The protests against the now-defunct extradition bill that have gripped Hong Kong for the past six months have deep social and economic roots. This situation has been effectively exploited by powerful foreign actors in a wide geopolitical conflict to achieve different political goals.

These events have completely overwhelmed the Hong Kong government, which is mostly trained in peacetime administration, not to handle crises of this scale and intensity.

Behind its facade of peace and prosperity, Hong Kong has many social and economic fault lines. Even with huge budget surpluses and foreign currency reserve assets that currently amount to US$434.3 billion, for a population of almost 7.5 million people, income inequality has grown over the years.

In 2016, it hit its highest level since the city began keeping records 45 years ago. The median household income of the top 10 per cent of the population is 43 times that of the lowest 10 per cent. With a median individual monthly income of HK$16,000 (US$2,044), life is tough in this city.

Until Chief Executive Carrie Lam Cheng Yuet-ngor recently raised the mortgage ratio to 90 per cent for first-home buyers (who still have to pay a price of slightly more than US$1 million for a flat), it would take eight years of combined unspent household income to save for the deposit of a flat in the private sector. People who wish to move into a public rental flat would still have to wait an average of more than five years.

On the education front, the 22 degree-granting institutions annually produce more graduates than the market can absorb, forcing many to take low-skill jobs. This structural mismatch of skills and opportunity has generated discontent among the younger generation.

Over the past few decades, while Hong Kong focused on economic growth, government and the community at large have allowed the education system to be infiltrated with anti-China material, imbuing the present generation with bias.

Meanwhile, in the four decades since China adopted its open-door policy, Beijing has lifted more than 800 million people from poverty and created a middle class of 400 million people. The number is expected to double in the near future .

In 2019, China replaced the US as the country with the most companies on the Fortune Global 500. Four of the five biggest banks in the world now are Chinese-owned.

The burgeoning middle class in China understands that economic prosperity depends on social stability and seems willing to accept limited political freedom as a prize for ever-expanding social mobility and economic freedom. China’s high savings rate is also an important buffer against global economic volatility.

A robust middle class, besides being an important driver of growth, also provides implicit endorsement and legitimacy for Communist Party governance. The spectacular rise of China, especially in technology, presents a threat to US global supremacy.

The Trump administration’s stance against President Xi Jinping’s technological ambitions has bipartisan congressional support.

The US flag-waving protesters in Hong Kong chanting for freedom and democracy have provided a convenient platform for the US to intensify pressure on China in difficult trade negotiations.



The Taiwanese government is eager to use the chaos in Hong Kong to show that Beijing’s “one country, two systems” model of governance has failed in Hong Kong and should not be applied to the island. This toxic mix of external forces, coupled with deep social fissures, is the dry timber set alight by the mismanagement of the extradition bill.

The Hong Kong people’s attitude towards Chinese from the mainland is a mixture of superiority, frustration, inadequacy,
jealousy and fear. Stories of seizures of land by local governments, prolonged detention without trial and denial of legal representation are constant themes of the local and foreign media. Mainland visitors coming to Hong Kong in record numbers, monopolising baby powder and private hospital beds, driving up property prices and exhibiting antisocial behaviour in public all create additional sources of frustration.

Images of the unexplained disappearance of booksellers critical of Beijing leadership and the alleged abduction of a mainland businessman from a five-star hotel in Hong Kong still weigh heavily on the minds of the people.

However, it should be pointed out Hong Kong still ranks third in the Fraser Institute’s Human Freedom Index, measuring individual freedoms of speech, assembly, religion and so on. The US trails at No 17.

But economic achievement and opportunity in China are not sufficient to compensate for the lack of transparency in the Chinese legal system. Chinese judicial authorities should heed the English legal dictum that it is not enough that justice be done but be seen to be done. It is only when powerful state-owned enterprises are brought to account for wrongdoing that people’s trust in the Chinese legal system can be restored.

After more than 150 years of British colonial rule, reversion to communist rule is daunting for many. While fear of the unknown is normal, Hong Kong is and always will be a part of China. Hong Kong’s importance to China lies not in economics but in China’s realisation of territorial integrity and national sovereignty.



While China should work on legal transparency, Hongkongers should embrace their cultural heritage and identity. Senseless destruction by young people is not a winning strategy to convince Beijing to grant Hong Kong greater freedom.

The combination of negative encounters with mainland Chinese and a new sense of inadequacy in reaction to mainland Chinese overachievement in schools and the workplace has resulted in rejection and self-seclusion. National reunification takes understanding, patience and adjustment from all stakeholders to achieve lasting harmony.

With a better understanding of China’s recent history and the true value of Hong Kong to China, the people of Hong Kong will realise that the safest place in the storm is in the eye of the storm itself.