These are interesting days for those who remember the time not so long ago when there was a “Beijing consensus” that authoritarian political leadership produced better economic results, notes analyst Joseph Sternberg.
“In that era, the unelected kleptocrats in China delivered consistently high growth figures while the softer technocrats of Hong Kong maintained stability and positive nonintervention. Democracies produced either populism (Thailand) or paralysis (India and Japan),” he writes for the Wall Street Journal:
Now it’s a foolish executive who isn’t reconsidering. Spurred by rising panic about the durability of its grip on power, China’s opaque political class has launched a war on corruption that already has claimed one foreign corporate victim, GlaxoSmithKline and likely will ensnare many others. Normally peaceable Hong Kong faces civil unrest amid unmet popular demands for democracy.
Hong Kong is an important case because, with the possible exception of Singapore, it is the place where softly-softly autocracy arguably worked the best for the longest. It is also the place where a potential crack-up looms largest this week, as at least 700,000 Hong Kongers have participated in an unofficial referendum to demand greater democracy, and could take to the streets in a protest movement known as Occupy Central if Beijing doesn’t deliver.
“It is no small matter that the territory’s gentle authoritarianism under the British and then the Chinese—partial autonomy and partial democracy—delivered the positive non-interventionism that allowed the economy to prosper,” Sternberg notes:
Yet it’s becoming clear that without a democratic mandate, the stability of that pro-economic-freedom consensus was illusory. Recent years have seen the government roll out a competition law and a minimum wage, special property taxes and even a levy on plastic bags, all in an attempt to retain non-democratic legitimacy by pandering to vocal interest groups.