Hong Kong's freedom once provided a shining example for others to follow. While that freedom was never perfect, it enabled residents of the resource-poor territory to prosper. Residents enjoyed respect for their liberties that was rare in the region and unknown in neighboring China. But administration of Hong Kong was surrendered to China in 1997 and, as the recent raid on a pro-democracy newspaper demonstrates, the territory is losing its liberty as the world looks on in what the Chinese government clearly assumes is a mixture of disinterest and impotence.
Hong Kong was "a place where there's an almost laboratory experiment in what happens when government is limited to its proper function and leaves people free to pursue their own objectives," economist Milton Friedman said in 1980 in his Free to Choose documentary.
"Incredibly, it was in its way to become richer than its colonial ruler, Britain," historian Johan Norberg pointed out when he retraced Friedman's footsteps over three decades later.
Protecting that wealth-producing liberty was a key point in the agreement under which Britain surrendered control of the territory to China.
"The current social and economic systems in Hong Kong will remain unchanged, and so will the life-style," promised the Sino-British Joint Declaration of 1984. "Rights and freedoms, including those of the person, of speech, of the press, of assembly, of association, of travel, of movement, of correspondence, of strike, of choice of occupation, of academic research and of religious belief will be ensured by law in the Hong Kong Special Administrative Region. Private property, ownership of enterprises, legitimate right of inheritance and foreign investment will be protected by law."
The Chinese government initially kept to the bargain, apparently gambling that the wealth provided by Hong Kong's freedom was worth tolerating the criticism of rulers and policies it also entailed. But, in recent years, China's rulers seem to have decided that whatever they hope to gain from quashing dissent is worth more than what will be lost as people and capital flee the territory.
"The people of Hong Kong, a special administrative region of China, have traditionally enjoyed substantial civil liberties and the rule of law under their local constitution, the Basic Law," Freedom House noted this year. "However, the chief executive and about half of the Legislative Council (Legco) are chosen through indirect electoral systems that favor pro-Beijing interests, and the territory's freedoms and autonomy have been sharply reduced in recent years amid growing political intervention from the mainland."
A case in point is the massive police raid last week on the offices of Apple Daily, a pro-democracy publication.
"Today, the Hong Kong Police raided the offices of Apple Daily newspaper for the second time in 10 months and arrested five employees for 'collusion with foreign forces' under the National Security Law," U.K.-based Hong Kong Watch observed on June 17. "According to the National Security Unit Senior Superintendent Steve Li, the operation was launched at 6 a.m. HKT and involved around 500 officers. He said HK$18 million worth of assets belonging to three companies linked to Apple Daily have also been frozen."
In defiance, Apple Daily dramatically increased its print run to emphasize a commitment to continue publishing. But the newspaper is running short of funds because of the asset freeze. While the company plans to ask the government and the courts to allow it to pay its employees and printers, such financial difficulties are undoubtedly an intended result of the application of the draconian National Security Law.
Also muzzled by the crackdown are traditional pro-democracy street protests, which have been held since 2003. This year's July 1 rally has been canceled out of fear of the reaction of the increasingly intolerant and brutal authorities.
The erosion of freedom and the resulting climate of fear inevitably make Hong Kong a less-attractive place to live and do business. About 42 percent of respondents to a May 2021 survey by the American Chamber of Commerce in Hong Kong said they were considering or planning to leave the city. "The most widely shared concern was discomfort due to the National Security Law" which was cited by 62 percent of those indicating a desire to leave.
"Dozens of international companies have moved regional headquarters or offices from the city since 2019, government data show," notes the Wall Street Journal. "That has contributed to the highest rate of commercial real estate vacancies in 15 years, with more than 80% of the vacant space surrendered by international companies."
The exodus of people fleeing the erosion of freedom likely means a decline in prosperity as brains and money seek happier environs. But the Chinese government seems comfortable with that tradeoff. The simultaneous domestic crackdown on large tech companies and successful entrepreneurs suggest that innovation and wealth creation now take a backseat to control for the country's leaders.
Too, the response by the West does little to discourage the totalitarian regime. While the U.K. offers a path to citizenship to hundreds of thousands of Hong Kong residents who hold British National Overseas passports, China threatens to block their departure. And while the U.S. imposed sanctions on Chinese officials and private companies (not necessarily a good policy if you're trying to punish a state), the Chinese government threatens retaliation against anybody who assists in their enforcement.
Many western countries are lukewarm, at best, in their condemnation of China's brutal policies. That no doubt represents deference to China's significant economic clout. But it may also demonstrate the fact that liberal democracies that might once have championed Hong Kong residents' rights have grown increasingly ambivalent about freedom within their own borders.
"Like many other observers around the world, we are deeply concerned with the decline of democratic attributes over the past decade or so, and this year's Democracy Report documents that this trend continues during 2020," warned the latest annual report from the University of Gothenburg's V-Dem Institute, based in Sweden. Freedom House and The Economist's Intelligence Unit offer similar warnings.
China's government has little reason to temper its authoritarian policies in Hong Kong when traditionally liberal nations that might have once objected instead look somewhat inclined to follow suit.