From The Diplomat, March 16:
For decades, Hong Kong’s geopolitical neutrality was the very foundation of its freedom, autonomy, and prosperity. That’s no longer possible.
In a meeting of the U.S. National Security Council held on June 8, 1960, John F. Dulles, the secretary of state of the Eisenhower administration, made an interesting comment on Cold War Hong Kong: “Hong Kong exists because it is useful both to the Free World and the Sino-Soviet Bloc.” Sixty years later, Dulles’ comment remains insightful to understanding Hong Kong today.
In recent years, many people have talked about the fall of Hong Kong. But different pundits have quite different focuses. The first perspective attributes the fall of Hong Kong to the erosion of its political freedom, highlighting the backsliding of its freedoms of speech, press, and protest. The second perspective perceives the fall of Hong Kong as a breakdown of its autonomy, focusing on China’s absorption of its government, economy, and society into mainland systems. The last perspective sees the fall of Hong Kong as a decay of its status as an international financial center, indicating its exodus of capital and talents.
The loss of freedom, autonomy, and prosperity in Hong Kong are facts written on the wall. But they are symptoms – rather than causes – of Hong Kong’s decline. Fundamentally, the fall of Hong Kong is caused by its demise as a “geopolitical neutral zone” between China and the United States.
From the Cold War to the post-Cold War, Hong Kong’s geopolitical neutrality not only attracted tremendous inflows of capital and talents, but it also enabled the city to be developed into a semi-democratic autonomy. But now it’s all over. For Hong Kong, the unfolding of China-U.S. New Cold War means that the city has lost the magic wand that has created its previous freedom, autonomy, and prosperity.
The Rise of Hong Kong From Cold War to Post-Cold War
In 1949, when the “Bamboo Curtain” had drawn down dividing Asia into communist and “Free World” countries, Hong Kong became an unique place in between the two rival camps. On the one hand, Hong Kong was geographically located at the doorstep of “Red China” and was a home to millions of ethnic Chinese. On the other hand, Hong Kong was a British crown colony and was diplomatically part of the Western bloc. Both the United States and China immediately realized Hong Kong’s unique geopolitical location and sought to make best use of the place to serve their own strategic interests.For the United States, Cold War Hong Kong had critical strategic, political, and military values. Strategically, Hong Kong was the only place geographically connected with China while still being ruled by an ally. This made Hong Kong the best intelligence hub for the U.S. in Far East. Throughout the Cold War, the U.S. Consulate in Hong Kong served as Washington’s largest overseas intelligence apparatus. Politically, Hong Kong’s status as a capitalist enclave on Chinese soil also made it an ideal “political show window” for contrasting the backward conditions in communist China. To influence China through this show window, the United States provided massive economic aid to British Hong Kong government and opened up its market to facilitate Hong Kong’s industrialization. Militarily, Hong Kong was a major rest and recreation base for U.S. forces deployed across Asia, especially during the Vietnam War.
For China, well before the founding of the People’s Republic on October 1, 1949, Mao Zedong had already made a strategic decision not to recover Hong Kong by force – a decision that was later formalized as the policy of “long-term consideration, full utilization.” Economically, Hong Kong as a free port separated from China meant that Beijing could make best use of it to develop international trade. This function became especially critical after the Korean War. Since then, China had heavily relied on Hong Kong to circumvent the U.S. trade embargo, importing Western equipment and exporting Chinese food products through the city. Hong Kong’s position as the “capital of overseas Chinese” also meant that it was China’s principal conduit for absorbing foreign remittances sent from Chinese diaspora members to their mainland relatives.
The United States’ and China’s interests in Cold War Hong Kong were clearly not entirely compatible. But throughout the Cold War, both powers exercised a high degree of restraint toward each other’s presence in the city. Instead of risking a geopolitical showdown, both sides sought to optimize their own strategic interests without provoking the other side.
For example, U.S. intelligence activities in Hong Kong were seen by China as a threat to its national security. In order not to provoke Beijing, Washington, London, and Hong Kong worked together to confine such activities within the scope of “information campaigns.” Similarly, the United States tolerated China’s use of the city as its trading hub after the Hong Kong government agreed to impose a system of import and export certification in 1952. Put differently, the tacit mutual accommodation of the U.S. and China in Hong Kong transformed the city into a de facto geopolitical neutral zone during the height of the Cold War of 1950s-1960s.
Moving into the 1970s, Hong Kong’s unique status as a geopolitical neutral zone was further consolidated under the wider context of China-U.S. rapprochement. Following U.S. President Richard Nixon’s visit to China in 1972 and formal normalization in 1979, economic engagement had dominated China-U.S. relations for four decades. This proved to be a historical window for Hong Kong’s economic take-off, enabling the city to thrive by serving as a distinctive bridge between the United States and Chins....
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