kenny hodgart


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Somewhat Occupied in Hong Kong

This article appeared in Scotland’s Sunday Herald

The Chinese government hasn’t had a great deal to say publicly about events in Hong Kong over the past week or so, but it was inevitable that it would warn of the financial costs. According to business associations cited on Wednesday by state media, the loss to Hong Kong’s economy from a week of protests that has put life as we know it in the city somewhat on hold, will be at least HK$40 billion (£3.2 billion).

One operation that has certainly prospered is the 24-hour McDonald’s restaurant in the Admiralty Centre, an ugly shopping arcade that yields access to the Admiralty Mass Transit Rail (MTR) station, formerly the site of the city’s naval dockyards and right now the epicentre of Occupy Hong Kong. ‘Pure capitalism’ is often said to rule here, and Hongkongers do enjoy a visit to McDonald’s (the city has 234 outlets, serving a city of 7 million people). With tens of thousands having reclaimed the streets outside, its convenience foods seem never to have been more appreciated.

The “umbrella revolution” has been a unique sort of revolution. So-labelled by someone on Twitter – in New York – after images of protesters using upturned umbrellas to defend themselves against pepper spray went global last weekend, it is self-evidently no revolution at all. It has at times felt like one, though.

“It’s like a utopian state around here,” one protester, a 48-year-old salesman, told the Sunday Herald on Wednesday night, gesturing at Connaught Road, an eight-lane artery taken over by a mass of humanity. Along this vast demo site – and at smaller sit-ins in Causeway Bay, to the east, and Mong Kok, across the harbour in Kowloon – a new order had been established. Occupy Hong Kong is nothing if not well-run. There are First Aid points and makeshift Democracy Class Rooms, where activists with megaphones attempt to raise their fellow citizens’ political consciousness. Volunteers wander around with black bin bags, ensuring not so much as a cigarette butt is allowed to litter the scene; others crush plastic water bottles for recycling; some hand out cooling patches and crackers. On Tuesday a string quintet struck up a version of Do You Hear the People Sing? from Les Miserables, on an occupied stretch of road outside one of the city’s biggest department stores.

“No cars have been vandalised, no shops looted, nobody is throwing anything at the police,” another protester observed, with some pride, as we lingered by the window – no shutters – of the Admiralty Centre’s Audi showroom. His pride was widely shared; equally, the sheer numbers of Hongkongers who had come out to support anti-government sentiment were a source of surprise. “We all thought that the Hong Kong people were selfish and only interested in money,” is how one young journalist puts it.

What brought them out, then? The short answer is the heavy-handed tactics used by police against student protesters. There are several longer answers, but the first requires some technical explaining. Hong Kong has never chosen its leaders. However, written into the Sino-British Declaration of 1984 – under which the British and Chinese governments agreed the colony would revert back to Chinese sovereignty in July 1997 – and subsequently reiterated in Hong Kong’s Basic Law, its mini-constitution, is a commitment to eventual universal suffrage in elections for the city’s Chief Executive. Article 45 of the Basic Law states: “The ultimate aim is the selection of the chief executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures.”

Various pledges were given, down the years, by the Chinese Communist Party, that Hong Kong would be allowed to determine its own democratic path under the “one country, two systems” arrangement. But ultimately they settled on a conservative interpretation of Article 45: this year, both the Chinese State Council and the Hong Kong government have reiterated that candidates for the chief executive election of 2017 must be nominated by a 1200-member committee roughly similar to that which directly chose current leader Leung Chun-ying in 2012. In other words, people will get to choose between two, possibly three, candidates, approved by Beijing loyalists; civil or political party nominations are off the table. In June, a State Council white paper claimed “comprehensive jurisdiction” over Hong Kong, leading many to fear the city’s much-cherished rule of law was under threat.

The campaign group Occupy Central, led by Benny Tai, a law professor, had planned to bring only the city’s Central district – its financial heart – to a standstill, from October 1, National Day across China. Things changed, however, after a week-long class boycott organised by the Hong Kong Federation of Students (HKFS) and Scholarism – an activist group formed two years ago by secondary school students – took an unexpected turn. After young demonstrators stormed a public square in front of the government headquarters in Admiralty which had been zoned off, they were held there overnight by police and subsequently set upon with pepper spray. Several arrests were made, including that of Scholarism’s skinny 17-year-old leader Joshua Wong, although all were later released. Occupy Central announced its civil disobedience campaign would begin immediately and thousands rallied to the protest site.

Last Sunday, as the swelling crowds attempted to block off major routes across the north of Hong Kong Island, another stand-off developed. This time, police attempted to clear the streets with batons, pepper spray, tear gas and threats of opening fire with rubber bullets. Again, the streets filled up. Having botched their response from the first, by Monday the police were standing off and Occupy Hong Kong had taken on a momentum of its own. “Mr Tai and the other leaders never expected so many people to join, or so many spots in the city to be occupied,” a young office worker told The Sunday Herald. “We’re angry because we were provoked.”

Angry or not, by midweek the atmosphere was almost euphoric: hundreds of thousands had discovered a commonality of purpose; the public square belonged, squarely, to the public; yellow ribbons fluttered like a thousand flowers blooming. But still, there was a nervousness. On Thursday, the Chinese Communist Party warned, via state media, of “unimaginable consequences” if demonstrations continued, and called on Hong Kong to “deploy police enforcement decisively”.

At a press conference late that evening, Leung rejected calls for him to stand down but announced chief secretary Carrie Lam would hold talks with protest leaders. The authorities had appeared to hope the protests might just fizzle out, but enough have expressed a determination to stay until they see evidence that the government means to address their concerns. Others, in a city where tens of thousands mark the anniversary of 1989’s Tiananmen Square massacre every year with a candlelit vigil, can’t help but feel apprehensive.

INA BRIEFING note prepared by a political risk analyst on Wednesday and shared with the Sunday Herald, he laments that the protesters had “no exit strategy”, and that their calls for Leung’s resignation had closed a window of opportunity for Beijing to grant a concession without losing face. “Even if… numbers dwindle to even 10% of current estimates, the continued disruption would require security forces to intervene… creating the conditions for a long burning fuse and ongoing confrontation and disruption,” he wrote, adding that: “If agent provocateurs from whatever side are successful… in fermenting confrontation the situation could spiral quickly downward to chaos.”

Since Friday, that prospect has reared its ugly head. With the overall police presence escalating once more, and scuffles breaking out between protesters and police near Leung’s office, there have also been skirmishes of a new sort in Mong Kok and Causeway Bay as some pro-Beijing elements have made their presence violently felt. According to reports, eight of the 19 men arrested following clashes in Mong Kok on Friday, when a group wearing masks attacked protesters, injuring several (including journalists), have triad backgrounds. Amnesty International said the police had failed in their duty to protect peaceful protesters from being attacked, while Occupy Central co-founder Chan Kin-man said the violence had been organised and planned and accused the government of being behind it in an effort to clear protest areas.

Whether or not that accusation holds truth, what’s clear is that the Hong Kong government’s failure to either quell or diffuse the protests will not please Beijing. And at present there are too many domestic and international issues that the Chinese Communist Party sees as threatening its survival – unrest in Xinjiang and Tibet; territorial disputes in the South China and East China Seas; internal party divisions – for it to be in any mood for compromise or retreat.

Awareness of this and of the fragility of Hong Kong’s semi-autonomous status has provided a wellspring of anger which has clearly fed into the current dissent. But there are other factors, too. For some decades, Hong Kong has benefited from being a “gateway to China” for multinational companies. With China’s economic rise and the gradual opening up of its economy, that gateway access to its markets via Hong Kong has become less paramount. No longer, then, quite so much the privileged middle man, Hong Kong has also had to contend with an influx of mainland Chinese with money. Inevitably, they have been blamed for overcrowding and rising prices – Hong Kong is now the second most expensive city in the world, behind London – and friction between Hongkongers and mainland visitors is rife.

Such concerns cannot easily be dismissed, particularly when they seem to affect all but the wealthiest. As one middle-aged, middle-class protester puts it: “We’re pessimistic about Hong Kong but a lot of it is about the economy. How can I have a good job? How can I support my family. The housing situation is crazy. But the government is not helping people at all. It’s corrupt – nobody trusts the people running things. We see no way out of this without new leaders.”

Tragically perhaps for the young idealists who have forged an inspired and at times inspiring grass-roots movement over the last week, it is reasonable to wonder whether the wider world truly cares about any of this. Certainly, many see the British government’s meek response – “I feel for the people of Hong Kong” is about as much as David Cameron could muster on Tuesday – as a betrayal of its obligations stemming from the Sino-British declaration. Trade with China trumps all, it seems.

In Hong Kong, though, regardless of the outcome, these events will shape a generation. Whatever lies in wait, student activists and the young have done more to focus minds on democracy than scores of pro-democracy politicians since the 1997 handover. Notwithstanding the possibility of an escalation of violence, it may be that they in themselves will be Occupy Hong Kong’s profoundest legacy.


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Squeezes and wheezes

Tax may seem like an obvious subject for this column (which was published as a Rant in the South China Morning Post’s Post Magazine) – nobody likes having their money taken away, do they? – but there’s been a lot of noise about it lately, mostly emanating from places that don’t have their houses much in order.

What our European friends – all up in arms about individuals and large corporations using various Machiavellian stratagems to shunt their wealth into tax havens – seem unable to grasp is that businesses nowadays don’t so much avoid tax as choose where to pay it (if production and sales can be easily shifted around the world, why stick to one tax jurisdiction?). The answer, garcons and frauleins, therefore is to shut up and be more accommodating – after the example of Hong Kong, where tax is simple, flat and low.

Of course, there’s plenty wrong with how things are done in this city: the government sneakily drip-feeds building land on to the market to keep prices high, the “trickle down” effect making life more expensive for everyone; it offers tax wheezes and loopholes and exemptions; and nobody bothers much to hold it to account. But, as Chief Executive Leung Chun-ying was keen to point out on his recent visit to the United States, our business-friendly arrangements do fill up the coffers.

Politicians in Britain, meanwhile, have seized on the word “immoral” to describe companies such as Google, at whose altars they previously worshipped; while campaigners styling themselves as modern-day Robin Hoods – quite forgetting that it was the Sheriff of Nottingham who collected taxes – have been doing the exchequer’s bidding by demanding corporations cough up more for the government to spend. The risk is they’ll frighten all the dastardly rich off to places like Hong Kong, leaving old Robin with no one to steal from.

This article was published in the South China Morning Post’s Post Magazine


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The poor and the greedy

This article appeared in the South China Morning Post

One hears a lot of about “the grass roots” in Hong Kong. It’s a phrase that seems to carry a more specific meaning here than I have encountered elsewhere, having come out from Scotland some 18 months ago.

Whereas in Britain and the US it intimates more generally the ordinary rank and file, or the population base at large, in Hong Kong “the grass roots” also tends to serve as a rather euphemistic term for the poor. We are told that grass roots people feel neglected, or that they are being effectively papuerised by inflation, or that they do not trust Chief Executive Leung Chun-ying to deliver on his pledges to help them.

There is one problem with the metaphor, however: real grass roots find it easy to break through the sod and grow. If they have the strength to seek their days in the sun, then so it shall be. By comparison, many of Hong Kong’s poor can legitimately be described as being downtrodden.

Much has been made recently of inequality in Hong Kong. As indicated by the city’s Gini co-efficient, a statistical measure of income disparity, we are living in one of the most unequal societies in the world. But it would be a mistake to unhesitatingly conflate, as many do, these two problems: stalled social mobility (the thwarted seedbeds) and a yawning gap between rich and poor.

To seriously confront the latter would require large-scale redistribution of wealth, which seems an unlikely course for any government here to take. There is more than a whiff of crony capitalism in Hong Kong, but it remains one of the world’s freest market economies: increasing the tax burden significantly on wealth creators would be to curtail much of the activity that stems from that.

It is always worth stressing, furthermore, that a more equal society is not necessarily a better one. “Solitary, poor, nasty, brutish and short” is how Thomas Hobbes described life in mankind’s “natural” state – relative equality tends to prevail in primitive societies as there is little scope for accumulating wealth. There is therefore less economic activity, less innovation and less incentive to create employment – things which benefit everyone.

How to ensure this is so is the challenge faced by governments: even the right accepts the state has a responsibility to help the poor. But where the right may be correct to insist that income disparity is necessary, the solution to ensuring inequality works for the benefit of society as a whole is perhaps the most sensible idea to come from the left.

It was the great liberal 20th Century American political philosopher John Rawls who outlined it best. Arguing for the free market and social inequality, he nevertheless insists in his A Theory of Justice on equality of opportunity: “Those who have the same level of talent and ability and the same willingness to use these gifts should have the same prospects of success regardless of … the class into which they are born and develop until the age of reason.”

To be born poor in Hong Kong is to have one’s prospects of success seriously blunted. Partly this is because the strivers who are given the chance to better themselves in one generation have a tendency the world over to pull up the ladder behind them on subsequent generations. It is also, however, a matter of public policy.

During his election campaign, Leung promised to focus on livelihood issues affecting the poor. Some of these he will no doubt follow up on; others he will not. But in a city whose coffers are directly swelled by booming asset prices – which themselves create new haves and have nots – and which has a grievous track record of billions spent on unnecessary infrastructure projects, the fact that people are forced to live in cage homes is nothing short of scandalous.

No doubt the isolation and immiseration of swathes of what used to be the working classes in rich societies is a global phenomenon and one related to deindustrialisation, which in Hong Kong happened in the space of a generation. Economic circumstances will stall social mobility, but this is when government spending – on housing, on education subsidies, on underwriting small business loans – is at its most useful.

For all the protest and agitation in Hong Kong in recent weeks and months, the conditions for class warfare thankfully do not yet exist. But for the “grass roots”, a bit of Rawlsianism would not go amiss. The city can afford it.