remain in the good graces of their new political masters through self-censorship; but over time, more direct political control over the media will take hold. The freedom of travel that residents of Hong Kong now have will be closed, as the communist authorities impose the same restrictions on freedom of movement that the mainland Chinese suffer under.

When the British first arrived in Hong Kong in 1841 and began settling there, it was a bleak, underpopulated island with nothing in its favor other than a good harbor. Limited government, private property, free markets, and the rule of law made Hong Kong a bustling trade, manufacturing, and financial center of Asia, with rising prosperity for practically everyone. It is now coming to an end. It will not end all in one moment. But just like the twilight shadows that slowly envelop the sky as the sun sets, communist darkness will cover Hong Kong and the unfortunate people there, many of whom escaped in the past to that 415 square miles of freedom precisely because they wanted to leave communism behind.

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).