Few historical marvels compare with Hong Kong. On this tiny island, smaller than O’ahu, some 7.5 million people have built one of the world’s most powerful economies. Its annual GDP is $341 billion—five times that of Hawai’i. And with an average per capita income nearly six times that of the People’s Republic of China (PRC) and an average life expectancy six years higher, Hong Kong stands as a vivid rebuke to the communist system of its giant neighbor.
It wasn’t always so. A century ago, Hong Kong, which has virtually no natural resources, was a dreary outpost infested with pirates. Even long after the British took it over, it remained an unremarkable backwater. And when China fell to communism in 1949, and hundreds of thousands of refugees fled across the eight-mile strait into Hong Kong, it was just beginning its role as a manufacturing center.
Then came 1961 and the appointment of John Cowperthwaite as financial secretary. A firm believer in capitalism, Cowperthwaite implemented free-trade policies, eliminating barriers to imports and limiting spending, taxes, and regulations. It wasn’t laissez-faire—the government built public housing and infrastructure, funded schools, and redistributed wealth in other ways—but the colony of Hong Kong soon became the world’s freest market. And the result was breathtaking growth, with per capita GDP quadrupling in forty years.1 By the 1990s, Hong Kong accounted for a quarter of China’s entire GDP.2
It wasn’t just wealth—Hong Kong nurtured a tradition of free speech and protest, as well as freedoms of religion, travel, and assembly.3 But the astonishing energy unleashed by Cowperthwaite’s policies overwhelmingly refuted the idea that wealth results from natural resources or historical accidents. Like a laboratory experiment, the Hong Kong/China divide proved that the same people, with similar cultural and historical circumstances and the same geography, would experience radically different outcomes based on the presence or absence of liberty. In half a century (during which the PRC murdered 7.7 million people as part of its “Cultural Revolution”) Hong Kong went from a barely noticeable industrial district to the city with more skyscrapers than any other.4
Then came the 1997 “handover.” Although often characterized as a mere return of land at the expiration of Britain’s ninety-nine-year lease, the handover was actually a more complicated—and regrettable—episode, during which history was disastrously misrepresented. Britain’s claim to Hong Kong Island dates not to 1898, but to 1842, when China’s emperor signed a treaty giving the island to Britain “in perpetuity.” The emperor signed a second treaty in 1860 reiterating Britain’s “perpetual” claim. Four decades later, when the lease was drawn up, it referred not to Hong Kong Island—which was understood to be British property—but to a broader district called the New Territories.
Yet in the 1980s, when British leaders approached the PRC about the approaching expiration of the lease, these factors were brushed aside. Acceding to Deng Xiaoping’s argument that the 1842 and 1860 treaties were void because Britain had forced the emperor to sign after defeating him in war—despite the fact that countless territorial cessions have resulted from war and that this never has been grounds for voiding them—Britain promised to “return” Hong Kong to a country that didn’t own it.
The PRC soon adopted a “Basic Law” for Hong Kong that promised to respect existing freedoms—but only until 2047, and such promises are routinely ignored by communist governments anyway. Since 1997, it steadily has reduced Hong Kong’s autonomy. In 2014, when protests erupted over the PRC’s decision to limit who can run for office in Hong Kong, the communists imprisoned pro-democracy activists, and the protests collapsed. Two years later, the PRC blocked six political candidates from Hong Kong’s Legislative Council because they refused to swear allegiance to the communist state. Then, in February 2019, a bill was proposed that would allow authorities to extradite Hong Kong citizens and try them in the PRC’s politically controlled courts. Protests broke out again, which now have persisted for six months, growing increasingly confrontational and violent.
Hovering over it all is the dark cloud of the 1989 Tiananmen Square massacres, during which the communists slaughtered thousands of protestors—a brutal but typical (indeed, comparatively minor)—example of their policies. An announcement this week by the PRC that it would use “all the powers vested” by “the Basic Law” to restore order implies that similar carnage might follow soon.
The bravery that motivates the protestors today is nothing short of incredible. Confronting the massive forces of the world’s largest and most bloodstained dictatorship, they stand for freedom—and for Asia’s and Cowperthwaite’s greatest economic achievement—against overwhelming odds. Yet they remain undaunted. “We cannot give up,” one protestor told The Atlantic recently. “If we do, there will be no future for us anyway. We might as well go down fighting.”5
Note: If you want to support the Hong Kong protestors, here is a list of some things you might do.On the tiny island of Hong Kong, smaller than O’ahu, some 7.5 million people have built one of the world’s most powerful economies, and it stands as a vivid rebuke to the communist system of its giant neighbor. Click To Tweet