Contact is taking a holiday!

Dissatisfaction with China in Hong Kong and Taiwan shows up on the streets and at the polls. The causes are strikingly similar

[The Economist]

Dec 6th 2014 | BEIJING, HONG KONG AND TAIPEI

THE Communist Party’s strategy for bringing the self-governing people of Taiwan into its fold has long been tricky seduction. Ply them with money and favours (and tourists from the mainland) if they play along, and with threats of cutting them off if they don’t. Let them see how happy and prosperous the people of nearby Hong Kong are under Chinese rule.

That strategy is faltering. China is not winning hearts and minds in either Taiwan or Hong Kong. On November 29th voters in regional and municipal elections in Taiwan delivered a drubbing to the ruling Kuomintang party (KMT), which under President Ma Ying-jeou has forged closer economic links with Communist leaders in Beijing but has failed to soothe widespread dissatisfaction with the economy. More than 60% of the 23m people of Taiwan will now be governed by mayors who belong to or are supported by the Democratic Progressive Party (DPP), which opposes union with China. Mr Ma is now an unpopular lame duck serving his second (and final) four-year term, and the DPP has the early advantage in the presidential election due to be held in early 2016.

The electoral rout of the KMT is even more worrying to Chinese leaders seen in the context of Hong Kong, where protesters have been demanding more democratic elections than promised for 2017, when the position of chief executive comes up for a popular vote. After two months of huge demonstrations, the protests seem to be near an end following violent clashes between police and demonstrators. Leaders of one protest group, Occupy Central with Love and Peace, have called for protesters to go home. Two encampments, one of them outside the government’s headquarters, remain. But Hong Kong’s leaders have wisely waited for public opinion to sour. On December 1st Joshua Wong, an 18-year-old from the student group Scholarism, turned to a new tactic: a hunger strike. Three founders of the protest movement, however, turned themselves in to the police. They were released without charge.

Anti-mainland sentiments still run high. A poll in October by Chinese University of Hong Kong found just 8.9% of respondents identifying themselves solely as “Chinese”, the lowest figure recorded in the survey—and way down on 32.1% in 1997, the year of Hong Kong’s handover. Nearly two-thirds identified themselves as a combination of Hong Konger and Chinese, but another 26.8% said they were just Hong Kongers, the highest share since 1998.

Polling tells a similar story in Taiwan. In a survey in June by National Chengchi University, 60.4% of respondents said they identified as Taiwanese, a record high and up from less than 50% when Mr Ma was first elected in 2008. Only 32.7% identified themselves as “both Taiwanese and Chinese”, a new low.

China insists the problems posed by Hong Kong and Taiwan are separate. There is some truth in this. Voters in Taiwan, dissatisfied with the economy, have been aching to repudiate Mr Ma’s party at the polls. In Hong Kong young people have been increasingly chafing over Chinese rule. There have been bits of cross-pollination between youth movements in both places, but with little impact on events in either. (Chinese officials, for their part, blame “hostile foreign forces” from America and Britain for fomenting unrest; a committee of British parliamentarians has been denied entry to Hong Kong on the grounds that they had unfriendly intentions.)

Yet many grievances of young people in both places are strikingly similar. They are unhappy with growing inequality of wealth and are wary of integration with the mainland. Well-connected mainlanders are increasingly seen as interloping competitors for jobs. Investors from the mainland (and, in the case of Taiwan, rich Taiwanese who live on the mainland) bid up property prices. Rising numbers of tourists from the mainland have raised consumer prices (the torrent continued to increase in Hong Kong even during the protests, to 4m visitors from the mainland in October, up from 3.4m in the same month a year ago).

And in both Hong Kong and Taiwan there is a sense that the economic embrace of the mainland has enriched only the elite—the tycoons who are seen to be controlling Hong Kong and rich Taiwanese entrepreneurs who back eventual unification. Young people find it difficult to find work in either place: unemployment for 20-24-year-olds in Taiwan is around 14%, and the jobs they find pay little, as wages have stagnated.

A turning point in Taiwan came early this year, when young Taiwanese were at the forefront of an occupation of the legislature that lasted for more than three weeks. The protest, known as the “Sunflower Movement”, aimed to stop the legislature ratifying a cross-strait deal that would have allowed greater liberalisation of trade in services. The pact ignited fears that an influx of Chinese businesses would overwhelm Taiwanese competitors and flood Taiwan with cheap Chinese labour. It has since been stuck in Taiwan’s legislature without being ratified.

There seems little hope of more cross-strait dealmaking now. The results in the elections for 11,130 mayors, councillors and town chiefs represented “a total collapse of people’s confidence in the government and the ruling party”, says Jason Hu, who was voted out as mayor of the central city of Taichung. The KMT, which controlled four of the six main municipalities of Taiwan before the polls, emerged as victor in just one—losing even the capital, Taipei, long a KMT stronghold.

China’s president, Xi Jinping, will not have been too shocked. He knew after the Sunflower debacle that he had work to do to build better relations with Taiwan. In June Zhang Zhijun, the director of China’s Taiwan Affairs Office, became the first ministerial-level Communist official to visit Taiwan since 1949, when Chiang Kai-shek fled to the island at the end of the Chinese civil war. Mr Zhang also took the unusual step of meeting a prominent member of the typically despised DPP. There was an air of magnanimity not seen in cross-strait relations in years.

But will China adjust its approach to Taiwan, or to Hong Kong? In the wake of the election even KMT supporters seem less keen on economic co-operation with the mainland. Media in China shrug off Taiwan’s elections as “the chaos of democratic politics”, but have no suggestions for making voters happier. Perhaps it would help if citizens in both places got more of what they wanted. In Taiwan the DPP plans to deliver just that, with such things as virtually free health care for the elderly, welfare for the underprivileged and lots of social housing. (Hong Kong’s leader, Leung Chun-ying, won no sympathy for fretting aloud that “numerical” democracy would tilt policies towards the poor.)

There are signs of recognition in Beijing that the roots of discontent in Hong Kong must be addressed. On December 2nd an editorial in Global Times, a newspaper in Beijing, said that Hong Kong should manage its own problems. “The mainland shouldn’t be tempted to quell the unrest with troops too easily,” the newspaper said. “It can only bring temporary peace, but the deep-rooted cause will still linger.”