Abstract
This analysis offers a historical assessment of “economic statecraft” in Beijing's approach to Hong Kong from 1997 to 2020. It discusses how the concept of “economic statecraft” can be applied to Beijing–Hong Kong relations given the nature of the “one country, two systems” framework, and looks at some differing perceptions about economic statecraft in Hong Kong. It argues that, during this period, economic tools were in general used by Beijing relatively sparingly, and in the form of inducements rather than coercion. In conclusion, the analysis suggests that the contested interpretations of Beijing–Hong Kong economic relations demonstrate that “economic statecraft” is to a certain extent in the eye of the beholder.
Highlights
On 1 July 1997, the People’s Republic of China (PRC) resumed the exercise of sovereignty over Hong Kong
There was much debate over how well this framework was implemented up to the political crisis of 2019, since when relations between Beijing and Hong Kong have entered a new phase (Summers, 2021). This analysis offers a novel lens for the study of Beijing– Hong Kong relations by applying the concept of “economic statecraft” to the central authorities’ approach to Hong Kong from 1997 to 2020, shedding light on how the central authorities might deal with Hong Kong and the debates around how much Beijing has attempted to influence or control aspects of Hong Kong’s society, economy or politics
The analysis demonstrates contested interpretations over the application of “economic statecraft” towards Hong Kong, it argues that when used, economic tools have generally been in the form of inducements rather than coercion (“carrots, not sticks”)
Summary
On 1 July 1997, the People’s Republic of China (PRC) resumed the exercise of sovereignty over Hong Kong. A formal exception to this is the scope for the central government to appoint the Chief Executive of Hong Kong and other senior officials, though the involvement of Hong Kong actors in the selection process for the former has constrained Beijing more than would be the case in appointing a provincial party secretary or governor in mainland China Another formal mechanism that the central authorities could employ is the constitutional right for the National People’s Congress Standing Committee to interpret provisions of the Basic Law (provided for under Article 158), though this would not necessarily deal directly with specific issues, and – as its use since 1997 has shown – it is a blunt and politically controversial tool. Goodstadt (2018) argues that the central government always wanted Hong Kong to maintain and use its separate system, and the desire of Hong Kong’s elites who wanted to integrate further into national planning constituted Hong Kong misreading and “mismanaging” the mainland
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