Opinion / Op-Ed Contributors

HK residents face 'make or break' choice

By Dan Steinbock (China Daily) Updated: 2014-09-05 07:51

On Aug 31, the National People's Congress Standing Committee decided that candidates for Hong Kong's chief executive (CE) election in 2017 must be endorsed by the majority of nominating committee members, instead of open nominations. Describing the decision, China's top legislator Zhang Dejiang said it is significant for the gradual democratization of Hong Kong.

In Hong Kong, however, the decision has been intensely criticized by the pan-democrats, while the "Occupy Central" group has vowed to go ahead with civil disobedience. In the summer, the latter did draw tens of thousands of protesters to the streets. But much of Hong Kong is growing wary of such vocal confrontations.

Recently, Hong Kong's business communities and the Alliance for Peace and Democracy mobilized thousands in a march to oppose the "Occupy Central" goals. These groups have collected more than 1.3 million signatures, far more than "Occupy Central" did in June.

As a former British colony, Hong Kong continues to observe British common law under the doctrine of "One Country, Two Systems", established when the city was reunited with the motherland in 1997. It is governed by the Basic Law, which ensures a "high degree of autonomy" for Hong Kong in its internal affairs.

Today, Hong Kong's steady economic development requires unity more than ever before. Yet public concerns have increased over the high cost of housing, inequality and immigration. Since 2008, cheap mortgages, constrained supply, GDP growth and demand from overseas have pushed up property prices in Hong Kong by 135 percent (300 percent from their trough in 2003), which far exceed the increase in rents or wages. Some market observers expect price declines in excess of 30 percent over the next few years.

In 2013, Hong Kong's growth recovered to 2.9 percent. And in May, the International Monetary Fund anticipated external demand to lift growth to 3.7 percent in 2014. In reality, Hong Kong's GDP was already contracting, based on the second quarter data. In the process, political uncertainty is paving the way to very different scenarios.

When critics exploited some Hong Kong residents' frustration with mainlanders' role in the local economy, mainland visitors stayed away from Hong Kong and those who visited it spent less. As retail sales plunged 9.8 percent in April, panic ensued in the markets and retailers came out to oppose proposals to limit the number of mainland visitors. But it was too little too late.

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