Big celebrations this weekend in Hong Kong, with the 20-year anniversary of the return of Hong Kong to China. For some strange reason, corporate media is not making much of the important speech by Xi Jinping, who today is wrapping up a three day visit. The full speech can be found here, but I would like to highlight a few features.

First, the story of Hong Kong is very much part of the story of modern China, moving from the humiliation at the hands of European colonialism to the overcoming of humiliation under the leadership of the CPC. As Xi puts it:

The destiny of Hong Kong has always been intricately bound with that of the motherland. After modern times, with a weak China under corrupt and incompetent feudal rule, the Chinese nation was plunged into deep suffering. In the early 1840s, Britain sent an expeditionary force of a mere 10,000 troops to invade China and got its way in forcing the Qing government, which had an 800,000-strong army, to pay reparations and cede the island of Hong Kong to it. After the Opium War, China was repeatedly defeated by countries which were far smaller in size and population. Kowloon and “New Territories” were forcibly taken away. That page of Chinese history was one of humiliation and sorrow. It was not until the Communist Party of China led the Chinese people to victory in a dauntless and tenacious struggle for national independence and liberation and founded New China that the Chinese people truly stood up and blazed a bright path of socialism with distinctive Chinese features. Thanks to close to four decades of dedicated efforts since the launch of the reform and opening-up policy in the late 1970s, we have entered a new era in the development of the Chinese nation.

Further, the role of Deng Xiaoping is crucial, not merely with the reform and opening up (gaige kaifang) from 1978, with its emphasis on the central Marxist feature of unleashing the forces of production under socialism, but also the policy of ‘one country, two systems’.

It was against the historical backdrop of reform and opening-up that Mr. Deng Xiaoping put forward the great vision of “One Country, Two Systems”, which guided China’s diplomatic negotiations with the United Kingdom that led to the successful resolution of the Hong Kong question, an issue that was left over from the past. Twenty years ago today, Hong Kong returned to the embrace of the motherland. This ended past humiliation and marked a major step forward toward the complete reunification of China. Hong Kong’s return to the motherland has gone down as a monumental achievement in the history of the Chinese nation. Hong Kong has since then embarked on a journey of unity and common development with the motherland.

In case you wanted to know about the exact status of Hong Kong in relation to the rest of China, Xi lays it out very clearly:

As a special administrative region directly under the Central Government, Hong Kong has been re-integrated into China’s national governance system since the very day of its return. The Central Government exercises jurisdiction over Hong Hong in accordance with China’s Constitution and the Basic Law of the HKSAR, and corresponding systems and institutions have been set up for the special administrative region. Hong Kong’s ties with the mainland have grown increasingly close, so have its interactions and cooperation with the mainland.

In short, one country, two systems, means that Hong Kong can remain capitalist while the rest of China is socialist. This is also a model for global cooperation.

But they say of Xi Jinping that he is ’round on the outside and square on the inside’ In other words, he is very gentle and understanding in dealing with people, but very tough inside. For example:

To uphold and implement the principle of “One Country, Two Systems” meets the interests of the Hong Kong people, responds to the needs of maintaining Hong Kong’s prosperity and stability, serves the fundamental interests of the nation, and meets the shared aspiration of all Chinese. That is why I have made it clear that the Central Government will unswervingly implement the policy of “One Country, Two Systems” and make sure that it is fully applied in Hong Kong without being bent or distorted.

Indeed, as is common in the tradition of leaders of socialist states, a speech also engages in criticism and self-criticism. Of course, there are problems that need to be addressed, such as distorted images among some of Chinese history and culture, public consensus of key political and legal issues, the challenges as Hong Kong loses its economic edge, the pressure on housing and opportunities for young people, and so on.

Let me emphasise these points:

First, in line with the nationalities policy from the 1990s, China’s sovereignty is not negotiable:

“One Country” is like the roots of a tree. For a tree to grow tall and luxuriant, its roots must run deep and strong. The concept of “One Country, Two Systems” was advanced, first and foremost, to realize and uphold national unity. That is why in the negotiations with the United Kingdom, we made it categorically clear that sovereignty is not for negotiation. Now that Hong Kong has returned to China, it is all the more important for us to firmly uphold China’s sovereignty, security and development interests.

Dialectically, this enables the diversity of the ‘two systems’, as embodied in the Constitution:

We must both adhere to the “One Country” principle and respect the differences of the “Two Systems”, both uphold the power of the Central Government and ensure a high degree of autonomy in the HKSAR, both give play to the role of the mainland as a staunch supporter of Hong Kong and enhance Hong Kong’s own competitiveness.

Another aspect of Chinese (and indeed socialist) culture is the simultaneous desire for peace and harmony, as well as the constant process of criticism. At times, this relationship can suffer by focusing on one or the other side too much:

So it comes as no surprise that there are different views and even major differences on some specific issues. However, making everything political or deliberately creating differences and provoking confrontation will not resolve the problems. On the contrary, it can only severely hinder Hong Kong’s economic and social development.

In other words:

Any attempt to endanger China’s sovereignty and security, challenge the power of the Central Government and the authority of the Basic Law of the HKSAR or use Hong Kong to carry out infiltration and sabotage activities against the mainland is an act that crosses the red line, and is absolutely impermissible.

As Mao would put it, contradictions are to be expected, but antagonistic contradictions are not acceptable. Or as Xi puts it, invoking a traditional concept: ‘Harmony brings good fortune, while discord leads to misfortune’.

Xi wraps up his speech by invoking key features of CPC policy:

China is now in a decisive phase to finish building a moderately prosperous society in all respects. People of all ethnic groups across the country are engaged in a joint endeavor to realize the Two Centenary Goals and fulfill the Chinese Dream of national renewal. Ensuring the continued success of the practice of “One Country, Two Systems” in Hong Kong is part and parcel of the Chinese Dream.

All the key ideas are here (which I have written about extensively elsewhere). The ‘moderately prosperous society’ (xiaokang shehui) is a key element of Chinese socialism, drawing on a Confucian term, xiaokang. This is expressed in Xi’s signature ‘Chinese Dream’, which has the concrete elements of the two centenary goals. The first is the centenary of the CPC in 2021 and the second is the centenary of the People’s Republic in 2049. During this period the moderately prosperous society through ‘socialist modernisation’, will be achieved, which really means the second stage of socialism. How? Through lifting the remaining people, mostly in western China, out of poverty (700 million have so far been lifted out of poverty since 1978), through gradually bringing about a socialist welfare state (an original invention of socialism), through the Belt and Road Initiative, the Shanghai Cooperation Organisation, the Asia Infrastructure Development Bank, and – with specific reference to Hong Kong – the Guangdong-Hong Kong-Macao Greater Bay Area.

So what is Hong Kong to do in light of this? Xi quotes a local saying:

After leaving Suzhou, a traveler will find it hard to get a ride on a boat, meaning an opportunity missed is an opportunity lost.

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