On or shortly after June 16, the Hong Kong authorities are expected to submit a package of electoral reforms to the special administrative region’s representative body, the Legislative Council (LegCo), that includes a proposal for implementing universal suffrage in the former colony for the first time. Despite the obvious attraction this should present to democratic activists in LegCo, it appears headed for defeat because of the restrictive terms and conditions imposed on the process by Hong Kong’s sovereign, the People’s Republic of China. A seemingly irresistible force, the expectation of democratic representation, has met an immovable object: China’s determination to put limits on the process.

If the proposal is defeated, Hong Kong faces the likely prospect of many years before there will be a reconsideration of universal suffrage. The political repercussions are likely to affect Hong Kong’s relations with the United States and other nations with an interest in the city’s autonomy. That autonomy is supposed to be guaranteed by the Basic Law that governed Hong Kong’s return to the People’s Republic of China in 1997 and is to preserve its unique system for the subsequent fifty years. Political relations between Hong Kong and Beijing are likely to be strained for years as well.

How Did This Situation Come to Pass?

Douglas H. Paal
Paal previously served as vice chairman of JPMorgan Chase International and as unofficial U.S. representative to Taiwan as director of the American Institute in Taiwan.
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To summarize without recapitulating the complex negotiating and legislative history, Beijing agreed to initiate universal suffrage for the selection of a chief executive for Hong Kong by 2017. In late August 2014, China’s National People’s Congress approved implementing legislation to govern the election process. The old way of doing business, with the chief executive chosen by 1,200 representatives of Hong Kong trades, professions, and communities, mostly compliant with China’s wishes, was to be replaced by a final ballot among the eligible voters of Hong Kong, numbering about 5 million. The winner of the election would then be formally appointed chief executive by the National People’s Congress.

But Beijing limited the number of candidates to compete in the election to two or three, nominated by the same 1,200 worthies who controlled the chief executive selection process previously. This limitation produced outrage among the democratic forces in Hong Kong, culminating in the Umbrella or Occupy Central movements that produced seventy-nine days of sit-in protests last autumn. The protesters want this procedure to be changed; Beijing refuses to budge. The authorities in Hong Kong appear caught in between, in the eyes of various Hong Kong quarters lacking either the leverage or the will to fight back against China’s determination to proceed.

The implementing legislation to change the electoral system requires a two-thirds majority of LegCo, and as of now, it is four votes short. The pan-democrats, as the various opposition forces are known, would rather use China’s rigid stance to embarrass Beijing by not complying with it, hoping domestic and international pressure will lead the Chinese leadership to reconsider its stance. In a recent visit to Hong Kong, I found a surprisingly strong sense among some of these forces that brinksmanship might work, that Beijing will grant a concession at the last moment.

On May 31, Beijing’s Hong Kong and Macao Affairs Office invited the democrats to a meeting in Shenzhen for long-overdue direct consultations, but these produced no breakthrough. Senior Hong Kong bureaucrats Carrie Lam and Raymond Tam subsequently approached some of the democrats seeking their cooperation, but they were unable to offer improved terms to win them over.

The Choice

So the issue boils down to this: whether to make the best of what is on offer.

As a U.S. congressional leader reportedly said during a recent visit, Hong Kong’s democrats must choose whether to take “half a loaf” or nothing. When I asked a leading democrat about this choice, the response was that the option on the table was an inedible “half-baked half a loaf.” At this point, the democrats believe they will gain more from confrontation than limited cooperation.

They are counting on support from the United States in particular. In the U.S. Congress there are competing drafts of an amendment to the 1992 Hong Kong Policy Act, which laid the legal basis for accommodating under American law Hong Kong’s special status once it was returned to China’s sovereignty in 1997. This preserved the former colony’s preferences in trade and technology transfer, among other things. The act required until 2002 annual reports from U.S. administrations on how Hong Kong was doing in preserving its autonomy. The new proposed amendments would require renewal of those reports, either annually (in the House version) or as determined by changed circumstances (in the Senate version). Hong Kong’s pan-democrats eagerly seek the more intrusive of the amendments as a source of outside support.

Threading the needle-sized gap between Beijing and the democrats seemed possible if difficult in recent months. Perhaps, it seemed, the composition of the nominating committee of 1,200 could be made more democratically representative and less based on interest groups. This might have produced candidates for chief executive more acceptable to the opposition. But Beijing refused. Other suggested reforms to the nominating process met similar fates.

The remaining realistic possibility is what Richard Bush of the Brookings Institution calls “a narrow pathway.” That is, the democrats in Hong Kong should make the most of the only offer on the table for universal suffrage. If some of the pan-democratic LegCo members can be persuaded to support the imperfect nomination process in hopes of developing a more democratic voting culture, giving the proposed reform its necessary two-thirds majority, the election itself will provide an opportunity for a new political dynamic. The proposition is based on the idea that if there are two or three chief executive candidates vying for the votes of perhaps 5 million Hong Kongers, the simple fact of competition among them will expose differences on which the voters can base their choices. This is likely to be true even if the candidates appear equally safe to Beijing when they are nominated by the semiclosed process now authorized. This could produce a taste and feel for democracy that is unprecedented in Hong Kong.

The alternative to seeking democracy through this approach is returning to the unsatisfying current method of choosing the chief executive by the 1,200 unelected representatives. With this comes the expectation of a return to street protests. Observers in Beijing privately suspect that the disciplined and pacific character of last year’s protests would transform into something uglier and potentially violent. They did not note this in a threatening fashion but in a way that suggested they are resigned to the outcome. Others in China will smirk with satisfaction if LegCo turns down the voting package, obtaining their preferred outcome of no expansion of democracy in this small part of China.

U.S. Interests

Hong Kong remains a favored entrepôt for American business and residents, who number in the thousands. Its financial services industry has long facilitated trade and investment in China’s growing market.

Because of this, and because of the United States’ continuing faith in democracy, it is to be expected that the U.S. Congress will take up the two draft amendments to the Hong Kong Policy Act in the aftermath of a failure of LegCo to pass the implementing legislation for universal suffrage. The Obama administration, in my judgment, would be unlikely to veto the bill in the interest of smooth relations with China. This certainly would be due in part to the “motherhood and apple pie” nature of bills intended to promote democracy, but also because of the deteriorating atmosphere in U.S.-China relations over the South China Sea, cyberintrusions, and perceived challenges to American power.

As the United States heads into an election year, Hong Kong can become one of the talking points for candidates critical of China, probably joined in time by new tensions over Taiwan as it enters into an election cycle as well.

Meanwhile, Beijing is going through a complex internal reform program that is making its responses to political opposition more brittle and unforgiving. This apparently reinforces a need to show toughness on issues abroad to reinforce political support at home.

This is a combination of factors that should induce caution and realism in U.S. expectations, as well as greater attention to an effective and comprehensive China policy strategy, something difficult to identify today.

The Social and Economic Dimension

Among the factors leading to the street protests of 2014, one that should not be overlooked is the effect of Hong Kong’s young people’s belief that their lives are unlikely to improve as did those of their parents and grandparents. Increasingly well educated, they have high expectations, but in too many cases their training does not fit the needs of the labor market. Government mismanagement has left housing in short supply and therefore too costly for many. And the entrepôt premium that Hong Kongers enjoyed between China and the rest of the world has diminished greatly as China has opened up and educated its native competitors for the well-paying jobs. Managing the effects of declining expectations will be a huge challenge for the Hong Kong authorities.

This is a subject for further research and policy generation, but it should be noted that Hong Kong is not unique. Similar mismatches between reality and expectations have infected Taiwan’s politics as well and helped account for the sunflower protests last year in Taiwan’s legislature. Occupy Central took its name from the Occupy Wall Street movement of 2009, so the broad themes of this dissent reach far.

But I suspect that proximity to China and its nondemocratic authoritarianism, combined with the boom-and-bust sense of young people about economic opportunities there, make the activists of Hong Kong feel the costs and threats more directly than elsewhere. This combination also makes effective policy solutions more difficult for governments to manage. Hong Kong’s opposition compounds the difficulty by proving so far unable to organize around a coherent and common package of reforms and priorities.

For Beijing, Hong Kong, and the opposition, without more homework and conciliation, the outlook is not bright.

Correction: This article originally stated that a meeting in Shenzhen between Beijing officials and the democrats took place on June 6. The meeting was on May 31.