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. LANE- 1. INTRODUCTION Transitional Hong Kong's endgame formally came to a close with the territory's reversion to Chinese rule on July 1, 1997. How- ever, a legal and institutional order and a "rule of law" for Chi- nese-ruled Hong Kong remain works in progress. They will surely bear the mark of the conflicts that dominated the final years pre- ceding 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 sover- t 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 End- game 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 sym- posium 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" poli- ticians 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 sover- eign. 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 end- game'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 be- tween 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 suffi- ciently 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 pat- tern of sharply clashing yet substantially indeterminate visions. On one hand, these developments deepened the political rift be- tween 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 gov- ernance 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 emer- gence 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 political- ly possible or prudent in the quest to settle the legal and institu- tional 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 busi- ness community. In Hong Kong in the 1990s, these two social con- stituencies appeared to be potentially vital allies or formidable op- ponents 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 promis- ing sources of effective post-reversion pressure on the S.A.R. re- gime to implement, go beyond, or retreat from the legal and insti- tutional 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 polariza- tion and intramural schisms and shifts among the principal par- ticipants in the political conflicts of Hong Kong's endgame also re- inforced the key political actors' determination to obtain support, or at least acquiescence, from the people of Hong Kong and the business community. The focus on concrete legal and institutional questions to which fundamental visions of law mandated no single answer allowed adherents to a particular vision to consider how various arrangements that were arguably acceptable in principle might be received in practice in Hong Kong. They could do so without betraying core principles of the vision of law and sover- eignty that they embraced, or sacrificing the benefits that they thought would accompany a legal and institutional order compati- ble with those principles. In addition, the vastly more powerful popular politics and the increased politicization of the powerful business community in 1990s Hong Kong made either group's Published by Penn Law: Legal Scholarship Repository, 2014 1528 U. Pa. J. Int'l Econ. L. [Vol. 25:4 views on legal and institutional issues obviously and immediately relevant to the political struggles of the day. Because the main par- ticipants in the political conflict over Hong Kong's future legal and institutional order sought a rule of law that was viable in practice as well as acceptable in principle, they could ill-afford to ignore the attitudes and values of the people or the business community. Section 2 of this Article discusses the struggle over "the Hong Kong people." Section 2 begins by examining the long-standing impediments to the emergence of an influential popular constitu- ency in Hong Kong politics, the gradual and accelerating pressures for its development and accommodation since the 1960s, and the indications of a growing recognition of "the people" as an impor- tant target for prediction and persuasion in the endgame struggle to shape S.A.R. laws and institutions. The discussion also notes the potentially salient fault lines running through the people, whom the key political participants in the struggles of the endgame none- theless addressed as a near-monolith. The principal subsections of Section 2 assess, in turn, the "Brit- ish and Hong Kong liberal-democratic" and "China and 'pro- China' Hong Kong" approaches to the struggle over the people. These subsections examine how members of each of the sometimes internally divided groups sought to claim or cultivate popular backing or acceptance in clashes over general questions of "rule-of- law" values and four key legal-institutional issues of the endgame: the Bill of Rights, including broadly related amendments to laws restricting civil and political liberties; the Legislature, including both the democracy-expanding electoral reform laws introduced by Governor Patten to govern the last colonial elections and the P.R.C.'s decision to install a post-reversion "Provisional Legisla- ture" named by a P.R.C.-selected committee; the Court of Final Appeal ("C.F.A." or "Court"), including issues of its membership, jurisdiction, and establishment date under Sino-British accords reached in 1991 and 1995; and the Chief Executive selection proc- ess, including issues raised by the initial occupant Tung Chee- hwa's pre-reversion use of his position as Chief Executive- designate.