May, 2003: The Yankee Trader

By Greg Rushford

Published in the Rushford Report

While the world’s attention is naturally now focused on the immediate medical crisis, the political implications of the SARS virus may in the long run prove more important for two key members of the world’s economy, China and Hong Kong .

            Last November, Hong Kong Chief Executive Tung Chee-hwa was busy pressing for legislation to combat subversion, sedition, and other “crimes against the state” pursuant to Article 23 of the territory’s Basic Law — even though he admitted that he was not aware of any actual subversive threat. The chief executive was, as usual, demonstrating his unquestioning loyalty to authorities on mainland China who had recently tapped him for a second five-year term in office.

            Tung was so eager to trust Hong Kong ’s cherished open way of life to the good faith of rulers in Beijing that he brushed aside the cautionary warnings of distinguished legal scholars and some of the most respected members of the business and financial community in Hong Kong . Tung had no idea that his reward for such loyalty to the Communist Party leadership on the mainland would be of the dismissive kind that lackeys always tend to receive: namely, betrayal.

            In their typical, cult-of-secrecy fashion, Chinese officials betrayed Hong Kong by covering up what they knew about the atypical pneumonia virus. In November 2002, the subversive Severe Acute Respiratory Syndrome was quietly creeping into Hong Kong from across the border of southern Guangdong Province , which is at the heart of mainland’s export engine that has driven China ’s booming economic growth. For Hong Kong SAR — the acronym for China ’s Special Administrative Region — it must be a bitter irony that the virus has been dubbed SARS, a very unfortunate acronym indeed. Chinese officials did not provide any information on SARS cases to neighboring Hong Kong (or anyone else outside of Guangdong ) for months, refusing even to acknowledge its existence until February.

            Hong Kong has paid a dear price for this betrayal in terms of the loss of human lives and economic devastation. Last month, America ’s 14th largest export market and a vital financial cog in the world’s international-trading system resembled a ghost town. Chief Executive Tung got nothing in return for his loyalty to the mainland.

            But Hong Kong got something — an opportunity to answer the big question that has been hanging since 1997, when the outgoing British colonial master handed the territory back to China .         

            Under the unprecedented 50-year “one-country, two-systems” experiment that will guide Hong Kong’s relationship with the mainland until 2047, will Hong Kong’s renowned freedoms continue to be a shining model for a still-modernizing China? Or — as many have believed during Tung’s uninspiring tenure — will the motherland gradually smother Hong Kong ’s way of life?

            I believe that the answer is now in: Hong Kong has reacted to the SARS challenge by demonstrating how resilient its citizenry and strong institutions really are. Hong Kong is not about to be smothered. The city is simply too vigorous, too transparent, its institutions too competent. While the Chinese mainland’s system reacted to SARS with official lies, Hong Kong ’s reacted with its characteristic spirit. Even though this world-class financial center has many difficult challenges ahead, Hong Kong , its people and its vibrant institutions will remain, well, world class. Late last month, it began to appear that Hong Kong , thanks to its open system, appeared to have the virus under control. But on the mainland, there were reports of panic, discontent, and social unrest that suggested that the Communist Party had subverted itself.

Hong Kong ’s many unsung heroes

            There is currently plenty of unhappiness in Hong Kong directed at the backward mainland system of official lies that spread the SARS nightmare by trying to cover it up.  But mainly, the citizenry and its medical establishment are too busy trying to save lives to indulge in political recriminations. Hong Kong ’s unsung medical heroes, by simply serving their city well at great personal risk to their health, have provided the motherland with a wonderful example of the virtues of transparent institutions. Moreover, the value of Hong Kong ’s vigorous and free press — as contrasted with mainland China ’s hapless official mouthpieces who repeated official lies without question — has never been clearer. Hong Kong has news; China has rumors.

            Business Week’s Mark Clifford commented in a column last month that Hong Kong ’s officials had been releasing information on SARS in timely fashion, and that the territory’s press had been persistent in posing the right questions to those officials. “This public debate of ideas is one reason I remain optimistic about Hong Kong ,” Clifford wrote. 

            Indeed, Hong Kong has many heroes. There are too many doctors, nurses and individual acts of courage to mention, plus the tens of thousands of ordinary citizens who have taken their mops and buckets to the streets, hoping to wash SARS away by cleaning the environment (the air of which is continually poisoned by clouds of pollution emanating from across the border in Shenzhen).

             But the list of heroines should begin with the woman who runs Hong Kong ’s health department. When the subversive SARS virus crept unseen across the Chinese border, Director of Health Margaret Chan got no help from Guangdong hospitals. Hong Kong health officials didn’t even get to meet with their counterparts in Guangdong until April 11. The contrast between the mainland’s backward and bureaucratic medical system and Hong Kong ’s talented civil service and medical community has never been more obvious. 

            Chan only figured out where SARS was coming from when a 64-year old doctor from Guangzhou who had stayed on the 9th floor of the Metropole Hotel in Kowloon on February 21, died in the Prince of Wales Hospital on March 4. Hong Kong medical researchers, along with counterparts in Germany , were soon able to isolate the virus. (Alas, by then, other Metropole guests had carried it to Vietnam , Singapore , and Canada .)

            This wasn’t the first serious health crisis that Chan has coped with. In late 1997, Dr. Chan and Anson Chan, then Hong Kong ’s top civil servant, moved quickly and decisively to deal with a bird-flu crisis by ordering that millions of chickens in the territory be destroyed. While this was controversial at the time, in retrospect the two women’s leadership has been highly praised for producing results — and for illustrating Hong Kong at its best.

China ’s cover-up

            By contrast, the SARS crisis has demonstrated that while China has made great progress towards becoming a respected member of the global community in recent years, the mainland and its still-weak institutions have a long way to go.

            Chinese officials wouldn’t even permit World Health Organization medical authorities to travel in China until April 3. Even weeks after that, there were credible reports that patients in Chinese military hospitals were deliberately hidden from visiting foreign medical teams. By then the SARS bug had become a sad symbol of globalization, having spread to more than 20 countries.

            Then the cover-up collapsed.

            China’s new president, Communist Party boss Hu Jintao, who only took office in March, showed that he had learned something on April 17, when he was quoted in State-controlled newspapers as saying, “There must be no delay and no deceit in reporting.” Then, on April 20, Hu fired Beijing ’s mayor, Meng Xuenong, and Health Minister Zhang Wenkang for their lies. Five other provincial officials were fired a week later. Even its most vociferous critics had to admit that still-backward China — which really has made astounding progress in improving the lives of millions of its citizens in the past two-plus decades by opening its economy — had taken a step in the right direction. Another such step was taken by Liu Qi, one of nine members of the Communist Party’s Politburo Standing Committee. Liu made a rare apology on April 21, admitting that there were “obvious deficiencies in our work.”

            Of course, President Hu only acted to limit the fallout of the SARS cover-up after it had become the subject of world-wide ridicule. And Liu’s sudden discovery of the virtues of transparency coincided with reported threats from the World Health Organization that “if they wanted American athletes coming to China in 2008, they would need to change fundamentally and change fast,” John Pomfret reported in the Washington Post.

            Nor is it likely that the mainland’s official lies have entirely stopped. Doctors in Shanghai , for example, have been telling western journalists that officials there still have not come clean on the impact of SARS on their city. (Note to foreign investors: Here is further evidence why Shanghai , which would love to surpass Hong Kong as an international financial center, is very much handicapped. World-class financial centers require more than big, beautiful buildings. They require transparency, not official manipulation of information. Hong Kong ’s system that protects the free flow of information, meets the test; Shanghai ’s doesn’t.)

            For the Communist Party, much more is at stake than the 2008 Olympic Games — the regime’s survival has always been thought to depend upon its ability to control information. President Hu has inherited a system that insisted for years that HIV/Aids did not threaten public health, for example. How many innocents in the 1980s and 1990s died because their government prevented them from learning how to take precautions for safe sex?

            But while Hu’s first move in the direction of greater transparency is commendable, that’s all it was: one step forward. Will there be more such steps, or will it be another case of  “one-step forward, two-steps backward?” We don’t even know if Hu himself was a party to the original cover-up that he now has only partly unveiled. The political pace of future SARS-induced reforms, if there are going to be any, will depend upon how far the subversive virus will mutate throughout China . For those in charge of the mainland’s system of government, the thought of actually having to tell the truth about anything is excruciating.

            If the rapid spread of SARS around the world reflects the downside of globalization, it also seems to illustrate the brighter side in a political sense for those who want China to become a truly respected global player. The Chinese Communist Party’s ability to control information is gradually being eroded. Consider: ubiquitous cell-phones, the internet, membership in the World Trade Organization and demands from foreign investors for accurate financial data, continuing pressure from western and Hong Kong independent news organizations ( Hong Kong television has a wide audience in southern China ). The free flow of information is a comparative economic advantage. China has been held back, but is now being pushed in the right direction by the SARS challenge.

Tung Chee-hwa: No Rudy Giuliani

            There also could be a shift in Hong Kong politics. While the city itself has performed admirably during the SARS crisis, questions have been raised about Chief Executive Tung, whose initial reaction to SARS was tepid, even mainland-like — and clearly out of step with the vibrant city that he is supposed to lead. Tung’s learning curve on SARS has been widely criticized in the region as having been slower from the start than Singapore and Vietnam , two countries that are hardly models of transparency.

            When SARS hit Hong Kong ’s Amoy Gardens housing complex on March 13, the chief executive waited more than two weeks before acting. Tung first spoke about SARS in public on March 27, when he followed the advice of Hong Kong medical authorities and announced tight quarantine measures. Yet even as he announced that schools would be closed, Tung also pretended that there was no crisis. “This is exactly the same response as China ’s leaders, who also tried to deny that there is a crisis,” the sharp-eyed Hugo Restall of the Asian Wall Street Journal pointed out. It was Margaret Chan — not Chief Executive Tung, or anyone on his political staff — who disclosed the fact of the mainland’s non-cooperation.

            Meanwhile, Hong Kong ’s top leader has been trying to catch up. One leading American medical official who has met with Tung in private has told colleagues that he was impressed with the chief executive’s sincerity in trying to do the right thing for Hong Kong . But typically, that meeting has remained secret, and Tung still seems a step behind everyone else.

            Any true leader of a great city must personify its spirit. New York ’s Rudy Giuliani earned a cherished place forever in the hearts of his city with his compassion and dignity after the Sept. 11 attacks on the Twin Towers . But Tung has never quite figured out a way to personify Hong Kong ’s vitality and distinct identity. Giuliani is New York . Tung Chee-hwa is… Shanghai .

            Hong Kong is transparent, its chief executive is not. 

            Tung met with President Hu in Shenzhen on April 12. The meeting — Hu’s first visit to the southern city that directly borders on Hong Kong — was secret. After the Chinese side disclosed the meeting, Tung’s office issued an opaque, mainland-style press release that really didn’t say anything important.

             “The SAR Government is deploying all the necessary manpower, financial and other resources to reduce the number of cases among medical and nursing staff and the public, to increase the recovery rate and enhance public confidence in fighting the disease,” the release says Tung told Hu. “The Chief Executive also explained to President Hu the current impact of the disease on various industries and sectors.” Such is Tung’s idea of transparency.

            According to a report in Hong Kong’s Next Magazine, which is owned by independent media tycoon Jimmy Lai — a pesky thorn in the side of officialdom if there ever was one — Hu expressed annoyance that Tung had not been more aggressive and rebuked the chief executive. Tung’s office has denied the report, which also suggested that Hu might have Tung replaced with someone who better personifies Hong Kong ’s spirit, as “untrue and fabricated.”

            On April 17, the chief executive admitted to reporters that his government “had been slow” in its initial reaction to SARS, according to a report in Agence France Presse. “No matter which way you look at it, it is a disaster,“ said Tung, who was described as “stone-faced.”

            On April 21, Tung told reporters, “I think we are making good progress.” But he declined to take questions, most likely because reporters surely would ask about the price that Hong Kong is paying for the mainland’s cover-up.

            Last month, health authorities around the world expressed their regret that because mainland Chinese authorities had not been more forthcoming in sharing with the world what they knew about SARS from the onset, lives in places like Hong Kong have been lost. U.S. Health and Human Services Secretary Tommy Thompson, the European Union’s health and consumer affairs commissioner, David Byrne; Gro Harlem Bruntland, the director general of WHO; and even courageous medical doctors in China – all have spoken out.

            Last month I asked Tung in an e-mail if he also agreed that the mainland’s non-transparency had let Hong Kong down.

            Tung could have found a way to answer that question. He might have agreed with Chinese Premier Wen Jiabao, who has warned that officials who participated in cover-ups would be punished. Tung could have expressed his sorrow for what had happened, while praising the mainland’s new top leadership for its acts to stem the cover-up. 

            But the chief executive did not even try. He just ignored the question. One wonders what China could possibly do to Hong Kong that would cause Tung to utter the slightest peep.

            “The joke around town is for the government to hire the ex-Iraqi information minister to improve its communication skills,” quipped civic leader Christine Loh in her weekly newsletter.

            But Loh was too busy helping mobilize the Hong Kong community to fight SARS to spend much time on political criticisms. “The start of civic-led movements is an important milestone for Hong Kong that could have other longer-term beneficial effects,” she said. “The commitment of Hong Kong society to change behaviour and sustain public health and hygiene efforts over the longer-term is what will make a real difference in the end.”

            Tung Chee-hwa will, no doubt, continue to press for enactment of overly-strict Article 23 anti-subversion legislation. The chief executive will continue to listen to his comrades in Beijing , while shunting aside the views of Hong Kong ’s financial and legal community that the last thing Hong Kong needs now is tighter controls on information. Tung will also likely do all in his power to see that Hong Kong does not get universal suffrage by 2007, although that right is supposed to be guaranteed by the Basic Law. Tung’s administration will continue to be a drag on Hong Kong ’s prosperity and its international reputation.

            But in a sense, perhaps it doesn’t really matter. Tung, who turns 66 this month, has the look about him of a man whose time has passed.

            Meanwhile, by their intrepid reaction to the SARS crisis, the people and institutions of Hong Kong have already shown that they understand the difference between their system and mainland China ’s. The real subversive threat to the “one-country, two-systems” formula is mainland China ’s system of controlling and manipulating the truth.

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