HongKong

HK stock exchange CEO says ‘one country, two systems’ flawed


Charles Li, chief executive of the Hong Kong stock exchange, has publicly questioned the framework underpinning the city’s relationship with mainland China, just weeks after concerns about his company’s autonomy from Beijing helped scupper its unsolicited £32bn bid for the London Stock Exchange.

Mr Li said in a speech on Tuesday at the annual dinner of the London Metal Exchange the “one country, two systems” model had “fundamental flaws” in how it was implemented from the outset, referring to the framework under which Hong Kong was granted a high degree of autonomy following the handover from British to Chinese rule in 1997.

Mainland China, he continued, never trusted Hong Kongers would respect the “one country” element of the framework. “That lack of trust is a key reason why China is reluctant to give Hong Kong people . . . self-determination — two systems,” he said.

Mr Li’s comments come against a backdrop of protests in the city that have roiled the territory for more than four months, sparked by the introduction of an extradition bill that would have allowed suspects to be sent to mainland China for trial. Protesters’ demands have expanded to include calls for universal suffrage and an investigation into allegations of police brutality.

“The only thing we didn’t have is political rights,” Mr Li said under the current system. “But Hong Kong people need to ask: what do we want it for? What do we want to do with it? Because if we want to use it to oppose China’s sovereignty [over Hong Kong], that’s a dead end.

He added that if Hong Kongers wanted political rights in order to solve a local issue, “then the central government [in Beijing] shouldn’t have a problem”.

Carrie Lam, Hong Kong chief executive, praised the framework at a conference hosted by HKEX on Wednesday morning in the city. She placed adherence to the system at the top of a list of principles that underpin the territory’s economic success, ahead of commitment to the rule of law, an independent judiciary and clean government.

HKEX abandoned its pursuit of the LSE this month after the London bourse rejected the bid outright. Critics said the offer was unlikely to receive regulatory approval as Hong Kong’s government, which ultimately answers to Beijing, appoints seven of HKEX’s 13 board members.

Mr Li highlighted the challenge Hong Kong faces in maintaining its role as a bridge between the west and China. David Schwimmer, chief executive of the LSE, said that role was under threat, arguing shortly after HKEX launched its bid that he saw “Shanghai as the financial centre for China”.

“On the one hand, they would say: ‘You’re not really China. If we want to deal with China, we go to Shanghai directly,’” said Mr Li. “So, they don’t think we’re Chinese enough. But then on the other hand, they say, ‘Your deal is never going to get approved because of China.’ So you better make up your mind: you want me to be more Chinese or less Chinese?”



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