A Comparison of Hong Kong and China Post Colonialism

Edward C. Bohling Jr.

His 342

August 16, 2010

Holly Heatley

Hong Kong is a study in capitalism in its purest sense. China with its adaptation of agrarian communism was slower in development after it had shed imperialism. This work will take a brief look at the two and in the end show how China was dependent on Hong Kong until once again China opened up to market capitalism.

It is said that Hong Kong may be viewed in its relationship to China as either part of it or apart from it (Ngo, 1999, p1). Hong Kong, as we know it today or rather modern 20^th century prior to the 1997 return, is not the same Hong Kong which became the foundation of the British opium trade after the Heavenly Court forced the gwailo (foreign devils) from the interior shores of Canton province. The original Hong Kong began on the Island that the British named Victoria. Victoria was the administrative center of the Colony. According to James Stephan, Hong Kong was occupied not as an intended colony but as a commercial, military and diplomatic outpost (Brendon, 2007, pp103-106).

Hong Kong quickly became a boom town so to speak even with Chinese fleeing the Portuguese colony of Macau. Hong Kong became a place where there was opportunity to make money. The Celestial Kingdom (Chinese Monarchy) had illegalized opium, even though the British had pushed for its legalization. The Taipan’s were making their money by smuggling the Indian product into Canton which was responsible for 40% of India’s exports. The silver that was extracted by the trade not only paid for the British addiction to tea but also financed fifty percent of the Royal Navy. This was the foundation then of Hong Kong (Brendon, 2007, p106).

Although the Chinese thought of the British and other Europeans as barbarians, (also the Japanese view) much of Hong Kong’s wealth was generated with Chinese collaboration. As Piers Brendon points out, Chinese men were manning the scrambling dragons which smuggled the opium from ships in Hong Kong’s harbor into Canton (Brendon, 2007, p104).

Hong Kong had been considered to be more of a business corporation than a state. Even though it had a governor appointed by the British Crown the advisors of the business set determined policy, according to its critics. For all intensive purposes, Hong Kong policy was determined by members of the Jockey Club, the Hong Kong Shanghai Banking Corporation, and the Jardine & Matheson Co., with the government bringing up the rear (Ngo, 1999, p3). The laissez-fare policies promoted the development of the colony and allowed it to grow economically.

At the onset, according to Ngo, the colonial policy was set for trade at the expense of industrialization. Industrialization was not in the priorities of colonial development until after World War II. The colonial government was fearful of competing with the British home manufacturing base and did not want to harm its dependency on trade which the colony was in business for (Ngo, 1999, p4). The realities of World War II later cooled bureaucratic heads and policies were laid for limited manufacturing capabilities, strict rules were put in place to deter the upgrading of industrial capacity (Ngo, 1999, pp4-5).

Robert Ash states in his work on Hong Kong transition that the colony was so successful after World War II that real GDP increased 10% per annum from 1960 until 1970. Wages were starting to spiral out of control which begun to erode the colonies competitive edge. Hong Kong had achieved such growth that rents had skyrocketed and land prices were out of sight. (Ash, 2000, p58)

Affluence had reached such a level that Chinese families were hiring Filipino house keepers and care takers for their elderly, which began to fill the treasury of the Philippines with interest earned from the exchange rate. (Chiu, 1996, p14) Times have changed for the contract workers that had worked in Hong Kong after the new regime lowered wage rates. The Philippine government had ceased allowing its citizens to migrate to Hong Kong for work.

Hong Kong’s heightened economic status occurred at the time when China reopened its doors. Hong Kong manufacturers then had a source of cheap labor in the Pearl River delta. Factories made the move to Canton to take advantage of the labor and this is when the world began to see ‘made in China’ versus ‘made in Hong Kong’. Hong Kong had thus been in the position economically and geographically to indirectly aid in China’s modernization prior to the lease return in 1997. (Ash, 2000, p58)

When Mao made the choice to close the door to all outside influence he set the Chinese society back for many years. It was the Maoist view that modernization and mechanization was not necessary with such a large labor supply. The Cultural Revolution that followed under the auspices of Mao’s wife also purged society of some of the country’s most brilliant minds. Many of China’s professors had been sent to reeducation camps or prison. What industrialization that had taken place was under the tutelage of Moscow assigned advisors (Wright, 2001, pp147, 148).

It was not until the period of Deng Xiaoping that China changed direction and opened up to the rest of the world. Deng would be the first Chinese leader to visit the United States. In order to modernize he set up four special economic zones mostly in the southeast and eastern coastal regions. The first zone was in the proximity of Hong Kong which is Shenzhen. Shenzhen is a thriving city dedicated to capitalism and commercialism. (Wright, 2001, pp167, 168)

David Wright relates that Hong Kong, as stipulated under the treaty of Nanking was to be ceded to Britain in perpetuity. There was just one problem. Hong Kong grew beyond the principle island and leased other territories for 99 years. The colonial government realized that without the other leased lands that the original habitation would not be able to function. In 1984 the British negotiated with Deng Xiaoping’s government for the total return of the colony to China in 1997. In the negotiation it was agreed to Hong Kong would retain its system of laws and administration for 50 years (Wright, 2001, pp171, 172).

Deng needed Hong Kong’s economic system to aid in the capitalism of the whole of China. While Deng had built up his four special zones and those economies improved the interior of the country was still lagging behind. These are the cities that are seeing energized growth today. One of the most important things that Deng did was to break up the agricultural communes and the nonsense of mass movement of people throughout the country. In the west particularly America, Deng’s one child policy is seen as an ethical morass. The policy has resulted in the infanticide of girls because boys are seen as more important in Chinese society; however Deng Xiaoping enforced the policy to get a handle on China’s overpopulation dilemma. China was close to the fringe where it could not feed itself (Wright, 2001, p169). In light of the population issue China has become dependent to a degree on the west for some food items.

In conclusion it can be seen that Hong Kong’s development was dependent upon its trading connections between China and the rest of the world and that there had always been a mutual relationship amongst the Chinese. China which had worked so hard to free itself of outside interference and western imperialism, found itself in need of foreign connections in its process of market reforms, and where Hong Kong once needed China it became clear that China now needed Hong Kong’s capitalist dynamics to energize its own market infrastructure.

As an end note the Chinese had once owned Buicks and Sun Yet Sen was known to have driven one. According to MSNBC, General Motors is building Buicks in Shanghai for Chinese consumption. (Alexander 2006)

References

1. Ash, R., Ferdinand, P., Hook, B., 2000, Hong Kong in Transition, Palgrave Publishers, New York Retrieved from http://site.ebrary.com/lib/ashford/docDetail.action?docID=2004509 August 16,2010

2. Alexander, P., NBC News, Buick bucks the trend: GM is number one car seller in China, thanks to smart marketing, May 15, 2006. Retrieved from http://www.msnbc.msn.com/id/12801549 August 16,2010

3. Brendon, P., 2007, The Rise and Fall of the British Empire: 1787-1997, Vintage Books, New York

4. Chiu, S.,W.K., 2006, Recent Trends in Migration Movements and Policies in Asia: Hong Kong Region Report, Department of Sociology, The Chinese University of Hong Kong.

5. Ngo,T., 1999, Hong Kong's History: State & Society under Colonial Rule, Rutledge , New York

6. Wright, D., 2001, History of China. Greenwood Publishers, Westport, Connecticut