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The Case of Jimmy Lai: Hong Kong's Press Freedom Canary?

Those looking to take the measure of China's attitude toward Hong Kong's outspoken press may not need to wait for macroeconomic changes. Beijing has already expressed its distaste for Hong Kong's independent journalism in the case of media magnate Jimmy Lai. The flamboyant millionaire has built a media empire in a very short time by combining investigative reporting with the flash of tabloid journalism and a reputation for no-holds-barred criticism of China.

Lai is the sole owner of both the Chinese-language Apple Daily, the No. 2 daily newspaper in Hong Kong, and Next, the territory's leading weekly magazine. His publications have a combined claimed readership of just more than 3.5 million out of a potential literate audience of some 5.6 million. Since its founding in June 1995, Apple Daily has revolutionized the newspaper business in Hong Kong. Drawing on feisty politics, sex, crime, and tabloid tactics, Apple Daily became profitable within a year of its launch.

Jimmy Lai's current troubles with Beijing began in 1994 when, in a Next editorial, he referred to Chinese premier Li Peng as "a turtle egg"‹a stinging Chinese insult that questions an individual's parentage. Soon afterward, Lai's profitable Giordano clothing chain began to experience financial and regulatory setbacks in China, which many observers trace to Beijing's official displeasure with Lai.

Last February, Lai's Next Media Group (which includes a number of general-interest magazines and a book publishing division) apparently paid a steep financial price for the boss's brashness. Needing to raise capital to fuel the company's growth, Lai was poised to list Next Media Group on Hong Kong's stock market. The much-anticipated Initial Public Offering (IPO) should have gone smoothly for a company that had surged to a leadership position among Hong Kong's media businesses.

Instead, Lai suddenly found himself without an underwriter for his offering when his sponsor, Sun Hung Kai International, a leading Hong Kong investment bank, withdrew from the deal on the eve of the listing without explanation. No other sponsor could be found, and it was widely believed that Beijing had put political pressure on bankers to torpedo Next's stock offering.

The collapse of Lai's IPO was a major story in Hong Kong, where business has traditionally been immune to pressure from China. Yet, with the handover just months away, the subject of China's apparent strong-arm tactics was so sensitive that reporters had trouble finding bankers willing to comment. In a chilling coincidence, the Sun Hung Kai pullout came to light on the same day Tung Chee-hwa told CNN that it might be unlawful for Hong Kong people to make "slanderous, derogative remarks and attacks" against Chinese leaders after the handover. Tung's comment echoed a similar threat made by Chinese Foreign Minister Qian Qichen in 1996.

The Chinese government proscribes many subjects considered legitimate grist for news and commentary in the Western press‹including the personal lives, financial dealings, and behind-the-scenes political maneuverings of national leaders‹and some press freedom advocates fear that this constricted view could eventually prevail in Hong Kong, as least in regard to coverage of the Beijing government. By Beijing's standards, many of the major news stories of the last two decades‹such as Kurt Waldheim's Nazi past, Watergate, or the scandals that have tarred the ruling elite in Japan‹would have been inappropriate subjects for media scrutiny. Jimmy Lai is infuriating to China's authoritarian leaders precisely because he refuses to take their cues and yet prospers by printing what his readers want.

Was Jimmy Lai paying the price for insulting Li Peng and covering China with an aggressiveness that had largely disappeared from the Hong Kong press by this time? "I was left scratching my head," said Next publisher Yeung Wai-hong, who said the underwriter had originally approached Lai enthusiastically, seeking the business. "They never told us the real reason for pulling out. The pressure that was applied must have been tremendous." After a Next editorial criticizing Beijing's role in the deal's collapse, Yeung noted, China's official Xinhua news agency, which during the colonial period functioned as a de facto Beijing embassy in Hong Kong and represented China's interests, countered that it played no role in influencing the bankers. "We never even named Xinhua," said Yeung. "So why are they denying?"

Some analysts believe that Lai is being punished indirectly‹not by Beijing but by one of Hong Kong's most powerful capitalists, Li Ka-shing. According to this theory, Li, who has vast holdings in Hong Kong and China, exacted revenge on Lai for publishing exposés about the tycoon's personal life and examining some of his business dealings in China. Publisher Yeung would only note of Li Ka-shing that none of his many companies would advertise with Jimmy Lai's publications.

Despite Lai's failure to launch the IPO‹and China's refusal to accredit reporters from Next or Apple Daily‹there has been no sign that his publications will mute their voices. The companies continue to expand, getting ready to move into a vast new $100-million corporate headquarters. On June 4, Apple Daily ran a striking full-page photo of the estimated 55,000 people who showed up in Victoria Park for the annual protest against the 1989 Tiananmen Massacre. Last May, the paper ran a front-page story trumpeting Chinese President Jiang Zemin's inclusion among CPJ's 1997 Top Ten Enemies of the Press.

"We don't expect anything and we don't try to second-guess what the incoming government will do to us," said Yeung shortly before the handover. "In the greater scheme of things we are low down the totem pole. If they try to jam us up it would be such a violation that they would have to pay a high price. Press freedom is guaranteed in the Basic Law, and we take that as a given. That is the only way we can do business."
Other papers have apparently been more willing than Next and Apple Daily to acquiesce to Beijing's wishes. The appointment of Feng Xiliang as a "consultant" to the South China Morning Post in April sounded alarm bells among those looking for press freedom danger signs. Feng, the founding editor of Beijing's official China Daily, has set up shop in an office adjacent to the chief editor of the immensely profitable paper owned by Robert Kuok, a major investor in China and another of the world's wealthiest men.

The Post's editor, Jonathan Fenby, challenged critics at the time to find any change in the paper's coverage, while others denounced the new "commissar" as a sign of things to come. Fenby may be right, at least in the short term‹the Post, never noted as a crusading newspaper even in the best of times, has continued to carry coverage that is critical of Tung and aspects of the transition.

Still more disturbing are the changes at Ming Pao. (See "A Hong Kong Newspaper Softens Its Voice," by Joseph Kahn of The Asian Wall Street Journal, page 11.) Founded in 1959 and long a favorite of Hong Kong intellectuals, Ming Pao once broke stories on China's notorious Gang of Four and Beijing's secret military maneuvers. Reporting on Chinese dissidents frequently led the paper, and the official Xinhua news agency often singled out Ming Pao's reporters for criticism.

Then, in 1993, Xi Yang, Ming Pao's Beijing correspondent, reported on a plan by the Chinese government to sell a portion of its vast gold reserve on the world market. The story scuttled the deal by shedding light on the transaction and alerting the markets. Beijing authorities charged Xi with reporting on state secrets; he was tried and sentenced to 12 years in prison.

In 1995, Malaysian-Chinese timber magnate Tiong Hew King bought the paper, and the tone of Ming Pao shifted. Stories about China began to emphasize fires, crime, and celebrities; photos got bigger; and the paper began referring to Taiwan as a "province" of China, following the style of mainland papers. An opinion writer from Shanghai who once worked for the Chinese government propaganda department joined the staff. When Xi Yang was released from prison last February, after serving three years, Ming Pao thanked China for showing "leniency."

Nothing that has happened at Ming Pao could be called direct censorship, but the hand of China‹or at least the perceived need to please China‹is manifest in these cases. "Xi Yang broke the law," said Edgar Yuen of the pro-Beijing Hong Kong Federation of Journalists, which was formed in 1996 with China's apparent blessing. "Of course he was punished."
Law-abiding Hong Kong journalists do not need to fear China, said Yuen, whose group was established one year before the handover. "It is a matter of getting to know one another," he said, and of learning about China. "We are not puppets of anyone," Yuen bristled, "and to practice self-censorship would be an insult to the profession."

Yuen and other pro-Beijing commentators argue that China would be foolish to interfere with Hong Kong's formula for success, which generates hard currency and national pride for the mainland. Tsang Tak-sing, a member of the mainland's People's Congress, is editor in chief of Ta Kung Pao, one of two pro-China newspapers in Hong Kong. He told the American Chamber of Commerce in Hong Kong last February that protecting free speech is vital. "We need the free flow of information for Hong Kong to consolidate its position as a regional and international center of financial and economic activities, so as to be useful to the modernization of China."

Even so staunch a defender of democratic values as Martin Lee has expressed a sense of cautious optimism a few weeks into the new regime. One month after the handover, in an interview with the South China Morning Post, he said, "I hope this is the beginning of building up trust. It takes a bit of time to cultivate. But when they [China] saw a smooth transition, they could say: ŒLeave it to Hong Kong'. And the more they do not interfere in Hong Kong, the more we can trust them. So far the climate is right for this trust to grow. If this first month becomes a year, then I'm sure people will feel more comfortable."

If the comfort level for Hong Kong's democrats continues to rise, the Jimmy Lai case may eventually be seen merely as an aberration rather than as the canary in the coal mine, measuring the danger ahead for Hong Kong's press under Chinese rule. But as Martin Lee has often emphasized in advocating for the preservation of democratic institutions in Hong Kong, much more can be gleaned about Hong Kong's future from China's approach to the territory's rule of law.

The Basic Law
If Hong Kong is to remain free, its legal lifeline is the Basic Law, the mini-constitution governing the Special Administration Region. Yet to be fully defined by the courts and open to contradictory interpretations, the Basic Law is the sole guarantor of press freedom and the rule of law for Chinese Hong Kong.

Much of what happens to Hong Kong also may be determined by the attitudes that emerged from the 15th Communist Party Congress held in Beijing in September, the occasion for President Jiang Zemin to formally solidify his hold on power. And as the Congress neared, tantalizing hints of possible political reform in China began to emerge. Early in September, Liu Ji, a senior aide to Jiang, broke with a nearly decade-long moratorium on discussion of reform and called for more political liberalization to satisfy rising popular demand. "The continued rapid development of China's economy is safeguarded by reform of the political structure," Liu Ji said in an interview with the official China news service. "Otherwise the consequences are unimaginable."

Expressing sentiments that have not been heard in official China since the People's Liberation Army violently crushed the democracy movement in June 1989, Liu, who is vice president of the Chinese Academy of Social Sciences, said, "When the people have enough food to eat and enough clothes to keep warm and as cultural standards increase, they will then want to express their opinions. The people wanting to take part in political thinking is a good thing, it is a sign of the prosperity and strength of the nation and is also a tide of the age that cannot be turned back."

Jiang himself hinted at political reform during his speech before the Congress. "As a ruling party, the Communist Party leads and supports the people in exercising the power of running the state, holding democratic elections, making policy decisions in a democratic manner," Jiang said. While hardly a manifesto for free expression, Jiang's remarks were bold by recent Chinese standards. Since 1989, Chinese officials have avoided public discussion of reform because of the assumption that official calls for easing restrictions on expression in the late 1980s contributed to the student uprising in Tiananmen Square.

It is too soon to assess whether such talk of reform will lead to action. And the recent rhetoric of democracy is not likely to erase the cumulative weight of Chinese officials' more typical public pronouncements about the press. For example, Lu Ping, Beijing's Director of China and Macao Affairs, evoked Hong Kong journalists' worst fears about Chinese rule last June in his warning to the press against "advocating" independence for Taiwan, Hong Kong, or Tibet. That, he said, would be a violation of national security restrictions in China. "It is all right if reporters objectively report. But if they advocate, it is action. That has nothing to do with freedom of the press."

Lu's statements reflect a view of the relationship between speech and action whose ultimate extension is the massacre of demonstrators in Tiananmen Square. It is a position incompatible with the freedoms that Hong Kong people have enjoyed under the territory's rule of law.

Yet because the Basic Law, hammered out in often-contentious negotiations between Beijing and London after the 1984 Joint Declaration agreeing to the handover, gave half a loaf to each side in the debate over press freedom, there is uncertainty about how the two views will be reconciled in the post-handover period. Chapter Three, Article 27, of the Basic Law, titled "The Fundamental Rights and Duties of the Residents," provides for "freedom of speech, of the press and of publication." The same article guarantees freedom of association, assembly, procession, demonstration, and the right to strike and form unions; there is also the right of academic freedom, and of literary and artistic creation. Framing these freedoms is Article 39, which promises to comply with the International Covenant on Civil and Political Rights. It also prohibits the introduction in Hong Kong of any restrictions incompatible with the covenant.

But Article 23 seems potentially to contradict Articles 27 and 39. It instructs Hong Kong to pass laws prohibiting "treason, secession, sedition, subversion against the Central People's Government, or theft of state secrets," and prohibits political organizations from establishing ties with foreign political organizations.

The relationship of these three potentially contradictory clauses has never been clarified. This "is the great fascination for me as a constitutional lawyer," Hong Kong legal scholar Yash Ghai said in a wide-ranging analysis published by Dateline: Hong Kong, a Web site devoted to the handover. "It is also the great challenge of the Basic Law."

The Basic Law will be adjudicated both in the Hong Kong courts and by a committee of the Chinese People's Congress, notes Ghai. "You have this one document which is subject to two different regimes of interpretation." Questions about freedom of expression in Hong Kong would ostensibly be handled by the Hong Kong courts, which are to remain independent of Beijing. But Article 23 broadly dictates that certain questions of freedom of expression fall under China's jurisdiction. So, for example, criticism of Chinese authorities might be deemed as within the purview of Article 23.

Hong Kong courts might take the line, consistent with common law, that the Basic Law is binding and creates rights and obligations. But the two bodies could have different approaches to those rights. Ghai said, "I suppose that ultimately the standing committee of the national People's Congress will prevail because it also has a general power of interpretation of all the laws passed in the People's Republic of China."

While such thorny interpretive and jurisdictional issues arising out of the Basic Law may take years to be fully adjudicated, Beijing's decision to dismiss all opposition members of the elected legislature as of July 1 and to appoint a provisional legislature seemed a clear enough sign that civil liberties would suffer. "National security can be anything [Chinese government officials] say it is," noted Robin Munro, the director of the Hong Kong office of Human Rights Watch-Asia, "and that is absolutely worrying."

Will China Rein in Hong Kong's Press?
Will China be able to tolerate an irreverent, independent Hong Kong press climate, in which reporters, writers, commentators, and editors seek to push the boundaries?
With 16 major daily newspapers, two commercial television stations, and two commercial radio stations, in addition to the seven English and Chinese-language outlets of government-owned but independently run Radio Television Hong Kong, the territory's media have flourished under an open system. The city is home to dozens of foreign news bureaus that cover Asia out of Hong Kong because of its ease of transport and climate of freedom. The regional press is also based in Hong Kong, and news magazines such as the Far Eastern Economic Review, Asia Week, and Yazhou Zhoukan can freely publish objective reports on virtually any topic with little fear of interference.

Hong Kong is one of the few places in Asia where journalists operate with almost no government control. Indonesia, Singapore, and Malaysia require licenses and special visas for journalists. In Hong Kong, anyone can be a journalist. There are no government-issued press cards or journalists' visas. When press rights are threatened elsewhere in the region, Hong Kong is the place of refuge, where regional activists can meet journalists with little fear of apprehension or sanction from local authorities.

Hong Kong's role as a media center and a press freedom haven has continued with little change under the new dispensation. Human rights observer Michael Davis of Chinese University of Hong Kong has said that one important measure of press freedom will be Chinese treatment of dissident publications. "Hong Kong is the one Chinese-language press that regularly confronts Beijing," Davis said. "Watch China Rights Forum and other such publications to see how they fare. That will be a test."

China Rights Forum, a small independent magazine published by the group Human Rights in China, has had no trouble, according to director Sophia Woodman. "As far as how things are going here, nothing seems very different," she said in late August. In addition, according to Woodman, Beijing Spring, a Chinese dissident magazine produced in the United States, is still on Hong Kong newsstands.

Writing in the International Herald Tribune in late August, Philip Bowring, the former editor of the Far Eastern Economic Review, said he saw Hong Kong's media little changed after the transition. "Although there was an evident increase in media self-censorship in the months leading up to the handover," Bowring wrote, "the situation has not become worse. Indeed, there are signs of greater determination now to exercise old freedoms and test the new limits. Commentators may be wary of being too rude about leaders in Beijing, but they are familiar enough with many of Mr. Tung's acolytes to feel free to display their views, and sometimes their contempt."

While Hong Kong's journalists may continue to tread lightly on stories about Beijing's power elite, they already regard Tung and the provisional legislature as fair game. Many of the legislators, and certainly Tung himself, have long been subjects of scrutiny by the local media, and they may quickly establish a rhythm in their relationship quite different from that between Beijing and the mainland press.

During the party congress, Apple Daily gave front-page play to the full text of a letter signed by former Communist Party leader Zhao Ziyang, who has been persona non grata in China since his ouster just before the Tiananmen Square massacre. Zhao's letter, which called on Politburo leaders to reassess the government's violent suppression of the pro-democracy demonstrators, provoked only stony silence from party officials. But Jimmy Lai's newspaper once again displayed its penchant for airing Beijing's dirty linen in public.
Still, China's record of inflexibility toward the press on the mainland raises the question of how long it will be before China acts to rein in Hong Kong's feisty journalistic culture. With Hong Kong's media often seeping into Southern China, will pledges to leave the broadcast news alone be honored in the longer term? In the event of social or political unrest in China, or other occurrences that could cast Beijing in a less than positive light, how will China's leaders react if Hong Kong reporters cover the story?

Beijing traditionally has been sensitive to the point of paranoia about the reporting of economic information. In 1994, Chinese reporter Gao Yu was sentenced to six years in prison for her reporting on China's economic reforms for the generally pro-Beijing Hong Kong magazine Mirror Monthly. Last May, when UNESCO honored Gao in absentia on World Press Freedom Day, Beijing called her a "criminal" and threatened to close the UNESCO office in China.

It is not hard to imagine a scenario in which powerful economic interests in Beijing bridle at critical reporting about so-called "red-chip" stocks, issued by Hong Kong-based China-owned companies. These red-chip companies, currently the darlings of the market, have defied the tumble in Hong Kong share prices that has accompanied the economic downturn in Thailand and the rest of southeast Asia. Yet some financial analysts say that many of these companies are wildly overvalued, and the lack of transparent reporting about the nature of their ownership in China make them inherently unreliable. Eventually even bullish business writers in Hong Kong could uncover potential scandals in the red-chip market. Would China regard an exposé of a scandal in a Hong Kong-traded, Beijing-owned company as a threat to "national security"?

Covering the new Tung government has caused some journalists to complain about lack of access and lapse into nostalgia for the public-relations-conscious British administration. "The level of access and the culture of secrecy is already worse," said Stephen Vines, a veteran Hong Kong reporter and editor who has worked in both the local and foreign media. "Something happens when you phone Tung's office and you get no answer. [Former Hong Kong governor] Chris Patten was very media-savvy and media-friendly. Now there is no one you can phone up for a straight answer."

Tung's inaccessibility is symptomatic of an executive-led government that tolerates the press as a necessary evil, Vines said. Patten lobbied long and hard to get the Hong Kong media to believe in his efforts to democratize the territory. Tung doesn't see the press as a partner in the public discourse. "But," cautioned Vines, "it's not as bad as China. Not yet anyway."

Vines' attitude seems to prevail in Hong Kong, where journalists often take to heart the old adage: Hope for the best, prepare for the worst. It is no coincidence that Hong Kong's amazing economic growth‹it is the world's eighth-largest trading economy, with a per-capita income that rivals many European countries‹has been accompanied by great freedom. It is that freedom to report and challenge and exchange information that has brought the world to Hong Kong as Asia's financial and business hub.

If China and Tung Chee-hwa confound the critics and allow the one-country, two-systems philosophy to flourish in Hong Kong, it may open the way toward greater press freedom for all of China. At the 15th Party Congress, Jiang set in motion the further privatization and modernization of the Chinese economy by calling for the sale of state-owned companies to private shareholders. As the Chinese government proceeds with privatization, the last vestiges of a socialist economy will likely whither away, further erasing the barriers between China and the rest of the world. The next aspect of the Chinese system to go should be the apparatus of one-party control over information and the press. No country has built a successful, dynamic modern economy on the scale of China without allowing its people democracy and free access to information. Hong Kong knows how to be free; it can point the way for China.

Success in Hong Kong will be measured in large part by freedom of information and the rule of law. At stake in Hong Kong is the health and vigor of one of the world's great trading economies, a vital cog in the great wheel of Asian commerce and development. In that sense, the whole world will be watching‹and living with‹the outcome of Hong Kong's drama.

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