The Washington Diplomat / May 2015
By Larry Luxner
Clement C.M. Leung’s job is about to get much more interesting.
As commissioner of the Hong Kong Economic and Trade Office here, Leung’s objective is to promote U.S. trade with, and investment in, this prosperous city-state of 7.2 million.
Leung’s mission, housed in a 19th-century Beaux Arts townhouse just off Dupont Circle, isn’t an embassy, and that’s because Hong Kong isn’t a country. Rather, it is a Special Administrative Region (SAR) of China — a status the 426-square-mile territory acquired in July 1997 when Britain’s 99-year lease on Hong Kong expired and the prized colony was returned to Chinese sovereignty.
That’s why no flag flutters outside this mansion, though the flags of Hong Kong and China are displayed prominently in the lobby. There’s also a bilingual bronze plaque commemorating the D.C. office’s Sept. 9, 1997, inauguration by Hong Kong’s then-chief executive, Tung Chee-hwa.
“We are not a diplomatic mission, but instead we’re treated like an international organization. We do have some immunities and protections, but we do not have the same diplomatic status as an embassy,” Leung explained. “It’s a kind of very unique situation.”
Yet make no mistake about it: Beijing is still clearly in charge.
Residents of Hong Kong had hoped that under the promised “one country, two systems” formula that gives them more autonomy and freedoms than mainland Chinese, they would also eventually achieve universal suffrage. But constitutional reform that would have allowed Hong Kong’s residents to directly elect their leaders for the first time ever by 2017 was shot down by the Chinese Communist Party, which insists on screening all candidates for chief executive.
For the past 18 years, Hong Kong’s top boss has been chosen by a 1,200-member committee of pro-Beijing, pro-business delegates; before the 1997 handover, Hong Kong was led by a governor appointed by the British crown. In order to change the current rules, Hong Kong’s legislature must approve the proposal by a two-thirds supermajority — a very high bar, says Leung.
“This is not just the biggest step since the handover, but probably the most significant event in Hong Kong’s history,” Leung told The Washington Diplomat in a mid-March interview. “Back in 1998, we didn’t have any seats in the legislature. It was all appointed or indirect elections. Now we have about 60 percent of our legislature elected directly, based on constituencies. So potentially, 2017 could be very big because all Hong Kong people could vote. At the moment, there are still a lot of differences and views about how it should be implemented.”
That’s putting it diplomatically. China’s decision to vet 2017 candidates sparked a fierce backlash last September, when one of the world’s safest and most orderly cities exploded into a battleground between riot police and tens of thousands of protesters armed only with yellow umbrellas, raincoats and plastic wrap to protect themselves from tear gas and pepper spray.
Hong Kong’s so-called “Umbrella Movement” — a civil-disobedience campaign loosely patterned after the Occupy Wall Street Movement — quickly grabbed the front pages of newspapers around the world, putting Beijing in a negative light and leading Chinese officials to accuse “foreign forces” of fomenting the unrest.
The dispute exposed cracks in China’s uneasy marriage with Hong Kong, where residents often complain that tourists from the mainland (or “locusts”) lack manners and buy up goods. More broadly, they fear that Beijing will trample on the independent, ordered way of life for which the territory has become renowned.
The Umbrella Movement, however, did little to change China’s heavy-handed control of the glitzy financial center — or to dampen the former colony’s main activity: making money. Leung said that despite the protests, the number of visitors to Hong Kong actually increased last year, to 60 million, from 53 million the year before.
He added that Hong Kong’s business reputation was never tarnished by the upheaval, and that if anything, the Umbrella Movement showed that the city’s inhabitants have little to fear from the “one China, two systems” policy long advocated by Chinese communist leaders.
“It seemed from TV or newspaper photos that it was very chaotic, but there were only isolated incidents of confrontation with the police,” he said. “Even at its height, it was not violent. The stock market operated smoothly and effectively, and the protests had no effect on the banking system. The Hong Kong dollar did not fluctuate.
“Even at the most difficult periods of time, we maintained full access to local and international media. Internet access remained unfettered. I don’t think you could really roll back all these things,” he continued. “I don’t know why people have the impression it will be undermined afterward.”
One reason might be the way Beijing unceremoniously demolished Hong Kong’s largest protest camp of thousands of makeshift tents and barricades that had been set up in the middle of the city’s Admiralty district. Chinese authorities also arrested leaders of the uprising along with hundreds of their supporters.
According to Amnesty International, at least 27 of those supporters remain behind bars in China. Nine of them have had access to lawyers and four are being held in unknown locations.
While the crackdown drew international condemnation, China seems to have successfully waited out the protesters while refusing to give in to their political demands. Hong Kongers themselves also grew increasingly impatient with the months-long paralysis of an upscale commercial district, and the protests ran out of steam by late last year.
But pro-democracy activists have vowed to fight on. Sporadic protests have broken out, and six months after the beginning of the Sept. 28 uprising — remembered as “928” by activists — tents are sprouting up again along Tim Mei Avenue and Harcourt Road, in the shadow of Hong Kong’s looming Legislative Council Complex, where the government hopes to pass the controversial electoral package soon.
Leung said negotiators want to resolve the issue before the summer recess in July. Support for the electoral reform bill has steadily ticked up, especially if China offers concessions to win over a handful of pro-democracy legislators and pledges to review the process again at some point in the future. Another motivation: If nothing is passed, things go back to the old way of doing things.
“If the package does not get passed, then we would revert to the status quo, meaning the chief executives will be elected by an electoral college of 1,200 as it is now,” Leung said, adding that in any event, “what we’re talking about is the electoral mechanism, not the rights and freedoms of the people of Hong Kong.”
Leung, who is not related to Leung Chun-ying, Hong Kong’s unpopular chief executive, says he acknowledges people’s concerns that the city’s freewheeling political environment may be undermined, but dismisses them as unrealistic.
“Hong Kong has very strong traditions to protect civil liberties like freedom of speech, press, religion and assembly, and all this is underpinned by common law and our constitution, and by our fiercely independent courts,” he told us. “These will stay no matter what the political system is.”
Leung, 49, was born and raised in the former British colony, where his parents emigrated in the 1940s from Guangdong province. He graduated from the Chinese University of Hong Kong and earned an MBA from Stanford, then joined the civil service in 1987.
Leung spent years guiding Hong Kong’s trade relations with the United States and mainland China. He visited Washington frequently as a negotiator with the U.S. Trade Representative Office on textiles, with previous assignments focusing on industry, higher education, telecommunications policy, internal security, revenue and taxation, food safety and municipal services. Before coming to Washington, he was director of food and environmental hygiene from 2010 to 2014, responsible for food safety and the delivery of municipal and public hygiene services.
This current job, which he began in February 2014, is Leung’s 12th assignment — and his first outside Hong Kong.
“We are not part of the Chinese Embassy, so I do not report to the ambassador, but rather Hong Kong’s secretary for commerce and economic development,” he said. “Of course, we meet our colleagues at the [Chinese] embassy from time to time for social occasions, and when senior officials come to town, we make a point to have a courtesy call. But we are quite distinct. Hong Kong has autonomy in commerce and trade.”
That’s why instead of the familiar State Department-issued diplomatic plates, the mission’s official sedan uses personalized Maryland plates that say “HKSAR.”
Outside of those subtle differences, Hong Kong’s trade office — housed in a 14,000-square-foot building that once served as Saudi Arabia’s chancery and consular office — functions much like any embassy. The first-floor walls of this brick, stone and terra cotta townhouse are decorated with traditional Chinese paintings, including “Scenery of Chang Jiang,” a watercolor by Fang Zhao Ling, the mother of Hong Kong’s former “Iron Lady” chief secretary, Anson Chan (who, incidentally, says the recent protests were about China honoring its handover promise to give Hong Kong free and fair elections).
Hong Kong’s Washington mission employs 20 staffers, including Leung and four other diplomats. A regional office in New York covers 31 eastern states, while another regional office in San Francisco has jurisdiction over 19 states out west. Hong Kong also has overseas trade missions in Toronto, Vancouver, London, Brussels, Geneva, Berlin, Tokyo, Singapore, Sydney and Taipei, plus five on the Chinese mainland.
“Essentially, our task is to promote closer bilateral ties between Hong Kong and the United States,” said Leung. “A big part of this is promoting two-way investment, explaining to a U.S. audience what is happening in Hong Kong. When we had the big protests, people on Capitol Hill were concerned.”
And with good reason.
Last year, Hong Kong imported $60 billion worth of goods from the United States, making it the 10th-largest market for U.S. products worldwide. It’s also the sixth-largest market for U.S. agriculture, though 30 to 40 percent of all agricultural products end up elsewhere, since Hong Kong is a major world transshipment center.
In addition, Hong Kong’s reputation as a world financial hub is undisputed. As in past years, the territory came in first worldwide among 178 countries surveyed in this year’s Economic Freedom Index. And in the World Bank’s 2015 Doing Business survey, Hong Kong placed third among 189 jurisdictions, behind only Singapore and New Zealand.
“We have a strong legal and constitutional framework and a fiercely independent judiciary. Anything the government does is subject to judicial oversight. If people bring a lawsuit or writ of habeas corpus, our court protects civil liberties,” Leung said, adding that, “Hong Kong is a very international city with a strong American business presence. We also have lots of former Hong Kong residents who have immigrated to the U.S. They’d like to know what’s going on, and part of my job is to answer their questions.”
One of Leung’s priorities at the moment is to lobby lawmakers to grant holders of Hong Kong SAR passports visa-free travel to the United States. At present, such people can obtain 10-year visas, though the application process costs $200 and fewer than two out of every 100 applicants are rejected.
“This is part of my main mission,” he said. “Because Hong Kong is not a country, Congress would have to pass a law for us to get admitted to the visa-waiver program. During the last Congress, a bill passed the Senate and got integrated into the comprehensive immigration bill. That didn’t go anywhere.”
Leung said he saw 70 to 80 lawmakers on the Hill, trying to garner support. In that regard, he got help from Sen. Mazie Hirono (D-Hawaii), along with Rep. Mark Amodei (R-Nev.) and Rep. Judy Chu (D-Calif.).
“When I talk to these senators and congressmen, they immediately understand that it makes sense for the U.S. to encourage more investment and tourism from Hong Kong,” he explained. “We don’t pose any security or immigration risks. Hong Kong’s unemployment rate is only 3.3 percent. Everybody has a job. They won’t overstay their visas, washing cars or picking apples. But I know that anything having to do with immigration could be very sensitive.”
About 5 million people hold HKSAR passports, which are available only to Chinese people born in Hong Kong. Some 150 countries currently provide visa-free access to holders of these passports. Leung, citing a recent study by the libertarian CATO Institute, said that if the United States were to do likewise, the number of Hong Kong tourists visiting this country would jump by 30 percent in the first year of visa-free travel.
Leung is also closely watching the highly controversial Trans-Pacific Partnership (TPP), a sweeping trade pact that encompasses a dozen Pacific Rim economies — but not China or Hong Kong.
TPP is strongly supported by the Obama administration and big business, and is likely to be approved by the Republican-controlled Congress, which recently signaled that it is willing to give the president “fast-track” trade promotion authority allowing him to put the deal for an up-or-down vote on the Hill, without any amendments. If ratified, the TPP would go down as the largest trade agreement in American history — and a key economic buffer against Chinese hegemony in the region.
“I think it will have a great impact on the kind of trade pattern we may see arising from the agreement. We’ve detected a lot of energy in this country to get it passed,” said Leung. “But in Hong Kong, being a very open trade regime, we always say we could become a victim of our own success.” Leung said he’s more interested in building closer ties with the 10-member Association of Southeast Asian Nations (ASEAN), with which Hong Kong is negotiating a free trade agreement.
As important as they are, all these trade pacts pale in significance compared to the uncertain future Hong Kong faces as a lonely outpost of democracy and free-market enterprise surrounded by a sea of communism and repression.
If the status quo prevails, Leung won’t be able to vote for chief executive in 2017, because he doesn’t belong to Hong Kong’s 1,200-member electoral college. But if by some miracle the law changes, he said, “I would be prepared to spend my own money to fly back just to cast my vote, in the event the government doesn’t sponsor my flight.”