Hong Kong is in a standoff with Beijing. It’s a fight ostensibly about universal suffrage. But in some ways, it’s also a litmus test for financial freedoms under President Xi Jinping.
Right now, Hong Kong is governed by a “one country, two systems” charter mandating that until the year 2047, the territory will remain a capitalist economy - with a good deal of political autonomy.
The tens of thousands of protesters taking to the streets this week are banking on Hong Kong’s financial leverage over the world’s second largest economy. But the unspoken worry is that Hong Kong just isn’t as important to China as it used to be.
When Britain handed the reins back over to China in 1997, Hong Kong accounted for 16% of the mainland’s economy. As of today, it’s down to 3% of China’s gross domestic product. Hong Kong is also increasingly dependent on the mainland for its goods.
And then there's the Shanghai Free Trade Zone, China's experiment to develop economic reforms. Analysts give it a mixed reception, one year on from its launch. But even so, for Hong Kong – a city that’s long been the go-to test-bed for Beijing’s financial experiments – it’s not only feeling under pressure; some say it’s increasingly wary that China’s roving eye could mean the end of an era.
In the meantime, the unrest is taking a toll on local stores. They usually rake in big bucks during Golden Week, a holiday that draws many mainland tourists to Hong Kong. But protesters are camping in some of the city's glitziest shopping districts.
“I think the business establishment is very apprehensive about this. They don’t like any disturbance to the flow of making money,” says Hong Kong tycoon Jimmy Lai. He is a strong supporter of the democracy movement, and fierce critic of Beijing.
Lai adds, “To a lot of people, this city is so poor that we’re only left with money. We can’t have a conscience. We can't have a spirit for justice. I find it very funny that maybe these guys have made so much money they’ve become numb.”
Losing this battle with Beijing would transcend its local election in 2017. It would likely be a harbinger for its flagging significance as a global financial hub. That would arguably be much more problematic.