photo credit: Financial Times

BREXIT, Money and Interdependence : What Britain may Learn from its ex-Colony, Hong Kong

Britain is heading to host Brexit referendum in about 100 days. Last month David Cameron had made his last struggle to persuade the British to vote to stay by negotiating with EU to offer the country a so-called “special status”, which gives Britain a larger control over its domestic financial and welfare policies, as well as keeping away from deeper political integration.

This deal reminds me of the agreement signed by Margaret Thatcher with Deng Xiuping of China in 1984. The Sino-British Joint Declaration gave Hong Kong a weird status as “special administrative region” under the principle of “one country, two systems” as stated by the Basic Law.

When the British are complaining the EU for banning the use of powerful vacuum cleaners and potentially extend the rules on high-powered kettles and toasters, the flood of EU immigrants which seize their jobs and welfare, and stepping up in supranational integration, the Hong Kongers resemble the similar social and political outcries brought by continual inflow of Chinese immigrants and the pro-China social, economic, education and cultural policies. Those China factors may not account for all but at least some of the social unrest. Chinese Smugglers, introduction of Mandarin as teaching language, affordable housing prices, white elephant infrastructural projects, reckless and rude behaviors of Chinese tourist everywhere in the city…are just few examples which capture the headlines in recent years.

I am not going to discuss in details about the political and social dilemma in Hong Kong, as the consequences are easy to imagine: people are losing their original living style and many local people feel alienated by their government, letting to the growth of localism.

photo credit: AP

Power of Money

Apart from the constitutional setting, one of the main reasons made China influence irresistible in Hong Kong is the economic interdependence, or we may simply call it the power of money. For example, in 2014, there were 47 millions Chinese tourist visited Hong Kong, accounting for 77.7% of the total arrivals, while Hong Kong’s international status makes it the strategically important to China’s financial market.

Britain had long been trapped into the game of interdependence with Europe since joining the EEC 60 years ago. That’s why the integration spilled over into supranational levels and we see the problem of Brexit today. The sad but true fact is, it is almost impossible for a country to enjoy economic benefits of joining a bigger authority without surrendering some degree of its own autonomy. This is always the agenda of European integration.

The core question is, does the “special status” offered by EU offer any exception? The “one country, two systems” rule between China and Hong Kong was said to be a preservation of Hong Kong’s social and economic system, but this separation line is melting as economic integration goes on. Like people in Britain, some people is embracing the integration while some are resisting.

Devolution or Centralization ?

We cannot directly compare Hong Kong and Britain’s cases, but Hong Kong’s circumstance is a clear example to show how forceless is an institutional barrier when facing a tremendous market force. David Cameron’s deal can be revised on negotiation table or just silently and gradually be changed, as economic cycle of Britain and European continent, as well as national attitude towards EU change day by day.

Therefore, the “special status” gained by David Cameron will never be the final answer, instead it started another wrestling on how “special” Britain should be, either go devolving like what happen in Scotland, or turn back to go centralizing like Hong Kong-China relations after the handover.

Originally published at