Can protests do any good?

U.K. Can't Complain About Hong Kong

Jim O'Neill worked for Goldman Sachs Group Inc. from 1995 until 2013, serving most recently as chairman of Goldman Sachs Asset Management, and as the firm's chief economist from 2001 to 2011. Before joining Goldman Sachs, he was head of global research at Swiss Bank Corp.
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In recent weeks, Hong Kong has seen street protests over Beijing's role in the city's politics. Some prominent overseas commentators, especially from the U.K., have begun to complain that China is failing to honor the promises it made in 1984, when the two countries agreed that Hong Kong would be handed back to the mainland.

The letter of those commitments is something for international lawyers to debate. Meanwhile, I see a danger in griping about China's lack of good faith. This sits a bit too comfortably with the idea, popular in the U.S. and Europe, that China will fail, and deserve to fail, unless it makes itself over in the West's image. According to this view, China should take Hong Kong as it once was as the model for its own political and economic development.

QuickTake Hong Kong's Autonomy

Some business people with long experience of investing in Hong Kong and dealing with its rulers are nostalgic for the old days. China's leaders see the history, and the role of Britain and other invaders, a bit differently. To put it mildly, there's quite a perception gap.

Yet whatever one's view of the history, the idea that criticism from the U.K. can be productive in this context is questionable. Once the U.K. signed Hong Kong back over to China, it lost its standing to complain, unless China was in breach of the letter of its commitments. The people of Hong Kong, of course, should be allowed to press their case. Expressions of disapproval by the previous owner don't help their cause.

The U.K.'s coalition government has tried hard to improve its relationship with Beijing in the last couple of years. Prime Minister David Cameron and his colleagues seem to have realized that they cannot lecture China on how to run its economy or society, and then expect U.K. companies to get a warm welcome as they try to participate in China's ongoing economic miracle. I've been involved in some of these interactions and been impressed by the efforts made and by the results. U.K. policy makers, in addition, know that London's standing as a global financial center will depend, in part, on its ability to exploit the liberalization of China's currency, trade and capital market. If London starts lecturing China about its internal politics, that prospect is put at risk.

Some observers will see such calculations as squalid. They'll say, Stand up for what is right and be damned. I'd have more sympathy for that approach if I thought that standing up for what is right would serve anybody's purpose in this case. The risks -- not just to the U.K.'s interests, but also to those of the Hong Kong protesters -- would seem to outweigh any plausible benefit.

Pragmatism aside, the issue illustrates the worldview of many Westerners of my generation, encapsulated in the notion that there's a right way to do things, that it's the only way, and that alternatives should be disdained or opposed even if they seem to be working. If China isn't going to embrace our vision of democracy, they seem to say, then it won't succeed in creating mass prosperity -- and, by the way, it shouldn't be allowed to.

By the end of this year, China's economy will be about $1 trillion bigger, with output exceeding $10 trillion. The extra trillion is more than three times the size of Hong Kong, and it will make China almost twice the size of Japan; as big as France, Germany and Italy combined; or four times bigger than the U.K. Incidentally, in 1984, the U.K.'s economy was far bigger than China's. That's worth pondering.

Business people from mainland China love many things about the U.K. -- from our gardens to our schools and universities. Harnessed correctly, that fondness could make the U.K. one of the biggest beneficiaries of China's emerging economic preeminence. Indulging in nostalgia for enlightened colonialism won't help anybody.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Clive Crook at ccrook5@bloomberg.net