By Keith Bradsher, Photographs by Lam Yik Fei, June 29, 2017<\/p>\n
When the British left 20 years ago, Hong Kong was seen as a rare blend of East\u00a0and West that China might seek to emulate. Now, increasingly, it\u2019s a cautionary tale.<\/p>\n
HONG KONG \u2014 When Hong Kong<\/a> returned to Chinese rule two decades ago, the city was seen as a model of what China<\/a> might one day become: prosperous, modern, international, with the broad protections of the rule of law.<\/p>\n There was anxiety about how such a place could survive in authoritarian China. But even after Beijing began encroaching on this former British colony\u2019s freedoms, its reputation as one of the best-managed cities in Asia endured.<\/p>\n The trains ran on time. Crime and taxes were low. The skyline dazzled with ever taller buildings.<\/p>\n Those are still true. Yet as the 20th anniversary of the handover approaches on Saturday, that perception of Hong Kong as something special \u2014 a vibrant crossroads of East and West that China might want to emulate \u2014 is fading fast.<\/p>\n Never-ending disputes between the city\u2019s Beijing-backed leadership and the pro-democracy opposition have crippled the government\u2019s ability to make difficult decisions and complete important construction projects.<\/p>\n Caught between rival modes of rule \u2014 Beijing\u2019s dictates and the demands of local residents \u2014 the authorities have allowed problems to fester, including an affordable housing crisis, a troubled education system and a delayed high-speed rail<\/a> line.<\/p>\n Many say the fight over Hong Kong\u2019s political future has paralyzed it, and perhaps doomed it to decline. As a result, the city is increasingly held up not as a model of China\u2019s future but as a cautionary tale \u2014 for Beijing and its allies, of the perils of democracy, and for the opposition, of the perils of authoritarianism.<\/p>\n \u201cMore and more, there is a sense of futility,\u201d said Anson Chan, the second-highest official in the Hong Kong government in the years before and after the handover to Chinese rule. She blames Beijing\u2019s interference for the city\u2019s woes. \u201cWe have this enormous giant at our doorstep,\u201d she said, \u201cand the rest of the world does not seem to question whatever the enormous giant does.\u201d<\/p>\n Others spread the blame more broadly. They point to the opposition\u2019s reluctance to compromise and policies that weaken political parties, including multiseat legislative districts that allow radical candidates to win with a minority of votes.<\/p>\n \u201cThis kind of a political atmosphere will disrupt many of the initiatives that may come along,\u201d said Anna Wu, a member of the territory\u2019s executive council, or cabinet.<\/p>\n A high-speed rail station planned for Hong Kong is a half-finished shell \u2014 years after every other major city in China has been linked by bullet trains.<\/p>\n Hong Kong ranks only after New York and London as a center of global finance, but it has no world-class museums. After 15 years of delays, construction of a cultural district intended to rival Lincoln Center has started, but funding from the legislature could be disrupted in the coming days.<\/p>\n Widespread complaints about test-obsessed schools leaving students ill-equipped to compete against those in mainland China have not led to education reform. Nor has the government found a way to address simmering public anger over skyrocketing rents and housing prices.<\/p>\n Hong Kong was once known for the speed and efficiency with which it built huge planned communities with ample public housing every several years. But it has not managed to do so since Britain<\/a> returned it to Chinese rule on July 1, 1997.<\/p>\n Hong Kong is still a gem in many ways, a place that is hard not to love, and for its 7.4 million residents, hard to leave.<\/p>\n Narrow ribbons of oceanfront skyscrapers are backed by wooded hillsides protected as country parks. Just 10 minutes uphill from the majestic Victoria Harbor and financial district are breathtaking views of the South China Sea. Steel and concrete fade into sylvan trails that wind past lakes and waterfalls, all of it not too far from the city\u2019s cavernous and efficient airport, part of a renowned transport network of subways, buses, trams and ferries.<\/p>\n But the airport was built by the British before they left. So were the institutions that really distinguish the city: the independent courts, the widely respected civil service, the freewheeling press.<\/p>\n Those were preserved under the \u201cone country, two systems\u201d formula that promised Hong Kong a high degree of autonomy when Britain returned it to China. But they have been weakened as the Communist Party increasingly meddles in the city\u2019s affairs, intimidating and even abducting<\/a> people seen as challenging its interests.<\/p>\n The Umbrella Movement demanding free elections<\/a> that seized control of downtown streets for 11 weeks in late 2014 is just a distant memory. But sullen resentment of mainland China has spread as Hong Kong\u2019s democratic evolution has stalled.<\/p>\n This spring, a new chief executive for the territory, Carrie Lam, was selected<\/a>by a committee of about 1,200 residents \u2014 mostly allies of Beijing following its instructions<\/a>.<\/p>\n Her predecessors tiptoed around tough issues, wary of both offending the Chinese leadership and provoking the public. At the same time, critics say, limited public accountability has allowed incompetence and even graft to spread among officials. The top two government officials from a previous administration have been <\/a>tried<\/a> on corruption<\/a> charges<\/a>.<\/p>\n Beijing\u2019s allies have a majority in the legislature because half the 70 seats are selected by interest groups mostly loyal to the mainland government. But the other half is elected, and lawmakers who favor greater democracy have won a majority of those seats. The result is gridlock.<\/p>\n There has also been a generational shift<\/a> in the pro-democracy camp. Voters have replaced older, more pragmatic politicians with younger candidates more stridently opposed to the Communist authorities and willing to engage in all-out resistance. Late last year, Beijing intervened to prevent the seating of two pro-independence politicians<\/a> who had altered their oath of office to protest Chinese rule.<\/p>\n The legislature\u2019s rules allow any three members to stall action for months with filibusters<\/a>. In the past two years, various groups in the pro-democracy camp have repeatedly used that tool as leverage, causing a backlog of legislation that has delayed even projects that are not contentious, like a cleanup plan for the harbor.<\/p>\n Both sides agree that the city will become ungovernable without some kind of political change. But they cannot agree on what to do.<\/p>\n The democrats want a clear road map to universal suffrage \u2014 which Beijing promised in 2007 \u201cmay be implemented\u201d in 2017 \u2014 starting with direct elections for the chief executive. Only when the government is accountable to the public will it have a mandate to tackle the challenges facing the city, they say.<\/p>\n But supporters of Beijing say the problem is too much democracy, not too little.<\/p>\n Shiu Sin-por, the departing head of the local government\u2019s agenda-setting Central Policy Unit, said pro-Beijing lawmakers must break with tradition and get tough on filibusters.<\/p>\n He also wants to eliminate civil service protections for many senior officials and put them on renewable, short-term contracts \u2014 which would make them more accountable to Beijing.<\/p>\n \u201cYou have a lot of deadbeats and layabouts who drag it out until they retire,\u201d he said. \u201cWould elections change this? No.\u201d<\/p>\n Mr. Shiu, a longtime power broker with close ties to the Beijing government, warned that if Hong Kong remained politically paralyzed, it could slip from the ranks of the world\u2019s great cities and end up like Monaco, a tax haven for the wealthy with few industries beyond financial services and retail.<\/p>\n In an interview, Mrs. Lam, who will be sworn in on Saturday, acknowledged \u201ca certain degree of truth\u201d in the argument that the lack of a political overhaul was making it more difficult to address issues like housing, education and infrastructure.<\/p>\n But she added, \u201cIf we were to have universal suffrage tomorrow, would all these problems disappear? I don\u2019t think so.\u201d<\/p>\n In many ways, Hong Kong as a city has fared better than its people. Since the handover, more than one million mainland Chinese have moved here, contributing their energy and talents to the territory\u2019s economic development. But the newcomers\u2019 success has sometimes come at the expense of those with deeper roots.<\/p>\n The big international companies and banks now aggressively recruit mainland Chinese instead of local residents, who speak Cantonese instead of the Mandarin used on the mainland and who often lack the connections to win deals and thrive there.<\/p>\n The language issue is a challenge for Hong Kong\u2019s education system, which tries to teach three of them \u2014 English, as well as Mandarin and Cantonese. This produces many graduates with weaker English and Mandarin than those from the mainland\u2019s top schools.<\/p>\n But efforts to address the problem get caught in the city\u2019s fractious politics, with suspicions that Beijing wants to undermine local identity or limit the West\u2019s influence.<\/p>\n At the same time, the government has resisted proposals to ease the culture of high-pressure testing, a source of much public dissatisfaction. Instead, it tried to introduce \u201cpatriotic\u201d material into the curriculum, appeasing Beijing while angering parents and students<\/a>.<\/p>\n The influx of mainland Chinese has also contributed to a historic run-up in housing prices, making Hong Kong one of the world\u2019s most expensive places to live. A single parking space recently sold for $664,000<\/a>.<\/p>\n Soaring prices and rents have squeezed middle-class families and younger residents in particular, fueling resentment against the mainland Chinese who have poured money into the market. Government measures to limit speculation have not deterred those investors, many of whom are looking for a safe way to get their money out of the mainland.<\/p>\n The underlying problem is limited supply. Land disputes have nearly halted plans to build big residential areas in the rural sections of northern Hong Kong.<\/p>\n Under a policy dating from the colonial era, families in traditional villages there are awarded long-term grants of land, producing suburban sprawl and making it difficult to put together a large parcel for development. The government could force families to sell but is worried about setting off protests, in part because the leaders of those communities have generally supported Beijing.<\/p>\n Plans to build elsewhere have also stalled. Efforts to rezone the fringes of country parks for apartment buildings have been blocked by environmentalists, while the government has been leery of the cost of controversial proposals by developers to subsidize land reclamation and build thousands of acres of artificial islands.<\/p>\n \u201cThere\u2019s land in Hong Kong, but what we lack is developable land,\u201d said Anthony Cheung, the transport and housing secretary, noting that everyone wanted more housing but no one wanted it built next door. \u201cWe still need to seek local community support.\u201d<\/p>\n Gaining such support is difficult, though, given deep distrust of the government. Lawsuits by neighborhoods and environmental groups have delayed a range of infrastructure projects that require much less land than housing developments.<\/p>\n The planned high-speed rail line, for example, is being built underground the entire 16 miles to the border partly because of the political challenge of obtaining land. That has driven up the project\u2019s cost many times over. Even the tunneling effort required the removal of a village of scarcely 100 people, though, and democracy activists joined them in protests that slowed the initiative.<\/p>\n The proposed deployment of Chinese immigration officers at the downtown rail station under construction is also contentious. Critics are objecting to an expanded mainland security presence in the heart of the city. They point to several recent cases in which Chinese officers appeared to abduct people \u2014 booksellers peddling salacious tales<\/a> about mainland officials, or a tycoon with rare insight<\/a> into the finances of the Communist Party elite \u2014 and whisk them to the mainland without legal authority.<\/p>\n \u201cIt will be used as an excuse to create a serious loophole to allow mainland officers to implement mainland laws in Hong Kong\u2019s territory,\u201d said Eddie Chu, a pro-democracy member of the legislature.<\/p>\n As the political wrangling in Hong Kong is drawn out, some people are leaving. One popular destination is Taiwan, a flourishing Chinese democracy with more affordable real estate and news outlets that have not been cowed by Beijing as many of those in Hong Kong have.<\/p>\n Pat Yeung, 43, an entrepreneur, said she moved to Taiwan this summer after a friend emigrated to get her children out of the high-pressure schools, and after she met another couple who relocated seeking cheaper housing.<\/p>\n In Hong Kong, with its relentless business competition and darkening political climate, Ms. Yeung said, \u201cthe pressure is too, too much.\u201d<\/p>\n Three years ago, Beijing presented Hong Kong with a pro<\/a>posal<\/a> to allow residents to elect the chief executive, but only from a slate of candidates approved by a nomination committee under its control. The pro-democracy forces rejected the offer, holding out for free elections without such a limit, and Beijing\u2019s refusal to budge prompted the Umbrella Movement protests.<\/p>\n It was a pivotal moment for Hong Kong, with all sides letting a chance at compromise slip by and digging in for what has been a prolonged stalemate.<\/p>\n The pro-democracy camp\u2019s biggest mistake may have been believing that President Xi Jinping, who at the time had been in office for almost two years, intended to guide China toward a more pluralistic future.<\/p>\n Martin Lee, the founding chairman of the Democratic Party, said that he harbored such hopes because he had met Mr. Xi\u2019s father, a senior Communist leader considered more open-minded than most of Mao\u2019s generals.<\/p>\n Others noted Mr. Xi\u2019s record as a leader in the eastern provinces of Fujian and Zhejiang, where he adopted a moderate tone while trying to attract Hong Kong investors, said Joseph Cheng, another longtime democracy advocate.<\/p>\n Zhang Dejiang, a member of the powerful Politburo Standing Committee, took the lead on policy toward Hong Kong, and some wondered at the time if his hard-line stance reflected Mr. Xi\u2019s views.<\/p>\n But there is little doubt now that Mr. Xi calls the shots. After nearly five years in power, he has proved to be a committed authoritarian who considers political liberalization a threat.<\/p>\n There seems little hope that Beijing will make Hong Kong an offer better than the one it put forward three years ago. Jasper Tsang, the recently retired president of the legislature and a longtime ally of Beijing, said the attitudes of the Chinese leadership toward the city had hardened.<\/p>\n \u201cPeople are telling me there won\u2019t be a second chance,\u201d he said.<\/p>\n Last month, Mr. Zhang visited Macau, the former Portuguese colony that is now a Chinese gambling hub, and praised it in terms that suggested he saw it as a model for Hong Kong.<\/p>\n People here were stunned because Macau has a reputation for obsequious obedience to Beijing as well as chronic corruption, organized crime, and limited tolerance for labor unions and other independent organizations.<\/p>\n The worry now is that Mr. Xi may share that vision of Hong Kong\u2019s future. \u201cIf the idea came from him,\u201d Mr. Lee said, \u201cwe are finished.\u201d<\/p>\n