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A thread on HK, China, and the intersection of capital and authoritarian politics. The article below shows the disbelief among foreign businessmen and investors that the new national security law would change capitalism-as-usual in HK. They may be wrong. 1/n https://twitter.com/benjaminbland/status/1278926657273819138
This disbelief among foreign investors makes sense: they are used to operating in neoliberal havens where capitalist interests take precedence over "politics." This is one of the crowning achievements of the past 4 decades and "globalization." 2/n
Throughout the Global South, local interests are often sidelined, from unionization, wealth inequality, to environmental pollution, in order to maintain the stable market conditions craved by multinational corporations. This was the basis for reform and opening in China, too. 3/n
Scholars like Ching-Kwan Lee show PRC state interests now often supersede capital interests. https://press.uchicago.edu/ucp/books/book/chicago/S/bo22657847.html This is in part the paradox of the authoritarian, developmentalist regime: it must co-opt capitalism in order to deliver economic growth that is so cherished 3/n
by citizens today, while at the same time balance the needs of regime survival that can be threatened by excess economic liberalization. Hong Kong represents a special case because for decades it was the neoliberal gateway for foreign capital to enter the PRC, 4/n
in 2018 constituting 60% of FDI in and outflows into the PRC. https://www.reuters.com/article/us-hongkong-protests-finance-explainer/explainer-how-important-is-hong-kong-to-china-as-a-free-finance-hub-idUSKBN2350VO 5/n
With the HK protests starting from the Umbrella movement, Beijing policymakers see this as a liability. A disrupted Hong Kong threatens the well-being of the entire PRC, and thus we have seen that the protests have been met with corresponding crackdowns. 6/n
What is missing is that Beijing no longer wishes for HK to have that kind of leverage. Scholars like Yuen Yuen Ang have shown that FDI can exist on much smaller scales, at provincial or even lower levels, for manufacturing and services. https://www.cornellpress.cornell.edu/book/9781501706400/how-china-escaped-the-poverty-trap/ 7/n
Beijing would much rather have Shanghai or Beijing serve as the financial hub, where equities, capital markets, and IPOs can be controlled. The idea is to cut out HK and center financial flows in a more easily managed location outside of One Country, Two Systems. 8/n
The national security law is one of the final nails in the coffin. Whereas Beijing has already wielded state violence via police, the NSL signals that the previous safety offered by 1C2S is no longer valid in the civil code, thus removing the legal institution that forms 9/n
one of the pillars of neoliberalism. As shown by scholars like Quinn Slobodian, these legal and governance institutions create the market protections that allow for neoliberalism to thrive. https://www.hup.harvard.edu/catalog.php?isbn=9780674979529 Without the political and legal institutions behind 1C2S, 10/n
Beijing is signaling nearly complete abandonment of the idea of a separate neoliberal haven. There's little that distinguishes HK from Shanghai, Beijing, or Shenzhen now, and this is likely the goal. Once business interests feel the effects of having legal and 11/n
economic institutions dismantled, and that ongoing protests threaten the stability of their labor market and capital infrastructure, firms will consider Shanghai, Beijing, and other cities more viable alternatives for their financial operations. 12/n
In the long run, this doesn't hurt Beijing. This is why certain strategies in engaging the US among the HK left have been hotly debated. The revocation of HK's special status in US trade would no doubt hurt the PRC in the short term, but in the long term, it enables 13/n
greater control from an economic perspective. HKers, meanwhile, depend on HK's economic success as a form of leverage (for example, occupying HKG airport), but as its activists emigrate and HK's economic is eclipsed, they lose in the long run. 14/n
To end, keep in mind that capitalist and authoritarian interests are often lingering in the not so distant background, and then revisit this old article from @wilfredchan to see why this is all deeply tragic. https://thenation.com/article/world/hong-kong-china-national-security-law/ /end
Just realize I have two 3/ns in this thread, time for me to sign off and enjoy the long weekend.
