CAMBRIDGE, England — Last week, Willy Wo-Lap Lam lost his job as the China correspondent on the South China Morning Post. That technically he resigned rather than be “promoted” to a non-China-related job is irrelevant, as it was clear that he was not going to be allowed to continue writing his weekly opinion piece about developments in China.
Whatever the editors say, this can be seen as another step in the loss of independence of Hong Kong. Willy was a thorn in the side of mainland politicians. His acerbic, questioning columns were always well, if usually anonymously, sourced. His connections are apparently at the highest levels. Whenever a significant high-level meeting in China takes place, Willy seems to know what has been said almost as soon as the meeting ends. In his articles, he has demonstrated a well-targeted cynicism about the actions and motives of party leaders and government officials that has clearly gotten under their skin. Of course, the editor of the South China Morning Post denied that any pressure was put on him to remove Willy from his post, but he would, wouldn’t he?
Pressure takes many forms, and while I am sure the editor did not get a phone call from Zhonganhai (home of China’s party leaders), I am equally sure that the people there found a way of letting him know their views. As Willy’s articles were the most widely read reports on current political developments in China, the China-watching world has lost one of its main windows onto that murky space.
This is only the latest in a series of events since the return of Hong Kong to the mainland that has had observers raising their eyebrows. Some, including me, are becoming concerned that the characteristics that made Hong Kong what it is today are being undercut by Beijing and its friends in the Special Administrative Region.
Apart from the case of the University of Hong Kong, where the vice chancellor resigned after the university forcefully passed on to a researcher the news that Hong Kong’s chief executive was unhappy at his publishing unflattering opinion polls, the situation is largely negative. In particular, the reputation of Hong Kong as a free-market economy is being compromised, threatening the future of Hong Kong as an international entrepot, especially in international finance.
The first indication that the SAR might abandon its free-market credentials came in the inaugural speech of Chief Executive Tung Chee-hwa. In this speech, Tung effectively announced that his administration would use the price of land, which it controls by releasing land from a government land bank, for direct political purposes. According to some analysts, he made it worse by later backtracking, after the Asian political crisis, in response to protests from the real-estate lobby.
Tung, incidentally, chose not to live in the governor’s mansion vacated by former Gov. Chris Patten, opting instead for a luxury apartment block supposedly owned (and also lived in) by Taipan Li Ka-shing.
More recently, in 1999, the Hong Kong government awarded the right to develop publicly owned land into the vaunted new cyberport — designed to put Hong Kong at the frontiers of the IT revolution — to a company run by Li’s son Richard. This was done without going through the usual process of tendering. Early this year, there were widespread allegations that Richard Li’s company Pacific Century CyberWorks won the battle to buy Hong Kong Telecom in the face of competition from Singapore with the help of intervention from both the SAR and mainland governments. Sometimes, all that is needed is an indication that the government(s) would not like something to happen for market participants hoping to remain in Hong Kong on a profitable basis to take the hint, especially now that the SAR government has acquired the habit of intervening in the economy.
On the other hand, Li Ka-shing has allegedly indicated twice, in 1998 and earlier this year, that the activities of the local democrats might lead him to cut his investments in Hong Kong by more than $1 billion. The Li family is reputed to own or control the largest share, possibly more than a third, of the total shareholdings listed on the Hong Kong stock exchanges. Their company Tom.com was listed on the Hong Kong NASDAQ style GEM market after accelerated listing procedures that did not apparently follow the requirements imposed on many, if not all, other companies.
The biggest public intervention, of course, was the direct manipulation of the stock market at the time of the Asian crisis, when speculators bet that Hong Kong would not be able to maintain the parity of the Hong Kong dollar with the U.S. dollar. Government authorities spent US$15 billion propping up the market in order to “hit them where it hurts and [to warn them] don’t come here and make a lot of money by playing in our futures market,” as Hong Kong Monetary Authority Chief Executive Joseph Lam put it at the time.
More recently, the Hong Kong government has decided to speculate directly in the real-estate market by taking 57 percent of the equity in the proposed Disneyland Hong Kong project — while undertaking to pay 88 percent of the development costs.
While all of these interventions have been explained away by the government, which continues to claim the mantle of a free-market economy, other observers are not so sure. There are suspicions of a drift toward a mainland-style control economy — and possibly a mainland-controlled economy. This would make Hong Kong a less attractive place for international business and threaten the future pre-eminence of Hong Kong as a international business city.
This has not gone unnoticed by the international business community. Those respected indicators of international competitiveness and business culture The Global Competitiveness Report, The Global Country Forecast and The World Competitiveness Yearbook have all recently downgraded Hong Kong. In the case of The Global Competitiveness Report, Hong Kong fell from second to third place in 1999, and it went from first to sixth in the The Global Country Forecast’s placings for 2000. The World Competitiveness Yearbook dropped it all the way from third place in 1998 to 14th place in 2000.
In such situations, governments don’t appreciate open-minded critical reporting from columnists such as Willy Wo-Lap Lam. His removal was not the first indication that all is not well in the Hong Kong media, but it is the most significant.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
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