In 1989, there were massive mobilizations in the then-British colony of Hong Kong in support of the Tiananmen Square protestors. Ever since then, the Chinese Communist Party has been concerned by the possibility that Hong Kong, which was returned to Chinese sovereignty in 1997 under the ‘one country, two systems’ arrangement, might become a weak link in its authoritarian rule. Since the 1980s, when negotiations for the handover began, Beijing has repeatedly promised that the Chief Executive and Legislative Council (LegCo) of the Hong Kong Special Administrative Region (hksar) would eventually be elected locally through universal suffrage. But in practice, Beijing has unbendingly sought to perpetuate the oligarchical political structure left behind by the British. It has found ready allies in the Hong Kong business elite, who have enjoyed privileged access to political power since colonial times.

In the early summer of 2010, Beijing and the Hong Kong Democratic Party (dp)—the flagship organization of the local democratic movement since the 1990s, which the ccp still officially designates a subversive organization because of its leaders’ active role in 1989—reached a surprising deal that would apparently for the first time increase the proportion of popularly elected seats in the 2012 LegCo election to more than 50 per cent. Confusion and speculation abounded as to what motivated Beijing to make such a concession, or whether it was a real concession at all. To make sense of this puzzling development, and to draw out the implications for the future of Hong Kong’s political system, we need to take into consideration the mounting class tensions since the 1997 handover, and the concomitant radicalization of the democratic movement in Hong Kong. In this light, Beijing’s gesture appears as a pragmatic attempt to contain brewing class and generational struggles; for it knows that any large-scale political turmoil in Hong Kong could spill over to destabilize the political order in mainland China. Such turmoil would also jeopardize Beijing’s plans to turn Hong Kong into a showcase for what awaits Taiwan, as well as into a stable offshore financial market facilitating the internationalization of the renminbi.

The core urban area of what is today Hong Kong was ceded by the Qing Emperor to Britain in 1842 under the Treaty of Nanjing; the British added to this by seizing the Kowloon peninsula in 1860, and then in 1898 secured a 99-year lease on what became the New Territories, which constitute Hong Kong’s hinterland. After the enclave’s establishment as a colonial entrepôt, its ruling elite was composed of colonial administrators and European capitalists, who exerted their control through the Executive and Legislative Councils. The overlapping membership of these two bodies included both government officials and business representatives appointed by the Governor. The British also co-opted the local Chinese business elite into the colonial power structure, allowing these community leaders to help maintain law and order, as well as offering philanthropic welfare, among the growing migrant Chinese working class.footnote1 The colonial state relied on both the Chinese and the British business elite for revenue. While the authorities routinely awarded the elite privileged access to land, markets and information—turning them into monopoly-holders in a range of key sectors—the colonial rulers were also constrained by this elite, which consistently blocked any attempts to raise expenditure or taxation, effectively forcing the colonial government to become a laissez-faire state.footnote2

British rule was interrupted by Japanese occupation from 1941–45, but with the end of the Pacific War London rushed to reassert control over Hong Kong. Mao reassured the British in 1946 that the ccp was ‘not interested in Hong Kong’, and would not be agitating for its return in the near future. Upon the founding of the People’s Republic in 1949, the ccp decided to prolong the status quo, allowing Hong Kong to remain a colony, as Party officials were eager to keep it as a diplomatic and commercial window to the world. While offering the colonial authorities de facto recognition, Beijing ensured that the British would tolerate underground ccp activities in the territory; the Party’s presence there also discouraged London from introducing democratic reforms, as they had in preparing for decolonization in many of their other territories.

The us embargo on trade with the prc, introduced in 1950, voided Hong Kong’s purpose as a commercial entrepôt, so its capitalists turned instead to manufacturing. Industrial employment rose from a mere 5 per cent of the workforce in 1950 to 10 per cent in 1960, rising to 25 per cent in 1970.footnote3 At the same time, the colony saw an influx of refugees from the mainland, who contributed to a huge increase in the population: from 600,000 in 1945 to 2.5 million in 1955. The new arrivals included small-scale entrepreneurs from Guangdong or textile magnates from Shanghai, who helped fuel Hong Kong’s industrial takeoff, but the majority of the refugees were peasants and workers who provided Hong Kong’s emerging industries with low-cost labour. They settled in urban slums, which became fertile ground for ccp-affiliated organizations—including a myriad of unions grouped under the Federation of Trade Unions, as well as schools, news agencies and filmmakers.