The U.S. and other Western powers are working to preserve a capitalist dystopia and manufacture consensus for long-term conflict with China, write Kevin Zeese and Margaret Flowers.
Hong Kong protesters waving U.S. flags last week. (YouTube)
By Kevin Zeese and Margaret Flowers
PopularResistance.org
Hong Kong is one of the most extreme examples of big finance, neoliberal capitalism in the world. As a result, many people in Hong Kong are suffering from great economic insecurity in a city with 93 billionaires, second-most of any city.
Hong Kong is suffering the effects of being colonized by Britain for more than 150 years following the Opium Wars. The British put in place a capitalist economic system and Hong Kong has had no history of self-rule. When Britain left, it negotiated an agreement that prevents China from changing Hong Kong’s political and economic systems for 50 years by making Hong Kong a Special Administrative Region (SAR).
China cannot solve the suffering of the people of Hong Kong. This “One Country, Two Systems” approach means the extreme capitalism of Hong Kong exists alongside, but separate from, China’s socialized system. Hong Kong has an unusual political system. For example, half the seats in the legislature are required to represent business interests meaning corporate interests vote on legislation.
Hong Kong is a center for big finance and also a center of financial crimes. Between 2013 and 2017, the number of suspicious transactions reported to law enforcement agencies rocketed from 32,907 to 92,115. There has been a small number of prosecutions, which dropped from a high of 167 in 2014 to 103 in 2017. Convictions dropped to only one person sentenced to more than six years behind bars in 2017.
The problem is neither the extradition bill that was used to ignite protests nor China, the problems are Hong Kong’s economy and governance.
The Extradition Bill
The stated cause of the recent protests is an extradition bill proposed because there is no legal way to prevent criminals from escaping charges when they flee to Hong Kong. The bill was proposed by the Hong Kong government in February 2019 to establish a mechanism to transfer fugitives in Hong Kong to Taiwan, Macau or Mainland China.
Extradition laws are a legal norm between countries and within countries (e.g. between states), and since Hong Kong is part of China, it is pretty basic. In fact, in 1998, a pro-democracy legislator, Martin Lee, proposed a law similar to the one he now opposes to ensure a person is prosecuted and tried at the place of the offense.
The push for the bill came in 2018 when a Hong Kong resident Chan Tong-kai allegedly killed his pregnant girlfriend, Poon Hiu-wing, in Taiwan, then returned to Hong Kong. Chan admitted he killed Poon to Hong Kong police, but the police were unable to charge him for murder or extradite him to Taiwan because no agreement was in place.
The proposed law covered 46 types of crimes that are recognized as serious offenses across the globe. These include murder, rape, and sexual offenses, assaults, kidnapping, immigration violations, and drug offenses as well as property offenses like robbery, burglary and arson and other traditional criminal offenses. It also included business and financial crimes.
U.S. Secretary of Commerce Wilbur Ross addressing AmCham event in Hong Kong, 2017. (Twitter)
Months before the street protests, the business community expressed opposition to the law. Hong Kong’s two pro-business parties urged the government to exempt white-collar crimes from the list of offenses covered by any future extradition agreement. There was escalating pressure from the city’s business heavyweights. The American Chamber of Commerce, AmCham, a 50-year-old organization that represents over 1,200 U.S. companies doing business in Hong Kong, opposed the proposal.
AmCham said it would damage the city’s reputation: “Any change in extradition arrangements that substantially expands the possibility of arrest and rendition … of international business executives residing in or transiting through Hong Kong as a result of allegations of economic crime made by the mainland government … would undermine perceptions of Hong Kong as a safe and secure haven for international business operations.”
Kurt Tong, the top U.S. diplomat in Hong Kong, said in March that the proposal could complicate relations between Washington and Hong Kong. Indeed, the Center for International Private Enterprise, an arm of the National Endowment for Democracy, said the proposed law would undermine economic freedom, cause capital flight and threaten Hong Kong’s status as a hub for global commerce. They pointed to a bipartisan letter signed by eight members of Congress, including Senators Marco Rubio, Tom Cotton, and Steve Daines and Members of the House of Representatives, Jim McGovern, Ben McAdams, Chris Smith, Tom Suozzi, and Brian Mast opposing the bill.
Proponents of the bill responded by exempting nine of the economic crimes and made extradition only for crimes punishable by at least seven years in prison. These changes did not satisfy big business advocates.
The Mass Protests and U.S. Role
Hong Kong World Financial Centre Tower, 2008. (Ray Devlin/Flickr)
From this attention to the law, opposition grew with the formation of a coalition to organize protests. As Alexander Rubinstein reports, “the coalition cited by Hong Kong media, including the South China Morning Post and the Hong Kong Free Press, as organizers of the anti-extradition law demonstrations is called the Civil Human Rights Front. That organization’s website lists the NED-funded HKHRM [Human Rights Monitor], Hong Kong Confederation of Trade Unions, the Hong Kong Journalists Association, the Civic Party, the Labour Party, and the Democratic Party as members of the coalition.” HKHRM alone received more than $1.9 million in funds from the NED between 1995 and 2013. Major protests began in June.
Building the anti-China movement in Hong Kong has been a long-term, NED project since 1996. In 2012, NED invested $460,000 through its National Democratic Institute, to build the anti-China movement (aka pro-democracy movement), particularly among university students. Two years later, the mass protests of Occupy Central occurred. In a 2016 Open Letter to Kurt Tong, these NED grants and others were pointed out and Tong was asked if the U.S. was funding a Hong Kong independence movement.
During the current protests, organizers were photographed meeting with Julie Eadeh, the political unit chief of U.S. Consulate General, in a Hong Kong hotel. They also met with China Hawks in Washington, D.C., including Vice President Mike Pence, Secretary of State Mike Pompeo, National Security Advisor John Bolton, Sen. Marco Rubio and Rep. Eliot Engel, chairman of the House Foreign Affairs Committee. Larry Diamond, a co-editor of the NED’s publication and a co-chair of research, has been openly encouraging the protesters. He delivered a video message of support during their rally this weekend.
Protests have included many elements of U.S. color revolutions with tactics such as violence — attacks on bystanders, media, police and emergency personnel. Similar tactics were used in Ukraine, Nicaragua, and Venezuela, e.g. violent street barricades. U.S. officials and media criticized the government’s response to the violent protests, even though they have been silent on the extreme police violence against the Yellow Vests in France. Demonstrators also use swarming techniques and sophisticated social media messaging targeting people in the U.S..
Mass protests have continued. On July 9, Chief Executive Carrie Lam pronounced the bill dead and suspended it. Protesters are now calling for the bill to be withdrawn, Lam to resign and police to be investigated. For more on the protests and U.S. involvement, listen to our interview with K. J. Noh on Clearing the FOG.
What Is Driving Discontent in Hong Kong?
Makeshift shelters at Tung Chau Street Temporary Market in Sham Shui Po. (Nora Tam)
The source of unrest in Hong Kong is the economic insecurity stemming from capitalism. In 1997, Britain and China agreed to leave “the previous capitalist system” in place for 50 years.
Hong Kong has been ranked as the world’s freest economy in the Heritage’s Index of Economic Freedom since 1995 when the index began. In 1990, Milton Friedman described Hong Kong as the best example of a free-market economy. Its ranking is based on low taxes, light regulations, strong property rights, business freedom, and openness to global commerce.
Graeme Maxton writes in the South China Morning Post:
“The only way to restore order is through a radical change in Hong Kong’s economic policies. After decades of doing almost nothing, and letting the free market rule, it is time for the Hong Kong government to do what it is there for; to govern in the interests of the majority.”
The issue is not the extradition proposal, Carrie Lam or China. What we are witnessing is an unrestricted neo-liberal economy, described as a free market on steroids. Hong Kong’s economy relative to China’s gross domestic product (GDP) has fallen from a peak of 27 percent in 1993 to less than 3 percent in 2017. During this time, China has had tremendous growth, including in nearby market-friendly Shenzen, while Hong Kong has not.
As Sara Flounders writes, “For the last 10 years wages have been stagnant in Hong Kong while rents have increased 300 percent; it is the most expensive city in the world. In Shenzhen, wages have increased 8 percent every year, and more than 1 million new, public, green housing units at low rates are nearing completion.”
Hong Kong has the world’s highest rents, a widening wealth gap and a poverty rate of 20 percent. In China, the poverty rate fell from 88 percent in 1981 to 0.7 percent in 2015, according to the World Bank.
Hong Kong in Chinese Context
Skyline of Beijing, China’s capital city, at dusk, 2017. (Picrazy2, CC BY-SA 4.0, Wikimedia Commons)
Ellen Brown writes in “Neoliberalism Has Met Its Match in China,” that the Chinese government owns 80 percent of banks, which make favorable loans to businesses, and subsidizes worker costs. The U.S. views China subsidizing its economy as an unfair trade advantage, while China sees long-term, planned growth as smarter than short-term profits for shareholders.
The Chinese model of state-controlled capitalism (some call it a form of socialism) has lifted 800 million people out of poverty and built a middle class of over 420 million people, growing from four percent in 2002, to 31 percent. The top 12 Chinese companies on the Fortune 500 are all state-owned and state-subsidized including oil, solar energy, telecommunications, engineering, construction companies, banks, and the auto industry. China has the second-largest GDP, and the largest economy based on Purchasing Power Parity GDP, according to the CIA, IMF and World Bank.
China does have significant problems. There are thousands of documented demonstrations, strikes and labor actions in China annually, serious environmental challenges, inequality and social control through the use of surveillance technology. How China responds to these challenges is a test for their governance.
China describes itself as having an intraparty democracy. The eight other legal “democratic parties” that are allowed to participate in the political system cooperate with but do not compete with the Communist Party. There are also local elections for candidates focused on grassroots issues. China views Western democracy and economics as flawed and does not try to emulate them but is creating its own system.
China is led by engineers and scientists, not by lawyers and business people. It approaches policy decisions through research and experimentation. Every city and every district is involved in some sort of experimentation including free trade zones, poverty reduction and education reform. “There are pilot schools, pilot cities, pilot hospitals, pilot markets, pilot everything under the sun, the whole China is basically a giant portfolio of experiments, with mayors and provincial governors as Primary Investigators.” In this system, Hong Kong could be viewed as an experiment in neoliberal capitalism.
The Communist Party knows that to keep its hold on power, it must combat inequalities and shift the economy towards a more efficient and more ecological model. Beijing has set a date of 2050 to become a “socialist society” and to achieve that, it seeks improvements in social, labor and environmental fields.
Where does Hong Kong fit into these long-term plans? With 2047 as the year for the end of the agreement with the U.K., U.S. and Western powers are working toward preserving their capitalist dystopia of Hong Kong and manufacturing consensus for long-term conflict with China.
How this conflict of economic and political systems turns out depends on whether China can confront its contradictions, whether Hong Kongers can address the source of their problems and whether US empire can continue its dollar, political and military dominance. Today’s conflicts in Hong Kong are rooted in all of these realities.
Kevin Zeese and Margaret Flowers co-direct Popular Resistance.
A version of this article first appeared in PopularResistance.org.
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Hey! Want to extradite anyone for anything? The Chinese will cook up a charge to fit the bill in any case. They’ve always done that to their own, and Hong Kongers know it. Something sex related is popular, or embezzlement, something hard to pin down without an extended fake investigation (and real detention). That’s why the wise in Hong Kong want the bill completely expunged.
The BBC top news story drones on in serious tone about the detention of some Chinese bloke that no one has ever heard of meanwhile Julian Assange languishes in solitary confinement in a British prison. Hypocrites.
Thanks for the full explanation of the extradition law and link. And the update on China’s remarkable progress.
The protesters deserve support when their issues (like universal suffrage) are are not coopted by foreign coup makers. One person one vote representation in the Hong Kong legislature would be the end of Hong Kong as capitalist oligarchs and international criminals know it.
China can change the situation whenever it wants. By offering high wages to Hong Kong workers who make the 25 mile rail journey to Shenzhen for work. Whatever the riposte of the Hong Kong oligarchs, Hong Kong workers and China Gain.
History suggests events in Hong Kong are part of a global power struggle. History suggests that the struggle will end in world war –nuclear war.
https://www.ghostsofhistory.wordpress.com/
Yet the USA has destabilized and overthrown many governments.
Very good survey, avoiding the usual cliches and Cold War propaganda.
“Months before the street protests, the business community expressed opposition to the law. Hong Kong’s two pro-business parties urged the government to exempt white-collar crimes from the list of offenses covered by any future extradition agreement. There was escalating pressure from the city’s business heavyweights. The American Chamber of Commerce, AmCham, a 50-year-old organization that represents over 1,200 U.S. companies doing business in Hong Kong, opposed the proposal.
AmCham said it would damage the city’s reputation: “Any change in extradition arrangements that substantially expands the possibility of arrest and rendition … of international business executives residing in or transiting through Hong Kong as a result of allegations of economic crime made by the mainland government … would undermine perceptions of Hong Kong as a safe and secure haven for international business operations.”
Proponents of the bill responded by exempting nine of the economic crimes and made extradition only for crimes punishable by at least seven years in prison. These changes did not satisfy big business advocates.”
Translation: allow is to rob, pillage and exploit to our hearts’ content. Allow us total and absolute free rein to do exactly whatever we want, consequences or “externalities” be damned.
These same pro-business schmucks are often (not always) the same ‘law-and-order, police can do no wrong’ conservatives when it comes to underdogs caught stealing to support a habit or a kid caught with a couple joints in his pocket.
The “outside agitator” theory has been used against labor activists and progressives for 150 years. The notion that $400,000 of NED money could turn out one to two million people week after week is an application of this ridiculous but vicious theory. The U.S. did not show such support in Venezuela, Syria, etc.; those are places where U.S. imperialism really ruins less-developed countries.
China has had 22 years to show the working people of Hong Kong that a bright future is ahead — and has done nothing. Instead, the PRC buddied up with the billionaires of Hong Kong.
China itself turned from socialist development to capitalist industrialization after 1978. The window on “a test of their governance” — a pallid euphemistic phrase for its suppression of workers and its extreme inequality (a Gini coefficient near the U.S. ratio) — closed shut years ago.
Thanks for pointing this out. I had been under the impression that China was essentially centrally planned authoritarian capitalism vs the US decentralized anarchist capitalism (two sides of the same capitalist coin). I find this idea of “intraparty democracy” somewhat concerning. I find the European approach of inter party democracy better (particularly in Scandinavia) at preventing extremism and monopolization of power by any one interest.
This article would seem to repurpose the old argument used for the US but for China: “the US is mostly a good capitalist country that ‘makes mistakes’ along the way towards getting it right” vs “China is mostly a good socialist country that ‘makes mistakes’ along the way towards getting it right.” One wonders how Tibetans, or the impoverished rural farmers of western China, or the immigrants from western China denied services in their cities, or the recipients of low “citizen scores” would feel about this notion of “China is mostly good but occasionally makes mistakes” attitude.
(Potential critics: Yes, I know the US has its own laundry list of people it’s abused also, the point here is to do away with the idea that China is some sort of pious country we should all look up to as a roll model much like we need to do away with that same idea for the US)
Good points on the extent of NED influence budgeting, but:
1. Other US influence budgeting is highly likely on a far greater scale;
2. China has brought a far brighter future to most of its people: HK would not be expected to perceive gains in that economy;
3. PRC may have business in KH, but did not “buddy up” to billionaires if they are so afraid of extradition;
4. A similar Gini coeff is “extreme inequality” for the US but progress in China, and misses regional cost of living variation.
What “test of governance” do you propose for the US, which has no more than a contest of gangsters to control DC?
…and it is all because the Chinese will not allow western spy agencies to have backdoor access to Huawei equipment. This is shameless thuggery on the part of the west. Do as we say, obey us or we will make trouble for you. It is only a matter of time before others return the favor. Our leader are putting us in danger.
I’ve written it many times before and I’ll write it again — any nation-state that 1.) gives the finger to Wall Street or the Fortune 500, or 2.) gives diplomatic support to the Palestinians or is even a mild thorn in the side of the Zio enterprise — that state will be demonized by the Western corporate press while the Washington intel operatives and their NGOs will orchestrate velvet riots to destabilize the independent administration that attempts to enjoy a bit of sovereignty from Washington corporate dictates.
Also, regarding the specific Hong Kong color rebellion, it’s interesting that over the last year or so Beijing’s been signing lucrative mutually advantageous oil contracts with vilified Tehran. Isn’t that interesting?! Isn’t that fascinating?! The number one demonized nation in the world today happens to be doing a robust business with China and we now then witness destabilization occurring in Hong Kong. Funny how that works.
Washington’s unilateral and illegal sanctions on the Persian state weren’t enough. Now it’s fomenting nonsense in the side belly of one its customers.
Right on, Drew.
From the start of this latest round of “protests” in Hong Kong there was a fishy smell. They began at an “opportune” moment for the western, 5 eyes nations: trade war with China itself, US naval patrols far from its own shores in the South China Sea – a deliberately threatening posture, of course, China’s development of various weapons that the US’s local occupied, vassal states don’t like and so on. The US wants very much to destabilize China (and Russia, of course) so that it – or rather its corporate-capitalist-imperialist ruling elites can continue to control the world and the world’s dwindling resources.
On the BBC World Service this morning – as on every morning (quite unlike – as Zeese and Flowers point out – the deafening silence regarding the brutal violence perpetrated by the French riot police on the Gilets Jaunes protestors) – talked about the HK protests, specifically mentioning the “demos” at the airport. They were violent the facilitator said – but left quite unsaid was *WHO* were perpetrating the violence. Thus by omission – in true propagandist style – the intended impression was that the violence – surely – came from the forces of law and order. In other words – the Chinese mainland government.
Nowhere does one read, hear, and I assume see, *any* allusion, consideration, comparison with even a hypothetically similar situation in say, London’s Heathrow or Gatwick, or New York’s Kennedy airports. Thousands of protestors deliberately preventing passengers from taking their flights, deliberately and severely beating up journalists and then preventing EMTs from attending to them – just *how* exactly would the British or US governments and their forces of law and order deal with such a situation? One doesn’t have to stress one’s brain too heavily to conjure the scene. And they wouldn’t take as much care as the HK police to not hurt the passengers, either (tear gas use).
Nor would the US or UK governments “negotiate” with the protestors, even less so following such violence. But that was what the news program facilitator on the BBC thought the HK government ought to do – not just talk with, but negotiate…..
Your analysis is right on target Anne. Typical.
Yes, the double standard is appalling, but of course not unexpected.
Wow. What a clueless article. ‘The source of the discontent is capitalism’. Hah.
The source of the discontent is the THREAT from the communists to remove the individual choice/freedom that capitalism depends on.
And from the looks of the crowds almost EVERY SINGLE person from Hong Kong shares this discontent.
This might be the worst article I’ve ever read on this site. Hopeless and clueless. Editors… please do better. You don’t need this kind of babble here.
WHERE is capitalism being strangled in China? To claim the health of “capitalism” is at stake in China is absurd. The Chinese learned Western capitalism inside out and have excelled at it better than America has. That is why they are eating our lunch in the marketplace. They have raised their middle class up from medieval peasantry, while the American middle class has been exploited by our aristocracy back to a feudal existence, all within the second half of the twentieth century and the first quarter of the twenty-first. You’d rather tilt at rhetorical bogeymen than face reality.
“The source of the discontent is the THREAT from the communists to remove the individual choice/freedom that capitalism depends on.”
Individual choice like the option to work 70 hours per week with paltry benefits. Or the discretion to work for 50 years with barely a pension. Or the choice to live in housing dominated by rent gouging landlords and exploitative real estate sharks. Or the choice to see ever widening inequality that is worse than the Gilded Age as deaths of despair multiply.
Capitalism never gave the working masses anything. Everything the toiling masses have was brought about by class struggle. Be it the 40 hour work week, progressive taxation, union rights, the abolition of child labor, paid vacation, Social Security, decent health ins benefits, I could go on. All of these life-affirming policies and programs were fought for over years of struggle.
If you want to see where capitalism truly flourishes, look to much of the Third World where you will see exactly what capitalism is about, a demographic breakdown as such: a tiny super rich elite, a huge impoverished and over exploited mass of humanity and a small middle class.
dear drew,
isn’t it amazing how there is not one word, so far that i have read, mentioning the chicoms computerized social ranking. the hong kongers know they are next. have you checked yours lately ?
old geezer
@ old geezer,
What’s amazing is the way China’s egalitarian gov’t has completely eliminated poverty. Last I checked, those living below or near the poverty rate in capitalist America is around 45 percent. Moreover, that they provide national single-payer healthcare for every last citizen is gratifying to see to those 30 million U.S. citizens who are sans health ins.
Also, what’s amazing is the way in which the administration in Beijing has built up infrastructure to such a stunning degree that super high speed bullet passenger trains zip across much of China transporting Chinese citizens for a pittance in minutes. Take the Greyhound bus in the U.S. and it’ll cost you $100 and a couple days to get across just a few states.
Lladnar said: “And from the looks of the crowds almost EVERY SINGLE person from Hong Kong shares this discontent.”
This is typical of the ignorance and innumeracy of the west’s population. A simple search would show that even under the massively exaggerated organizer’s “estimates” of crowd size, this claim is false. More realistic estimates show the marchers of yesterday’s protest to be a tiny fraction of the organizer’s estimate.
Lladnar you’ve got it dead wrong, it’s not just babble, as other readers have noted from the facts presented in the article. Hong Kong is in fact controlled by corporate oligarchs.
A plus: The co-author Kevin Zeese used to be Ralph Nader’s right arm, press secretary in 2004, so he’s entirely credible with me.
PR China is about as uncommunist as can be. The CPC invites businessmen to join – something real Communists do not do. Time to flush your Cold War political education down the toilet!
The contrasts of East and West are deeper than may be readily characterized.
That China has been able to harness greed while lifting its poorest from poverty is remarkable.
That “communism” survives there in the presence of “capitalism” defies any simple choosing of sides.
Perhaps there are forms of democracy that work without Western institutions.
Certainly western “democracy” is now no more than a fraud of organized crime in politics.
We all need far more understanding of politics in China and the US than is readily available in the US.
That is sufficient to condemn the US, if not sufficient to exonerate China.
Where the US and China are going is worthy of far more analysis yet.
The US is going to a protracted hell of decline, the only hope for restoration of democracy here.
Whether China is headed the same way after a generation or two would be interesting to know.
But choosing sides would be a mistake in the absence of detailed investigation and analysis.
Excellent article. There is a pattern and Zeese and Flowers have identified it and the special characteristics of Hong Kong vis a vis neoliberalism and the relationship to China.