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'One country, two systems' on the rocks?

By Willy Wo-Lap Lam, CNN Senior China Analyst

Observers say Beijing is trying to cool down HK's democratic forces.
Observers say Beijing is trying to cool down HK's democratic forces.

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• Special report: One country, two systems 
Under the proposed legislation -- prior to recent amendments -- anyone found guilty of acts of treason, sedition, secession or subversion against mainland China could be jailed for life.
Treason: instigation of foreign invasion, assisting a public enemy at war with the People's Republic of China (PRC), or joining foreign armed forces at war with the PRC.
Secession: use of war, force or serious criminal means to split the country.
Subversion: use of war, force or serious criminal means to overthrow or intimidate the Central People's Government, or to disestablish the basic system of the state
Sedition: inciting others to commit treason, subversion or seccession, or inciting others to engage in violent public disorder that would seriously endanger the stability of the PRC.

HONG KONG, China (CNN) -- The good news on the Hong Kong front is that Beijing is adopting relatively moderate policies to defuse the crisis that erupted over widespread opposition to the national security bill and the rule of Chief Executive Tung Chee-hwa.

The less encouraging development is that President Hu Jintao and Premier Wen Jiabao, who back this apparently conciliatory approach, have stopped short of thorough measures such as allowing a faster pace of democracy for the Special Administrative Region (SAR).

And there are possibilities that as Tung's -- and Beijing's -- hold on Hong Kong continues to weaken, hardliners within the Chinese Communist Party (CCP) could seize the initiative on SAR matters.

Chinese sources familiar with the latest twists in Beijing's Hong Kong policy say the CCP leadership is using three new strategies regarding the SAR, which is still reeling from the after-effects of three major demos in the past fortnight.

Firstly, Beijing is no longer insisting on a definite time frame for the enactment of the much-feared law against subversion, sedition and the leakage of state secrets.

When Tung was forced early last week to give up July 9 as the "deadline" for passing the draconian bill, some analysts thought Beijing might want the SAR Legislative Council to wrap up legislation before Christmas.

However, it seems clear that the CCP leadership hopes to cool tempers by not pressing for the promulgation of the national security law in the coming half-year or so.

In fact, Secretary of Justice Elsie Leung, who is close to Beijing, said on Sunday she was not aware of any timetable regarding the statute.

Secondly, senior cadres have practiced uncharacteristic restraint by not commenting on what some Western media call the "Hong Kong rebellion."

And Vice-Premier Wu Yi cancelled a scheduled visit to Hong Kong this week so as not to be drawn into addressing the still-volatile political situation.

Apart from an article in the official China Daily slamming the SAR's pro-democratic politicians for trying to "topple Tung" and to seize power, the state propaganda machinery has so far desisted from firing the big guns.

This forbearance is even more remarkable given that hard-line cadres had speculated in internal sessions that "anti-Chinese forces in the U.S." were behind the anti-Tung protests.

Economic partnership

The SAR has been suffering substantial economic downturn for years.
The SAR has been suffering substantial economic downturn for years.

Most importantly, Beijing is pushing the game plan first spelled out by Premier Wen when he was in Hong Kong recently: focus on the economy, particularly the benefits that economic cooperation with the mainland can bring to Hong Kong.

The Closer Economic Partnership Agreement (CEPA) signed between Beijing and Hong Kong late last month -- which makes it easier for SAR goods and services to enter the mainland market -- has been portrayed as Beijing's "big gift" to recession-hit Hong Kong.

According to a Beijing academic close to the Hong Kong policy-making establishment, the CCP leadership is convinced that a large percentage of the 500,000 anti-Tung demonstrators on July 1 was basically motivated by unemployment and declining living standards.

"If the economy turns around by the end of this year -- and Hong Kong residents realize that the SAR's prosperity hinges on closer ties with the mainland -- the pressure on Tung as well as revulsion against the National Security Bill may decline," he said.

At this stage, the Hu-Wen team has no intention of replacing Tung, whose term runs into mid-2007.

This is despite the fact that the CCP leadership is fine-tuning the qualifications that Tung's successor must have.

As far as personnel is concerned, Beijing is inclined toward allowing only a limited reshuffle of the current Tung cabinet to appease widespread dissatisfaction with its performance.

The big question, of course, is whether Beijing's economic card, as well as partial palliatives such as postponing national-security legislation, will be enough to placate SAR residents who are savoring the first fruits of the assertion of people power.

Local economists have doubted that CEPA and other economic initiatives can substantially lower the unemployment rate -- which is edging toward 9 percent -- within the short term.

Breaking point

Beijing says it supports Tung Chee-hwa administration.
Beijing says it supports Tung Chee-hwa administration.

More importantly, the focus of the SAR's democratic forces, including popularly elected legislators and church leaders, has shifted to campaigning for the election of the chief executive by universal suffrage.

As outspoken legislator Emily Lau indicated, stopgap measures such as changing a few cabinet members wouldn't do.

"More and more people are beginning to realize that only a democratically elected government can better safeguard human rights and formulate policies to address the SAR's many problems," she pointed out.

Diplomatic analysts in Beijing see a possibility that if the Tung cabinet loses further control of the situation due to perceived "agitation" by the democrats, the Hu administration may harden its stance on Hong Kong so as to pre-empt criticism from the CCP's conservative wing.

It is understood that at the Politburo Standing Committee (PSC) meeting called a few days after the July 1 protests, a couple of senior cadres expressed anger that "anti-Beijing forces" were taking advantage of Hong Kong residents' fears about the national security bill to "stir up feelings against the zhongyang [central party authorities]."

"If they [the SAR's pro-democracy forces] are playing up the two systems, we shall put emphasis on one country," a PSC member reportedly said on the occasion.

As powerful -- and sometimes irrational -- forces contend to shape the SAR's future, Deng Xiaoping's two decades-old "one country, two systems" formula could be strained very close to breaking point.

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