Hong Kong Was Better Under the British

February 23, 2012  

It wasn't a democracy, but its rulers were uncorrupt and accountable. Now its government is none of the above.

The slow-motion implosion of Henry Tang, Beijing's pick to be Hong Kong's next chief executive, brings to mind a speech given shortly before the 1997 handover by former Far Eastern Economic Review Editor Derek Davies. In "Two Cheers for Colonialism," Mr. Davies attempted to explain why the city flourished under the British. Fifteen years later, the Chinese officials who are having trouble running Hong Kong might want to give it a read.

The Brits created a relatively uncorrupt and competent civil service to run the city day-to-day. "They take enormous satisfaction in minutes, protocol, proper channels, precedents," as Mr. Davies described them, "even in the red tape that binds up their files inside the neat cubby holes within their registries." Their slavish adherence to bureaucratic procedure helped create respect for the rule of law and prevented abuses of power.

Above the civil servants sat the career-grade officials appointed from London. These nabobs were often arrogant, affecting a contempt for journalists and other "unhelpful" critics. But they did respond to public opinion as transmitted through the newspapers and other channels.

Part of the reason they did was that Hong Kong officials were accountable to a democratically elected government in Britain¡Xa government sensitive to accusations of mismanaging a colony. Still, local officials often disobeyed London when it was in the local interest¡Xfor this reason frustrated Colonial Office mandarins sometimes dubbed the city "The Republic of Hong Kong." And for many decades the city boasted a higher standard of governance than the mother country.

Mr. Davies nailed the real reason Hong Kong officials were so driven to excel: "Precisely because they were aware of their own anachronism, the questionable legitimacy of an alien, non-elected government they strove not to alienate the population. Their nervousness made them sensitive."

The communists claim that the European powers stripped their colonies of natural resources and used them as captive markets for their manufacturers. But Hong Kong, devoid of resources other than refugees from communism, attracted investment and built up light industry to export back to Britain. And as for taking back the profits, Mr. Davies noted, "No British company here would have been mad enough to have repatriated its profits back to heavily-taxed, regularly devaluing Britain."

Most expatriate officials retired to Blighty, so they were less tempted to do favors for the local business elite. The government rewarded them with pensions and OBEs. A Lands Department bureaucrat didn't have to worry whether his child would be able to find employment in Hong Kong if a decision went against the largest property developer.

Contrast all this with Hong Kong after the handover. The government is still not democratic, but now it is accountable only to a highly corrupt and abusive single-party state. The first chief executive, Tung Chee Hwa, and Beijing's favorite to take the post next month, Henry Tang, are both members of the Shanghainese business elite that moved to the city after 1949. The civil service is localized.

Many consequences flow from these changes, several of which involve land, which is all leased from the government. Real-estate development and appreciation is the biggest source of wealth in Hong Kong, a major source of public revenue and also the source of most discontent.

In recent years, the Lands Department has made "mistakes" in negotiating leases that have allowed developers to make billions of Hong Kong dollars in extra profit. Several high-level officials have also left to work for the developers. This has bred public cynicism that Hong Kong is sinking into crony capitalism.

This helps explain why the public is so upset with Mr. Tang for illegally adding 2,400 square feet of extra floor space to his house. Likewise Michael Suen, now the secretary for education, failed to heed a 2006 order from the Lands Department to dismantle an illegal addition to his home. His offense was arguably worse, since he was secretary for housing, planning and lands at the time.

In both cases the issue is not just a matter of zoning and safety; illegal additions cheat the government out of revenue. But it's unlikely Mr. Tang will face prosecution because nobody above or below him is independent enough to demand accountability. So now there is one set of rules for the public and another for the business and political elites.

Under the British, Hong Kong had the best of both worlds, the protections of democracy and the efficiency of all-powerful but nervous administrators imported from London. Now it has the worst of both worlds, an increasingly corrupt and feckless local ruling class backstopped by an authoritarian regime. The only good news is that the media remain free to expose scandals, but one has to wonder for how much longer.

Hong Kong's Chinese rulers have been slow to realize that the only way to keep Hong Kong the same is to accept change. It is no longer a city of refugees happy to accept rule by outsiders. And democracy is the only system that can match the hybrid form of political accountability enjoyed under the British.

Mr. Davies ended his appraisal of colonialism's faults and virtues thus: "I only hope and trust that a local Chinese will never draw a future British visitor aside and whisper to him that Hong Kong was better ruled by the foreign devils." Fifteen years later, that sentiment is becoming common.

Mr. Restall is the editorial page editor of The Wall Street Journal Asia. ¡@