Accounting for Kowtow? You can Bank on it!

It was May 1989. I had arrived in January in Hong Kong as a visiting research fellow at the University of Hong Kong, and just finished reading Jan Morris’s new book Hong Kong about Britain’s last colony. During the previous six months I ploughed my way through various histories of the colony, and was struck by how very active civil society had been over most of the twentieth century, from trade union organization to social activism. This seemed to run counter to the popular myth that portrayed the Hong Kong people as only interested in money and never in civil or political affairs, a myth being actively cultivated by at least one local leading Oxford-based Chinese scholar at the time.

The news in May was about students and others across China showing increasing solidarity with those occupying Tiananmen Square in Beijing. The Students Union (SU) of the University of Hong Kong was supporting a series of pro-democracy rallies that were gathering pace in Hong Kong and I was shamed into attending one such march and rally by a SU organizer after I pointed out that there was a typhoon. She replied that getting wet was not much of a sacrifice compared with what Chinese students were facing. I sheepishly took her point.

By then over one million people, from students to professors, from labourers to office workers, from street sweepers to pro-democracy clerics and politicians, were taking to the streets, rain or no rain. One-in-six Hong Kongers were in some way or other involved. All sorts of one-off demonstrations of solidarity were launched by free-thinking, free-acting citizens; for example, taxi drivers toured the streets in a lengthy procession of cabs and fortune tellers read fortunes for free. In supermarkets patriotic songs were blasted out. And as I marched along, what I noticed most of all, was the discipline, the one sense of purpose that blotted out everything else. Not a car over-turned, not a shop window smashed, and no confrontation with the police. Coming from London, this was novel. The reason? The police had retreated off the streets. The streets belonged to the people. I had witnessed something of the sort in Portugal during the revolution in 1974-75, especially in Lisbon. As an outsider, as a British outsider, I was fascinated to see the colonial power lose control. Not permanently, because this was definitely not a revolution. That was the point. This was a movement of heart-felt solidarity. British colonial power was not seen as an enemy. At that moment in time, it was seen as an irrelevance. Contrary to that Chinese scholar, the people did have a voice and were concerned to make it heard, but not to the British rulers. They were not speaking to the colonial government. Only later, after the tragedy of the massacre in the streets of Beijing – I reviewed a controversial report produced by Robin Jenkins from Amnesty that showed the killings were not in Tiananmen Square as misguided pro-student propagandists suggested, but in the surrounding streets and involved more citizens than students – did the colonial government work its way back into the picture when the momentum of protest was finally diverted (I have always suspected in a cleverly orchestrated way) into a demand for overseas passports.

Fast-forward quarter of a century. 1st July 2014, the day that marks the return of Hong Kong to China’s sovereignty. Once again, the streets of Hong Kong were filled with citizens supporting the aspiration for a government elected by the people, for the people. Nearly 800,000 “voted” in a pro-democracy unofficial referendum. Not for independence from China, not for revolution, not for making Hong Kong ungovernable. On the contrary, as in 1989, to exercise the democratic right to use peaceful civil disobedience if necessary to make their point. Just how peaceful was seen by the many arrests of sit-down civilians, without violence. More Gandhi than grandstanding.

And how did Hong Kong as a commercial hub react? “Hong Kong Shares Hit Peak” was the headline in the Wall Street Journal. And EY, KPMG, Deloitte and PwC? They ran ads in three local Chinese newspapers opposing the pro-democracy campaign, suggesting that companies could choose to exit Hong Kong, just as HSBC and Standard Chartered banks had pulled their ads from pro-democracy Apple Daily. Now it is pretty evident that this suggestion is groundless. Corporate survey after survey has shown the top three reasons for multinationals wanting to base themselves in Hong Kong are rule of law, transportation links and telecommunications. If Hong Kong has had a weakness since the handover in 1997, undoubtedly it has been the quality of government, if for no other reason than China inherited from Britain a system impoverished by the lack of the “political class” and, with few to choose from, felt it necessary to narrow the field even further to loyalists who, perhaps not surprisingly, lacked charisma, and lacked the quality of natural leaders. Demonstrators on July 1st carried posters saying “689” which was the total number of votes the current Chief Executive Leung Chun-Ying received from the electoral college handpicked by Beijing. A stark reminder how narrow is the basis of political leadership. It simply lacks popular legitimacy. After 2017 there is a prospect of the Chief Executive, nominated by the electoral college, to be elected by universal suffrage. At the very least, it serves the interests of Hong Kong to widen the base of the electoral college to become more representative of Hong Kong society.

The four accounting and consulting companies, along with the two banks, have made good business in Hong Kong for decades. They are also under pressure in China as Beijing wishes to promote Chinese companies to win local business, and is just a little bit concerned that Chinese accounting and banking practices may not quite measure up to international standards. No one can blame Messrs EY, KPMG, Deloitte and PwC, or HSBC and Standard Chartered for wanting to appease China, but to do it at the expense of the people of Hong Kong and at the expense of a commitment to democratic values is crossing a line, a view publicly shared by both ex-Governor Chris Pattern and ex-Chief Secretary Anson Chan – by far the outstanding candidate in 1997 to become a competent Chief Executive. One wonders on which page of the corporate responsibility manual of Messrs EY, KPMG, Deloitte and PwC, HSBC and Standard Chartered, the word ‘kowtow’ appears?

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