Hong Kong's Endgame and the Rule of Law (II): The Battle over the People and the Business Community in the Transition to Chinese Rule (The Journal in Review: A Look Back at Twenty-Five Years of The University of Pennsylvania Journal of International Economic Law)

HONG KONG'S ENDGAME AND THE RULE OF LAW (II): THE BATTLE OVER "THE PEOPLE" AND THE BUSINESS COMMUNITY IN THE TRANSITION TO CHINESE RULE JACQUES DELISLE* & KEVIN P. LANE1. INTRODUCTION Transitional Hong Kong's endgame formally came to a close with the territory's reversion to Chinese rule on July 1, 1997. However, a legal and institutional order and a "rule of law" for Chinese-ruled Hong Kong remain works in progress. They will surely bear the mark of the conflicts that dominated the final years preceding Hong Kong's legal transition from British colony to Chinese Special Administrative Region ("S.A.R."). Those endgame conflicts reflected a struggle among adherents to rival conceptions of a rule of law and a set of laws and institutions that would be adequate and acceptable for Hong Kong. They unfolded in large part through battles over the attitudes and allegiance of "the Hong Kong people" and Hong Kong's business community. Hong Kong's Endgame and the Rule of Law (I): The Struggle over Institutions and Values in the Transition to Chinese Rule ("Endgame I") focused on the first aspect of this story. It examined the political struggle among members of two coherent, but not monolithic, camps, each bound together by a distinct vision of law and sovert Special Series Reprint: Originally printed in 18 U. Pa. J. Int'l Econ. L. 811 (1997). . Assistant Professor, University of Pennsylvania Law School. This Article is the second part of a two-part series. The first part appeared as Hong Kong's Endgame and the Rule of Law (I): The Struggle over Institutions and Values in the Transition to Chinese Rule, 18 U. PA. J.INT'L ECON. L. 195 (1997), as part of this Journal's symposium issue on Hong Kong's transition from British colony to Chinese Special Administrative Region. The authors thank Richard Sik-Wing Au, Jennifer Shiu-Li Fan, and Beatrice Mohini Schaffrath for research assistance, and Natasha J. Song and the staff of the Journalfor their inexhaustible patience and exhaustive editorial work. Support for this Article, and the broader project on the law and politics of Hong Kong's reversion to China of which this Article is a part, was provided by the University of Pennsylvania Research Foundation. McKinsey & Company, Beijing, China. Formerly Assistant Professor of Government, Franklin & Marshall College. 1525 Published by Penn Law: Legal Scholarship Repository, 2014 1526 U. Pa. J. Int'l Econ. L. [Vol. 25:4 eignty in the domestic realm. The People's Republic of China ("P.R.C." or "China") and its allies and surrogates in Hong Kong approached issues of the rule of law and legal institutions from a primarily positivist perspective, invoking procedural standards of legitimacy and insisting upon substantive sovereign discretion. A looser alliance of Hong Kong's "liberal" or "pro-democracy" politicians and the colonial and British governments proceeded from a perspective grounded in more "natural law"-like principles. They asserted that legitimate legal rules and institutions had to meet substantive standards of what justice demands of a good sovereign. Endgame I examined how the political clash between these two camps was highly polarized and how the camps were, to varying degrees, unstable and fragmented internally during the 1990s. These seemingly paradoxical traits, Endgame I argued, stemmed from the endgame's inevitable focus on quite specific aspects of a legal and institutional order for the S.A.R. On one hand, the endgame's focus on these final and highly concrete issues of Hong Kong's transition made it impossible for the participants to avoid addressing fundamental conflicts between their perspectives by postponing hard questions until later rounds of bargaining and conflict. This focus on matters of legal and institutional detail also made it harder for the participants to shroud the fault lines between their visions in the ambiguities of the broad "framework" laws and agreements on Hong Kong's future order that had been the main concern of earlier phases of negotiations. On the other hand, the endgame's emphasis on specific legal and institutional arrangements exposed how each broad vision of law was sufficiently indeterminate to permit its adherents to adopt disparate and shifting positions on the specific controversies of the era while credibly claiming to be faithful to the vision's core principles. Two contingent political events that marked the beginning of the endgame, the Tiananmen Incident of June 4, 1989 ("Tiananmen Incident") and the installation of Christopher Patten as Hong Kong's last colonial governor in 1992, also contributed to the pattern of sharply clashing yet substantially indeterminate visions. On one hand, these developments deepened the political rift between Hong Kong liberals, democrats, and colonial officials on one side and the P.R.C. and its allies on the other. The crackdown on the Beijing protests and Hong Kong's reaction to it seemed to lay bare fundamental gaps between the perspectives on law and governance dominant in the P.R.C. and in the territory. Patten's https://scholarship.law.upenn.edu/jil/vol25/iss4/7 2004] HONG KONG'S ENDGAME (II) 1527 agenda of legal and institutional reform, his methods for pursuing it, and China's reaction to Patten's goals and means all seemed to point to a widening of the gaps that the Tiananmen Incident had exposed. On the other hand, the pair of political developments that signaled the endgame's beginning also heralded the emergence of a complex and volatile political environment in Hong Kong. This environment was conducive to divergent and changing assessments within each camp about what strategies were politically possible or prudent in the quest to settle the legal and institutional questions of transitional Hong Kong's endgame on favorable or acceptable terms. This Article takes up the second aspect of the story of Hong Kong's endgame. It focuses on the battles that the key political participants, who comprised the two blocks identified in Endgame I, fought over "the people" of Hong Kong and Hong Kong's business community. In Hong Kong in the 1990s, these two social constituencies appeared to be potentially vital allies or formidable opponents for the principal political actors who were striving to establish their preferred legal or institutional arrangements in the final run-up to reversion, in what Endgame I called a "colloquial" endgame scenario. These constituencies also seemed to be promising sources of effective post-reversion pressure on the S.A.R. regime to implement, go beyond, or retreat from the legal and institutional arrangements formally, but perhaps meaninglessly, adopted during the last years of colonial rule, in what Endgame I identified as a "technical" endgame scenario. As Endgame I also indicated, the factors that fostered polarization and intramural schisms and shifts among the principal participants in the political conflicts of Hong Kong's endgame also reinforced the (...truncated)