As China’s aviation regulator turned up the heat on Hong Kong’s largest airline and its controlling shareholder in early August, it diagnosed what it thought the core problem was at Cathay Pacific Airways.
According to two people familiar with the exchange, the Civil Aviation Administration of China told executives at Swire Pacific, the airline’s parent group, that their top managers at Cathay “are not patriots”.
Within a matter of days, Cathay’s top two executives resigned, ostensibly taking responsibility for not promptly disciplining a pilot accused of participating in one of the dozen protests that have erupted in Hong Kong over recent months against a controversial extradition bill.
Last week the airline’s non-executive chairman, who famously said that he “wouldn’t dream of telling [Cathay staff] what they have to think about something”, was also replaced.
When it comes to resolving the political crisis in Hong Kong — which has morphed into a public order crisis as well as an economic one — the Chinese Communist party does indeed have a “patriot problem”.
But the problem is not that there is a dearth of patriotic tycoons running Hong Kong Inc. It is that the executives the party recognises as patriots and, therefore, listens to are so scared of the party — and so bent on preserving their enormous economic monopolies in the city — that they only tell the party what they think it wants to hear.
In the run-up to the 70th anniversary of the People’s Republic of China following Mao Zedong’s revolutionary victory on October 1, hundreds of such patriots will travel to Beijing to join in the festivities, which will be capped by a massive military parade.
Communication between the party and its Hong Kong patriots follows a predictable pattern.
Senior party officials regularly summon pro-Beijing business figures to private meetings at their de facto embassy in Hong Kong, the Central Liaison Office; to short-notice “seminars” in Shenzhen, the mainland Chinese city bordering Hong Kong; or to Beijing for grander sessions such as next month’s celebrations and the annual March session of China’s rubber-stamp parliament.
According to one senior executive in the territory who has attended many such events, the party’s favourite patriots invariably — to use the Chinese phrase — pai ma pi or “pat the horse’s rump”.
For more than two decades, the men and women who run Hong Kong Inc have been telling Beijing how wonderful everything is under the “one country, two systems” formula that has preserved the city’s civil liberties and independent legal system since the handover from British to Chinese sovereignty in 1997.
Their favourite statistics include Hong Kong’s per capita GDP figure (one of the world’s highest at more than $46,000) and its perennial place atop the Heritage Foundation think-tank’s list of the world’s “freest economies”.
What they do not mention is just how poor most people are in a city where half of the working population earns less than $27,000 a year, especially relative to Hong Kong’s astronomical property prices. Last year, half of all private rental flats cost at least $2,550 a month, or $30,600 a year.
Nor do they dwell on the fact that the conservative Heritage Foundation’s so-called “Index of Economic Freedom” reflects its admiration for Hong Kong’s low-tax regime — especially its lack of any capital-gains taxes — and entirely overlooks the cozy monopolies that enrich the few at the expense of the many.
Having told the party what it wants to hear, Hong Kong patriots are then told by the party what to say. As the crisis in the city escalated over the summer, Chinese officials routinely sent senior company executives “talking points” that they were expected to amplify in statements printed in Beijing-friendly newspapers. One person who is routinely tasked with turning the party’s talking points into published statements calls them his “Beijing homework”.
These talking points invariably condemn violent protests and demand the “restoration” of the rule of law in Hong Kong. They also just confirm the view of most protesters that Beijing listens to the city’s big business interests but not the average man or woman in the street.
The party would have been far better served — and Hong Kong would now be in a far better place — if over the years it had instead listened to the alternative voices that could have warned of the unsustainable socio-economic pressures building in the territory.
The party will have only itself and its patriotic friends in Hong Kong to blame if, as is likely, the city’s protest movement overshadows its big Beijing military parade on October 1.
This article has been amended to reflect the correct annual US dollar cost of private rental flats in Hong Kong