Social Security Policy in Hong Kong: From British Colony to China's Special Administrative Region 0739149547, 9780739149546

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Social Security Policy in Hong Kong

Social Security Policy in Hong Kong From British Colony to China’s Special Administrative Region Chak Kwan Chan

LEXINGTON BOOKS Lanham • Boulder • New York • Toronto • Plymouth, UK

Published by Lexington Books A wholly owned subsidiary of The Rowman & Littlefield Publishing Group, Inc. 4501 Forbes Boulevard, Suite 200, Lanham, Maryland 20706 http://www.lexingtonbooks.com Estover Road, Plymouth PL6 7PY, United Kingdom Copyright © 2011 by Lexington Books All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without written permission from the publisher, except by a reviewer who may quote passages in a review. British Library Cataloguing in Publication Information Available Library of Congress Cataloging-in-Publication Data Chan, Chak Kwan. Social security policy in Hong Kong : from British colony to China's special administrative region / Chak Kwan Chan. p. cm. Includes bibliographical references and index. ISBN 978-0-7391-4954-6 (cloth : alk. paper)—ISBN 978-0-7391-4956-0 (electronic) 1. Social security—China—Hong Kong. 2. Public welfare—China—Hong Kong. 3. Hong Kong (China)—Social policy. 4. Hong Kong (China)—Economic policy. 5. China—Social policy. 6. China—Economic policy. I. Title. HD7233.C43 2011 361.95125—dc23 2011024573 The paper used in this publication meets the minimum requirements of American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI/NISO Z39.48-1992. Printed in the United States of America

Social Security Policy in Hong Kong: From British Colony to China’s Special Administrative Region

Chak Kwan Chan

For My Lord and My Family

Contents List of Tables

ix

Abbreviations

xi

Preface

xiii

1

Hong Kong Social Policy & Chinese Welfare Ideologies

1

2

Co-optive Politics & Welfare Constraints

11

3

Legitimacy & Chinese Welfare Ideologies

25

4

Traditional Chinese Welfare Ideologies

37

5

Social Security & Chinese Welfare Ideologies Before 1945

61

6

Social Security & Chinese Welfare Ideologies:

83

1945-1967

7

Social Security & Chinese Welfare Ideologies:

111

1968-1997

8

Postcolonial Polity & Welfare Approach

137

9

Postcolonial Social Security & Chinese Welfare Ideologies

153

10

Chinese Welfare Ideologies & Hong Kong’s

171

Capitalism Bibliography

183

Index

209

vii

Tables 2.1 2.2 3.1 5.1 6.1 6.2 6.3 6.4 6.5 6.6 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 8.1 8.2 8.3 8.4 8.5 8.6 8.7

General Revenue and Fiscal Reserves, 1960-61 to 1981-82 1992 National Tax Rates Taxation as a Percentage of GDP, 1995 Hong Kong Population and Male-to-Female Ratios Growth in Factories and Workers, 1947-1978 Some Influential Kaifongs’ Social Services, 1972 Squatter Fires and Victims, 1948-1954 Distribution of Chinese Families in Hong Kong by Size in 1954 Personal Monthly Income Levels by Age Suicide and Parasuicide Cases, 1959-1960 The LegCo’s Composition, 1985 & 1988 Positions of the ExCo’s Non-government Members, 1987 Annual Hong Kong Economic and Budget Growth, 1975-1991 Social Security Expenditure as a Percentage of GDP, 1985-1990 Social Security Provision in Hong Kong, 1991 Family Benefit and Worker’s Income Compared Expenditure Patterns of Public Assistance Recipients Sex Ratio in Education, 1971 Method for the Formation of the LegCo before 2007 Composition of the Selection Committee for Choosing Hong Kong’s Chief Executive from 1997 to 2002 Composition of the Selection Committee for Choosing Hong Kong’s Chief Executive from 2002 to 2007 Co-optees’ Backgrounds Distribution of LegCo Seats in 2008 Election LegCo Membership, 1998-2012 Functional Representatives’ Vetoes of Geographical Representatives’ Initiatives, 1998-2003

ix

19 21 30 64 91 96 97 101 102 103 118 119 120 123 123 128 129 132 139 143 144 144 145 147 148

x

9.1 9.2 9.3 9.4

Tables

Living Conditions of Applicants on the Public-Housing Waiting List, 2000-2006 CSSA Old Age Cases, 1997-2004 Elders Living with Family Applying for Individual CSSA, 2000-2008 Abuse of Older People by Type, 2008

159 160 162 166

Abbreviations AEA

Active Employment Assistance

BLCC

Basic Law Consultative Committee

BLDC

Basic Law Drafting Committee

CE

Chief Executive

CCP

Chinese Communist Party

CPPCC

Chinese People’s Political Consultative Conference

CSD

Census and Statistics Department

CSSA

Comprehensive Social Security Assistance Scheme

DABHK

Democratic Alliance for the Betterment of Hong Kong

ExCo

Executive Council

HKSAR

Hong Kong Special Administrative Region

GDP

Gross Domestic Product

IEAS

Integrated Employment Assistance Scheme

ILO

International Labor Organization

LegCo

Legislative Council

MPF

Mandatory Provident Fund

NPC

National People’s Congress

PLC

Provisional Legislative Council

POA

Principal Officials Accountability

PRC

People’s Republic of China

SARS

Severe Acute Respiratory Syndrome

SC

Selection Committee

SCA

Secretary for Chinese Affairs

SWD

Social Welfare Department

TWBD

Tung Wah Boards of Directors

xi

Preface The Heritage Foundation has ranked Hong Kong as the freest economy in the world since 1994, and it has always been a showcase of capitalism. It is a rich society, its per capita GDP in 2010, according to the CIA World Factbook, being the twelfth in the world, just one place lower than the United States (US) but higher than Germany, the United Kingdom (UK), France, and Japan. Hong Kong has a residual welfare system that includes neither an unemployment insurance system nor an old age pension scheme. Its public expenditures were less than 20 percent of its GDP in 2010, which was far lower than the US’s 44 percent and the UK’s 45 percent. The Hong Kong government is not only free from debt but also had accumulated fiscal reserves of HK$1.1 trillion in February 2011, which was about twenty-three months of its public’s expenditure. Both the Hong Kong government and pro-market academics have always asserted that Hong Kong’s economic success is due to its free market philosophy. Right-wing politicians and academics even present Hong Kong as a success story when urging more extreme free market practices. Despite Hong Kong’s economic success many of its citizens actually live in poverty, more than 18 percent in 2010. According to the United Nations, Hong Kong had the greatest wealth disparity in Asia in 2008, with a Gini coefficient of 0.53. Using social security as a case study, this book argues that Hong Kong’s market economy is not the result of democratic choice but the consequence of an authoritarian polity during British colonial rule and a semi-democratic system under Chinese sovereignty. These political structures have allowed Hong Kong’s governments to manipulate traditional Chinese welfare ideologies by shifting the duty for welfare from the state to society and the family. Apart from critically analysing the Hong Kong governments’ social security strategies, this book also will examine their impact on the well-being of citizens. I am grateful to my wife Chi Wah and my mother Hok Ying Lam for their emotional and financial support. Chi Wah’s patience and concern reinforced my efforts in my research work; while my mother always supported my academic adventure during good times and harsh times. This book was originally developed from my PhD study at Sheffield University eighteen years ago. I should like to express my deepest gratitude to my supervisors Prof. Alan Walker and Mr. David Phillips. I learned from them the importance of social justice, the skills for conducting rigour research work, and the techniques for formulating a solid theoretical framework. My thanks also go to Lenore Lautigar, Laura Grzybowski, and their colleagues at the Lexington Books. Their patience and effective work has contributed to the successful publication of this title. Chak Kwan Chan July 2011 xiii

Chapter One

Hong Kong Social Policy & Chinese Welfare Ideologies Introduction This book addresses the relationship between Chinese welfare ideologies and Hong Kong’s capitalism. In particular, it critically examines how the British colonial regime and then China’s Hong Kong Special Administrative Region (HKSAR) have maintained a minimal social security system there since 1842. Widely regarded as a prime example of capitalism, the Heritage Foundation (2011) ranked Hong Kong was as the world’s freest economy for nineteen consecutive years. The Cato Institute (2004) also confirmed its extreme free-economy status by awarding it the highest score on its Economic Freedom of the World Index. Hong Kong’s economic achievements are remarkable. With just 1,095 sq km, or 0.45 percent of that of the United Kingdom (UK), in 2006 it was the world’s sixth largest foreign-exchange trading centre, twelfth largest trading entity, and fifteenth largest banking centre (Hong Kong Government 2007). As a result of economic growth, its per capita gross domestic product (GDP) jumped from US$5,649 in 1980 to US$29,172 in 2009, nearly twice of that of Korea and more than eight times that of mainland China (International Monetary Fund 2010). Unlike many developed countries that have to bear a heavy welfare burden and have high taxes, the Hong Kong government has always maintained a surprisingly minimal welfare system, and its businesses have benefited from a low tax rate for more than 160 years. For example, its tax rates in 1

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Chapter One

2010-2011 were just 15 percent for salaries and 16.5 percent for corporations (GuideMeHongKong.com 2010). Hong Kong’s welfare expenditures are also relatively low, with its social security expenditure having been just 1.8 percent of its GDP in 2003-2004, compared to the UK’s 9.3 percent (House of Commons 2009). In addition, its public expenditure is notably small, having been only 19.8 percent of its GDP in 2010 (HKSAR (Hong Kong Special Administrative Region) 2010d). Obviously, Hong Kong has successfully maintained a small government and an economic system that provides high incentives for individual people and private companies to invest and accumulate wealth. A major question is how its successive governments have kept its residual welfare state since UK administration began in 1842. Using social security as an example, this book examines the role of Chinese welfare ideologies in maintaining Hong Kong’s residual social security system.

Hong Kong’s Government and Chinese Community It is possible to explain the relationship between Hong Kong’s government and its Chinese community during colonial rule from two main perspectives. These are that of the administrative absorption of politics, as proposed by King (1981), and of utilitarianistic familism, as proposed by Lau (1982). According to King (1981), the Hong Kong government established its legitimacy through the administrative absorption of politics. This means that it co-opted social and economic elite onto its main decision-making bodies in order to achieve political integration and consensus. The government had long appointed wealthy Chinese people to sit in both its Legislative Council (LegCo) and Executive Council (ExCo), as well as other official advisory bodies, then extended this co-optive system following riots in 1966 and 1967 by appointing the leaders of grass-roots organizations to join this economic elite in district-level advisory bodies. King (1981: 144) concluded that Hong Kong had been governed by an elite consensus, and its political stability during colonial rule had been the consequence of “the successful process of the administrative absorption of politics.” Lau (1982: 157), however, argued that Hong Kong had a minimally integrated sociopolitical system with weak links between the bureaucratic polity and the Chinese community, as both were concerned about the violation of their autonomy and integrity and were always “on guard against intrusions or encroachments from the other side.” The Chinese people were also intent on preserving their customs, mode of thinking, habits, mores, lifestyles, and social organizations. Lau concluded that utilitarianistic familism characterised the Hong Kong’s Chinese community’s dominant culture. This implies that: the normative and behavioural tendency of an individual to place his familial interests above the interests of society and of other individuals and groups, and to structure his relationships with other in-

Hong Kong Social Policy & Chinese Welfare Ideologies

dividuals and groups in such a manner that the furtherance of his familial interests is the overriding concern. Moreover, among the familial interests, material interests take priority over non-material interests. (Lau 1982: 72) This, then, is how the Chinese people in Hong Kong used utilitarianistic familism to meet their welfare needs during colonial rule. They therefore had a low level of dependence on the government, emphasising instead mutual support among family members. Lau (1982: 158) claimed further that the colonial government’s laissez-faire and social non-interventionist philosophy guaranteed against “tampering unnecessarily with Chinese affairs,” and concluded that Chinese society and the British bureaucracy had been able to coexist peacefully because neither of them tried to encroach on the other’s space. King (1981) and Lau (1982) have therefore clearly indicated two crucial factors involved in the relationships between Hong Kong’s colonial government and its Chinese community. King focused on the Chinese elite’s role in maintaining social stability and the government’s strategy for mobilising their support. As the overwhelming majority of Hong Kong’s population were ethnically and culturally Chinese, the colonial regime could not afford to ignore the views of that community’s social and economic leaders. In addition to the elite and their organizations, however, the institution of the family deserves particular attention, as it is Chinese culture’s most basic social, economic, and political unit. Thus, the principal weaknesses of King’s perspective are that it lacks detailed analysis of the relationships between the elite organizations and families, the dynamic forces within families, and the impact of government policies on them. Although Lau (1982) did analyse Chinese families’ developments and contexts in the colony, he seemed to have underplayed the role of the colonial government in shaping the mode of Chinese political participation. Also, the Chinese family’s capacity to maintain self-sufficiency had been exaggerated and the welfare contributions of the elite organizations to Chinese community were inadequately studied. The colonial government’s philosophies of first laissez-faire and later positive non-interventionism resulted in the state minimising its economic role but not hesitating to intervene in social and political affairs, co-opting influential Chinese into its political decision-making bodies and using the state to shape and maintain Chinese welfare practices (King 1981). For example, it encouraged such philanthropic and voluntary agencies as the Tung Wah and the kaifongs to provide Hong Kong’s Chinese people with social services (Social Welfare Officer 1948, 1952; Hodge 1976). Chiu (1991), furthermore, noted that the Hong Kong government’s attitude in regard to the effective functioning of Chinese families has been consistent over time. It has continually emphasised their welfare functions, treating them as the basic caring unit. For example, Hong Kong’s last colonial

3

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Chapter One

governor, Chris Patten (1993: 22), stressed that in regard to the aging population “the best solution is care in the family.” He declared further that the government’s future family policy was to “preserve and strengthen the family as the foundation of our community” (Patten 1994: 25). Clearly, Lau’s (1982) conclusion that Hong Kong’s government and Chinese society were minimally integrated and had a high degree of separation fails to reflect the situation’s reality. Hong Kong’s colonial government therefore actively utilised Chinese charitable organizations and families to meet the public’s welfare needs. It is therefore important to study comprehensively the functions of traditional Chinese welfare ideologies and practices in regard to Hong Kong’s welfare system, particularly the extent to which they have helped to maintain Hong Kong’s capitalism. Hong Kong has, furthermore, been a special administrative region of China for more than fourteen years. It is therefore necessary to examine whether the postcolonial government has adopted the same strategy of utilising traditional Chinese welfare practices. This work’s findings can enhance understanding of the relationship between Chinese welfare ideologies and the nature of Hong Kong’s capitalism.

Historical Approach and Welfare Strategies This work uses a historical approach to analyze systematically the successive Hong Kong governments’ social, economic, and political pressures and the welfare strategies they have used to maintain its free economy since 1842. Among its many challenges, the colonial regime experienced widespread riots in 1966 and 1967 that threatened its existence. These led it to improve welfare services and enhance its communication with the general public. It also introduced some elements of representative government during the final stage of colonial rule, especially during the administration of its last governor. Chapters Seven and Eight describe this in detail. When the Chinese government assumed sovereignty in 1997, it aimed to limit the progress of Hong Kong’s democracy by preserving a colonial-style administrative-led polity following the departure of the British. Nevertheless, decolonization and democratization have provided Hong Kong’s people with more opportunities to express dissatisfaction over social, economic, and political issues. One example of this development was street demonstrations by half a million people on 1 July 2003 to express grievances over welfare issues and the government’s political reforms. Economically, the Asian financial crisis in 1998 and the outbreak of the severe acute respiratory syndrome (SARS) epidemic in 2003 had both had seriously negative impacts on Hong Kong’s economic situation, its unemployment rate consequently jumping to

Hong Kong Social Policy & Chinese Welfare Ideologies

8.6 percent, with 309,000 people being unemployed, its highest since the early 1970s (Census and Statistics Department [CSD] 2003). Despite such political and economic crises, Hong Kong’s governments have successfully preserved its traditional fiscal principles of low taxation, a balanced budget, and a small public sector. It is therefore relevant to examine what strategies they have adopted to address various social, political, and economic pressures since UK administration began in 1842. A historical approach can systematically identify the key social and political challenges that have threatened Hong Kong’s free economy and its successive governments’ strategies for tackling them.

The Case of Social Security This book uses social security as a case example to illustrate the interactions between Hong Kong’s governments’ welfare strategies and the Chinese people’s welfare ideologies. It should be noted that “no universally accepted definition of social security” exists (Tyabji 1993: 53; see also McKay and Rowlingson 1999), nor does any “single right model of social security” (International Labor Organization [ILO] 2001: 4). National governments determine the contents of social security systems independently (Pemberton 1999). The social security system in mainland China, for example, includes all social insurance schemes, public assistance programmes, social services, and supplementary protection measures (Zheng 2002). The Beveridge Report’s advocacy of a social insurance scheme and financial assistance measures largely shaped the UK’s concept of social security. Lacking a common definition of social security, researchers have defined it according to the scope and objectives of their own studies. By comparing the social security systems of eight European countries, for example, Hansen (2002) focused on the six elements of (a) unemployment, (b) injuries from work, (c) disability, invalidity, or both, (d) retirement, (e) having children, (f) and maternity leave, adding that whether family allowances are a form of social security is debatable (2002). Mckay and Rowlington (1999: 4) put social security “within the context of other related forms of government and employer financial provision.” Similarly, Spicker (1993: 95) defined social security as “a term used for financial assistance, in whatever form it may take [that provides] not goods but money with which people can purchase goods.” By studying the economic effects of social welfare, Pemberton (1999: 494) defined social security as “the use of current tax revenue to finance transfers to individual consumers.” Some have emphasised social policies’ goals and objectives rather than their scope. Because human expectations are unlimitedly expandable, social security has always been a goal rather than an accomplishment (Derthick 1979). It is derived from some deeper system of beliefs about what consti-

5

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Chapter One

tutes the good society, the relationships among their citizens, and the relationships between their citizens and the state. Societies constantly contest, define, and redefine their social security systems’ aims, with their makeup changing accordingly (Sainsbury 1999). Bismark’s creation of the first insurance schemes in Germany, for example, aimed mainly at reducing social threats to the existing political order instead of addressing the financial needs of the working class (George 1973). In short, there is no established definition on what social security is, and its contents also change in response to socio-political challenges. This study divides Hong Kong’s social security systems into three broad periods that reflect its social changes and its governments’ changing perceptions of their welfare duties. These periods are before the Second World War, from the end of the war to the 1960s riots, and since the riots. Prior to the Second World War the Hong Kong colonial government cared little for the well-being of the colony’s Chinese people. Its principal social security strategy for ensuring that their basic needs were met was to manipulate the welfare work of large-scale Chinese charitable organizations. Social security in this period therefore involved the medical and emergency relief that these elite Chinese associations offered. They and the government designed the Tung Wah in particular to be an informal social welfare department. Hong Kong’s social security provisions changed following the arrival of a large number of refugees after the Chinese Communist Party (CCP) took control of mainland China in 1949. Due to a decline in the ability of the large-scale Chinese charitable organizations to perform their welfare functions, the colonial government helped to establish medium-sized neighbourhood organizations called kaifongs to provide emergency relief in order to preserve its limited involvement in providing social security. The makeup of Hong Kong’s social security system changed dramatically after the establishment of its first official public assistance scheme in 1971. After the riots in the late 1960s, the Hong Kong government finally took up some of the burden of providing social security. This study’s focus therefore moves on to the social security programmes provided by Hong Kong’s Social Welfare Department and then the Mandatory Provident Fund introduced in 2000. As the ILO (2001:4) noted, “social security systems evolve over time and can become more comprehensive in regard to categories of people and range of provisions as national circumstances permit.” In regard to the UK, Millar (2009: 6) claimed that based on post-war welfare provisions the term social security seems to be outdated because it could no longer encapsulate current “institutional arrangements for policy making about, and the delivery of, income transfers.” As this book uses a historical approach, the makeup of social security during the three periods it addresses reflects the cultural values influencing the changing social, political, and economic structures (Tyabji 1993) as well as the Hong Kong governments’ changing welfare strategies in

Hong Kong Social Policy & Chinese Welfare Ideologies

response to its new socio-economic challenges.

The Case of Hong Kong Hong Kong provides a relatively unambiguous case for studying a free economy and the nature of social policies both during and after colonial rule. Its experiences can illustrate the special features of social welfare in the world’s freest economy, and more importantly whether such a system can achieve human well-being. Some free-market advocates assert strongly that the free play of economic forces can benefit poor people as well as rich ones. Having established itself as the benchmark example of free-market capitalism for a long time, Hong Kong is the best case with which to test the validity of these free-market arguments. The case of Hong Kong can also reveal much about social welfare under authoritarian regimes. It was not until the final period of colonial rule that Hong Kong’s people could elect some of the members of its LegCo. Before then a colonial governor appointed by the UK government had ruled the then Crown Colony. Chapter Two describes this in detail. Since the political handover in July 1997, furthermore, the people have still been unable to elect their government’s chief executive (CE) or all the members of the LegCo. A committee of only 800 members of Hong Kong’s social and political elite elected its present CE, and the members of some business and professional groups rather than the public elected half of the LegCo’s members. Chapter Eight describes and analyses this. Hong Kong’s experiences can therefore demonstrate how an undemocratic political system can shape the welfare arrangements of a free economy. In addition, the case of Hong Kong illustrates how Chinese welfare ideologies function in a free economy. Its residual welfare system expects families to provide financial assistance for their members, the government being only the last resort for those who cannot otherwise survive (Titmuss 1974). Chinese people have traditionally emphasised self-reliance and filial piety, and it seems that Chinese families and charitable organizations can bear a capitalist state’s welfare burden. Chapter Four describes and analyses these ideologies. Hong Kong’s experiences can therefore illustrate the interactions between Chinese welfare values and a capitalist state and their impact on welfare recipients’ well-being.

Overall Outline Using social security as an example, this book examines how successive Hong Kong governments have maintained its minimal welfare system. The basic argument here is that the UK colonial government and China’s HKSAR

7

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Chapter One

have utilised traditional Chinese welfare ideologies to meet the public’s welfare demands, minimising the state’s welfare duties. The book has ten chapters divided into three parts. Part One has four chapters that formulate a framework for explaining why Hong Kong’s governments have had to utilise traditional Chinese welfare ideologies to justify their welfare provision processes. This chapter has introduced the key features of Hong Kong’s economic and welfare systems. Chapters Two and Three argue that both internal and external factors constrained Hong Kong’s colonial regime’s capacity to address welfare needs. Internally, colonial civil servants needed to avoid conflicts with the local business community by adopting a low-tax policy. Externally, the Colonial Office required Hong Kong to follow several fiscal principles to prevent it from becoming a financial burden for the UK. Within these constraints, the colonial government had to use the resources of Chinese organizations and families to cope with welfare problems. After becoming part of China, the HKSAR faced similar financial constraints because its Basic Law clearly mandated low taxation and a small government, so it has consequently continued to use traditional Chinese welfare values to limit its welfare expenditures. Chapter Four discusses the elements of traditional Chinese welfare ideologies. It argues that Chinese culture has traditionally considered social welfare to be the grace of the emperors, and as a result the general public expected little from the government, instead forming their own mutual-help organizations based on surnames, localities, and occupations. More importantly, Confucianism emphasises filial piety, making the parent-child relationship the obvious basic welfare unit. Part Two has three chapters that examine how colonial Hong Kong governments utilized traditional Chinese welfare practices. Chapter Five argues that early colonial governments adopted a passive and non-interventionist policy toward the needs of their Chinese subjects, and as a consequence such traditional large-scale Chinese organizations as the Tung Wah Hospital, the Po Leung Kuk, and the District Watch Force became Hong Kong’s main welfare providers, acting as government agents by offering emergency services to poor people. Chapter Six discusses the nature of the Crown colony’s social pressures after the Second World War and how the colonial government used the kaifongs, which are medium-sized Chinese charitable organizations, to address its people’s welfare needs. Chapter Seven examines why the colonial government became more active in welfare provision after 1967. It argues that the 1966 and 1967 riots had shaken the foundation of UK rule and that the colonial government implemented various types of welfare reforms both in order to reduce public dissatisfaction and to maintain a stable society. Despite more welfare involvement from the government after 1967, however, Chinese families in Hong Kong still played an important role in meeting their members’ financial needs.

Hong Kong Social Policy & Chinese Welfare Ideologies

Part Three has two chapters. Chapter Eight analyzes the nature of Hong Kong’s polity and its welfare ideology since 1997. It argues that the Basic Law, which requires the HKSAR to follow the pre-existing colonial fiscal principles, has preserved colonial capitalism. The HKSAR has also kept a form of the colonial administrative-led polity, giving its political power to a CE elected by a small clique of pro-China and pro-business groups in both the LegCo and ExCo. Against this background the HKSAR has continued to pursue such pre-existing colonial welfare practices as maintaining a small public sector, providing welfare mainly for economic development, and promoting self-reliance. Chapter Nine discusses how the HKSAR government has utilised traditional Chinese family values in the context of economic recessions and rising welfare expectations, arguing that it has emphasised self-reliance and filial piety in its social security provision policies. Chapter Ten examines the importance of traditional Chinese welfare values for the operation of Hong Kong’s economy. It counters Friedman’s explanation of Hong Kong’s economic success by arguing that successive Hong Kong governments have continually manipulated Chinese welfare practices to reduce their welfare expenditure and to secure social stability. Hong Kong’s capitalism and its minimal welfare system therefore need to be studied in the context of an administrative-led polity and its utilisation of Chinese welfare ideologies during its different stages of economic development.

9

Chapter Two

Co-optive Politics & Welfare Constraints Introduction The constraints on Hong Kong’s ability to address its people’s welfare requirements need to be examined in the context of British imperialism and the selfinterest of British businesses. Hong Kong is composed of Hong Kong Island, Kowloon Peninsula, and New Territories. The UK government controlled these three areas as a result of three treaties it made with China in 1842, 1860, and 1898 respectively. Dissatisfied with the Chinese government’s confiscation of some opium belonging to British businessmen in 1839, the UK government sent a military expeditionary force to attack China in what became known as the First Opium War. Defeated by the British, the Chinese government had no choice but to sign the Treaty of Nanking, which ceded Hong Kong Island to the UK in 1842. Later, the Second Opium War broke out and the UK pressed China to cede Kowloon Peninsula to it under the Convention of Peking in 1860. In order to strengthen Hong Kong’s defence, the UK government forced the Chinese government to sign the Second Convention of Peking in 1898, which leased the New Territories to the UK for ninety-nine years, its expiration date being 30 June 1997. The UK occupied Hong Kong to serve its military and commercial interests. According to former Colonial Secretary, Lord Ripon (Petition of the Merchants, 1964a), the UK expected Hong Kong to serve its imperial purposes and safeguard British trade in the Far East. Being situated along the strategic line formed by India, the Straits settlements, and the China Sea, it was “Britain’s key to the East” (Eitel 1983: 126). Four factors contributed to UK naval supremacy in the Far East before the Second World War. These were “the geographic position of Hong Kong, its maintenance as a first-class naval base, the ability of the main fleet to reinforce the 11

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Chapter Two

China squadron, and the alliance with Japan” (Mills and Mills 1970: 378-379), the Royal Navy having built a dockyard in the colony in the nineteenth century to “provide repair facilities for the ships of the Royal Navy operating in Chinese waters” (Miners 1991: 15). The UK government established an authoritarian government in Hong Kong to fulfil its military and commercial obligations. Although it could supervise this type of polity closely, the arrangement created conflicts between the colony’s officials and the British business community involving such issues as taxation and public expenditure. This chapter argues that the Colonial Office’s requirements and the pressures from British entrepreneurs combined to constrain Hong Kong’s fiscal policies, and as a result its government had limited resources and needed to seek alternative institutions for addressing social problems.

The British Empire’s Interests and Hong Kong’s Authoritarian Polity The UK government created Hong Kong as an authoritarian colonial state so it could follow its instructions. Fieldhouse (1983: 29-30) pointed out that the common bases of all UK colonial systems were “autocratic government by colonial governors, closely supervised by London, and the preservation of existing patterns of law and social organization.” Perceiving Hong Kong to be an important military and diplomatic headquarters, the UK government made it a Crown colony, with a bureaucracy having all political power. The leading figure of the colonial bureaucracy, the governor, had absolute power over its affairs. He was appointed by the Queen, and assisted by the LegCo and the ExCo. The Hong Kong Charter stated that: And we do hereby grant and ordain, that the Governor for the time being of the said colony, with the advice of the said Legislative Council, shall have full power and authority to make and enact all such Laws and Ordinances as may from time to time be required for the peace, order, and good government of the said colony of Hong Kong. . . . And Whereas it is expedient that an Executive Council should be appointed to advise and assist the Governor of Our said colony for the time being in the administration of the government thereof. (Hong Kong Charter 1964a: 252-253)

The charter deliberately kept the two councils small, each having just three official members other than the governor, in order to enable the governor to maintain his personal influence more easily (Endacott 1973: 38). These constitutional arrangements made each colonial governor “an absolute dictator” through whom the UK government could easily exercise its power (Beazer 1978: 9). As MacPherson (1982) claimed, the characteristics of the colonial administrations were that they were powerful, bureaucratic, hierarchical, and centralised, and their primary activities involved the routine administration of policies that were concerned above all with order and stability.

Co-optive Politics & Welfare Constraints

13

In order to make sure that Hong Kong avoided being a financial burden on the UK government, the Colonial Office demanded that the colonial governors comply with several fiscal requirements. In particular, it regarded self-sufficiency to be the colonial governors’ first duty and expected its colonies to live off their own resources. Lord Stanley, the UK’s Secretary of State for War and the Colonies at the time the Hong Kong administration was established, accordingly spelt out two fiscal principles clearly. First, the colony’s fiscal procedure was to make an initial estimate of the proposed expenditure for the ensuing year and then to issue “a statement of the Ways and Means by which provision made according to the amount of the expenditure” (Lord Stanley 1843). He also required that “the local Revenue will be adequate to defray the charge of the local establishments and all the expenses of the government of Hong Kong” (Lord Stanley 1843). This means that by ensuring an authoritarian and centralised polity and by putting these fiscal requirements into practice the UK government could easily push colonial bureaucrats to pursue the British Empire’s interests.

Local Conflicts and Co-Optive Politics Hong Kong’s early government structure, however, stressed the interests of the UK government too much, creating potential conflicts between colonial officials and British businesses. Unlike other colonies that had numerous natural resources or some rich natives or both to cover the administrative costs of colonial governments, Hong Kong’s small population and scant natural resources meant that its government had to depend heavily on the local business community to pay for its administration. More importantly, the UK government forced it to bear a heavy burden of the expenditure for its military activities in the Far East. British merchants in Hong Kong, who were extremely dissatisfied with having to finance the UK’s administration in China and Hong Kong, saw this as “unjust in practice” (Endacott 1964: 266). Although the policy was beneficial to British international-imperialist capitalism, it hurt the interests of the members of Hong Kong’s business community, who were also angry that the colonial bureaucracy had all the political power. The structural weakness of the early colonial polity was therefore a seed for confrontations between Hong Kong’s bureaucrats and merchants. The first conflict emerged in 1845 when the merchants became angry with Governor Sir John Davis’s (1844-1848) taxation policies and his policy of putting rates on property to pay for police and other local services. They consequently presented a memorandum to the Secretary of State, complaining that the Hong Kong government was forcing unusually harsh conditions on the landholders. They argued that the ground rent was a heavy charge that would drive trade away from the colony (Hong Kong Merchants 1964a). More importantly, they questioned the Hong Kong government’s authority to raise taxes by claiming that:

14

Chapter Two the promulgation of an ordinance, which we submit to be unconstitutional and illegal, empowering government assessors arbitrarily to value all household property, with the view of raising a new tax, ostensibly for payment of a Police force, there being no municipal body of any kind in the colony to determine whether such tax be necessary, or equitably levied and appropriated. (Hong Kong Merchants 1964a: 263)

They further urged the UK government to “authorise the formation of a Municipal Body, vested with the usual power of deciding on the appropriation of the money raised for Local purposes” (Hong Kong Merchants 1964a: 264). A select committee of Parliament supported the merchants’ arguments, and the UK government made such concessions as extending the period of the land leases from 75 to 999 years and co-opting merchants onto the Hong Kong government’s key decision-making body, with Jardine and Edger, two influential merchants, taking seats in the LegCo in 1850. It should be stressed here that this 1845 incident had a farreaching impact on Hong Kong’s administration. First of all, the UK government officially recognised free trade and low taxation as Hong Kong’s guiding principles. The select committee’s members criticised Sir John's policies as likely to “sacrifice the real interests of the Settlement” and suggested that the colony could prosper under “the greatest amount of freedom of intercourse and traffic” (Endacott 1964: 113). They also condemned the practice of putting the whole colony’s imperial burden on the merchants, as Hong Kong’s establishment was for the general trade with China. Next, they held that a minimal administrative establishment was beneficial to Hong Kong. Again, they condemned the Hong Kong government for placing the colony on “a footing of needless expense” (Endacott 1964: 113) and advised it to contract the administrative system. Equally important, the committee legitimated the British merchants’ participation in Hong Kong’s affairs. As the committee ruled, “a share in the administration of the ordinary and local affairs of the Island should be given, by some system of municipal government, to the British residents” (Endacott 1964: 113). The parliamentary confirmation of the merchants’ rights in Hong Kong’s politics curtailed the colonial bureaucrats’ freedom in policy making. Any future increase in Hong Kong’s taxation would be more difficult, as senior civil servants had to follow the Colonial Office’s self-sufficiency principle and at the same time meet the merchants’ expectation of low taxes. Despite these concessions, the local merchants’ political power was still limited. Only two of the LegCo’s five seats were reserved for the business community, leaving the official members appointed by the Crown still in the majority and able to pass any legislation, and the unofficial members representing the merchants’ interests had “no power to carry any proposal which they may consider beneficial, nor have power to reject or even modify any measure which may in their opinion be prejudicial to the interests of the colony” (Petition of the Merchants 1964a: 274). Also, all of the members of the ExCo were officials appointed by the Crown. This unequal distribution of political power between the merchants

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and the colonial officials unsurprisingly led to another constitutional crisis in 1894. The relationship between the merchants and the colonial bureaucrats became strained again when the UK government pressed Hong Kong to make a large contribution to imperial defence expenditures. The colony had previously had to pay £20,000 annually for its military defence. Owing to the expansion of imperialist activities overseas, especially in the Far East in 1883-1884, the UK government demanded an additional £116,000 in 1889, and even required it to double its annual military contribution due to an increase in the garrison there. On top of this, the Hong Kong government needed to increase the salaries of civil servants because of a depreciation in the value of silver, a medium of exchange at that time. It responded by proposing a 35 percent increase in salary for staff recruited from Britain and 2 percent for those recruited locally. Despite strong opposition from the unofficial members of the LegCo, the majority bureaucrats were able to pass the measure. Frustrated with the high amount of the military contribution and limited political power, the merchants sent a petition to the House of Commons in June 1894 to express grievances. It emphasised that they did not have “any really effective voice in the management of [Hong Kong’s] affairs, external or internal” (Petition of the Merchants 1964a: 275). By using such other colonies as Malta, Cyprus, Mauritius, and British Honduras as examples, the merchants demanded that the UK government grant them similar privileges. These were “unofficial seats in the Executive Council; unofficial majorities in the Legislative Council; power of election of members of Council; and more power and influence in the management of purely local affairs” (Petition of the Merchants 1964a:276). The UK government, however, rejected the demand for self-government, as any form of election in the colony would directly challenge its own authority. More importantly, if the franchise was based on ratepayers, the Chinese people in Hong Kong would be in a majority, so a free election could mean the return of the Crown colony to the Chinese people. Restricting elections to only the colony’s British subjects would bring the colonial administrators and the military and naval forces under the control of the merchants. The UK government feared that the merchants would pursue their own interests at the expense of those of the British Empire, and more seriously that their control could lead to a confrontation with the Chinese people. Former Secretary of State Labouchere had already expressed this worry as early as 1856, noting that “the British were few and not permanently residents, and if they alone had the vote, the effect would be to give power over the permanent population to a small number of temporary residents” (Labouchere 1856). The Secretary of State Lord Ripon also stressed that any constitutional change should take the views of the Chinese people into account, insisting that “the overwhelming mass of the community are Chinese, that they have thriven under a certain form of government and that in any scheme involving a change of administration their wishes should be consulted and their interests carefully watched and guarded” (Petition of the Merchants 1964a:280).

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He strongly criticised the merchants’ demand that would place the power “in the hands of a selected few, and to constitute a small oligarchy, restricted by the lines of race,” and concluded that Hong Kong was “wholly unsuited” for selfgovernment (Petition of the Merchants 1964a: 280). In order to avoid any racial conflicts and to protect the interests of the British Empire, Ripon told the merchants that “the well-being of the large majority of the inhabitants is more likely to be safeguarded by the Crown colony system―under which, as far as possible, no distinction is made of rank or race, than by representation which would leave the bulk of the population wholly unrepresented” (Petition of the Merchants 1964a:280). The UK government’s basic principle was clearly that absolute authority should be vested in the hands of the colonial bureaucrats, who could both mediate conflicts between the local Chinese and British communities and safeguard the interests of the British Empire. Joseph Chamberlain, the new Secretary of State, followed Ripon's views, insisting that “Hong Kong will cease to be a Crown colony if representative government was put into practice” (Petition of the Merchants 1964a:285). The UK government rejected the merchants’ requests for selfgovernment, as these had challenged its two most important principles of securing the British Empire’s interests and maintaining a harmonious relationship with the native people. The Hong Kong government, however, used co-optive politics to enhance its legitimacy. As Scott (1989: 36-37) observed, colonial regimes “have particular problems with legitimacy. . . .They find it difficult to claim a popular mandate and they normally accept political change only when there is a challenge to government practice or intentions of such proportions that the authoritative basis of decisions is threatened.” In order to maintain its domination of the colonial bureaucracy and to resolve internal conflict the UK government therefore decided to build up a political system based on consensus between the bureaucrats and the colony’s merchants. Eitel (1983) observed that the conflict could be avoided if the governor consulted with the leading merchants. Accordingly, the UK government added two seats to the LegCo for one official member and one unofficial member. More importantly, it opened the ExCo, condemned by the merchants as a secret committee, to the merchants by offering them two seats. Though these constitutional arrangements did not meet all of the merchants’ demands, they were willing to accept the concessions. In the first place, they understood the danger of self-government based on elections by taxpayers, among whom Chinese people were the majority. Next, they understood that an authoritarian colonial government with an economic ideology similar to theirs was suitable for meeting their needs. In addition, they had to depend on the UK government to provide or organise defence, police, justice, and routine administration, as they had “no interest in power politics, nor had they leisure, ability, or resources” to deal with such matters (Szczepanik 1958: 15). These constitutional reforms in the early period of colonial rule created a political model for successive governments to follow. The 1845 and 1894 incidents

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helped to set up a bureaucratic-capitalist state for accommodating both the UK government’s and the merchants’ interests. Hong Kong’s governments selected appropriate candidates into their decision-making bodies based on the concept of co-optive politics. The transformation of the colonial political structure from a bureaucracy to a bureaucratic-capitalist state aimed to preserve an authoritarian form of government in which political power was still mainly in the hands of top civil servants, and at the same time to provide a forum for the colony’s political and economic forces to settle their differences. Hong Kong’s political stability therefore depended on consensus among the colony’s political and economic elite. The system also co-opted members of the Chinese business community, an expression of the traditional British principle of indirect rule. The objective of indirect rule was to institutionalise local political groups by confining the scope of each’s activities. British officials were particularly cautious when selecting Chinese people to join the main decision-making bodies. This was evident in the appointment of Ng Choy as the first Chinese LegCo member in 1880. Hennessy’s (1964a) dispatch to the Secretary of State for the Colonies fully explained the reasons why Ng Choy was considered an appropriate candidate. He was a Chinese British subject who had been educated in England and also called to the Bar at Lincoln’s Inn in Hilary Term in 1877. Moreover, he was rich, having “a good private fortune from his father and by his marriage.” Furthermore, he had established an intimate relationship with the British, “the only Chinese gentleman whose name appears in the list of our Justices of the Peace” (Hennessy 1964a: 269). This shows that the co-optees were limited to those social and economic elite who used Hong Kong’s favourable business environment to pursue their own interests. Through this type of co-optive politics, the British officials were able to preserve a homogenous ruling class for supporting UK’s imperialism in Hong Kong as well as in the rest of the Far East. The co-optive political strategy directly linked colonial administrators with leaders of influential social and economic organizations. In 1851, Hong Kong’s Governor Bowen (1848-1854) appointed representatives of the Chamber of Commerce and the Justices of the Peace to the LegCo. This type of “indirect election [was] a permanent element in the colony’s constitutional machinery” (Endacott 1964: 102). Similarly, the appointment of members of the Chinese business community was mainly made through such key Chinese organizations as the District Watch, the Tung Wah, and the Po Leung Kuk. Scott (1989: 37) asserted that the main objective of co-optive politics is “to incorporate those elite into the political system in exchange for their help in exerting social control over the rest of the population.” It should be noted that the unofficial members of the LegCo were overwhelmingly representatives of such large enterprises as Jardine, Matheson & Co., Gibb, Livingston & Co., MacKinnon, and Mackenzie & Co. and such highly influential professionals as doctors and solicitors. They represented the Europeans, especially the British companies in the colony. The Chinese unofficial members were also limited to those with similar interests as their European counterparts. In

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this regard, the voice of the elite, apart from minor and emotive issues, was “remarkably homogeneous” (Davies 1977: 64). The formation of the bureaucratic-capitalist state was therefore the Hong Kong government’s strategy for enhancing its legitimacy in response to two constitutional crises, as well as an expression of traditional British indirect rule over colonial populations. The bureaucratic-capitalist state also signified a departure from the early form of colonial administration, in which the officials were the sole players in colonial policy-making. The newly established polity integrated colonial political and economic forces into a mechanism that could solve internal conflicts effectively and secure a stable society for advancing the interests of both local businesses and the British Empire. In short, Hong Kong was formally ruled by a governor appointed by London, but informally ruled by a small group of capitalists and professionals in alliance with the colony’s senior civil servants (A Group at the Hong Kong Research Project 1974).

The Bureaucratic-Capitalist State and Social Policy The previous section explained how Hong Kong’s social and economic policies became based on a consensus of top colonial officials with local business and other elite in line with the expectations of the UK government. These three parties imposed several constraints on Hong Kong’s welfare development.

Fiscal Constraints As detailed earlier, the Hong Kong government had to observe strict fiscal principles imposed by the UK government as “a duty of the utmost importance” (Lord Stanley 1964a: 256). These principles included self-sufficiency, a balanced budget, maintaining fiscal reserves, and keeping public expenditure below the growth rate of the GDP (Endacott 1964; England and Rear 1975; Rabushka 1976; Cheng 1977; Eitel 1983; Miners 1987). It also had responsibility for a large amount of military and naval costs unnecessary for local defence. Rabushka (1976: 83) concluded that “Historical precedent has shaped Hong Kong’s economic and budgetary policies. The incentives and constraints that dictate contemporary practice derive, in the case of budgetary policy, from the letter and spirit of the colonial regulations―the emphasis on selfsupport and balanced budget.” Obviously, the Colonial Office’s fiscal requirements and Hong Kong’s financial contributions towards the expansion of the British Empire were basic constraints on the development of the colony’s welfare system. After the Second World War the UK government lifted several restrictions on Hong Kong’s finances. For example, its financial estimates and financial votes did not need the permission of the Secretary of State after 1958, it gained the freedom to set its exchange rate in 1967, and the freedom to invest its reserves in any cur-

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rency in 1974. Despite these changes its government continued to follow its traditional conservative fiscal policies (Rabushka 1976). Such characteristics of Hong Kong’s political institutions as the centralised administrative system, top-down organizational procedures and regulations, and the circulars given to the budget participants facilitated the adoption of an incremental decision-making approach to public budgeting (Cheng 1990). The nature of its administration therefore helped to explain why its various governors could maintain the traditional fiscal principles. The colony was virtually unique in the avoidance of budget deficits and the accumulation of substantial reserves among post-Second World War countries (Rabushka 1976: 33). Table 2.1 illustrates this. Table 2.1 General Revenue and Fiscal Reserves, 1960-61 to 1981-82 ________________________________________________________________ Fiscal Year Revenue Expenditure Surplus (+) (HK$ million) (HK$ million) Deficit (-) ________________________________________________________________ 1960-1961 859 845 +14 1961-1962 1,030 953 +77 1962-1963 1,253 1,113 +140 1963-1964 1,394 1,295 +99 1964-1965 1,518 1,441 +78 1965-1966 1,632 1,769 -137 1966-1967 1,818 1,806 +12 1967-1968 1,900 1,766 +134 1968-1969 2,081 1,873 +208 1969-1970 2,481 2,032 +449 1970-1971 3,071 2,452 +619 1971-1972 3,600 2,939 +661 1972-1973 4,988 4,340 +648 1973-1974 5,306 5,230 +76 1974-1975 5,973 6,366 -393 1975-1976 6,725 6,080 +645 1976-1977 7,576 6,639 +937 1977-1978 10,233 8,997 +1,236 1978-1979 12,557 11,090 +1467 1979-1980 16,796 13,872 +2,924 1980-1981 30,290 23,594 +6,696 1981-1982 34,313 27,778 +6535 Source: Yu (1994). Maintaining budget surpluses was clearly a guiding principle for Hong Kong’s colonial administrators, the colony only experiencing deficits for two years from 1960 to 1982. The budget surpluses complemented the principle of maintaining a large financial reserve, and reports indicated that the Hong Kong

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government always underestimated revenues to accumulate reserves (Cheng 1977; Wu 1977). These conservative financial measures clearly succeeded in preventing the colony from becoming a burden on the UK government as well as the Chinese government after 1997. Politically, the reserves could also meet the cost of pensions for civil servants in case China decided to take over Hong Kong before 1997 (Wu 1977: 266). Obviously, these financial polices were “a direct offshoot of colonial tradition,” particularly the colonial regulations, and “the nineteenth-century values of economic liberalism” (Rabushka 1976: 34-35). They were, however, also a basic obstacle to the colony expanding its pubic services. In addition to these external fiscal constraints, the local business community also monitored Hong Kong’s financial policies closely. As noted earlier, the UK government adopted a strategy of co-optive politics to address local conflicts between civil servants and the business community. Although the official members of both the ExCo and the LegCo were in the majority until 1960, they were unwilling to use their constitutional power to defeat the unofficial members’ demands, especially when all of the latter maintained the same views, and the two groups would usually reach compromises before open confrontations occurred (Endacott 1964; Mills and Mills 1970; Rear 1971; Davies 1977; Scot 1989; Miners 1991). One of the most influential consultative organs was the LegCo’s Finance Committee, in which the unofficial members had a majority. According to its regulations its unofficial members had the power to veto officials’ proposals, but they could neither suggest new proposals nor change the taxation system. In order to ensure the smooth running of the government and to avoid any unnecessary disputes, the official members always took the views of the unofficial members into account. It was a long-established convention that Hong Kong governors respected the majority view of the LegCo, and they were notably reluctant “to act against the determined opposition of the unofficial members” (Crisswell 1991; Miners 1991). As Governor Sir Mark Young (SeptemberDecember 1941; May 1946-May 1947) admitted in 1947, the official majority asserted itself only in particularly special cases (Hong Kong Hansard 1947: 257), and the governor’s veto power was just a “superficial appearance” (Mills 1970: 396). This means that after the crises of the 1840s and 1890s, the colonial capitalists were able to “shape the broad course of policy” and ensure that the government was “generally conducted in their own interests” (Scott 1989: 39). The LegCo’s unofficial members’ main concerns were matters of “taxation and industry” (Rear 1971a: 82). Colonial civil servants had learnt from the lesson of taxation-without-representation in America and were willing to listen to the views of British merchants in order to avoid repeating previous constitutional crises. For example, Hong Kong’s Governor MacDonnell (1866-1872) had to modify the contents of the Stamp Ordinance in 1866 after great opposition from the business community, who held a public meeting to condemn it (Endacott

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1973; Eitel 1983: 267). The merchants’ opposition in the early days of colonial rule “set a precedent which applies today with equal force whenever new or increased taxes are proposed” (Rabushka 1976: 13). Obviously, a low-tax policy was historically important for the bureaucracy’s legitimacy. Table 2.2 shows that the colony’s profit and income taxes were the lowest among both developed and developing economies, less than half of those of fellow Asian city-state Singapore, and the lowest of the four Asian Dragons of Hong Kong, Singapore, Korea, and Taiwan. Table 2.2 1992 National Tax Rates _____________________________________________________________ Economies Highest Profit Highest Income Tax Rate Tax Rate _____________________________________________________________ Hong Kong 16.5% 15% United States 41% 31% Singapore 33% 33% Japan 42% 50% Taiwan 25% 50% China 40% 45% Philippines 35% 35% Thailand 35% 55% Malaysia 35% 45% Australia 39% 49% Indonesia 35% 35% South Korea 30% 50% New Zealand 38% 33% England 40% 40% Germany 53% 53% Source: Hong Kong Association for Democracy and People’s Livelihood (1992: 50).

Ideological Constraints Hong Kong’s welfare policy was also limited to a particular direction because only professionals and members of the business community were able to take part in key decision-making bodies. England and Rear (1981: 10) noted that colonial bureaucrats, British merchants, and the Chinese business community formed a triple alliance that determined Hong Kong’s public policies: In large measure the strength of the government rests on a tacit alliance between the British officials and the Chinese business community. Its foundation

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Chapter Two is a very strong common interest in economic stability and public order and it is strengthened by the support given to both sides of this unspoken partnership by the British business community, which has both a nationalistic and a financial interest in the preservation of the colonial government. . . .This power bloc is strongly represented in the Executive and Legislative Councils and it has an important bearing on social and economic policy.

Miliband (1969) asserted that ruling classes are used to persuading their societies to accept their policies and to advocate the ethos, values, and goals of capitalist enterprise. In Hong Kong, both Jardine and Matheson, the two most influential merchants in the colony’s early years, were supporters of Adam Smith and in the forefront of the campaign for free trade, with Matheson publishing a weekly newspaper called the Canton Register, which advocated the principle (W. Chan 1991: 20). Wai Chan (1991: 21) further pointed out that British merchants in China, “armed with a theoretical knowledge derived from Adam Smith and his followers that a restrictive commercial system was irrational and ingenious [sic],” condemned the monopoly of both the East India Company and the Cohong system. The most famous newspaper in Hong Kong, the China Mail, was founded in 1845 with Jardine’s support, and influential merchants were able to use it to promote laissez-faire philosophy (W. Chan 1991). Moreover, Hong Kong’s social policy, especially in the early years of colonial rule, was deeply influenced by Victorian economic ideology. Advocates of Victorian political economy held that market forces could effectively allocate goods and services best, and emphasised self-help and minimum government intervention in markets (Pedan 1991). As Miliband (1969) put it, capitalist regimes have been governed by those who have accepted free enterprise as the supreme economic principle, making defending the capitalist mode of production their most crucial task. Trained in conservative political economy, Hong Kong’s colonial civil servants regarded laissez-faire as the prime force of economic growth, and consequently preferred a private economy to a planned one. For example, a Dr. Ernest Eitel, former head of the Education Department, cut public expenditure by closing down eleven government schools in 1893 and offering government grants to private schools to provide education instead. Laissez-faire policy was even deliberately established as Hong Kong’s national goal. The Hong Kong Annual Report (1981) claimed that the economic policies of free enterprise and free trade were major factors contributing to Hong Kong’s international reputation as a leading manufacturing and commercial centre. In the early 1970s, the Hong Kong government was able to claim that “Hong Kong is probably the only territory still completely faithful to the liberal economic policies of free enterprise and free trade” (Hong Kong Annual Report 1973a: 12). A speech by Sir Philip Haddon-Cave, the colony’s Financial Secretary in the late 1970s, clearly revealed its civil servants’ approach to economic policy when he said that:

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Surely we can do no better than leave individual businessmen, with their intimate knowledge of overseas markets, to follow their homing instinct for profits. . . . I remain quite unconvinced that the arguments so far adduced in favour of lessening our reliance on the market mechnism to allocate resources efficiently and in favour of lessening our faith in the free enterprise system are in the least compelling. (Hong Kong Hansard 1978-9: 214)

Because the top civil servants were firmly committed to the nineteenth-century economic policy, Hong Kong became widely regarded as the best contemporary example of a laissez-faire economy (Friedman and Friedman 1980: 54-55). Its welfare policy was an expression of the domination of the free-market philosophy, its tenets being: a) individual welfare can only be achieved in a free competitive market, b) the best way of dealing with poverty is economic prosperity, and c) social policy should reinforce and uphold the capitalist market system and multiply the benefits of a market economy (Chan 1992). Social policy in Hong Kong was clearly subordinate to its economic policy, and it was “only under the wing of British colonialism that the laissez-faire economy had grown up” (Woronoff 1980: 31).

Conclusion This chapter has shown how the UK government used co-optive politics to settle internal conflicts between colonial bureaucrats and British merchants, allowing unofficial members representing the interests of business organizations to sit in Hong Kong’s highest decision-making bodies. This type of consultative polity allowed members of the colonial business community to put their suggestions forward and to exert pressure on colonial officials. For example, they opposed the officials’ proposal to reduce the working hours for women and young children before the 1967 riots and rejected proposals to set up a social insurance scheme between the 1960s and 1990s, claiming that it would raise labor costs and weaken Hong Kong’s competitive position. The business community’s main concern was to obtain economic policies favourable for wealth accumulation through low taxation, free trade, minimum government intervention, and minimal labor welfare. Although senior civil servants were in a majority in the two councils, they avoided using their veto power because if they ignored the unofficial members’ views they would be strongly criticised by the English-speaking press in the colony and in the UK or challenged by Parliamentary questions (Mills and Mills 1970). Thus, “serious overt clashes in the [LegCo] are avoided by a system of informal discussion behind the scenes or in the privacy of the Standing Finance Committee” (Rear 1971a: 76).

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In addition to pressure from the local business community, the Hong Kong government needed to follow the Colonial Office’s requirements to maintain a balanced budget, accumulate fiscal reserves, and finance military expenditure in the Far East. These internal and external financial constraints shaped the nature of Hong Kong’s capitalism, and were also the underlying cause of the Hong Kong government’s policy of utilising other social resources in order to address the colony’s welfare problems.

Chapter Three

Legitimacy & Chinese Welfare Ideologies Introduction Chapter Two illustrated how the Hong Kong government’s financial policies were constrained by both the local merchants’ opposition to higher taxation and the Colonial Office’s requirements for accumulating fiscal reserves and maintaining a balanced budget. It consequently had limited resources for addressing social problems that not only threatened social stability but also negatively affected its economic development, health and education services being essential to maintaining an effective workforce. It therefore badly needed alternative institutions to provide essential social services in the colony. Against this background, this chapter explores the basic functions of a capitalist state and discusses the contributions of traditional Chinese welfare practices to Hong Kong’s capitalism.

Capitalist States & Fiscal Crisis In the 1970s and 1980s some neo-Marxists, especially O’Connor (1973), Gough (1979), and Offe (1984), maintained that capitalist states would face inbuilt and inescapable crises. According to Offe and Keane (1984), the economic subsystem of capitalism has dysfunctional consequences and government intervention is necessary to help achieve accumulation and legitimation. Habermas offered a similar view, claiming that capitalism imposes a contradictory demand upon the state for securing capital accumulation and mass loyalty (Pierson 1991). O’Connor (1973) provided a systematic account of the contradictory roles of the capitalist state. He pointed out that capitalist states have to fulfil the two basic functions of accumulation and legitimation, and public expenditure is re25

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quired to satisfy these functions. He further explained that public expenditure can be divided into social capital and social expenses. Social capital is required for profitable private accumulation, while social expenses are needed to maintain social harmony. Social capital has the two forms of social investment and social consumption. Social investment may be in physical capital and human capital; the former is the economic infrastructure necessary for capitalism and the latter investment in education and training facilities. Social consumption includes the two categories of non-private goods and social insurance. Non-private goods are such services as health care, recreation, and housing; social insurance is expenditures for reducing economic insecurity. Social expenses are paid for goods and services that promote social harmony and legitimize and protect the capitalist economy. Social welfare, which is in this category, serves the purposes of controlling “the surplus population politically [and expanding economic] demand and domestic markets” (O’Connor 1973:101). Piven and Cloward (1971) also noted the legitimacy function of social welfare. Using social assistance as an example, they emphasized that mass unemployment may lead to the outbreak of turmoil so that a government’s relief programs are ordinarily initiated or expanded to absorb and control enough of the unemployed to restore social order. O’Connor (1973) predicted that a gap between state revenues and expenditure in fulfilling the contradictory tasks of legitimation and accumulation will trigger a fiscal crisis. He claimed that by providing social welfare and ignoring capital accumulation, a capitalist-democratic state risks “drying up the source of its own power, the economy’s surplus production capacity, and the taxes drawn from this surplus (and other forms of capital).” The state’s welfare burden would then become heavier as more of the population becomes dependent on state help, but, as Mishra (1984) firmly maintained, any attempt to reduce the working class’s gains from social welfare would bring about swift retribution. The only way to solve the crisis would be the transformation of the mode of production from capitalism to communism, and that no alternative means of resolving the inbuilt conflict exists (O’Connor 1973).

From Fiscal Crisis to Crisis Management O’Connor’s thesis provides an important insight into the needs of capitalist states and the dual functions of their public expenditure. Equally important, he linked their policy outcomes to “a continuum of class struggle” (Fabricant and Burghardt 1992: 49), which is a push-pull over the mix of accumulationlegitimation functions. O’Connor’s views, however, have a narrow perspective on social welfare, as he placed it only in the category of social expenses, serving the legitimating function. Actually, many social services, such as education and housing, can be seen as social capital as well as social expenses. Because the process of capital accumulation generates needs or requirements, social welfare

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is required for meeting two essential activities in all human societies. These are the reproduction of the working population and the maintenance of such parts of the non-working population as sick and unemployed people (Gough 1979). Welfare provision may also be considered to be “an extension of capitalist production and exchange” (Ginsburg 1979: 25). Because social welfare programmes perform both social investment and social control functions, confining them narrowly to only one particular category, serving only one particular function, is questionable. Still, the principal function of social welfare in capitalist societies is to “secure the long-term circumstances for the continued accumulation of capital” (Pierson 1991: 53). When it achieves this objective it helps to ensure the presence of factors of production and to secure a harmonious society. O’Connor’s notion of inevitability can also be criticised as being too deterministic. George and Miller (1994: 15) stressed that the terms legitimation crisis and ungovernability are exaggerations, as governments with prudence that judiciously employ ad hoc responses to problems can “steer their way through the troubled waters.” Higgins (1981) also argued that the crisis only reflects the long-standing dilemmas and contradictions of advanced societies, but it does not indicate their imminent downfall. To the contrary, she asserted that the demands and pressures of capitalist states can be “resolved, or modified, through the political process” (Higgins 1981: 171). Gough (1979), a neo-Marxist who took a less deterministic view of the crisis of capitalist states, argued that crisis is a process of restructuring, in which new conditions can be created for capital accumulation, and that monetarism, market orientation, and corporatism, as well as a social contract approach, are means for solving the welfare state crisis. As Klein (1993: 13) emphasised, capitalism has tried to rebuild the welfare state in its own image “by introducing the values of the market place: by commodifying welfare.” Since capitalism’s laws of motion are not natural and inevitable, they are affected by the balance of forces in the complex relationships between capital and labor. Gramsci once noted that the impact of economic crises depends on the strength of the civil society and political institutions and the power of social classes involved. Two factors have emerged concerning the crises of capitalist states. These are that the degree and extent of fiscal crises differ due to the variations of political structure and that the available resources or means for handling the contradictory tasks of legitimation and accumulation vary from country to country due to different social institutions and welfare practices. This means that a capitalist state’s polity and political processes can shape, modify, or solve its crises (cited in Jessop 1982). It should be noted that Western capitalist states have used various strategies for solving their fiscal crises since the 1980s. In the United States (US), the conservatives in the Reagan administration were “eager to defund the welfare state” (Phillips 1990: 87). They rolled back the state by containing, if not reducing, expenditures for social services and also used “the budget deficit to make domestic spending a zero-sum game” (Stoesz and Karger 1993: 622, 627). Australia

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implemented privatisation widely in health care, child care, legal services, and education (Graycar 1983). In the UK, the Conservative government under the leadership of Margaret Thatcher established a new consensus based on a free economy and a strong state by stressing the importance of the private market and demanding a greater contribution from the voluntary and informal sectors (Johnson 1990). Gilbert and Gilbert (1989: 4) pointed out that welfare states in the 1980s had been transformed into enabling states by stressing “public and private efforts through diverse arrangements for the finance and delivery of social welfare.” Clarke et al. (1994) noted that managerialism emerged as a crucial ideology of planning and delivering welfare services. Various states used management as a solution to social and economic problems by stressing efficiency, productivity, and quality (Newman and Clarke 1994). Western welfare states in the 1980s therefore tried to reduce their public expenditures through privatisation and the promotion of more welfare involvement by voluntary organizations. Since the early 1990s the advanced economies have tended to promote the concepts of an enabling state and welfare duties. In particular, with the implementation of welfare-to-work programmes, social security has become conditional and social citizenship has been changed from a status to a contract (Handler 2004). Lodemel (2000: 335) observed that “on both sides of the Atlantic we are witnessing a redirection of welfare provision with the aim of furthering labor market integration.” In the UK the New Labour government’s focus was on getting people into paid employment by introducing a wide range of New Deal programmes (Grover and Stewart 2000). In the US the government set a five-year lifetime for those receiving help from the federal Temporary Assistance for Needy Families programme in 1996 and also allowed states to set up eligibility criteria and workfare programmes (Cebulla and Walker 2005). Workfare has now become a dominant welfare approach there (Prideaux 2001; Peck 2001), and states have accordingly designed their welfare policies to “correct [such] individual behavioural dysfunctions” as moral laxity and inadequate work discipline (Peck 2001: 88). Many advanced economies have come to use workfare programmes to address welfare dependency, promote self-reliance, and reduce public expenditures. Three points emerge from the above discussion. The first is that in the 1980s some governments tried to redefine the boundaries between various welfare sectors in order to reduce their welfare burdens. Johnson (1987) suggested that shifting the emphasis from statutory to non-statutory sources of welfare might offer opportunities for cutting public expenditure. In particular, some developed countries, especially English-speaking ones, introduced market values into welfare provision. This might be called a market-centred welfare mix, in which governing bodies used informal sectors to support a free market and a minimal state. Next, such policies are likely to be put into practice under strong governments that both suppress the opposition of the lower classes and construct market-centred welfare values. Political power, therefore, is a base for implementing residual-style welfare policies. Walker (1987) observed that the position that any

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nation occupies on the continuum between public and private welfare depends to a considerable extent on the balance of power between social classes in that society, and Gough (1979: 126) noted that the final burden of taxation is determined by “the ebb and flow of class conflict.” If working class households can bear the costs of the welfare state, the expansion of social services does not harm surplus value and capital accumulation. Finally, advanced welfare states have used workfare since the 1990s to promote conditional welfare and personal duties. This means that Western welfare states have adopted various welfare strategies to push social security claimants back into the labor market and to shift the welfare boundaries between the state, the market, voluntary organizations, and individuals. In this way, public welfare expenditures can be controlled or even reduced and the fiscal crisis of capitalism can be avoided.

Fiscal Constraints & Chinese Welfare Ideologies Chapter Two detailed how both internal and external fiscal constraints weakened the Hong Kong colonial regime’s capacity to maintain its legitimacy as a capitalist state through the provision of welfare. It did however, have to deal with social problems caused by disease epidemics and natural disasters, especially in its early years. In 1843 an extraordinary fever killed 24 percent of the British troops and 10 percent of the European civilians. Then, during the administration of Governor Bonham from 1848 to 1854, an unusually violent storm damaged or wrecked thirteen vessels and killed many people. In 1855 a typhoon with heavy rain did a great amount of damage to drains, piers, roads, and Chinese houses (Eitel 1983). Because of its limited health services, Hong Kong was a notably unhealthy place during the early years of colonial rule (Eitel 1983). The 1882 Chadwick Report stated that the death rate of the Chinese varied from twenty-six to thirty per thousand, the mean age at death of all men, women, and children who died in 1881 was eighteen, and the mean age for those who died older than age twenty was forty-three (Choa 1981). Actually, as early as 1860 a Colonial Surgeon named Murray complained in his annual report that the drainage and sewage in Hong Kong “had never yet received adequate attention, nor been carried out on any comprehensive plan” (Endacott 1973: 114). The early hospitals were also overcrowded and provided inadequate services (Eitel 1983). For example, the Civil Hospital could not cope with an outbreak of smallpox in 1871 because it had no wards for patients with infectious diseases, and destitute Chinese were not allowed to be treated at the hospital until 1864. Although Governor MacDonnell (1866-1872) found that the colony was extremely unsanitary, he could do nothing because of a lack of money for building street drainage and a new civil hospital (Endacott 1973). During the governorship of Robinson (1859-1865) the town remained undrained and its sanitation neglected owing to his paying more attention to a “labored balance sheet and the

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accumulation of surplus than to public works and the most vital interests of the colony” (Eitel 1983: 406). Obviously, the wants, the welfare, and the development of the colony were being sacrificed without mercy to the interests of the UK government (Eitel 1983). Cheng (1977), a former senior civil servant, pointed out that the low-tax policy placed severe restrictions on the amount of money available for social welfare. Table 3.1 shows that compared with other advanced economies, Hong Kong’s tax receipts formed only a small amount of its revenue: Table 3.1 Taxation as Percentage of GDP, 1995 ________________________________________ Countries Taxes as % of GDP ________________________________________ Hong Kong 10.7 Korea 15.6 France 18.8 United Kingdom 26.3 Sources: Asian Development Bank (2008); World Bank (2011). During the colonial administration low taxation was indispensable to Hong Kong’s capitalism, but its colonial government found it difficult to address basic social problems because of it, particularly in the early years. Although Hong Kong is no longer a UK colony, the HKSAR still strongly adheres to the preexisting colonial fiscal principles. Chapter Eight describes this in detail. The HKSAR’s first CE, Tung Chee-hwa, openly declared in his first policy address in 1997 that “Hong Kong’s development will be based on two principles, a free market economy and a prudent fiscal policy” (Tung 1997). He further explained his economic and welfare philosophy following the Asian economic crisis by asserting that: we will make full use of this opportunity to reduce the size of government, redefining its responsibilities, reducing unnecessary intervention, streamlining and re-organising work procedures and departmental structures. We will also carefully review our social welfare policies, re-prioritize the provision of public services and give full play to market forces. In short, our moves to tackle the deficit problem will expedite the return to a small, lean government, which is more energetic, more sharply focused on its priorities, more efficient and better able to make optimum use of resources. (Tung 2003: 18)

Obviously, the Hong Kong government’s principles of low taxation and minimal government have constrained its capacity to promote its citizens’ welfare and have forced it to seek alternative means to fulfil the tasks of accumulation and legitimation. As O’Connor (1973: 6) warned, “A capitalist state that openly uses its coercive forces to help one class accumulate capital at the expense of other classes loses its legitimacy and hence undermines the basis of its

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loyalty and support.” Still, such essential preconditions as the reproduction of the labor force and a stable society need to be present for a capitalist economy to operate in a politically stable environment. Both the Hong Kong colonial government and the HKSAR have utilized traditional Chinese welfare practices to secure social stability. In particular, Hong Kong’s authoritarian colonial government always made the Chinese community shoulder the colony’s welfare burden. For example, a 1965 social welfare white paper emphasized that families should deal with such social problems as poverty, delinquency, infirmity, and even natural disasters, the government’s responsibility being mainly to “support and strengthen this sense of family responsibility” (Hong Kong Government 1965: 6). Hong Kong’s government has made use of the Chinese people’s loyalty toward their families since the early years of colonial rule. For example, it made householders responsible for all the occupants of their houses in regard to crimes and the payment of court fines (Endacott 1973). Furthermore, an ordinance in 1844 created the Chinese Peace Officers, whom it granted the legal authority to settle disputes among the Chinese people. The government placed the District Watch Force, an informal Chinese police force financed by shopkeepers and guilds, under the control of the Register-General only in 1888. Chapter Five describes this in more detail. In regard to solutions to the problem of destitution, Dr. Eitel, then the head of the Education Department, asserted that it was desirable to be “left in the main to private charity and to voluntary effort,” the main task of the government being to “organize by law private charity which may then be supplemented by state aid” (Hong Kong Government Gazette 1880: 472). To meet the Chinese community’s medical needs, Governor MacDonnell aimed to “enlist active Chinese sympathy in the erection and future maintenance of the proposed hospital” (Tung Wah Hospital Commission 1896: xxii). This shows that Hong Kong’s colonial regime traditionally perceived the colony’s Chinese community as its own main welfare provider. As Chinese families could save the government from spending money on welfare, Hong Kong policy makers have always tried to prevent the frontiers of public welfare from rolling forward. A family and community-centered welfare approach has therefore long been a foundation of Hong Kong’s residual welfare system. The reproduction of social welfare includes the two components of the transaction of material services and the transaction of ideology (Wong 1991). Traditional Chinese welfare practices helped to preserve social relationships based on the ideologies of hard work, self-reliance, utilitarianistic familism, the family’s responsibility for caring, low expectations of the state, and state welfare as a type of grace mainly for those least able to help themselves (Lau 1982; Tao 1992). Hong Kong has continued to face similar internal and external constraints on its fiscal policies since 1997. Externally, the Chinese government has aimed to preserve the HKSAR’s colonial capitalism so that its businesses can continue to make contributions to China’s economic reform. Internally, a form of the co-

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lonial administrative-led polity has remained, with pro-China and pro-business groups having most of the political power. Chapter Eight discusses this in detail.

Factors Facilitating Hong Kong Governments’ Welfare Strategies The preceding discussion illustrates how the fiscal principles imposed by the Colonial Office and the Basic Law have limited the capacity of both the Hong Kong colonial regime and the postcolonial HKSAR to provide welfare services. These governments have therefore needed to seek alternative resources to minimise their welfare expenditures. This section examines how Hong Kong’s social and political environments have facilitated its governments’ utilization of traditional Chinese welfare practices. Hong Kong’s administrative-led polity is the most important factor for the state’s ability to place its welfare duties onto the Chinese community. As noted in Chapter Two, the governors of Hong Kong were dictators with nominal absolute power over all colonial affairs. In particular, they appointed all the unofficial members of both the LegCo and the ExCo. Top civil servants, under the governors’ leadership, could easily pass legislation requiring families and the Chinese associations to take up welfare duties. The British expatriates’ political monopoly of the senior official posts that controlled the most sensitive and important tasks strengthened the colonial regime’s political control over the Chinese. In 1976 expatriates held 97.6 percent of the top sixty-six posts in the police force. Although the government always insisted that its rule was based on consultation, it reserved the majority of the places on consultative committees for senior civil servants and members of the business community. In 1975, government officials occupied 474 of the 1,765 places on government committees, panels, boards, the LegCo, the ExCo, and the urban councils (Davies 1977). Hong Kong’s colonial political system was therefore centrally important to the implementation of its free market economy. After 1997 the Chinese government maintained the colonial administrativeled polity and the HKSAR co-opted members of the business community, professionals, and members of pro-China organizations onto the ExCo and other consultative committees. As the co-optees supported former colonial fiscal principles, the welfare rights of the working class improved little after the end of UK rule. Chapter Eight discusses this in detail. A strong military force also enhanced the Hong Kong government’s power. Gramsci (quoted in Sasson 1980: 113) claimed that an “armour of coercion” protects the ruling class’s hegemony, and Hong Kong was always one of the most heavily policed and highly regulated societies in the world, its police having the two main functions of law enforcement and political control (Davies 1977). The police force was 16,025 strong in 1973, having increased by 1,500 between 1965 and 1970. This reflected “the increased insecurity engendered by the anti-colonial upheavals of 1966-67” (A Group at the Hong Kong Research Project 1974: 15). As physical coercion and legitimacy reinforced each other,

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such a strong police force formed another crucial factor for safeguarding Hong Kong’s mode of capitalism. As Offe (1984: 119) noted, “What the state protects and sanctions is a set of institutions and social relationships necessary for the domination of the capitalist class,” and many of the laws devised by Hong Kong’s bureaucraticcapitalist state also became instruments for controlling the public. Government ordinances also restricted the activities of such traditional Chinese organizations as the Tung Wah in 1891, the District Watch Force in 1893, and the Po Leung Kuk in 1896. Chapter Five describes how they did this. In 1844 the government amended a Registration Ordinance that “required the registration of all inhabitants and imposed an annual poll tax of HK$5 on each European merchant and HK$1 on each Chinese coolie” to apply only to the lowest classes because of the Europeans’ opposition (Chan and Young 1994: 12). Before 1980 an ordinance required all people to apply to the Commissioner of Police in order to hold a public meeting. Flogging, branding, and the repatriation of offenders to China, furthermore, were common practices before the 1890s. Perhaps more importantly, Hong Kong laws have imposed strict measures to limit labor organization activities, restricting trade union memberships to those habitually engaged or employed in the relevant industry. This has consequently divided trade unions by craft, industry, and occupation, weakening workers’ power by preventing them from forming conglomerates. Chen (1977: 287), a former senior official, strongly criticized this policy as “the largest single factor accounting for the proliferation of workers’ unions [and] responsible for the segmentation, partitioning, and weakening of organized labor.” Furthermore, the Illegal Strikes and Lockouts Ordinance of 1949, which defined illegal strikes and lockouts and restricted public servants’ right to strike, was clearly intended to suppress the workers’ freedom to withhold their labor through strikes. The HKSAR has continued to limit workers’ rights since 1997. For example, the Provisional Legislative Council (PLC) set up by the Chinese government abolished seven labor ordinances passed by the last colonial LegCo granting employees more power in collective bargaining. Chapter Eight explains how this came about. Chief Secretary of the Administration F.O. Chan (1997) argued that these ordinances would adversely affect “harmonious labor relations [and] Hong Kong’s economic competitiveness and attractiveness to overseas investment.” More importantly, the HKSAR reintroduced measures limiting the public’s freedom to demonstrate. The Public Order Ordinances amended by the PLC in 1997 required the public to inform the police in advance about the location of any planned demonstration and its number of participants. The police authorities also despatched strong police presences to monitor even small-scale protests and had police personnel keep a close eye on certain activists. Clearly, a strong police force and class-biased legislation have formed a solid foundation for the HKSAR to defend market-oriented social policies by suppressing the activities of the lower classes. Chinese capitalists also strengthened the Hong Kong government’s welfare strategies during colonial rule. Chapter Two detailed how the government co-

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opted Chinese capitalists as well as British ones into its decision-making bodies. Apart from participating in formal political organizations, Chinese voluntary organizations also became important forums in which the government and the Chinese elite could consult in regard to their mutual concerns. For example, Governor Hennessy (1877-1882) always sought the advice of the Tung Wah Committee, which the China Mail called an “Advisor-General” of the government (Sinn 1989: 119), and before the Second World War many regarded the District Watch Force to be a Chinese ExCo (Mills and Mills 1970). In 1877, some Chinese capitalists joined with the European property owners to oppose a draft public health bill intended to reduce overcrowding and to clear slums. Influential Chinese capitalists also supported Adam Smith’s economic ideologies. For example, Ho Kai (1859-1914) and Li-yuan Hu (1847-1916) proclaimed that private enterprise was the best way to develop a nation’s economy and that individuals pursuing their self-interest would lead to public benefits. They further suggested that taxpayers should be the masters of all the world’s political affairs (Tsai 1975). In short, Chinese capitalists strengthened the power of European ones, and together they formed a strong force for defending laissezfaire ideology. Since 1997 the HKSAR has followed colonial practice by co-opting social and economic elites into its decision-making bodies. Chapter Eight describes how it does this. For example, among the eleven unofficial members of Hong Kong’s ExCo in 1997, five were members of the business community, two were heads of public statutory bodies, two were professionals, one was a retired official, and one was a key figure in a pro-China labor organization. More importantly, Hong Kong’s first CE, Tung Chee Hwa, was a businessman supported by the Chinese government. The demographics of Hong Kong’s key decision makers clearly reveals that the Chinese government has attempted to consolidate its rule in Hong Kong through the support of local capitalists, professionals, and pro-China groups, and it is therefore unsurprising that the Hong Kong government continues to pursue policies to make it an attractive environment for the business community at the expense of the welfare of workers. Traditional Chinese society was an authoritarian, patriarchal, and hierarchical system similar to that of the colonial regime. Hong Kong’s Chinese people therefore presented little resistance to the UK government’s policies. Lau (1982) argued that, more importantly, they developed a non-participatory parochial political culture, which enabled them to focus their concerns on their families’ wellbeing and to concentrate their energy on improving their families’ welfare. Moreover, traditional Chinese political culture stressed “submissiveness to authority and the need to give ‘face’” (England and Rear 1975: 71). The Hong Kong colonial government reinforced this type of political orientation by supporting elite politics rather than direct elections. Held observed that obedience or compliance is likely with apathetic people (cited in Barker 1990). This explains why Hong Kong’s Chinese people during colonial rule tended to be uninterested in political issues and produced little demand for popular elections for the LegCo (Mills and Mills 1970: 383). Although somewhat more will-

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ing to use petitions and demonstrations to express dissatisfaction since the process of decolonization began in the 1990s, their perspective on welfare has tended to remain family oriented. Wong (1995) found that 60 percent of his respondents agreed that in “caring for old people’s financial needs, the children should play the primary role.” While under colonial administration, and before the 1980s in particular, Hong Kong’s Chinese people therefore had low expectations of the state, enabling their government to place the burden of care on the family easily.

Conclusion Hong Kong’s governments’ fiscal polices have long been shaped by both external and internal pressures that have weakened their capacity to provide for their citizens’ welfare. During colonial rule, the UK government’s fiscal requirements for maintaining a balanced budget, accumulating fiscal reserves, and financing heavy military expenditures in the Far East, as well as local capitalists’ pressures to keep the tax rate low, constrained the colonial government’s financial capacity and left it with limited resources for public works and social services. However, as the neo-Marxists’ philosophy stressed, capitalist states have to provide goods and services to maintain a favourable climate for economic investment and to secure social stability. The colonial government therefore utilized traditional Chinese welfare ideologies to promote self-reliance, strengthen social and family welfare provision, and maintain political stability. Hong Kong’s capitalism was therefore a mixture of laissez-faire philosophy and the legacy of Chinese culture. As England and Rear (1981: 2) observed, “Hong Kong is a territory where the influence of traditional values may persist more than in China itself.” The HKSAR has preserved Hong Kong’s capitalism and fiscal principles since the departure of the colonial administration in June 1997 because the Basic Law requires it to do so. Chapter Eight explains this in detail. Against these financial restrictions, the HKSAR has continued to use the welfare functions of Chinese families to reduce its burden of care. Therefore, both the UK and Chinese governments have manipulated traditional Chinese welfare ideologies to reduce welfare expenditure, secure a stable society, and maintain a residual welfare system in Hong Kong.

Chapter Four

Traditional Chinese Welfare Ideologies Introduction A society’s value system is the foundation of its social policies. According to Dixon (1981: 3), “Every welfare system is underpinned by a value system that provides the basis upon which choices are made: who gets what welfare support, for how long, and under what conditions.” Confucianism, which has been at the core of Chinese ideologies and culture for thousands of years, has shaped the Chinese people’s social and political institutions. Confucian ethical values have served the Chinese people “as the source of inspiration as well as the court of appeal for human interaction at all levels” for more than 2,000 years (Tu 1998: 3), and have been their “ultimate authority in all spheres of social and political life” (Dawson 1981: 79). It is therefore necessary to understand Confucian welfare values in order to study traditional Chinese welfare ideologies. Confucianism is, however, not a religion, but a secular ideology for securing social stability (Pye 1991). Influenced by Confucian ideologies, Chinese societies emphasise kinship ties, with the family being “the foundation stone in the total structure of social organization” (Dixon 1981: 7). This chapter examines the relationship between Confucian social and political values and Chinese welfare practices. It describes the hierarchical social structure that has accepted social distinctions are beneficial to society. Social welfare in China has traditionally been based on human relationships and the perception that the family should be the main welfare provider. Traditional Chinese authoritarian regimes had always manipulated Confucian welfare values in order to reduce the state’s welfare pressures and consolidate family and community-oriented welfare systems. 37

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Confucian Social and Political Ideologies Rectification of Names and an Authoritarian Regime Living in a period of social unrest and political disorder caused by the deterioration of feudalism, Confucius taught that peace could be secured through the practice of the rectification of names. In response to an inquiry about managing a country from Chi K’ang Tze, an official from Lu Kingdom, Confucius replied, “To govern [cheng] is to correct [cheng]” (1979 Analects XII: 17). He further explained this governing principle to Duke Ching of Ch’i by saying, “Let the ruler be a ruler, the subject a subject, the father a father, the son a son” (1979 Analects XII: 11). Obviously, the rectification of names defines a person’s role and proper behaviour by requiring people from different social classes to act with reference to their names. Confucius taught that social order could effectively be restored if everyone acted in this way. The rectification of names has two underlying assumptions, which are that individual people and society should be treated holistically rather than as separate entities and that the monarch, as the son of heaven, should have absolute power over his people. According to Chao (1983: 7), “The individual and society are essentially closely knit: they stand, in a sense, for two aspects of the same thing. The individual cannot exist outside society, likewise the society cannot function without individuals, its component elements.” This implies that societies function well when everyone performs their respective roles, and that social distinctions are therefore necessary for society’s well-being. As Confucius asked rhetorically, “But where there is no distinction of noble and mean, how can a state continue to exist?” (Dawson 1981: 71-72). This means that it is natural for societies to have a class system. Hsun Tzu, an influential Confucian scholar, developed this concept further: If people all live alone and do not serve one another, there will be poverty. If they live together, but are without social distinctions [fen], there will be strife. Poverty is a misfortune and strife is a calamity. To rescue people from misfortune and eliminate calamity, these is nothing like making social distinctions clear and forming a social organization. . . . Hence if men are to live, they cannot get along without a social organization. If they form a social organization, but have no social distinctions, they will quarrel; if they quarrel, they will be unable to dominate other creatures. (Fung 1983: 296)

According to Confucianism, social distinctions are arranged in a hierarchical order according to the will of heaven. The Book of Change, believed to be the work of Confucius, teaches that: heaven and earth existing, all material things then got their existence. All material things having existence, afterwards there came male and female. For the existence of male and female there came afterwards husband and wife. From husband and wife there came father and son. From father and son there came sovereign and subjects. From sovereign and subject there came high and low.

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Following the distinction between high and low came the arrangements of propriety and righteousness. (Hsu 1975: 33)

This addresses several important concepts. It asserts that heaven created human institutions and that people should follow its will. Confucius taught that the natural world is “a system, a unity, and an order [having the] great quality of universal nourishment and production” (Hsu 1975: 63). Being a superior power, heaven therefore had absolute authority over the human world, and its power formed the basis for such essential elements of Confucianism as filial piety, li, and the rectification of names. Confucius had therefore clearly used heaven to explain the existence of human beings and the principles of human institutions. Next, since the monarch was the son of heaven, it was necessary for him to have absolute power over his people. According to Mencius, the most important and influential Confucian scholar after Confucius, heaven caused the monarch to preside over sacrifices and human affairs, and these affairs were therefore well administered (Fung 1983). The Book of Change also claimed that the Sage had influenced the world morally by following the way of heaven and earth. This means that, being based on heaven, the monarch’s power was the only legitimate political power for human institutions. Finally, since heaven had designated all human relationships, they were an extension of the relationship between the heaven and the monarch. This hierarchical social structure was the foundation of the five relations that assigned human beings to different statuses and responsibilities, which the following sections detail. Granted the power to administer human affairs, the monarch’s key role was to rectify names and thereby regulate the people’s behaviour according to the principle of the five relations. Confucianism maintains that social class divisions are based on different levels of intelligence. Confucius taught that some people are born with superior intelligence and some with “average or inferior intelligence, [so] you may speak of high things to those whose intelligence is above the average, but you may not speak the same to those whose intelligence is below the average” (Hsu 1975: 162). Mencius regarded people with virtue and good education as the best qualified for administering a government, writing that: when right government prevails in the world, persons of little virtue are submissive to those of the great, and those of little worth to those of great. . . . Some labor with their brains and some labor with their brawn. Those who labor with their brawn are governed by others. Those governed by others, feed them. Those who govern others, are fed by them. This is a universal principle in the world. (Fung 1983: 114)

Mencius’s views reinforced “the vertical, inegalitarian, and organic Confucian view of the polity”(Nosco 2008: 34). The rectification of names, previously used to justify social distinctions, virtue, and intelligence, was also a criterion for assessing people’s suitability to be government officials. It therefore follows that heaven designated government administrators as well as the monarch. Confu-

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cianism therefore also strengthened the ruling class’s authority by treating its members as the representatives of heaven in the human world. Mencius therefore concluded that the Chou Dynasty’s system of feudalism, which divided the governing class into five ranks and the people into six, was the ideal political and social structure. The emperor [T’ien-tzu] constituted one dignity, the duke [Kung] one, the Marquis [Hou] one, the earl [Po] one, and the viscount [Tzu] and baron [Nan] each one of equal rank, making a total of five ranks. Again the ruler [chun] constituted one dignity, the chief minister [ch’ing] one, the great officer [ta fu] one, the scholar [shih] of the first class one, those of the middle class one, and those of the lowest class one, making a total of six ranks. (Fung 1983: 109)

Fung (1983), an outstanding modern Chinese philosopher, criticised Mencius for his approval of the Chou regulations and his promotion of the political and social institutions primarily for the benefit of the ruling aristocracy rather than the general public. Ch’u (1961) noted that officials, commoners, and such mean people as slaves, prostitutes, and beggars formed three major social classes in traditional China. Confucius’s teachings therefore formed the basis of China’s traditional class system. Confucian ideologies before the Han Dynasty therefore included (a) the need for social distinctions, (b) the criteria for social division, and (c) the view that a social order should be based on the rectification of names. Obviously, the rectification of names and the division of labor it formed justified a hierarchical social structure, according to which each social class had to perform its respective role. According to Pye (1991: 57), “the Confucian order valued continuity more than novelty and placed great importance on a division between the cultured and ethically concerned elite and the humble and hard-working masses,” thereby providing the moral justification for a hierarchical polity. Some Chinese philosophers have suggested that Confucian ideologies prior to the Han Dynasty (206 BC-220 AD) mainly emphasised social distinctions based on different social roles, intelligence, and education levels. People would thrive as a result of performing their mutually complementary roles (Madsen 2008). Indeed, Confucianism also advocated a ‘humane or benevolent government’ (Nosco 2008: 36), in which the monarch and his officials would be responsible for enriching and educating fellow citizens. Confucius stressed that “the rule of virtue can be compared to the Pole Star which commands the homage of the multitude of stars without leaving its place” (1979 Analects II: 1). The practice of ren, a key Confucian virtue involving benevolence, compassion, and loving others (Riegel 2006), manifested “a hierarchical system of human relationships in the spirit of reciprocity and harmony” (Chan 2008: 120). During the Han Dynasty, however, Confucian ideologies had mixed with those of the Yin-Yang School, and Confucian scholars “made Confucian ethics and politics rigid and hierarchical, placing the father and ruler at the centre of absolute power in the family and polity respectively” (Chan 2008: 114; see also Li 2008). Tung Chung-shu, a leading Confucian scholar in the Han Dynasty,

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further developed the concept of heaven granting power to the monarch to administer human affairs by reasoning that people were basically good, but were unable to be good in themselves, and that the purpose for having a monarchy was to provide people’s natures with completeness (Fung 1983). By defining the monarch’s role as that of carrying out heaven’s instructions and serving the needs of the temporal world, Tung mixed political power with natural power, advocating that: the ruler of men holds a position of life or death [over other men], and shares with heaven its transforming power. There are no things that do not respond to heaven’s transforming influence; the transformations of Heaven and Earth are exemplified in the four seasons. [Therefore,] when [the ruler] manifests a liking for something, this acts like the warm atmosphere [of spring], and births take place in the human world. When he manifests a dislike for something, this acts like the cool atmosphere [of autumn], and deaths take place in the human world. His joy acts like the hot atmosphere [of summer], and there is then nourishing and growth. His anger acts like the cold atmosphere [of winter], and there is then a cessation [to human activities.] Heaven, Earth, and the ruler of men are one. (Fung 1983: 48)

This means that the monarch was to be perceived as the representative of heaven, sharing the same features of the natural world. He received heaven’s commands, called decrees (ming) in order to check or transform people’s lives by finishing the forms of their natures. Linking the relationship between decrees and the human world therefore established the legal basis of the monarchy. Confucianism taught that heaven had instructed the monarch to set up hierarchical social and political institutions and to define social classes. “He rectifies his laws and regulations according to what is appropriate, and differentiates upper and lower [social classes] according to their proper sequence, in order to keep [people’s] desires in proper check. By practising these three things he promotes the great fundamental basis [of society]” (Fung 1983: 49). Confucian scholars had therefore developed a comprehensive political theory during the Han Dynasty to serve the authoritarian empire’s needs. By such methods as linking the monarch’s power to the characteristics of the four seasons, Tung enhanced the ruler’s domination of the ruled. Such teachings legitimised the monarch’s absolute power and the existing political and social institutions. Confucians therefore served an authoritarian empire by justifying it, employing filial piety to cultivate public loyalty to the monarch and using the code of li, which the next section explains, to restrict any anti-hierarchical behaviour.

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Filial Piety and Li

1

Filial piety is Confucianism’s core belief. It considers it to be the basis of all wisdom and all that it considers to be virtuous (Fung 1983). It was also the foundation of other social and political institutions. It commences with the service of parents; it proceeds to the service of the ruler; it is completed by the establishment of one’s own personality. . . . Yes, filial piety is the way of Heaven, the principle of Earth, and the practical duty of man. Heaven and Earth invariably pursue this course, and the people take it as their pattern. (Fung 1983: 361)

Filial piety stresses the importance of children’s duties to their parents. Families expect their younger members to try their best to serve their elders, sacrificing their lives for their parents’ benefit. The Cheng Family’s Rules, for example, spelt out the proper behaviour of children by asserting that when elders condemn their progeny the younger family members should accept this whether the condemnation was right or wrong (Hok 1989). This rule echoed the teaching of Confucius, who once stressed that “in serving your father and mother you ought to dissuade them from doing wrong in the gentlest way. If you see your advice being ignored, you should not become disobedient, but remain reverent. You should not complain even if in so doing you wear yourself out” (1979 Analects IV: 18). The fulfilment of filial piety represents the acceptance of a hierarchical relationship among human beings and the domination of those of lower status by those with higher status. While this perceives the family as a unit representing the authoritarian state’s hierarchical human relationships, it also perceives it as a social institution that extends this type of human relationship from the social to the political arena, nurturing the next generation to be amenable to authoritarian rule. Since the family and the state depended on filial piety as a means of social control, Pye (1991: 61) concluded that “parental power and imperial power were based on the same doctrines and upheld by the virtues of obedience and loyalty to authority.” The practice of filial piety ultimately served the needs of an authoritarian empire that had utilized the family as its primary social control unit. By deriving people’s loyalty from filial piety, the state formed a secondary and formal control system. As Confucius presented it, li is a recognized code of behaviour that defines people’s social and political duties. Enforced not by “political compulsion, but through individual conscience, [Confucius founded it on] a recognition of human nature, human feelings, and the operation of human life” (Hsu 1973: 95-96). Li’s ultimate objective, therefore, is to encourage desirable behaviour by influencing people’s minds. According to Confucius, “Guide them by edicts, keep them in line with punishments, and the common people will stay out of trouble but will have no sense of shame. Guide them by virtue, keep them in line

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with the rites, and they will, besides having a sense of shame, reform themselves” (1979 Analects II: 3). Li enforces the practice of filial piety, limits people’s activities, and defines the obligations of each social class. Fung (1983:339) quoted the Li Chi, or Younger Tai Record of Rites, as saying: Of all things by which the people live, the li are the greatest. Without them, there would be no means of regulating the services rendered to the spirits of Heaven and Earth, there would be no means of distinguishing the positions of ruler and subject, superior and inferior, old and young, and no means of keeping separate the relations between man and woman, father and son, elder and younger bother, and of conducting the intercourse between contracting families in a marriage, and the frequency of the reciprocities between friends or their infrequency.

According to Fung (1983: 339), li maintained the “social gradations that are necessary if there is to be no conflict between man and man.” A hierarchical social structure requires some form of social control and Confucians considered li to be more powerful and influential than any law, as it could create a social control culture at all levels of social and political institutions. Li mobilized mutual control among people and enhanced the internal control of each individual and social unit, serving as the cement that binds the ruled to the rulers. Early Confucians claimed that the Sage Kings had brought li into existence in order to achieve social justice. Mencius, for example, said, “therefore the Sage Kings formed the lever of the standards of justice and the ordering of the li, so as to regulate human feelings with them. Therefore human feelings were the field of the Sage Kings with which to plant it” (Fung 1983: 340). Mencius also asserted that “human nature is bound up with li while li is identical with heaven” (Chao 1983: 75). In short, filial piety defined the obligations of the ruled to the ruler and li legitimised the ruler’s interventions in the private sphere.

Hierarchy of Social Responsibilities Confucianism clearly did not assert the uniformity and equality of all people, but advocated instead that differences should exist among social classes. Confucius’s idea of the rectification of names laid out reciprocal human relationships attached with various social responsibilities. The Husun-tzu (Book of Filial Piety) asserted that “the young serve the old, the inferior serve the noble, and [the] degenerate serve the worthy; [these relationships are] the pervading rule of the universe” (Ch’u 1961: 227). The system therefore strictly required people with lower social status to serve their superiors. This ideology defines welfare relations as human relations, and bases welfare rights on status, class, and position. Li enforced this type of welfare relationship. As Wood (1981) pointed out, the need for obedience to authority had been a constant refrain throughout Chinese history.

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Tung greatly strengthened the concept of welfare based on human relationships by using the yin-yang teachings to interpret Confucius’s five relationships: In all things there must be correlates. . . . The yin is the correlate of the yang, the wife of the husband, the son of the father, the subject of the ruler. There is nothing that does not have such correlates, and in each such correlation there is the yin and yang. . . . Thus the relationships between ruler and subject, father and son, husband and wife, are all derived from the principles of the yin and yang. The ruler is yang, the subject yin; the father is yang, the son yin; the husband is yang, the wife yin. . . . The regulations for love, righteousness, and social institutions are wholly derived from Heaven. Heaven acts as the ruler, who shelters and confers benefits [on the subject]. Earth acts as the subject, who assists and supports [the ruler]. The yang acts as the husband, who procreates [the son]. The yin acts as the wife, who gives assistance [to the husband]. (Fung 1983: 42-43)

It is obvious that Tung’s teachings served the needs of the hierarchicalauthoritarian system, once again using natural power to justify the unequal human relationships and the uneven distribution of political power in both the public and private spheres. The relationship between yin and yang rationalised the relationship between the ruler and the ruled, which also legitimised the monarch’s domination of the people. Tung’s philosophy clearly established dominant actors at all three levels, these being the father in the family, the officials in the districts, and the monarch in the country, and also established three dimensions of domination, which are those of higher status over those of lower, older people over younger ones, and men over women. Li (2008: 187) emphasised that the original teachings of Confucius and Mencius had an ethos of caring and that suppressing women was “not an essential characteristic of Confucianism.” It was only Tung’s incorporation of the yin-yang doctrine into it that created its oppression of women (Li 2008). The concept of the five relations that developed during the Han Dynasty therefore represented an unbalanced distribution of power that mandated the transfer of resources from those with lower status to those with higher status, from the young to the old, and from women to men. The structure of social responsibilities was obviously top-down and their sequence was from the family to the emperor, restricting the ruled to being servants serving the ruler. More importantly, the responsibilities of the ruled to the ruler had become based on position and status rather than any logical argument, maintaining that people in subordinate roles should serve their superiors no matter what. For example, the Ru Chi Chun Chin, a book of history, asserted that “although the father is unreasonable, how dare a son not serve him? Even though a monarch does not carry out good policies, how dare people not obey him?” (Hok 1989: 130). The development of the concept of the five relations from Confucius’s reciprocal responsibility to Tung’s absolute obedience helped to enhance the rights of the privileged and to consolidate the ruling class’s dominant power. It linked the public to the state through a chain of human obligations.

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In short, the institutionalisation of Confucianism during the Han Dynasty translated human relationships into an unbalanced system of obligations based on status, age, and gender. This new Confucianism stressed the welfare duties of children, women, and the family, forming a hierarchical and patriarchal welfare system in a hierarchical-authoritarian polity.

Authoritarian Government and Sage Welfare2 Hierarchical Structure and Class Interests The Confucian ideology of a hierarchical society formed a basis for the Chinese ruling class to pursue their own interests. Empowered by heaven to rule the human world, the emperor enjoyed both political and economic power, being the owner of all wealth and resources. He could increase the land tax or labor services to him for his own enjoyment or to achieve his own ambitions. According to the Han Book, a history of Han Dynasty, Emperor Wuti, who levied heavy taxes on the people and used the country’s resources for military expeditions and civil construction, did not adopt the policy of limitation. He consequently used up the entire empire’s wealth to a large extent, leaving it impoverished (Lee 1969). After examining the Ming Dynasty’s fiscal policies, Huang (1974) found that the palace’s expenditures placed a heavy burden on the empire. The size of the palace staff was particularly costly, with an estimated 70,000 eunuchs being in service by the dynasty’s end, and the capital garrisons had 100,000 officers in 1520. During the Husuan-te period of 1425-1435, the palace employed 9,462 cooks and more than 30,000 charcoal burners for three months each year. The empire had to supply the emperor and his court with about 3.7 million piculs of grain annually. Since the emperor owned all of the country’s resources and his bureaucracy managed them, he could do what he pleased with anything. The aristocracy, Confucian scholars, and merchants were other social groups that these authoritarian regimes benefited. During the Ming Dynasty the aristocracy was mainly composed of such imperial relatives as the emperor’s uncles, younger brothers, and sons, all of whom left the capital upon reaching adulthood. Each prince received a magnificent residence, an annual stipend of about 10,000 piculs of grain, and a garrison of 3,000 men. The state supported all of them for life. It was obviously fortunate to be born with status and wealth in such a stratified society (Huang 1974). During the Han Dynasty the aristocracy, government officials, and merchants accumulated much land and became a powerful economic force. Emperor Ai-ti (6-1 BC) issued an edict strongly condemning their activities. It said in part that: At present, many princes, princesses, marquises, officers, and influential and rich persons, etc., are keeping a large number of slaves, and they are holding

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This type of accumulation also happened during the Ming Dynasty of 1368 to 1643. In a report submitted to the Emperor in 1380, Chow Chen, a senior government official, described the privileged groups as “eating up families.” Another official, Wong Chih, even pointed out that there was probably “not a single place where there are no powerful [ones] eating up families” (Lee 1969: 353-354). One of the privileged groups, the scholarly gentry, performed the dual role of social control agents and accumulators. They were the recipients of extensive training in Confucianism and provided the regime with “a rational and ethical sanction for the exercise of its authority” (Fairbank 1967: 52-53). Many of them were landlords or the children of landlords, and they used their political power to defend their class interests. In traditional China only rich families had the resources to support their sons to prepare to sit public examinations. After passing the examinations and receiving official titles, these sons of landlords were able to link their families’ interests with public policies. Landlords, scholars, and officials were therefore three of the ruling class’s main elements. As Fairbank (1967: 46-47) described the situation, “Landowning families, having some agricultural surplus, could give their sons leisure for study to become scholars. Scholars, with a mastery of classical learning, could pass examinations and become officials. Officials, with the perquisites and profits of bureaucratic government, could protect and increase family land holdings.” Those constituting these three elements were often members of the same group of families during difficult stages of social mobility and economic activity. As the scholarly gentry and the emperor had common interests, the former were unlikely to rock the authoritarian polity’s foundations, working instead as intermediaries between the monarch and the general public by putting the rectification of names and li into practice. They also had links with village leaders and would occasionally organise emergency relief to help the victims of floods, droughts, and rainstorms. As the empire’s experts in Confucianism, the scholarly gentry worked to preserve it, promoting a culture based on family and community self-reliance.

The Legal Basis of Community-Level Welfare Responsibility Confucianism had therefore legitimised the emperor as heaven’s representative since the Han Dynasty, thereby enabling successive authoritarian governments to shift their welfare burden to the communities. Although Confucian teachings expected emperors to practise li and to encourage virtue, hard work, and education by all their subjects by both setting the rules and setting an example (Sprenkel 1962), Confucian scholars proposed no effective mechanisms to check imperial power or misbehaviour. The reality was that they were dictators who could

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do “whatever [they] sincerely and honestly believed to be for the good of the people―just as [a] father would do for his son” (Hsu 1975: 59). Emperors frequently both ignored the public’s needs and transferred their welfare duties to community-level organizations and the family. Because of the personalisation of social problems, the families and lineages of people who committed socially unacceptable acts felt dishonoured. This created strong social pressures at the family and village levels for everyone to carry out their designated responsibilities. At the village level the elders were agents for maintaining traditional customs and passing on Confucian teachings. When disputes arose the elders adjudicated them. In villages where people shared common ancestors, called the tsu, group pressure was extremely powerful. Elders were like the parents of all the households, and enacted regulations for their entire villages. For example, according to the I tsu, or one of a tsu, regulations: anyone who commits one of the ten big offences according to the criminal code is to be expelled. . . . A person who leaves the coffin of his parents unburied and the graves of his ancestors to decay while erecting buildings for conspicuous display . . . is to be expelled. . . . Those who are wealthy, yet do not assist their poor relatives within the mourning degrees of five months to one year, so that these cannot celebrate funerals and weddings properly, are to be omitted, even though their conduct otherwise may be proper. (Sprenkel 1962: 82)

It was obvious that the regulation of tsu strongly upheld Confucian values by stressing filial piety and promoting mutual help among relatives. The village organizations formed a secondary social control mechanism, guiding individuals and households to observe li. Apart from the informal control of li, the emperor strengthened Confucian familism with laws. At the community level, the government delegated the village leaders to administer its affairs. For example, the Sung Dynasty established bao-jia, which involved the government making the heads of the ten most prosperous families in an area community chiefs responsible for collecting taxes and conscripting villagers for military service. The law also made families, based on biological relationships or marriage, responsible for crimes their members had committed (Sprenkel 1962). The policy of local self-government became more effective with the help of a scholar class trained in Confucianism who strongly defended the practice of li and filial piety. Each village formed a self-sufficient unit, dealing with own affairs with little support from the government. A village folk-song reveals the remoteness of the government’s welfare relationship with the people. When the sun rises we work. When the sun sets we rest. We dig the well for drink and cultivate the field for food. To us what’s the use of an imperial government? (Cheng 1980: 112).

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The government also used laws to strengthen parents’ authority and to consolidate families’ welfare functions. According to the Ch’ing Code, sons who struck their parents were to suffer decapitation regardless of the conditions of injury, but fathers received no penalty for striking their sons. Even if a son were to die the father would receive only 100 blows with a heavy bamboo stick if the son’s disobedience had provoked the violence. Wives who attacked their husbands received 100 blows with a heavy bamboo stick, but husbands who struck their wives would receive punishment only if they inflicted such significant injury as breaking a tooth or a limb and if the wife personally lodged a compliant with the authorities (Bodde and Morris 1967). A case in the Ch’ing Dynasty involved a father who killed his son for criticising him for maintaining an adulterous relationship with the wife of another man receiving a sentence of only a year of penal servitude. In another case from the era a woman who accidentally killed her father-in-law was sentenced to death by slicing (Bodde and Morris 1967). Under the law of the Sung Dynasty parents could even request that the authorities punish unfilial children with the death penalty (Ch’u 1961). These cases confirm that the traditional Chinese judicial system was based on hierarchical Confucian political and social ideologies that measured human worth in terms of position, age, and gender, so that the higher a person’s status the less severe the punishment they would receive for wrongdoing. Bodde (1980: 137) characterised the most conspicuous Confucian influence on traditional Chinese law as “the principle of legalised inequality.” By consolidating fathers’ authority in their families the state was also preserving the emperor’s power (Hsu 1975). Traditional China’s most common form of social control was therefore li, which operated through human relationships and group pressures, and the main purpose of the law was to force people to observe li. Such laws as those for the punishment of filial impiety and for enforcing collective responsibility were expressions of the Confucian moral ideologies of the rectification of names and li. By encouraging people to observe li and filial piety families and social organizations became main units for providing welfare.

Sage Welfare as the Last Resort Tung Chung-Shu asserted that the emperor, like heaven, loved and benefited the people, and that “the purpose of Heaven is ever to love and confer benefit; its work is ever to nourish and create growth. Spring, autumn, winter, and summer are all its instruments for this. The monarch, likewise, ever takes as his purpose the living and benefiting of all beneath heaven, and as his work the giving of peace and contentment to the entire world” (Fung 1983: 53). This was basically just empty words rationalising the emperor’s power. As mentioned previously, Confucianism was silent about any practical actions that could prevent emperors from abusing their power despite having granted that authoritarian power its legitimacy. Since the emperors received their power from

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heaven, control over that power relied completely on heaven rather than human institutions. Huang (1974) observed that no one had any way of checking the actions of emperors determined to exercise their absolute power in full. Confucian teachings obviously provided a framework for the ruling class to suppress the lower classes without any constraints. Confucian tradition also emphasised the self as a bearer of roles rather than as a holder of rights (Tao 1991). As previous sections have noted, the government could interfere in the private domain of the people through li and law. This practice had two underlying meanings, in that it defined the nature of welfare problems and the methods that the government should use to solve them. This means that caring for family members, especially the aged, was their families’ duty, so problems arising in this regard are therefore family and not social problems. The government’s duty was to enforce law and promote filial piety. State intervention was only necessary for problems that were beyond the capacity of families or districts to address. Other factors also limited the government’s welfare policies. It had traditionally suspended the imposition of land taxes in order to reduce farmers’ burdens resulting from natural disasters. During the 1426 to 1435 reign of Emperor Shen Chung of the Ming Dynasty, for example, the government exempted flood victims in the Soo and Sung regions from taxes (Lee 1969). Such measures, however, depended on the relevant official’s ability to persuade the emperor to take care of the victims and were not meant to solve their immediate needs. Relief measures also depended completely on the character of the emperor of the day. During Emperor Tai Tso’s reign from 1368 to 1398, the government granted several million pieces of cloth and currency, more than one million loads of rice, and tax exemptions to the victims of natural disasters, but under the rule of Emperor Chen Tso from 1403 to 1424, the government made no provisions for flood victims younger than age five (Lee 1969). The influence of the ideology of self-reliance resulted in neither the public nor government officials viewing social welfare to be the government’s duty. They considered helping hungry people in order to ensure their survival to be best limited to two meals a day that were small enough to leave them feeling hungry in order to encourage them to take care of themselves and not want state help (Ngan 1985). The government clearly used harsh welfare measures to encourage people to be self-reliant. People perceived social welfare to be only the emperors’ moral obligation rather than the people’s right (Chow 1987; Ngan 1985). Class interests also affected the effectiveness of the government’s welfare policies. When the Han Dynasty’s Wen-ti became emperor in 179 BC, two senior officials named Kun Kwong and Ho Wu asked him to adopt a policy of limiting the size of the aristocracy’s landholdings and the number of their slaves. Two other officials named Tin Fu and Tung Hsien, however, blocked these policies’ enactment because they were antithetical to their interests (Lee 1969). Traditional Chinese government welfare policies were therefore remedial and inconsistent, and provided a low level of assistance. Since emperors received

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their power from heaven, their legitimacy was based on fulfilling moral duties rather than on creating a comprehensive social welfare system. As a consequence, social welfare in traditional China was a family and community matter rather than a state concern. These characteristics kept the lower classes’ expectations of government assistance low or nonexistent, and state welfare remained only an unreliable last resort.

Community-Level Welfare Systems In traditional China the lowest-ranked national officials, the magistrates, were physically remote from the villages. Below the national level self-government existed under the leadership of the gentry class, kinship organizations, or geographical organizations. Ngan (1985) pointed out that traditional mutual-help organizations became established according to such criteria as biological relationships, geographical relationships, people’s common needs, and religious values. These community-level welfare systems consisted of both primary and secondary networks.

Primary Welfare Networks The family was the basic welfare unit in traditional Chinese society. It operated in practice according to the omnipresent Confucian three-dimensional domination of the state over families, the old over the young, and men over women. These unequal relationships helped to maintain a hierarchical and patriarchal family system.

The First Dimension of Domination Confucianism stressed that filial piety should be practised within families because it was essential for the stability of the state. As Confucius said, “If you are dutiful towards your parents and kind to your children, then they will be loyal. If you promote the good and instruct the incompetent, then they will be encouraged” (Dawson 1981: 67). As noted earlier, Confucianism viewed the state’s political power as being in proportion to its moral authority. This means that emperors were supposed to set a good example for the people to follow, which also could force people to practise filial piety through the encouragement of li and the prospect of punishment under the law. This therefore implies the integration of the public and private spheres to enable the state to have definite power over the people. During the Ching Dynasty the government published a code that established five main degrees or grades of mourning and allocated different kinsmen to each. This law also listed ten offences, four of which concerned offences against kinsmen. These were parricide, discord, incest, and impiety. Ch’u (1961: 8) commented that the main characteristics of Chinese law were to be found “in the concept of family and in the ideology of [a stratified] order,” with the main ob-

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jective of consolidating the family as the basic social unit. Confucianism provided Chinese families with a fairly consistent body doctrinal support, “backed by state sanction for over one thousand years. This long period of state power and support no doubt helped to standardise actual kinship practices and to further their penetration throughout society” (Johnson 1983: 24).

The Second Dimension of Domination The family, village, and state worked together to form a strong social control mechanism. At the family level, the Confucian concept of filial piety, which defined the moral obligations of progeny towards parents, established a parentcentred welfare unit. As Mencius emphasised, “The actuality of humanheartedness is to serve one’s parents. The actuality of righteousness is to obey one’s elder brother. The actuality of wisdom [chih] is this: to know these two things and not depart from them. The actuality of propriety [li] is this: the ordering and adorning of these two things” (Fung 1983: 125). The most basic and important responsibility of progeny of any age was to practise filial piety. Traditional Chinese culture posited filial piety as the most prestigious virtue and the only path to self-actualization. The Confucian concept of filial piety is extremely demanding, requiring people to spend their lives serving their parents. After analysing the teachings of Confucius, Fung (1983: 358) summarised filial piety’s physical aspect as consisting of “the care of the parents, the bearing in mind that one’s own body is something bequeathed to one by one’s parents, and hence the valuing and protecting of it, and the production of a ‘new self’ to carry on the life of the parents.” Children’s mothers bear them physically, forming a natural relationship. Confucianism denied people the right to their own bodies and considered parent and offspring to be a unit as long as they were both still alive. Protecting one’s body was therefore essential to Confucius’s standard of filial piety: I have heard from Tseng Tzu what he heard the Master [Confucius] say, that of all that Heaven produces and Earth nourishes, there is none so great as man. When, his parents having given birth to his body whole, he returns it to them whole, this may be called filial piety. When no member of it has been mutilated and no disgrace done to any part of the person, it may be called whole. Hence the Superior Man does not dare to take the slightest step forgetful of his filial duty. (Fung 1983: 358)

Obviously, caring for one’s body was the first step in the teachings upon which the spiritual aspect of Confucian filial piety was built. If people’s bodies were said to be their parents’, their lives were therefore to be focused mainly on serving their parents’ needs with little concern for their own well-being. Fung (1983: 359) summarised the spiritual side of filial piety by noting that people should conform to their parents’ wishes and nourish their wills as well as provide them with physical care and nourishment during their lifetimes, adding that:

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Chapter Four After the death of our parents, furthermore, one aspect of [filial piety] consists in offering sacrifices in our minds. . . . in perpetuating the activities of our parents and carrying on their uncompleted purposes, or for us ourselves to achieve something new, and thus make our names, and through them the names of our parents, widely known so that they will gain an immortality among others.

This clearly shows that Confucianism teaches that the purpose of people’s lives is to meet their parents’ needs. Confucian society, furthermore, expected people whose parents had died to continue to fulfil their wishes. The spiritual and physical aspects of filial piety created social relationships centred the parentchild one and upon which other social institutions have been based. These extensions of this relationship led to the establishment of what were called blood-type welfare networks based on biological relationships. Tseng Tzu, one of Confucius’s students, said, “There are three degrees of filial piety. The highest is the honouring of our parents, the second is not disgracing them, the lowest is being able to support them” (Fung 1983: 359). The acceptance of these concepts created an extremely strong caring spirit for meeting the needs of senior family members, especially parents. This is the foundation of family-oriented welfare system that helps rationalise the state’s minimal welfare role. Filial piety has also played a significant role in traditional Chinese social control by bringing about strong social condemnation for those who bring shame on their parents. Confucianism stresses that people must honour their parents because that is the highest form of filial piety. It has created the social and moral expectation that people are to honour their families for the sake of their parents whether those parents are still alive or have died. This regarding of individual people and their families as one has created a general acceptance of collective family responsibility. Confucianism also uses ritual to consolidate its concept of filial piety, regarding three years of mourning for parents to be desirable. Confucius said, “How unfeeling Yu is. A child ceases to be nursed by his parents only when he is three years old. Three years’ mourning is observed throughout the Empire. Was Yu not given three years’ love by his parents?” (Confucius 1979 Analects XVII: 21). According to the T’ang Dynasty’s Code, all officials had to retire from office during the entire period of mourning for their parents. As one of Confucius’s disciples taught, “Conduct the funeral of your parents with meticulous care and let not sacrifices to your remote ancestors be forgotten, and the virtue of the common people will incline towards fullness” (Confucius 1979 Analects I: 9). Before the Han Dynasty, then, the teachings of Confucianism centred on the human world, and the ultimate objective of such rites as mourning, burial, and ancestor worship was to strengthen the people’s filial piety. The family being China’s basic social unit as well as the authoritarian empire’s first line of defence, a powerful system of rites and legislation in regard to it was essential to control the people’s activities. For example, the Ch’ing Code considered a son who brought an accusation of parental wrongdoing before the authorities to be unfilial and therefore to receive three years of penal servitude

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plus 100 blows of the heavy bamboo stick (Bodde and Morris 1967). Such powerful formal and informal controls made the family the most effective welfare unit, which was a legacy of Confucian teachings (Dixon 1981).

The Third Dimension of Domination Traditional Chinese society regarded daughters-in-law to be a source of the weakening of the parent-son welfare system and they consequently tended to be ill-treated. One of the traditional means of preventing women from having power was dislocation, a system in which parents arranged their children’s marriages, sometimes when they were still small children, and married women had to stay with their husbands’ families. For example, Lam Mei-ying, born in 1905, reported arranging a marriage for her seven-year-old daughter (Davis-Friedmann, 1984). Johnson (1983: 19) argued that this practice was considered desirable because “arranged, blind marriages and the suppression of romantic love served to keep the conjugal bond secondary.” It also helped parents to protect their relationships with their sons, and was an expression of parents’ absolute power over their children. Traditionally, the groom’s family had to pay a bride price to the bride’s family, a symbol of the transference of a woman’s body and labor from her biological family to her new husband’s family. Marriages arranged in this way resembled a commercial exchange. Johnson (1983) described them as an exchange of women that made female-initiated divorce virtually impossible. Some poor families saved themselves from starvation by selling their daughters to the rich as mui-tusi, or young girl servants, if they could not arrange for them to marry. Chapter Five describes how this practice lasted into twentieth-century Hong Kong. Women’s economic value therefore sustained their families’ capacity for self-reliance. Johnson (1984: 79) quoted a woman he called Great-Aunt Yeung as saying that her marriage was “like making a purchase! My father did it because of poverty, my husband because he liked me and because he wanted another person to help out.” After marriage women became inferior members of their husbands’ families. According to the Three Ordinances, “as an unmarried girl a woman must obey her father and her brothers; as a married woman she must obey her adult sons” (Wolf 1985: 2). The Bride Chapter noted further that “a bride serves father-inlaw, mother-in-law and husband as serving God. In serving these three persons, she should make them satisfied and would not make them feel any anger” (Hok 1989: 163). Relationships between daughters-in-law and mothers-in-law could be extremely tense. Because of her dislocation after marriage, mothers generally found that their children were the family members with whom they were most intimate, especially their sons, who had the responsibility to care for their older mothers’ needs. Mothers-in-law therefore tended to be afraid that their daughters-in-law would weaken their mother-son relationships and were anxious to safeguard their interests. They therefore traditionally supervised their sons’ new brides closely, subjecting them to incessant criticism and a huge amount of work

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(Wolf 1985). Traditional China exploited women’s labor both domestically and agriculturally, considering them to be a resource for maintaining their families’ economic self-sufficiency, making polygamy a common practice even in poor villages (Johnson 1984). The traditional Chinese social system prevented women from having any economic power and controlled them ideologically with li. They had no right to own property or inherit land and also usually played only a minor role in family decision-making. This forced them to depend on their patriarchal family for support and subordinated them to it further. They could only improve their status by contributing to the preservation of the hierarchical, patriarchal system by, for example, bearing male children, or reaching a healthy old age. The dominant male ideology therefore regulated Chinese women’s status, and their attachment to those values reinforced the patriarchal system.

An Interlocking Primary Welfare Network The teachings of Confucianism centred on the family. The five relationships that defined human interactions formed a graded love society. In practice, graded love referred to the graded responsibilities that regulated people’s duties to each other according to the five relationships. Since the primary relationship was that of parent-and-progeny, the chia, which means family, was the basic mutual-help unit. To traditional Chinese the concept of chia was more than a narrow definition of a household unit and could also refer to an economic unit composed of several households sharing a common budget and property. Cohen (1970) noted that chias were composed of chia estates, groups, and economies that could have a variety of types of interrelationships. Chias based their memberships on biological relationships, marriage, or both for economic purposes and pursuing mutual help. They were therefore an effective economic and welfare mechanism for accumulating wealth and performing informal caring duties. Traditionally, the descendents of a common ancestor preferred to live together and formed clan-like villages based on lineage. Freedman (1965: 2) summarised this practice in south-eastern China by explaining that: after pointing out that in the first six or seven centuries the centres or strongly developed tsu (lineage) have been in central and south-eastern China, Miss Hu Hsien-chin says that in this area many villages are inhabited completely or predominantly by people of a single surname. In a work dealing with Kwangtung in the ’twenties of this century, Chen Han-seng states that at least four out of every five peasants “live with their clans” and that usually one village is inhabited by one clan. He goes on to say that even if there is more than one clan, each clan occupies a distinct section of the village; there is hardly a mixed neighbourhood. J.J.M. de Groot writes of the Fukien he knew at the end of the nineteenth century that the people of one village bore one clan name only.

Since traditional China had an agrarian economy, co-operation among family members and neighbours benefited families and communities. The govern-

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ment also promoted the lineages’ political and economic functions. For example, the government in traditional China considered the independent possession of property to be filial impiety. Those who violated this restriction received three years of imprisonment during the T’ang and Sung dynasties and 100 strokes during the Ming and Ch’ing dynasties. Cultural background, economic needs, and government policy therefore all contributed to the existence of settlements based on biological relationships. According to Chao (1983: 19), “Lineage is related to the term ‘tsung’. . . . [It] is a collective name standing for the major lineage and the honour lineages. Lineage includes no deeper than five generations. It represents a consanguineal kin group, comprising those persons who trace their common relationships through patrilineal links to a known ancestor.” Chao (1983: 25) explained further that a clan was “a group organised by and composed of numerous component families [that] trace their patrilineal descent from a common ancestor [who] first settled in a given territory. Men throughout their [lives] and women until their marriage belong to their father’s clan; a wife becomes a member of her husband’s clan.” This means that villagers with a common ancestor and surname lived together for mutual help and protection. This practice formed numerous separated social units in traditional China. “Traditional Chinese society was composed of numerous small groups. If a person left his family it was difficult for him to survive, as there was a clear dividing line between families. It seemed that each family only took care of its own members” (Lau and Yang 1989: 45). A family orientation and dependence on the family were the main features of the traditional Chinese welfare system. Villagers who shared the same ancestor held some corporate property. A 1933 survey of the ownership of land along the East River in Guangdong Province reported that one-third of its cultivated land was clan-owned. Another study in Guangdong a few years earlier distinguished this corporately owned land into the three ownership categories of the village, the lineage, and various sub-lineages (Freedman 1965). Villages commonly used their incomes to pay the costs of lawsuits, assist poor people and students, make awards to scholars and chaste widows, and repair public buildings, graves, bridges, and streets. Lineages were therefore an extension of the family welfare philosophy and formed an immediate welfare network outside of the family. Mourning rites, burial rites, and ancestor worship also consolidated these primary networks as providers of social welfare. Lineages developed different branches and sub-branches over time, and the relationships among them would gradually weaken. Ancestral halls, which were buildings where people placed ancestor tablets, were focal points for preserving lineage members’ identities. The ancestral rites are important occasions because they symbolise the social structure and define membership at the different levels of lineage segmentation. . . . During the complex ceremonial cycle the various groupings within the lineage divide to worship at separate ancestral graves, becoming progressively smaller as they move down the genealogical ladder. This enables all members

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Chapter Four to see just how closely they are related to every other member of their lineage. (Potter 1970: 126-127)

Rites at the ancestral halls drew lineages’ separate branches together through the worship of common ancestors. They also reinforced the family system’s hierarchical structure and the domination of the old over the young and men over women. The worship of common ancestors therefore served social and political purposes. “Ancestor worship in the halls,” observed Freedman (1965: 91), “was essentially a means of group action in which the power and status structure of the community was given a ritual expression. . . . These were rites of solidarity.” Domestic ancestor worship, which linked the parents and children, also performed the same function as ancestral-hall worship. The domestic worship strengthened family units’ welfare functions as the ancestral-hall worship enhanced lineages’ spirit of mutual help. These two levels of worship represented two levels of biological relationships as well as two social welfare networks. The family, which li and law firmly upheld, formed the most basic caring unit in the society, while lineages and clans, led by elders and centred on common ancestors, formed networks for families and the community as a whole. Due to the existence of these two levels of welfare networks Chinese people became more family-oriented and their expectations of state welfare remained relatively low.

Secondary Welfare-Networks: Geographical and Occupational Welfare Geographical Mutual-Help Networks Geographical mutual-help networks, similar to those based on tsu and lineage, played an important role in welfare provision at the village level. The governments of traditional China used a rural-based collective responsibility scheme to strengthen their control over villagers. Pao-chia, established by a famous official named Wang An-chih in 1070, was the most important rural control measure. It was organised by the number of households in each of its units, with ten households forming one p’ai, ten p’ai forming one chia, and ten chia forming one pao. During the Ch’ing Dynasty the pao-chia performed the two functions of registering people and households and reporting crimes and criminals to the government authorities (Wong 1972a). Lau and Yang (1989) pointed out that traditional China’s informal village organizations wielded most of the administrative power at the district level. As the scholar officials who administered local governments were militarily weak, local elite with power based on wealth, knowledge, aggressive force, or a combination of these filled the power vacuum between state and village. Lau and Yang likened local government to a carriage drawn by three horses, which symbolised the power of violence, education, and wealth. Local elite also acted as intermediaries between the state and their villages. The family, the village, the local government, and the central government were therefore traditional China’s four levels of social and political control. The

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first two exercised power informally while the governmental levels exercised formal coercive power. The informal control systems served the functions of providing welfare and maintaining the reproduction of social relationships. The scholar gentry were particularly important within social elite at the community level, as they were well versed in the classical formulas and served as the interpreters of customary law and as “intermediaries between the family, the village, and local government” (Chao 1983: 147-148). As the education that the scholar gentry received was in Confucianism, their basic social welfare values centered upon community-level welfare and holding low expectations of the state. They became the state’s social control agents for enforcing li at the district level. Fairbank (1967: 43-44) summarised the role of cooperative village organizations in providing social welfare as that they: raised funds for and supervised public works―the building and upkeep of irrigation and communication facilities such as canals, dikes, dams, roads, bridges, ferries. They supported Confucian institutions and morals―establishing and maintaining schools, shrines, and local temples of Confucius, publishing books, especially local histories or gazetteers, and issuing moral homilies and exhortations to the populace. In time of peace they set the tone of public life. In time of disorder they organised and commanded militia defence forces. From day to day they arbitrated disputes informally, in place of the continual litigation which goes on in any American town. The gentry also set up charities and handled trust funds to help the community, and made contributions at official request to help the state, especially in time of war, flood, or famine.

Led by the local gentry, village mutual-help organizations mobilised collective resources to address common social and economic problems. These organizations formed a second hierarchical level of the social structure beyond the family and acted as secondary social control agents as well. Although minor intervillage conflicts were common, large-scale confrontations were limited by the weakness their military power. Within the villages people stressed cooperation rather than confrontation, and the village welfare organizations formed a strong system for consolidating the rule of the authoritarian government. Traditional China was therefore a self-sufficient society that had been ideologically and politically constructed to encourage people to manage their own affairs. Confucianism emphasized the self-discipline of each person and such social institutions as the rectification of names and li strongly required individual people and social classes to perform their respective roles and duties. Guided by Confucian scholars, village people strongly adhered to the ideology of selfreliance, using their collective resources to address common welfare problems.

Occupational and Functional Welfare City people grouped themselves according to their needs. The kaifongs, merchant associations, and guilds played an important role in urban life. The kaifongs were neighbourhood organizations found mainly in small towns and mar-

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ket villages that carried out some basic social and cultural functions essential to the health, safety, and good order of the inhabitants (Hayes 1977). Chapters Six and Seven discuss them in detail in the specific context of Hong Kong after the Second World War. Because central and local government officials did not regard social welfare provisions to be one of their major concerns, town residents had to solve their own problems. As Lau and Yang (1989: 107) described it, “The distribution of towns in traditional China was dispersed, not concentrated. Every town had many self-sufficient resident units called neighbourhood units. . . . They would manage their own affairs such as public security [and] relief work. . . employ watchmen, and recruit private police.” Additionally, merchant organizations and guilds contributed to their members’ welfare. For example, during the Ching Dynasty, which ruled from 1644 to 1912, two types of organizations performed this function. One was organizations of local tradesmen who organized themselves according to special skills or products and the other was organizations of merchants from the same region (Sprenkel 1962). Fried (1953) argued that these urban social organizations had formed mainly through ties of mutual interest, as urban life involves extensive relationships beyond the extended family, and city people were far more likely to experience breakdowns in the centrality of the family and kinship ties than those who live in rural areas (Fried 1953). An example of this was a tenants’ association being founded in a setting of non-kin-oriented relationships to deal mainly with a dramatic increase of rent in Ch’u Hsien (Fried 1953). Human relationships have always remained an important reference point for Chinese social groupings. Although various kinds of non-kin groups such as temple associations and guilds were important in cities, some urbanites still bonded together in same surname associations and native-province organizations. Urban social groups, therefore, could form according to such varied criteria as surnames, provinces, and dialects as well as neighbourhoods and occupations. The fundamental forces driving the operations of occupation and functional organizations, moreover, remained human relationships and moral obligations. Business organizations in traditional China had both economic and social objectives, regarding their members’ needs as their responsibilities and commonly providing their members with social welfare help when needed. It was therefore not surprising that they managed such social affairs as burials in addition to promoting occupational and business interests (Lau and Yang 1989). Fried (1953) reported that when one of its members died the merchant guild in Ch’u Hsien collected voluntary contributions from the other members. As they practised traditional human-relationship welfare in commercial settings, the boundary between business organizations and social-welfare organizations was often indistinct.

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Conclusion Confucian teachings, which granted legitimacy to a hierarchical, patriarchal, and authoritarian social and political system, largely shaped traditional Chinese society. The Confucian welfare ideology taught that social problems resulted from the deterioration of li and filial piety, thereby blaming people for their own problems as caused by their failure to fulfil their duties. This personalisation of social problems extended such blame from individual people to their families and even their villages. The Great Learning, an influential Confucian work, asserted that “wishing to order well their states, they first regulated their families. Wishing to cultivate their families, they first rectified their hearts. Wishing to rectify their hearts, they first sought to be sincere in their thoughts” (Pye 1991: 49). Confucianism, therefore, taught that to rectify each person’s heart is the most effective way to secure a stable society. This ideology associated social problems with the consequences of personal immorality. The state’s interventions therefore emphasized education and the emperor’s chief function was to regulate public behaviour by promoting li. At the local level families, organised according to the three dimensions of domination of generation, age, and gender, were the basic welfare unit. Filial piety and li were the two pillars of family welfare, which put the parents’ interests as the dominant priority. In order to enhance the family’s caring capacity, Confucian ideology considered women to be an inferior class whose duty it is to serve the needs of their families’ members. Families sharing the same ancestor, furthermore, formed interlocking welfare networks. This type of welfare basically involved extending the family level’s parent-child relationship to the village level. Other types of mutual help organizations also became established in urban areas according to business and occupational needs. All together, various social institutions formed a comprehensive and powerful self-sufficient welfare system at the family and community levels. This type of welfare system emphasized personal responsibilities and selfreliance and therefore greatly reduced the welfare pressures of China’s traditional authoritarian governments.

Notes 1. Li was a code of proper manners to put chih, the basis of human behaviour, into practice. Confucius said, “The gentlemen has morality as his basic stuff and by observing the rites puts it into practice, by being modest gives it expression, and by being trustworthy in word brings it to completion. Such is a gentleman indeed!” (1979 Analects XV: 18). Fung (1983: 68) explained that li includes “all the rules for everything pertaining to human conduct.” Confucius stressed the restraints that the rules of society placed upon individual people in regard to li. Such Confucian works as the I Ching (Book of Changes), I Li (Book of Etiquette), and Li Chi (Book of Rites) explained the principle of li and its practices. In regard to the difference between li and fa, or law, Ames and Hall (1987: 173)

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explained that li “permits and in fact encourages an emergent harmony that is expressive of the demands of insistent particularity, [while] fa simply serves as a coercive means” with only functional and instrumental value. 2. Confucians used the term sage to describe a monarch or man with virtue who has realised the way of heaven. This book uses the term sage welfare to illustrate the characteristics of the traditional Chinese authoritarian regime’s social welfare approach. Sage welfare refers to an authoritarian regime based on moral rule, with its ruler, the emperor, considered to be the son of heaven. The emperor was mainly responsible for setting an example for the people to follow. He also had the power to pass laws for punishing those who had violated li.

Chapter Five

Social Security & Chinese Welfare Ideologies Before 1945 Introduction As the preceding chapters have illustrated, the Hong Kong government has had to seek alternative institutions to provide its people with welfare services because of the fiscal constraints imposed by both the Colonial Office and the colony’s British merchants. This chapter will analyse Hong Kong people’s welfare needs prior to 1945 by examining how the colonial government utilized traditional Chinese organizations to provide them with social security, then conclude with a discussion of the impact that these welfare strategies on the well-being of Hong Kong’s poor people.

Background of Hong Kong Government Welfare Strategies Before 1945 the Hong Kong government had to address various welfare needs resulting from fires and natural disasters, but found that the fiscal measures that the UK government and local businesses demanded of it had seriously weakened its capacity to do so. This section examines the factors contributing to its utilization of traditional Chinese welfare practices.

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Fiscal Constraints and Limited Welfare Capacity Chapter Two described how internal and external factors constrained the Hong Kong government’s social policies. The merchants, having been co-opted into the LegCo and the ExCo after expressing dissatisfaction with the colony’s taxation policy, firmly established their political legitimacy and exercised considerable influence on public policies (W. Chan 1991), receiving the power in 1872 to debate any matters before the LegCo (Crisswell 1981). Being concerned almost entirely with commercial affairs, the merchants showed little concern for the colony’s Chinese people. For example, they opposed Governor Hennessy’s abolition of floggings and repatriation of Chinese criminals in the late nineteenth century, arguing that these measures could effectively prevent crime (W. Chan 1991). In addition to sitting in key decision-making bodies, Hong Kong business people’s extraordinary solidarity, forged from years of commercial cooperation and informal contacts, solidified their power. Between 1936 and 1940 the colony’s major business corporations became directly and indirectly linked with each other, forming “a unitary and cohesive group structure at the top of the economic sub-system in the colony” (Tang 1973: 111). Perceiving themselves as the legitimate guardians of public revenues, they limited the government’s freedom to set taxation policy (Crisswell 1981). Chapter Two described how the UK government acted as another force restricting the Hong Kong government’s financial policies. The Colonial Office demanded that it balance its accounts, accumulate reserves, avoid borrowing, and pay a large portion of imperial military expenditures in the region. The 1901 Defence Contribution Ordinance even required it to contribute 20 percent of its gross annual revenue to support all UK military activity in the Far East (Hong Kong Government 1932; Collins 1952). These internal and external fiscal constraints severely limited the Hong Kong government’s financial activities, thereby weakening its capacity to provide public services. For example, financial difficulties forced it to suspend public works and pay only a portion of its officials’ salaries in 1848 (Eitel 1983).

The Public’s Welfare Needs During the early years of colonial administration the Hong Kong government faced many welfare demands resulting from fevers, fires, typhoons, rainstorms, and droughts. In particular, those in Hong Kong regarded fever, typhoons, and conflagrations as the “three great enemies of local prosperity” (Eitel 1983: 77). A great typhoon in 1906, for instance, caused thousands of boat people to die, capsized sampans and junks all over the harbour, tore down trees, blew broken tree branches and limbs everywhere, and destroyed all the squatter huts between the Star Ferry and Blake Pier (Campbell 2005). Hong Kong also experienced many fires in the second half of the nineteenth century, most seriously in 1867 and 1878. The 1878 fire destroyed hundreds of houses and made thousands of

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people homeless, with an estimated loss of property of HK$2 million (Bloomfield 1985). Public health was another major concern. The Chadwick Report of 1882 condemned the colony’s poor sanitary conditions and called for remedial measures. A colonial surgeon named Murray had strongly criticised the government’s health policy more than 20 years earlier in 1861, complaining that drainage and sewerage “had never received adequate attention, nor been carried out on any comprehensive plan” (Cameron 1991: 96). The services available from the government’s Civil Hospital were also inadequate, as it had no wards for infectious disease and no provisions for Chinese patients (Cameron 1991). The underlying cause of Hong Kong’s public health problems at the end of the nineteenth century was the Colonial Office’s refusal to finance another hospital for civilians and the merchants’ opposition to the 1887 Public Health Ordinance, which had the intent of improving tenants’ living conditions. Both Chinese and European property owners feared that better living standards would increase their costs and consequently decrease their profits. Some criticised their actions as absolutely “short-sighted and selfish” (Endacott and Hinton 1962: 162). A senior official named Eitel who had been appointed to investigate the government’s caring for the destitute reported in 1880 that the state provided “neither poor-house nor dispensary nor hospital, nor even lunatic asylum to the Chinese destitute” (Government Gazette 1880: 467). The European community even rejected the idea of assistance for poor Chinese people, setting up a fund in 1846 that offered support for destitute foreigners but not for ethnic Chinese (Eitel 1983). The Hong Kong government had therefore obviously done little to address overcrowding or to improve poor sanitary conditions. As Endacott and Hinton (1962: 173) pointed out, “for the first forty years of the colony’s history the government, while to some extent looking after the health of its own officials, showed little active concern about the general health of the colony.” Despite experiencing numerous social problems, Hong Kong’s people found it difficult to rely on the traditional Chinese primary-welfare networks described in Chapter Four because most of its people were separated from their extended families. Before 1945 Hong Kong’s economy was dominated by entrepôt trade, with only 10 percent of the total value of its exports coming from locally manufactured goods (Chiu 1973). Goods from other countries came to Hong Kong, from where they were then transported to other parts of China or exported to other Asian or European countries. The 1956 Hong Kong annual report stated that: Economically, Hong Kong was at that time the entrepôt for the great market of China. Goods arrived in bulk from all over the world and were unloaded into the warehouses of Hong Kong, where they were broken down into small parcels and these were conveyed by traders into all parts of China. Freedom of movement for these agents, buyers, or internal traders was essential if Hong Kong was to fulfil and promote its economic role, and to obtain return for its re-exports (it had no natural products and few manufactures to sell abroad) the

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Both the Chinese and Hong Kong governments allowed labor to have freedom of movement (Hong Kong Government 1957), and Hong Kong’s entrepôt trade and public works attracted many laborers from China (Smith 1971). Much of Hong Kong’s population was therefore composed of transient migrant workers who had left their families in China. More than 60 percent of the population was aged fifteen to fifty between 1881 and 1901 (Lo 1992), and the gender balance was notably skewed. Table 5.1 details this phenomenon from 1853 to 1931. Table 5.1 Hong Kong Population and Male-to-Female Ratios _______________________________________________ Year Population Male-to-Female (in thousands) Ratio _______________________________________________ 1853 1861 1871 1881 1891 1901 1911 1921

39.0 119.3 124.2 160.4 217.9 369.0 456.7 625.2

3.638:1 2.808:1 2.503:1 2.414:1 2.467:1 2.652:1 1.844:1 1.579:1

Source: Ng (1984). The gender ratio from 1853 to 1901 was more than 2.4:1 male, and it was not until 1911 that it declined to under 2:1. Although the colony’s population rose from 39,017 in 1853 to 125,500 in 1865, the imbalance in both gender and age remained unchanged. These population characteristics were indicative of “the relative paucity of families in the colony. Nearly two-thirds of Chinese residents were adult males who had left their families behind in their home villages” (Tsai 1993: 47; see also Lethbridge 1978; Sinn 1989). Since the family was China’s traditional basic caring unit and the migrant workers tended to have no family or an incomplete family in the colony, the Hong Kong government became the last resort for social welfare needs more often than it would have preferred. In addressing the problem of destitution, for example, when he was the head of the Education Department Eitel argued that it was desirable to leave doing so to private charity and voluntary efforts, and that the government’s role was to provide supplementary aid to charitable activities (Hong Kong Government Gazette 1880). In order to reduce the pressure to provide welfare assistance and to ensure that a sufficient amount of it was available for reproducing the workforce, the colonial regime had to seek alternative means to meet these ends.

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Indirect Rule and Hong Kong’s Welfare Strategies The UK government’s principle of indirect rule facilitated the Hong Kong government’s welfare strategies for its Chinese subjects. After occupying Hong Kong on 26 January 1841, Captain Charles Elliot, the colony’s first British administrator, announced that natives of China would be governed according to the laws and customs of China, every description of torture excepted. A further decree on 2 February 1841 granted the Chinese free exercise of their religious rites, ceremonies, and social customs, and the enjoyment of their lawful private property and interests (Norton-Kyshe 1971). Lord Stanley, the Secretary of State for War and the Colonies, wrote to Hong Kong’s first governor to stress that the British should avoid forcing institutions on the Chinese that were unsuited to them (Stanley, 1843). The principle of indirect rule was even incorporated into the Hong Kong Charter (1843), which stated that “the Laws and Customs of China should supersede the Laws and Customs of England.” Almost all British bureaucrats followed this principle closely right from the onset of colonial rule. The chief magistrate, for example, sentenced a robber to receive sixty strokes with a bamboo stick, a traditional type of Chinese punishment, in 1842. Governor Davis issued an ordinance in 1844 to appoint Chinese peace officers with the same authority and power as the regular police. The government then issued an ordinance based on the Chinese principle of mutual security in 1847 making householders responsible for the good behaviour of residents under their roofs (Norton-Kysh 1971). Eleven years later the government established the office of Registrar General, which had the additional title of Protector of the Chinese, to facilitate communication between colonial bureaucrats and Chinese residents. After taking over the New Territories, the government continued to adopt the principle of indirect rule by following the Chinese customary methods of administration to maintain order and collect Crown revenue. It later issued the Ordinance for the Better Regulation of the New Territories, which exempted those measures considered inappropriate in the New Territories, in 1899 (Hong Kong Legislative Council 1899). The colonial administration, therefore, clearly respected and preserved Chinese customs in order to maintain a secure and stable society. Indirect rule was especially important in the early days of colonial rule, when differences in social habits and language created difficulties for its administration. For example, the Hong Kong government’s attempts to suppress crimes were hindered by: the untrustworthiness and inactivity of native constables, by the dissolute character of European sailors or soldiers enlisted in the local Police Force, who were ignorant of the native language and consequently dependent on truculent native interpreters, by the coastlines of importing trained British constables, and finally by the inherent inapplicability to Asiatic of British laws and British modes of punishment. (Eitel 1983: 237)

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British administrators clearly needed an effective channel to communicate with Hong Kong’s Chinese people. Due to the lack of a traditional gentry, the colony’s Chinese merchants became the Chinese community’s prominent figures. Hong Kong’s Governor Kennedy invited them to attend social gatherings at the Governor’s House in the 1870s and also encouraged them to bring public grievances to him (Eitel 1983). More importantly, as noted in earlier chapters, the colonial regime co-opted them to join their European counterparts in both the ExCo and the LegCo. They offered great assistance to the colonial regime in guiding and directing the mass of the population (Mills and Mills 1970). As mediators linking colonial officials with the Chinese people, the Chinese merchants engaged in both social welfare and political control activities. The colonial government’s strategy played “a prominent role in maintaining peace and order in the Chinese sector, and without imposing serious financial and administrative strain on the colonial governmental apparatus” (Lau 1980: 6). This means that the government’s utilization of Chinese welfare organizations helped both to achieve political control and to provide welfare services.

The Utilization of Large-Scale Voluntary Associations As noted earlier, during the early days of colonial rule Hong Kong’s Chinese population was mainly composed of migrant workers with either no family in the colony or an incomplete one. Such family situations weakened their primary welfare networks and exposed them to various types of risk. In this environment such secondary welfare networks as the geographical, occupational, and functional linkages described in Chapter Four replaced the family, performing extremely important mutual-help functions. The following sections analyse how the colonial government manipulated the three key charitable organizations of the District Watch Force, the Tung Wah, and the Po Leung Kuk into providing welfare services.

The District Watch Crime was a major problem during the early years of colonial rule, posing a serious threat to public safety. According to Eitel (1983), highway robberies and burglaries happened almost daily, no one went out at night, and no house was safe without armed watchmen. The Bombay Gentleman’s Gazette described many early settlers as having poor character, and the Europeans had to sleep with pistols under their pillows for security (Norton-Kyshe 1971). The police force, however, was insufficiently strong and had a poor reputation. Lacking confidence in public security, some rich people employed guards to protect their families and properties. The colony’s Chinese merchants estab-

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lished their own kaifong associations in order to fight crime and address their other common concerns. They petitioned the government in 1866 for permission to form a Chinese watchmen force. With limited finance for improving public security, the colonial government was happy to support this proposal and issued an ordinance the same year allowing the establishment of the District Watchmen, usually called the District Watch Force (Hamilton 2008). Some colonial officials, however, were suspicious of the District Watch Force’s activities, fearing that the existence of an informal Chinese police force posed a threat to colonial rule. The government consequently established a committee to investigate its activities. Despite their contributions to the Chinese population’s security and welfare, the government issued an ordinance in 1888 putting every watchman under the control of the registrar general (Lethbridge, 1978). In 1891 Registrar General Steward formed a Committee of Management to supervise the District Watch Force. The ordinance both legitimised its status and made it accountable to the colonial administration rather than to the Chinese community. The District Watch Force had effectively become a quasi-official body closely monitored by the colonial government. Its committee members were prominent local Chinese people who rendered invaluable assistance to the management of the force and also advised the registrar general about important questions relating to the Chinese community (Secretariat for Home Affairs 1970). This strategy was obviously an extension of the colonial government’s co-optive politics. More importantly, the Chinese leaders had helped the colonial government to manipulate the Chinese community’s resources to serve its purposes. The District Watch Force performed such tasks as acting as census enumerators, providing guides for census officials, tracing runaway girls for the Po Leung Kuk, intercepting young girls brought into the colony for prostitution, and engaging in detective work in the Chinese quarters (Lethbridge 1978). The public also accepted members of the force as arbiters in disputes (Secretariat for Home Affairs 1970). Since the official police force was at first small and corrupt, the District Watch Force played a key role in maintaining social order.

The Po Leung Kuk The Po Leung Kuk, also called the Society for the Protection of Women and Girls, was founded in 1878 by some influential Chinese people in order to suppress the smuggling of women and children from China into Hong Kong and from there to other countries. It employed detectives to conduct enquiries and research in regard to its mission in places not open to the public. These activities aroused the suspicions of many of Hong Kong’s British, including a leading merchant named Whitehead, who accused the Po Leung Kuk of exercising “semi-judicial functions” (Lethbridge 1978: 86). In order to address this concern the Hong Kong government set up another special committee to investigate the situation. The committee’s report to Hong

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Kong’s governor in 1893 recognised the contributions of the Po Leung Kuk’s elite, who “acted with perfect bona fides but had taken the steps which were best calculated to secure the protection of the liberties and welfare of those concerned” (Lethbridge 1978: 89). The colonial government issued an ordinance based on the special committee’s recommendations in that year institutionalising the Po Leung Kuk’s activities. The ordinance stated that its purpose was “assisting the government in the suppression of kidnapping and the protection of women and children,” and established a permanent board of directors with “full power and authority to govern, direct, and decide all matters whatsoever connected with the administration of the affairs of the Society” (Lethbridge 1978: 89). The ordinance defined the board’s membership to include the Secretary for Chinese Affairs1 (SCA) as its president and the Chinese members of the ExCo and LegCo as its vicepresidents. The governor appointed all the other members of the board (Lethbridge 1978). This legislation obviously allowed the Hong Kong government to supervise the Po Leung Kuk closely as a semi-official department responsible for the welfare of children and women. Its work was remarkable. It reunited 2,421 men and women with their relatives, and arranged marriages for 218 women and adoptions for forty-six children from 1888 to 1892. As Wai-kwan Chan (1991: 128) stressed, however, “the Po Leung Kuk took the tasks that should be undertaken by the government.” The Hong Kong government’s ordinance had clearly guided the Po Leung Kuk into being a welfare agency instead of a political organization.

The Tung Wah Group of Hospitals The Tung Wah Group of Hospitals, called just Tung Wah by Hong Kong’s Chinese people, was Hong Kong’s biggest charitable institution (Tung Wah Board of Directors 1961). Although a hospital group by name, its functions were “never purely medical” (Lethbridge 1978: 62). A member of a commission that studied its work late in the nineteenth century reported that it was both a charitable organization and a hospital, that its services were admirable, and that “it has provided an asylum for the destitute, a refuge for the dying, and burial for the dead” (Tung Wah Hospital Commission 1896: xv). The Tung Wah was established in 1870 “chiefly for the relief of poor and helpless sick Chinese” (Board of Directors 1970: 11). It was “the one institution in nineteenth-century Hong Kong providing the most comprehensive and valuable welfare service” (Sinn 1989: 98). This section analyses how Hong Kong’s colonial government manipulated these welfare services.

The Establishment of the Tung Wah The Hong Kong government’s determination to avoid involvement in public welfare had reinforced the spirit of mutual help among the colony’s Chinese people. The formation of the Tung Wah was related to the I-Tsz incident. The ITsz, also known as Kwong Fuk Yee Che, was a traditional Chinese temple used

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as an asylum to accommodate the terminally ill and as a repository for ancestral tablets (Tung Wah Board of Directors 1961). A group of Chinese merchants had established it in 1851 because Chinese people in the colony needed a temple to receive their ancestral tablets (Tung Wah Hospital Commission 1896: v). Since the colony provided no assistance for the needy, the I-Tsz soon became a temporary shelter for refugees, the unemployed, the sick, and the destitute. Its conditions were extremely dirty and squalid and it had no medical provisions for caring for sick people. The acting Registrar General, Alfred Lister, reported in 1869 that: I visited this native hospital [I-Tsz] and found a picture of neglect and misery which I shall not soon forget. At my first visit there were, dead and alive, about nine or ten patients in the so-called hospital. One, apparently dying from emaciation and diarrhoea, was barricaded into a place just large enough to hold the board on which he lay, and not high enough to stand up in. Another room contained a boarding on which lay two poor creatures half-dead, and one corpse, while the floor, which was of earth, was covered with pools of urine. The next room contained what the attendants asserted to be two corpses, but on examination one of them was found to be alive, a fact which the coolie who discovered it greeted with an oath, and other rooms contained miserable and emaciated creatures, unable to speak or move, whose rags had apparently never been changed since their admission, and whom the necessities of nature had reduced to an inexpressibly sickening condition. (Tung Wah Hospital Commission 1896: v-vi)

Register General Stewart, who had a reputation for being familiar with Chinese customs, exclaimed, “It is impossible for me to convey in words the impression made on me by a picture of filth, misery, and neglect which I did not expect to find even in China” (Tung Wah Hospital Commission 1896: vi). This incident, however, revealed only one of the colony’s undesirable social conditions. Several poorly conditioned houses for dying people existed in different parts of the colony with health and sanitary conditions no better than those of I-Tsz (Hong Kong Administrative Report 1882). After I-Tsz’s infamy became public the Hong Kong community, including its European community, demanded that the government improve the conditions. The National Association for the Promotion of Social Science in London condemned the so-called coolie trade as being at the root of this incident. The UK government also asked the Hong Kong government to submit a report on this problem (Sinn 1989). The government’s first response was simply to close I-Tsz immediately. This, of course, failed to address the underlying cause of the problem, which was the needs of poor and sick migrant workers, so corpses and dying people consequently began to appear on the streets. The colonial government then began to investigate the Chinese community’s needs in order to protect the colony’s image (Sinn 1989). Lacking adequate resources, the Hong Kong government had attempted to mobilise Chinese merchants to make contributions to health care. Before the ITsz incident it had noted how resourceful the members of the Chinese elite were

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and expressed surprise at their expenditure on “puerile national processions and ‘shows’ every year” (Tung Wah Hospital Commission 1896: v). Hong Kong’s Governor MacDonnell informed the Secretary of State of his solution to the problems that the I-Tsz incident had disclosed by writing, “It has been my objective to enlist active Chinese sympathy in the erection and future maintenance of the proposed hospital…It is politic, when possible, to place the Chinese in a position where they find themselves heartily co-operating with the local government” (Tung Wah Hospital Commission, 1896: xxii). Encouraged by the colonial government, prominent Chinese figures formed a hospital committee to build a new hospital. The government’s utilization of the Chinese elite’s resources was more successful than expected, as their subscriptions reached HK$47,000 in only eight months. The Tung Wah was finally established in 1870 according to an ordinance defining it as a corporation with legal status. According to the Daily Press, by creating the Tung Wah Ordinance, Governor MacDonnell “had been most particular in not interfering with the Chinese arrangement of the details but great power of supervision was reserved to the government” (quoted in Tung Wah Board of Directors 1961: 19). The Tung Wah was a cross-dialects-geography-guilds organization. Its board of directors included representatives of all the influential guilds, including Nampak-hong, Rice, Piecegoods, Opium, and California Trade Businesses. The annual election to the board of representatives from different guilds legitimised its leadership role in the Chinese community. Since some of its committee members were representatives of the colony’s Chinese Chamber of Commerce, it became a joint council, drawing upon the resources of small social-welfare organizations to provide for the welfare of Chinese people and also to protect the interests of Chinese merchants (Sinn 1989). With the creation of the Tung Wah Hospital, therefore, the Hong Kong colonial government began its long-term utilization of the Chinese community’s resources.

The Institutionalization of the Tung Wah The Chinese and British concepts of social organization were completely different. Before the establishment of the Tung Wah, the Man-moo Temple Committee, composed mainly the merchants of the Nampak-hong, was the most significant long-established organization in the colony. The Chinese community regarded its leaders as community officials and granted them power to act as judges or arbiters. As this type of activity had obviously challenged the Hong Kong government’s judicial power, some accused these Chinese leaders of forming “a sort of unrecognised and unofficial local-government board [and having] secretly controlled native affairs” (Eitel 1983: 282). Because the Nampak-hong was one of the important guilds involved in the founding of the Tung Wah, and since its merchants were also directors of the Tung Wah, the Chinese community tended to treat the Tung Wah as another Man-moo Temple. Both the general public and the Tung Wah’s leaders regarded those leaders as judges and arbiters, and members of the public submitted disputes to the Tung Wah Committee for judgement daily. Some of these cases in-

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volved Chinese social practices. For example, “men whose wives had deserted them or had committed adultery, and masters whose apprentices had run away, would go to the Hospital Committee for justice. Often, when mui tsai (meizai), that is, girls sold as maid servants, had deserted, or were decoyed and taken away, the owners would seek help from the Hospital rather than the police” (Sinn 1989: 96). Although the Tung Wah Committee’s arbitrative role enhanced its social status in the colony’s Chinese community, it aroused suspicions among government officials and within the European community. In a letter to the Secretary of State, Kimberley Marsh accused the Tung Wah of violating its original purposes, reporting that: There seems to be little doubt that for some time past the Hospital Committee have not limited themselves to these [charitable] purposes. They appear to have been recognised by the Chinese as a kind of tribunal to which petitions for redress of grievances should be addressed and in fact to have exercised the duties, of which the Registrar General was relieved, of Protector of Chinese. Public sittings were held occasionally and summonses to witnesses to appear were obeyed as if issued by a regular court of justice. (quoted in Sinn 1989: 127)

The British apparently feared that the committee’s power would increase to the point that it could challenge their own, especially in the early days of the colony when the communities distrusted each other. The close relationship between the Tung Wah’s leaders and the Chinese government further intensified these worries. Since the Tung Wah was the colony’s biggest organization, it acted as a center for collecting overseas funds and organising fund raising activities for helping Chinese people in China during such natural disasters as drought or flooding. Many Tung Wah directors, moreover, bought official titles from the Chinese government in order to promote their businesses or to protect their relatives and property in China. Although these official titles brought no substantial power, they enhanced the directors’ status in the eyes of the Chinese residents (Sinn 1989). The directors also performed ceremonies similar to those conducted by Chinese officials. For example: Since the founding of the Tung Wah Hospital, the members of its board of directors have begun to hold an annual gathering to celebrate the lunar new year. For the occasion they had donned all sorts of fine headgear and gowns, as if they were illustrious officials acting an audience with the emperor. (Tsai 1993: 69-70)

Tung Wah’s directors were satisfied with achieving the status of their official titles. The Chinese authorities, however, regarded them as protectors of Chinese interests in the colony. For example, in response to anti-Chinese riots in San Francisco, Zhang Zhidong, the governor-general of Guangdong and Guangxi, telegraphed instructions to the Tung Wah Hospital’s authorities to help prevent trouble in Hong Kong. Zhang obviously considered the Tung Wah Hospital Committee to have a position equal to that of local elite groups in China and

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recognised them as having semi-official authority over the local population (Sinn 1989). Because there were a series of conflicts between the Chinese and British governments during the early period of colonial rule, the Tung Wah’s political role had therefore threatened the colonial government’s authority. A plague epidemic further heightened the colonial regime’s unease about the Tung Wah’s welfare measures. Plague broke out in 1894 and the Sanitary Board introduced the two precautions of a house-to-house search for infected persons and the quarantining of plague patients on a hospital ship called the Hygeia. These measures encountered resistance from many Chinese patients who refused to be taken to the Hygeia because they had little confidence in Western medicine. They preferred instead to return to Guangdong for treatment rather than wait for the British government to violate their rights (Pryor 1975). The superintendent of the Civil Hospital, a Dr. Lawson, accused the Tung Wah Hospital authorities of obstructing the removal of patients and of encouraging them to go to Guangdong. The Western medical professionals in the colony, furthermore, were dissatisfied with the Chinese treatment methods. After visiting the Tung Wah Hospital, Lawson strongly condemned its medical measures, saying, “I cannot denounce this hot-bed of medical and sanitary vice in sufficiently strong terms. I venture to say that if the question of allowing this to remain was to be submitted to the Public Health Authorities at home they would order its immediate abolition” (quoted in Sinn 1989: 185). Another British medical officer also criticised the Tung Wah Hospital’s sanitary conditions, complaining that: The verandas are used unfortunately for the storage of lumber, rubbish, woodwork, baskets, clothing. The premises occupied by the patients are in such condition as to cause a nuisance. They are not in a wholesome condition. . . . The rooms in the Ko Fong wards, in my opinion, are unfit for human habitation in their present condition. . . . The whole thing, to my mind, is a question of management. (Tung Wah Hospital Commission 1896: xxvi)

The acting Colonial Surgeon, Dr. Atkinson, also reported that the Tung Wah was grossly mismanaged and dirty. Due to these criticisms and the uneasiness about its political activities, the Hong Kong government decided to tighten its control over the Tung Wah, and Governor Robinson appointed a commission in 1896 to investigate it (Sinn 1989). The commission’s recommendations reflected both the Hong Kong government’s desire for political control over the Tung Wah and its welfare expectations of it. It reported that: it would be of advantage to the Hospital, would facilitate its relations with the government and the public, and would secure continuity and uniformity in its arrangements, if there were associated with the annually elected Committee some Chinese residents of long standing who have had experience of the Hospital and whose advice would be respected by, and whose views would carry weight with, the Chinese community. (Tung Wah Hospital Commission 1896: xiii)

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The government therefore established the Tung Wah Advisory Committee with the Registrar General as its chairman. This arrangement implied that the Tung Wah would be under the guidance of government officials rather than the elected representatives of the Chinese business guilds. The appointment of government officials to the Tung Wah Advisory Committee greatly weakened the Chinese elite‘s responsibilities to the Chinese people, and more importantly diverted their loyalty from business organizations to the colonial administration. The investigation report and subsequent actions, therefore, did not have the objective of abolishing the Tung Wah but of guiding its activities to meet the colonial regime’s expectations. As a Colonial Surgeon claimed, the consequences of abolishing Tung Wah would have included “a more rapid mortality among the Chinese, and we would have much more trouble in verifying cases of infectious disease” (Tung Wah Hospital Commission 1896: x). Without the Tung Wah providing essential welfare services the colonial government would have had to do so, and pay for them (Sinn 1989). The commission noted that “the [Tung Wah] Hospital has done excellent work in the past. . . . It will be able in the future to continue its work with still greater efficiency and with increased benefits to the indigent suffering Chinese for whose welfare the Hospital was established” (Tung Wah Hospital Commission 1896: xiii). Viewed cynically, the process’s principal message was that the colonial regime would not tolerate the expansion of the Tung Wah’s political influence. Its dilemma was “how to exploit the Hospital's ability to maintain social order without abdicating its own administrative powers” (Sinn 1989: 133). The establishment of the Tung Wah Advisory Committee greatly reduced the Chinese leaders’ autonomy in regard to running Hong Kong’s largest charitable organization and re-created it as a quasi-governmental department providing social welfare for the Chinese community.

The Tung Wah’s Social Security Services As the colony’s largest charitable organization, the Tung Wah provided a wide range of social services for its Chinese people. It offered emergency services for victims of such major disasters as typhoons and fires. When a fire broke out in Western District in April 1934, for example, the Tung Wah provided temporary shelter for 194 victims. Its board of directors also took responsibility for determining the total number of victims and requested financial assistance from the government on the victims’ behalf. Later, “pending the government's allocation of relief funds, the Hospital advanced a sum of money and granted $6 to each of them” (Tung Wah Board of Directors 1970:185). Through this role of applying for government assistance and distributing it to victims, the Tung Wah served the government as a social-welfare agent. The government, furthermore, recognised the Tung Wah as an informal social welfare department for the Chinese people and referred many kinds of cases to it. Civil Hospital, the Secretariat for Chinese Affairs, and the police, for example, referred many cases to the Tung Wah’s shelter (Tung Wah Board of Directors 1970). Since the SCA was also the chairman of the Tung Wah Board of

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Directors, he was able to direct the Tung Wah to provide social services, thereby reducing the colonial government’s welfare obligations. For example, he referred a widow who was unable to support herself following the death of her husband to it (Tung Wah Record 25 February 1917-13 December 1919: No.00211). He also urged it to carry out relief work after a severe typhoon in 1905. In addition to providing financial assistance, the Tung Wah helped the victims to rebuild their boats (Tung Wah Board of Directors 1970). Since one of the SCA’s main duties was to select appropriate members from the advisory committees to be representatives in the government’s key decisionmaking bodies, the colony’s Chinese elite were keen to establish a good relationship with him. It seemed that by responding positively to the secretary’s requests the Chinese merchants were, to some extent, investing in obtaining higher social status in the future. The Tung Wah also provided shelter and burial services, constructing a shelter in 1910 with a capacity of 100 that provided refugees fleeing into the colony from China with food and a place to sleep. When more than 15,000 refugees arrived in Hong Kong in 1932 as a result of the Japanese invasion of China, for example, the Tung Wah housed many of them in the shelter and its affiliated temples. When the worst typhoon ever hit Hong Kong in September 1937 it organized emergency relief by providing food and temporary shelter for 144 victims (Chan 1996). The Tung Wah burial service, furthermore, was culturally important to the colony’s Chinese people. Many migrant laborers left their families in China to work in Hong Kong between the 1840s and the 1890s. Those who died in the colony had no relatives to bury them. As a Registrar General named Lockhart noted, “for the Chinese the dead are almost of greater moment than the living” (quoted in Sinn, 1989: 64), so the Tung Wah offered free coffins and burial services in such cases (Chan 1996). The Tung Wah also played a significant role in repatriation and refugee work. In 1961 its directors claimed that the “repatriation of refugees has always been one of Tung Wah's regular services” (Tung Wah Board of Directors 1961: 35). As noted earlier, Hong Kong’s economy had centered on entrepôt trade from the start of British rule. This required a large number of coolies to move goods from place to place. Although these laborers were able to reside in housing within the colony, the assumption was always that they were, politically and economically, a temporary workforce. Even those who had worked in the colony for many years were denied citizenship and those in authority treated them as transients. Their repatriation to China also allowed Hong Kong’s merchants to recruit fresh labor with higher productivity. China itself had became a hinterland, a source of labor for the colony and a dumping ground for the sick, the disabled, and the aged. To summarise, Hong Kong’s colonial regime used ordinances to define the three key Chinese charitable organizations’ scope of activities. By appointing committee members to these organizations it made the Chinese community’s

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leaders responsible to colonial officials rather than to the Chinese people, thereby allowing it to monitor these organizations’ activities closely, to suppress any anti-colonial activities, and to divert the Chinese community’s resources to the provision of welfare services. This strategy of institutionalized indirect rule reconstructed traditional Chinese organizations into semi-governmental welfare agencies. As Mills and Mills (1942: 406) pointed out, “a large number of charitable enterprises are conducted by the well-to-do Chinese, and are of material assistance to a government which is never over-burdened with funds.”

The Government’s Welfare Strategies’ Impact The previous section described how the colonial government’s utilization of Chinese welfare ideologies directly affected the social and political status of Hong Kong’s rich Chinese people. Their welfare contributions provided them with access to the colony’s key political bodies, in which they could pursue their own interests. This section examines the colony’s welfare politics and the government’s welfare strategies’ impact on the well-being of the poor.

Welfare Politics The basis of Hong Kong’s welfare politics was the government’s creation of the advisory committees for the District Watch Force in 1891, the Po Leung Kuk in 1893, and the Tung Wah Hospital in 1896. In legislating itself full power over the appointment of these committees’ members, the government had deliberately created a hierarchical participation model in which the District Watch Force became the colony’s most prestigious and influential Chinese organization, almost a Chinese ExCo, followed by the Tung Wah, which resembled the LegCo, and the Po Leung Kuk, which was analogous to the Sanitary Board (Mills and Mills 1970). The government co-opted the District Watch Force’s committee members from influential members of the Chinese community, most of whom had previously served on the Tung Wah and the Po Leung Kuk advisory boards. After serving with these welfare organizations these members of the Chinese elite would receive government invitations to take such more powerful political positions as being justices of the peace and members of the Sanitary Board and, finally, of the LegCo and ExCo. According to Lethbridge (1978), at one time all but two of the Chinese members of the LegCo had previously been members of these advisory committees. This political strategy served as an important device for the validation of wealthy Chinese people’s social status in the colony. By linking the traditional Chinese community organizations with the political system the colonial government brought the Chinese community’s leaders into its orbit. This resulted in the channel of communication between the government and influential Chinese

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community leaders becoming “official, organized, and institutionalized, to the mutual benefit of both groups” (Lethbridge 1978: 4). The Chinese elite considered their generosity in these organizations to be “a form of investment with which further class advantages could be reaped” (W. Chan 1991: 99). This strategy had aligned the interests of the European administrators and businesses more closely with those of the Chinese businessmen. Before the Second World War, therefore, Hong Kong was ruled by an oligarchical political structure in which “a small number of entrenched and established Chinese shared political control over a largely immigrant and migratory population together with a small number of officials and taipans” (Lethbridge 1978: 117118).

Repatriation and Cheap Labor The members of Hong Kong’s underclass were politically stateless and could be repatriated to China. One of the Tung Wah’s key functions was to send homeless unemployed people back to their home towns, and it also repatriated sick workers (W. Chan 1991; Tung Wah Hospital Commission 1896). The entrepôt nature of Hong Kong’s economy made a young workforce desirable for employers, making the repatriation of older ones important. Governor Des Voeux stressed in 1889 that a key factor contributing to Hong Kong’s prosperity was the practically unlimited availability of cheap labor from China (Endacott 1964a). The Chinese workers’ expectations of the colonial regime remained low as long as their status was officially temporary. The government’s repatriation policy and oppressive measures2 towards offenders made Hong Kong a relatively unattractive place for migrant workers to stay for an extended time. The colony, therefore, basically transferred such social costs as those incurred by caring for the aged and for industrial victims to China. The Tung Wah, for example, sent seventy-five years old Leung Kim, who had committed a crime, to Macau, and Lam Yu, who suffered from eye disease, to his place of origin (Tung Wah Record 25 February 1917-13 December 1919: No. 00211). The Hong Kong government repatriated children born in the colony as well as laborers. It sent such Hong Kong-born natives as fourteen years old Hu Hung to China after he had committed an offence and another boy named Ru Chan to Shanghai after the police caught him begging (Tung Wah Record 25 February 1917-13 December 1919: No. 00211). Those Chinese workers who lived long enough almost all returned to China. Over time, however, “many remained longer and returned to China only to spend their declining years” (Eitel 1983: 125). A seventy years old man named Fung Tung, for example, who had been a coolie in Hong Kong for many years, requested that the SCA give him money to return home (Tung Wah Record 19261927: No. 00294). The 1921 census reported that 2,000 unemployed workers had had to return to China (Sessional Papers 1921). The Tung Wah’s emergency relief and repatriation efforts therefore helped to relieve the social pressures resulting from

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disconnected families and to enable the colonial merchants both to avoid compensating sick and retired workers and to recruit young ones from China.

Maintaining Traditional Welfare Relations The Hong Kong Chinese elite’s contributions to public welfare preserved the traditional Chinese ideologies in regard to welfare in the colonial setting. Tsai (1993) noted that the Chinese elite contributed to colonial rule by providing important community services at no government expense and by their espousal of Confucianism. “The elite sought to propagate Confucianism as the hegemonic ideology. Each year the Tung Wah directors performed the Spring and Autumn Sacrifices to Confucius at the Man Mo Temple. They espoused the cult of Confucius by founding Confucian schools, encouraging veneration of the sage, and acting in Confucian ways” (Tsai 1993: 76). As Chapter Four explained, Confucian ideology legitimised hierarchical political and social structures beneficial to an authoritarian government. Although the scholar class enjoyed the greatest benefits from maintaining the Confucian ideology in China, in Hong Kong the merchant elite had a similar interest in upholding Confucian teachings. The members of the colonial Chinese elite derived their social status from such sources as their wealth and economic power, political positions, connections with the colonial regime, and, most importantly, affiliation to Confucianism. The Chinese people in Hong Kong shared a common cultural background that was based primarily on Confucian ideology, which taught that those who were rich could not increase their social status simply by increasing their wealth, but could do so only by using their money for some social purpose, such as by making donations to welfare organizations. The colony’s Chinese merchants were therefore active in charitable activities, preserving the traditional welfare relationship between the social elite and those less fortunate. The Tung Wah’s regulations and its directors’ actions further promoted traditional Chinese welfare values. Its general rules stated that: medical treatment will be afforded to the helpless free of charge, but medical expenses will be recovered from employees who have friends to support them. . . . Any patients who may be introduced by any substantial firms, whether employees or businessmen, must either be their friends or relatives, and generally have their assistance through friendship. These patients should not be ranked with the helpless poor. (Tung Wah Board of Directors 1970: 11)

The responsibility for social welfare in Chinese society was traditionally based on human relationships. In a colony with a population of mostly transient workers these responsibilities devolved to relatives, friends, or employers. This forced the working class to solve their problems using horizontally collective means. Welfare needs were also limited to being family or a group problems. The Tung Wah’s rules strengthened the social support based on family or geographical relationships that extended the graded welfare duty into the colony. The Hong

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Kong Chinese elite’s means of providing welfare therefore strengthened the traditional mode of welfare relationships.

The Preservation of Child Labor The existence of the mui tsai system and child labor helped to balance the colony’s welfare pressures and to maintain a stable society. A mui tsai was a girl who performed domestic work for no wage. When such girls reached a marriageable age their employers usually tried to arrange marriages for them. A chairman of Po Leung Kuk named Tam described the harsh conditions to which mui tsai were subjected, noting that “taking the mui tsai among the poorer classes; they would probably not have very much to eat and would wear cast-off clothing. . . . The hours of work would be fairly long and punishment would depend on the nature of the mistress of the house. Education is bound to be neglected” (Mui Tsai Commission 1937: 181). The mui tsai system was the poor people’s last resort because the colonial government provided no housing or relief and the Tung Wah could only provide limited and temporary relief. Families with financial problems were therefore forced to sell their children for money. Some British observers severely criticised this practice and demanded its abolition. A Reverend Bray of the Methodist Mission testified that a mui tsai was “the worst treated person in the household” (Mui Tsai Commission 1937: 174). Many Chinese merchants, however, argued that the mui tsai system was important for social stability because it offered poor people a means of solving their financial difficulties and warned that if poor people were no longer able to obtain enough to survive by selling one or more of their daughters they would “become bandits or robbers” (Po Leung Board of Directors 1978: 34). Numerous interests, furthermore, sustained the system. The problem was that the system did not depend for its continued existence upon the support of the law, but on the needs of poverty-stricken parents for sustenance, the economic interests of the better-off in obtaining cheap and docile labor at minimum cost, the helpless ignorance of the mui tsai themselves, and the tolerance of Chinese public opinion for a long-established custom. (Miners 1987: 168)

The Hong Kong government made a half-hearted effort to resolve the mui tsai issue in the 1930s. The governor at the time, a man named Stubbs, objected strongly to a bill restricting the system, as the colonial government depended on the members of the Chinese elite, for whom it provided relatively cheap domestic workers, to manage the Chinese community. The nature of Hong Kong’s political system therefore put the Chinese elite in a powerful position to defend their interests. Although a Chinese community leader named Shou-son Chow asserted, “It is the opinion of the Chinese community and the Chinese people generally that the system should not be abolished” (Mui Tsai Commission 1937:

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107), acting Colonial Secretary North replied that most of Hong Kong’s Chinese people viewed it as a bad thing (Mui Tsai Commission 1937). In order to balance the UK government’s pressure and the local Chinese leaders’ opposition, the Hong Kong government did not abolish the mui tsai system, choosing instead to enact the Female Domestic Service (Amendment) Ordinance in 1929. This stipulated that people employing mui tsai could register them before May 31, 1930 and that no new registrations would be allowed after that date. There were 10,000 mui tsai in the colony in 1929, but at least 4,000 had evaded registration due to the enforcement of the registration scheme being lax (Lee and So 2006; Poon 2004). The system’s preservation reveals both the power of the Chinese capitalists to shape Hong Kong government policies and the suffering of the lower class as a result of the colony’s co-optive politics. Child labor was another social problem resulting from Hong Kong’s limited provision of welfare services, with 5,753 children aged five to thirteen working in the fishing and agricultural industries in 1931 (England and Rear 1981). A commission on child labor reported that child workers’ working hours were invariably excessive, most of them being forced to work more than seventy hours per week, including evening and night shifts. One witness before the commission testified that some girls had to work 13¾ hours per day for thirteen consecutive days before they could get a day off. This means that they worked 96¼ and 82½ hours on alternate weeks (Industrial Employment Commission 1921). More seriously, employers forced children to work in such dangerous places as docks, shipyards, and glass factories. The commission criticised the working conditions of some glass factories as thoroughly unacceptable, finding that: The sanitary conditions of these factories are unhealthy, the temperature is raised by the heat of the furnaces to an injuriously high level, the air is vitiated by gases and filled with floating particles of glass, and the physique of the workers is consequently poor. . . . From the general appearance of the boys it seemed unlikely that they would all live long enough or be healthy enough to take men’s work. (Industrial Employment Commission 1921: 124)

As with the mui tsai system, poverty was the underlying cause of Hong Kong’s child labor practices. Because poor families received little government assistance they had no choice but to send their young children into the labor market, and these children “generally [handed] over their earnings to their parents or guardians” (Industrial Employment Commission 1921: 123). Accepting the existence of child labor had become the only way for poor families to sustain themselves.

Conclusion Caring for Hong Kong’s sick and poor became urgent problems during the early period of colonial rule due to its migrant workers’ disrupted family structures and the absence of strong traditional organizations there. The colonial regime’s

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ability to provide social welfare was, however, limited by financial constraints imposed by both the local businessmen and the Colonial Office. In order to maintain social stability the Hong Kong government manipulated the social services of three Chinese organizations. It used its legislative power to create advisory committees to monitor the organizations’ activities closely. This enabled it to suppress their political activities and to encourage those involved to provide welfare services. A senior government official admitted that if the government had prevented the Tung Wah organization from providing those services it would have been forced to do so itself (Sinn 1989). The government had therefore transformed traditional Chinese charitable organizations into quasigovernmental welfare units to reduce the pressure on it to supply welfare services.

Notes 1. In 1845 the Secretariat for Chinese Affairs had been a specific office called the Registrar General. Its name changed to the Secretariat for Chinese Affairs in 1913. At first its main duty was to control the influx of criminals from China by enforcing the Registration Ordinance (SCA 1967). Together with the paouchong, an informal Chinese peace-officer system, it was a political device to check the activities of the Chinese. A Hong Kong governor named Robinson adopted a comprehensive control and communication system in the 1890s in order to improve the relationship between the government and the Chinese community. He declared that steps needed to be taken to make the Chinese “fully and correctly informed of the nature, purposes, and details of every government measure affecting their interests [and that, more importantly,] the Governor should be accurately informed of what the Chinese in any case, public or private, really wanted or needed or wished to say” (Eitel 1983: 364). This resulted in the government establishing a translation office and a cadet system. The cadet system equipped some staff members with greater proficiency in the Chinese language, thereby enabling them to become the heads of departments. The most influential step was the abolition of the paouchong system and establishing that the Registrar General should exercise the same functions in regard to the Chinese population that the Colonial Secretary performed with the European population (Eitel 1983). The disestablishment of the paouchong system meant extending the colony’s political frontier towards the Chinese community. The government had effectively modified its policy towards the Chinese slightly from indirect to more direct control. This new policy stressed the importance of state control over the Chinese community through Chinese elite organizations. 2. The Hong Kong government used severe punishments to punish crime and other deviant behaviour. As early as 1845 it issued Ordinance No. 14 to punish those “who shall beg, or expose any sore or infirmity to view, for the purpose of exciting compassion and obtaining alms” (Norton-Kyshe 1971: 31). Governor MacDonnell introduced a new measure in 1872 that released offenders and deported them to their place of origin with the provision that they not return to the colony. If they did return to the colony without cause, they would be “sufficiently marked or branded [and] once or twice publicly or privately flogged” (Hong Kong Government Gazette 1872: 153). Sir Julina Pauncefote, the colony’s Attorney General, criticised this and called the practices of branding and

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flogging illegal (Hennessy 1881). The Colonial Surgeon Report of 1880 also revealed that many old men were in the gaol and that the prisoners “principally belong to the beggar class, worn out, decrepit, or deformed” (Colonial Surgeon 1880). These repressive measures apparently treated destitution as a crime, which forced older and disabled people back to mainland China or drove them to seek assistance from family members. In this way, Hong Kong’s residual welfare system could be maintained.

Chapter Six:

Social Security & Chinese Welfare Ideologies: 1945-1967 Introduction Chapter Five described the important role that the Tung Wah played in providing social security for Hong Kong’s Chinese population prior to the Second World War. Its welfare and social control functions, however, deteriorated after the war as a result of tremendous demographic and economic pressures. In response to the declining capacity of large-scale Chinese organizations to perform their traditional functions the Hong Kong government changed its welfare strategy, targeting the welfare services of the kaifongs and the caring function of traditional Chinese families. The first part of this chapter analyses the post-war social and political challenges, followed by an examination of the Hong Kong government’s strategies for reducing its welfare expenditures.

The Blocking of Post-War Democratic Reform This section presents an explanation of how Hong Kong’s bureaucratic-capitalist state was able to maintain its dominant position after the Second World War when almost all other UK possessions were decolonising. Hong Kong’s political and economic elite used their power to block post-war political reforms in order to preserve existing laissez-faire policies, despite Hong Kong’s Governor Young announcing a constitutional reform proposal in May 1946.

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Chapter Six His Majesty's government has under consideration the means by which in Hong Kong, as elsewhere in the colonial empire, the inhabitants of the Territory can be given a fuller and more responsible share in the management of their own affairs. One possible method of achieving this end would be by handing over certain functions of internal administration, hitherto exercised by the government, to a Municipal Council constituted on a fully representative basis. The establishment of such a Council, and the transference to it of important functions of government might, it is believed, be an appropriate and acceptable means of affording to all communities in Hong Kong an opportunity of more active participation, through their responsible representative, in the administration of the Territory. (Young 1964: n.p.)

It should be stressed that a Colonel Stanley had already declared in the House of Commons in 1943 that British policy was “pledged to guide colonial people along the path to self-government within the British empire” (quoted in Endacott 1964b: 183). Apart from its international obligation under the Charter of the United Nations, the UK government genuinely wished to continue disseminating abroad the British traditions of constitutional freedom based on the Westminster model and to honour the rights of all peoples (Endacott 1964b). It had also apparently reached the conclusion in May 1946 that the general policy of self-government should be implemented in Hong Kong (Tsang 1988). In July 1947, the Secretary of State approved a revised constitutional reform plan based on Governor Young’s plan and then published three relevant bills, the Municipal Corporation Bill, the Municipal Electors’ Bill, and the Corrupt and Illegal Practices Bill, in June 1949. The plan called for a council consisting of a mayor and thirty councillors, half of whom were to represent the Chinese community and half non-Chinese groups. Twenty councillors were to be directly elected, and ten to be nominated by various public and professional bodies. The bills stipulated that the council take over all of the existing Urban Council’s duties and those of the Fire Brigade, including the management of parks, gardens, and recreation grounds, the licensing and control of places of amusement, and the licensing of vehicles. In addition, the UK government also planned to allow the council to be responsible, in the later stage of its development, for the provision of education, social welfare, and other important services. More importantly, it would even become the rating authority, acting as an agent for the colonial government to collect certain revenues. The UK government approved this constitutional proposal in principle before the arrival of Alexander Grantham, Hong Kong’s new governor (Miners 1986). If the Young Plan had been implemented it would have weakened the power of Hong Kong’s bureaucrats and capitalists, who therefore formed an alliance to preserve the traditional authoritarian government. The Working Party on Local Administration revealed in a resolution passed in 1966 that the Young Plan “was formally abandoned after fears had been voiced in the LegCo that the responsibilities of the proposed municipal body must overlap many of the functions of the colonial government” (Report of the Working Party on Local Administration 1966: 5-6).

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Actually, the unofficial members were worried that their power would be weakened because the proposed Municipal Council would take over most of the LegCo’s functions, and the rich and the educated in the colony feared that “Chinese political parties would seek to use the Municipal Council for their own ends” (Tsang 1988: 36). Furthermore, direct elections might lead to the introduction of an income tax in the future that would directly threaten the interests of the business community. After the UK government published the Municipal Bill the LegCo’s unofficial members strongly criticized it and passed a resolution that presented an alternative reform plan to it that asserted that the LegCo needed to be modified before the establishment of the Municipal Council and should also have the power to decide the new council’s structure. They proposed that the unofficial members of the future LegCo should have six more seats than the officials, which would mean that a united vote of the unofficial members could veto any policies tabled by either the Hong Kong government or the UK government (Hong Kong Hansard 1950). As Chapter Two explained, what Hong Kong’s businessmen had demanded from the early days of the colonial regime was an oligarchic system that enabled them to play the dominant role in Hong Kong’s politics, and certainly not a system governed by an elected majority. The China Association in London and the General Chamber of Commerce in Hong Kong lobbied the Colonial Office with letters and delegations immediately after the war, requesting the introduction of a local government close to the Shanghai model, since Shanghai’s municipal council devolved most of its political power to its unofficial members (Miners 1986). The LegCo’s unofficial members passed the resolution endorsing the Shanghai model after Governor Grantham asked the official members to refrain from voting on the measure to ensure that he could present it to the UK government as a reflection of the Hong Kong Chinese people’s opinion in regard to constitutional reform (Norman 1986). This resolution undermined the basis of the Young Plan by giving priority to reforming the LegCo and proposing that it then decide on any reforms (Endacott 1964b). Hong Kong’s colonial bureaucrats also lacked enthusiasm for post-war democratic reform because both the Shanghai model and the Young Plan would have greatly reduced their political power. A strong municipal council would have involved “a corresponding reduction in the establishment of the central government, a prospect which civil servants could hardly be expected to favour” (Miners 1986: 467). The government officials also feared that the colony would become a battlefield between the nationalists and the communists. Governor Grantham asserted that “to confine Chinese unofficial representation to elected members would in effect be to confine it to members of cliques or parties in China” (Miners 1986: 467). Grantham also considered the unofficial members’ reform proposal to be undesirable due to its making the LegCo’s official members a minority. Maintaining the colonial officials’ domination served the UK government’s long-term interests by preventing internal conflicts between the business community and the working class (Miners 1986).

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Such strong opposition from both the colonial bureaucrats and the capitalists made it obvious that neither wanted the constitutional reform. Before Grantham left Hong Kong for the UK to discuss the legislation the unofficial members of both the ExCo and the LegCo “approached him in a body and asked him to induce the Colonial Office to drop the whole scheme. Grantham agreed to do so” (Miners 1986: 480). Governor Grantham therefore played the central role in preventing the reforms. He based his opposition to it on the fear that it would bring disaster to the colony, and the bureaucracy based theirs on the fear that the introduction of direct and indirect elections would reduce their influence. From late 1948, therefore, LegCo’s unofficial members cooperated with Grantham in proposing a full range of changes in the proposed reforms’ direction and content (Tsang 1988). Hong Kong’s working class, however, lacked both the political power and the democratic ideology to defend or promote democratic reforms. It is essential to take the nature of traditional Chinese culture into account in order to understand the public response to the constitutional reform proposals. The Chinese had been accustomed for millennia to being ruled by authoritarian regimes characterised by elite politics. This means that an educated class had always taken care of political issues and problems, basically excluding the general public from the decision-making process (Tsang 1988). As the preceding chapters have emphasized, Hong Kong’s authoritarian regime had maintained this political culture. The combination of the Hong Kong government’s lack of enthusiasm and a lack of significant public pressure led the UK government to announce in October 1952 that it was an inappropriate time for major constitutional changes (Tsang 1988).

The Bureaucratic-Capitalist State and Fiscal Constraints After the scrapping of the democratic reform plan the colonial officials and capitalists continued to dominate Hong Kong’s politics and preserve traditional colonial fiscal principles. Rabushka (1976) found that among post-war governments Hong Kong was virtually unique in avoiding budget deficits, accumulating substantial reserves, and maintaining low taxes. He (1976: 12) explained that Hong Kong could “do this because of its colonial status, which [freed] public officials from the demands and interests of politically active citizens and candidates―demands which often stretch public expenditure beyond public means.” The British consolidated their control over Hong Kong with both its military power and by monopolizing such crucial government posts as those in the administrative officer grade and the police inspectorate, as well as some confidential assistants and personal secretaries. British expatriates, for example, held 51 percent of such directorate posts as the Chief Secretary, Financial Secretary, and the heads of government departments (Burns and Scott 1984).

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Having analyzed the backgrounds of the unofficial members of the LegCo from 1948 to 1971, Tang (1973: 173) reported that the power structure was “a unitary whole composed mainly of the economic elite holding leading positions in leading business corporations, and also closely interconnected with each other through interlocking directorships.” He pointed out further that despite being racially heterogeneous, the unofficial members of the LegCo were highly homogeneous, attaining such similar high status positions as justices of the peace and officers (OBE) and commanders (CBE) of the Most Excellent Order of the British Empire. They were also comparable in the level of their educational attainment, in their occupational pattern, and as members of government advisory committees. Tang (1973) identified three features of the composition of the LegCo’s unofficial members from 1948-1971. These were that the British were a key component, that the unofficial members were mostly merchants, and that such major UK corporations as Jardine Matheson & Co had a leading position in it. The colonial bureaucrats, moreover, co-opted newly emerging elite members into the LegCo during the process of industrialization. In this way those who dominated the ownership of the colony’s resources integrated themselves through co-optive politics. The failure of the proposed post-war constitutional reform therefore enabled the capitalists to continue shaping the government’s policies through both formal and informal channels. According to Goodstadt (1967b: 163), “The Legislative Council (unlike the House of Commons) does not need to influence the government through a process of open debate. It knows that members are just as effective in directing the administrator through the discreet discussion and the informal meeting.” The co-optive politics integrating the colony’s political and economic interests enabled both government officials and capitalists to rule Hong Kong jointly according to the free-market ideology. Scott (1984) noted that the bureaucrats had traditionally been committed to minimal government, defined largely in terms of law and order and value-for-money, and by following its traditional fiscal principles the Hong Kong government preserved the bureaucraticcapitalist state. Financial Secretary Cowperthwaite, who served in that capacity from 1961 to 1971, argued that the benefits of the free enterprise philosophy are that: in the long run, the aggregate of the decisions of individual businessmen, exercising individual judgement in a free economy, even if often mistaken, is likely to do less harm than the centralised decisions of a government; and certainly the harm is likely to be counteracted faster. . . . It has to be recognised, and it is recognised over a large part of our daily life, that the community's scarce economic resources can be efficiently allocated only by the price mechanism. (quoted in Rabushka 1976: 99)

The development of Hong Kong’s poor people’s welfare continued to be constrained by such traditional external factors as the Colonial Office’s princi-

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ples and such internal ones as the capitalists’ and bureaucrats’ economic ideology. Hong Kong achieved what progress in social welfare services that it did as a result of economic growth rather than by raising taxes (Rabushka 1976). The first social welfare white paper of 1965 made the dominance of economic policy over social policy clear by asserting that “government’s first emphasis must be on encouraging and developing those social welfare services that most directly contribute to the economic well-being of the community” (Hong Kong Government 1965: 4). Under this guiding principle, the Hong Kong government’s resources served mainly economic purposes, and it considered the social needs arising from industrialization and urbanisation to be best met by communitylevel resources. The white paper explained that: Voluntary effort is an essential element in a free community, if its citizens are to develop and maintain a sense of responsibility for the well-being of others. Such effort also serves as a means of channelling the charitable impulses of people in socially desirable directions and taps financial resources not otherwise available, thus relieving to a marked degree the burden falling upon public funds. A policy for social welfare services as now envisaged can succeed only through the combined efforts of both government and voluntary organizations―having the same goals and a mutual understanding of how best the common good can be met. (Hong Kong Government 1965: 4)

The government’s strategy in regard to the Chinese welfare organizations was apparently organised, systematic, and comprehensive. It established the Social Welfare Office in 1948 to encourage voluntary effort and to develop closer co-operation between voluntary bodies and interested government departments (Social Welfare Officer 1954). The 1965 white paper was a written statement of the government’s minimal state policy, which clearly designated voluntary organizations and families as the main welfare providers, with the government’s role being only supplementary.

Post-War Socioeconomic Pressures Before the Second World War the Hong Kong government gave precedence to traditional large-scale charitable organizations. After it the Hong Kong community experienced great changes in its size and composition due to the arrival of a large number of refugees. Increasing industrialization also brought more serious and complicated social problems.

Problems of Mass Immigration Hong Kong was devastated during the Second World War. One consequence of this was that 70 percent of its European-style residences and 20 percent of its tenements became unfit for habitation (Grantham 1965). The government also had to address the problems of poverty and unemployment. “Upon the Liberation

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of the colony in 1945, there were wounded people everywhere and hundreds of things to be rehabilitated. Many people were still unable to earn their living, as they had suffered loss of almost everything in the war except their lives” (Tung Wah Board of Directors 1971: 22). Demands for the Hong Kong government to provide welfare services increased further with the arrival of a massive number of refugees from China. By June 1954, 885,000 refugees had fled into the colony and another 500,000 arrived between 1954 and 1961, when the total number of post-war refugees reached 1,385,000 (Hu 1962). Before the war the government had repatriated such deprived groups as poor families and old and sick workers to China, but it had to discontinue this practice because most of the refugees were unwilling to return home after China’s communist revolution. The Hong Kong government, furthermore, was constrained from using its accustomed repressive measures to force the poor to leave the colony because the refugee problem had become an international issue, and the UK had accepted the obligation to protect those escaping from China’s communist rule. The Hong Kong government therefore had no choice but to use its scarce resources to help them. This rapid increase in population strained the colony’s resources further and many refugees experienced extreme hardship, with a quarter of them living “on the ragged edge of extinction, under conditions of misery” (Hu 1962: 30). The unemployment rate for the post-war immigrants was 15.1 percent, and many who did work could only earn subsistence incomes (Hambro 1955). Housing was another major social concern, as squatter slums sprang into being. The huts were constructed of such material as they could lay hands on at little or no cost―flattened sheets of tin, wooden boarding, cardboard, sacking slung on frames―every variety of two-dimensional material that was light enough to carry and cheap enough to beg or steal or buy for a few dollars. Land was scarce even for the squatters and the huts were packed like dense honeycombs or irregular warrens at different levels, with little ventilation or light and no regular access. Density was at a rate of 2,000 persons to an acre in single-storey huts. There was, of course, no sanitation and there was seldom any organised system of refuse disposal. (Hong Kong Government 1957: 13)

Facing such enormous welfare needs, the Hong Kong government had to seek additional resources in order to maintain social stability.

The Need for Social Integration The influx of refugees made the pre-war relationships between the Chinese elite and the general public through the provision of welfare become decidedly less efficient. SCA Mcdouall pointed out in 1962 that “in post-war Hong Kong, no single body such as the old District Watch Committee could, however, keep any longer in sure touch with all the major currents of public opinion” (SCA 1962: 140).

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In response to the Tung Wah and other pre-war Chinese associations’ failure to provide sufficient welfare and social control services, the Hong Kong government adjusted its welfare strategy by utilizing the welfare services of the kaifongs, through which it hoped “to keep its finger on the public pulse” (Ruscoe 1961: 212), as it needed new intermediary organizations to forge links with the colony’s ethnically and culturally Chinese population. It expected the kaifongs’ leaders to act as intermediaries between it and the Chinese people by both representing them to it and publicizing and explaining its policies to them. The kaifongs’ leaders, therefore, were to support the colonial establishment by acting as community leaders (Wong 1972a). The Social Welfare Officer (1954) also admitted that the government took the initiative of encouraging social organizations in urban areas because it feared the “real dangers of [their] utilization by triad societies or undercover political agents,” especially as Hong Kong had a reputation as a battleground between the communists and the nationalists (Social Welfare Officer 1954: 32).

The Pressures of Industrialization Despite putting great pressures on the colony, the refugees also brought essential factors of production into its economy. By October 1947 about US$50 million of Chinese wealth had taken refuge in Hong Kong and 228 Shanghai concerns had shifted their registration there (England and Rear 1981). Many businessmen and professionals, especially those escaping from Shanghai, also set up businesses in Hong Kong, and their financial resources and technical know-how helped to accelerate the process of industrialization. This resulted in Hong Kong’s traditional Chinese merchant elite coming into contact with an industrial one that was more oriented toward progress and development (Hambro 1955). Hong Kong’s rapid economic growth therefore involved an increasing number of factories and industrial workers. Table 6.1 details this dramatic industrial expansion. Hong Kong had clearly transformed itself from an entrepôt into an industrialising economy. The large number of immigrants, however, combined with the rapid industrialization to create demands for education, housing, and medical services that were dependent on public resources. If the government wanted to preserve its fiscal policy and minimal welfare system, it needed to deploy more community resources to meet these demands.

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Table 6.1 Growth in Factories and Workers, 1947-1978 ____________________________________________ Year Industrial Employees Ending Undertakings March ____________________________________________ 1947 972 51,338 1951 1,788 93,837 1957 3,290 148,135 1961 5,980 229,857 1967 10,635 431,973 1971 17,865 593,494 1977 36,273 756,320 1978 38,603 766,230 Source: England and Rear (1981).

The Hong Kong Government’s Welfare Strategies Facing tremendous pressure on its public services, the Hong Kong government continued to depend upon Chinese charitable organizations and appeals to traditional filial piety to reduce its welfare burden.

The Limitations of Using Large-Scale Organizations After the Second World War the SCA continued to use his constitutional power to encourage the influential traditional Chinese organizations to provide social services, particularly for refugees. For example, in November 1949 the Social Welfare Officer directed a group of 148 allegedly Nationalist soldiers and their refugee families to the Tung Wah for assistance (Social Welfare Officer 1954). Using co-optive politics, the government also exploited the Chinese leaders’ political ambitions by encouraging them to improve the quality of their services. When the Governor inspected the Tung Wah Hospital in October 1951 he advised its directors to draw up a long-term building programme to replace some older buildings that he considered to be unsatisfactory and wasteful (SCA 1951: 7). Being continually suspicious of the Chinese organizations’ activities, the colonial authorities tried to engage with them as a means of control and supervision. One example of this were quarterly meetings that the SCA held in 1960 with representatives from the leading Buddhist and Taoist organizations, which were interested in educational and medical projects (SCA 1961). The arrival of a large number of refugees both changed the colony’s social structure and subjected the traditional Chinese organizations to great stress. Chapter Four described how traditional Chinese communities consist of both primary welfare networks based on families and secondary welfare networks

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based on geography and occupation. The Second World War had weakened the primary networks by creating a shortage of resources and destroying many family structures, and after the war such secondary networks as the large traditional organizations like the Tung Wah required both a stable political and social environment to accumulate wealth and a flourishing solidarity between the community’s elite and the general public. These organizations obtained their finances primarily from trade and business guilds, the colony’s Chinese chambers of commerce, and families. The Cantonese remained the largest group of immigrants, but unlike the prewar migrants who came mainly from Guangdong Province, the post-war refugees included people who had fled from different parts of China, weakening the Hong Kong Chinese community’s cohesiveness. Most of the refugees other than the rich immigrants from Shanghai were too poor to support themselves. The breakdown of social networks and high unemployment in the post-war years therefore directly undermined Hong Kong’s traditional social organizations’ ability to provide welfare services. Even the Tung Wah had to approach the government in 1948 for assistance because it “did not have surplus funds to meet the requirement for the relief work, which meant free distribution of rice, meals, and other supplies” (Tung Wah Board of Directors 1970: 22). The massive number of refugees had overwhelmed it. “During the period of 1945 to 1958, it was not uncommon to find two patients sharing a bed. A maximum record showed that even five patients shared a bed, which was of course not only against the principles of medical treatment but was also absolutely inhuman” (Tung Wah Board of Directors 1970: 48). The refugee problem exposed the limits of the Tung Wah’s ability to perform its welfare functions. It was unable to provide sufficient food and shelter for the newly arrived refugees, so the Social Welfare Office had to set up a refugee camp at Rennie Hill to accommodate them. The refugee crisis had therefore forced the Tung Wah to rely on the government’s financial assistance by revealing the inadequacy of its own resources to provide what was needed (Tung Wah Board of Directors 1970).

Refugee Problems and the Utilization of the Kaifongs The SCA had helped to establish the kaifongs mainly to manage Hong Kong’s refugee crisis. The colonial regime had mistakenly assessed the post-war refugee problem as a temporary one, assuming that the refugees would return to China once the political conditions there settled. Governor Grantham (1965: 155) admitted that they had at first done little for the refugees, “since we predicted, wrongly as it turned out, that as soon as the new regime in China had settled down and things got back to normal, they would return to their native villages.” The Social Welfare Officer (1954: 32) confirmed this in his 1954 annual report, admitting that the government had assumed “that most of the colony’s residents had come here solely to make a living for themselves, to seek asylum, or to take

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advantage of Hong Kong social services. Their hearts would be with their families’ home elsewhere.” Because it considered the refugees to be a transient population the government did little to feed or house them for fear of attracting more Chinese refugees to come begging for free lodging and food. Previous experience, moreover, suggested that charitable organizations or the refugees’ relatives or friends in the colony could solve the refugees’ problems effectively (Grantham 1965). The government’s welfare strategy was therefore to reinforce these welfare networks in order to secure social stability. Thus, the SCA helped to establish the kaifongs to administer the government’s short-term refugee policy. The kaifongs were in the tradition of an ancient Chinese type of association of street residents (Ruscoe 1961). As Chapters Four and Five noted, they had operated in South China under various names for centuries and in parts of Hong Kong throughout its colonial history (Social Welfare Officer 1954). Some government officials took them to be the offspring of SCA McDonnell, but although the human factor might have been involved in their founding, they were in essence “a product of the social and political situations in the late forties, as well as a product of the Chinese cultural tradition” (Wong 1972a: 5). They extended the government’s welfare strategy from large to medium organizations in order to meet the rapidly changing society’s needs. Although organizations like the kaifongs had existed before the war, they all disappeared when the Japanese had occupied Hong Kong. The first new kaifong association, the Shamshuipo Kaifong Welfare Advancement Association, was established in October 1949 through the efforts of the staff from the Social Welfare Office, who helped to mobilise the interest of families, shopkeepers, and some prominent Chinese figures in the district. More kaifongs gradually formed under the guidance of the Social Welfare Office and the SCA (Social Welfare Officer 1954). The Social Welfare Office even published a Chinese Kaifong Bulletin, disseminating relevant news and information (Social Welfare Officer 1954). The government used the Secretariat for Chinese Affairs, the Department of Social Welfare, and the Resettlement Department to supervise them (Wong 1972a). The government’s active intervention helped the kaifong movement to develop rapidly. It estimated in 1952 that one adult in every fifteen was a kaifong member (Hong Kong Government 1952). By 1971 the colony had fifty-four kaifongs with a total membership of more than 850,000 (Wong 1971). Wong (1972a) referred to the relationship between the kaifongs and the Hong Kong government as one of guided democracy. Governor Grantham (1965: 118) stressed that the Social Welfare Officer kept an eye on the kaifongs’ social services, while the SCA had taken them “under his wing.” These two departments manipulated the kaifongs’ two main functions of welfare and social control. This extended to the kaifongs the welfare politics of encouraging the Chinese elite to make contributions to welfare services, which had begun with the Tung Wah. An interdepartmental report reinforced this by stressing the tradi-

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tional Chinese practice of rich people assisting their communities’ poorest members (Inter-Departmental Working Party on Social Security 1967). This type of political participation centred on welfare provision and diverted the energy of both the Chinese elite and the lower classes into constructive activities. It was also a means to depoliticize the Chinese community. The government only supported those voluntary organizations that shared its principles of free enterprise and self-sufficiency and that refrained from political activism (Wave 1989). The SCA and later the Social Welfare Department (SWD) adopted several strategies to utilise the kaifongs’ services. The most common one was by maintaining relationships between SCA staff and the kaifongs’ leaders. The SCA’s liaison officers contacted the kaifongs’ leaders both formally, by acting as advisors and interpreters of government policy at the kaifongs’ monthly meetings, and informally at social occasions (Wong 1972a). The kaifongs’ leaders were particularly traditional. Wong found that 67 percent of them did not read any English newspaper, 85 percent did not have English names, and only 43 percent of them had British nationality, despite most of them having lived in Hong Kong for thirty to forty years. They were proud of their attachment to traditional Chinese culture and wanted to be known as representatives of its excellence. Chinese people traditionally emphasized interpersonal relationships and the SCA’s liaison officers exploited this characteristic with their cultivating of close relationships with them when encouraging and directing them to carry out official policies. As noted earlier, the government also continued its strategy of using cooptive politics to induce Chinese community leaders to make contributions to support the kaifongs’ activities. Considering titles received for serving their community to be a desirable honour, the chance to be appointed a Justice of the Peace, or to receive a title such as an OBE or CBE was a powerful incentive for them, and the longer they served the community the greater their chance of being so honoured. Since such official recognition enhanced the kaifongs’ leaders’ prestige they were willing to cooperate with the government and follow its policies (Grantham 1965). In a colonial setting such as Hong Kong power was not necessary for leadership, but prestige was. The government exploited this to preserve the traditional paternalistic relationship between the state and the community elite in utilizing the kaifongs’ services. As with the Tung Wah, the kaifongs became a mechanism for preserving traditional hierarchical political relationships (Wong 1972a). The Hong Kong government turned the kaifongs into semi-official bodies, as it had done with the larger organizations. Since the government had facilitated their formation in order to provide services for refugees, at first it maintained contact with them through various Social Welfare Office relief-centre staff members (Social Welfare Office 1957). In the beginning their main activities involved relief work for the victims of squatter fires and natural disasters. Over time the government began to use them increasingly for community development and youth services, especially after the 1966 and 1967 riots, when it realised that

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the need to build cohesive communities was urgent (Director of Social Welfare 1968). The kaifongs accordingly followed the government’s guidance and shifted their focus to the provision of information and advice to residents and to organizing such recreational activities for young people as chess, table tennis, badminton, and basketball (SCA 1968). Since the government’s solutions to social problems depended financially on societal resources instead of public funds, it saw the kaifongs as a mechanism for sustaining the concepts of community welfare responsibility and self-reliance and for utilizing the Chinese community’s resources. For example, Tfe Yu Chuen, Chairman of the Causeway Bay District Kaifong Association, declared that self-reliance was a natural human instinct and that one of his organization’s objectives was to mobilize district resources to assist the government with welfare services (Causeway Bay District Kaifong Welfare Advancement Association 1964). The kaifongs were therefore essentially instruments for maintaining Hong Kong’s economic and political status quo in changed circumstances.

Kaifongs and Social Security The kaifongs, as did other traditional Chinese organizations, performed social, political, and cultural functions. The people regarded them as their neighbourhoods’ focal points, catering for the residents’ various needs and offering such social services as emergency relief, family arbitration, education, and public security. Table 6.2 shows the services that various influential kaifongs provided. Such services reflected their traditionalism and the public’s needs at the time. All of these kaifongs designated as influential provided charitable and relief services, and almost all of them offered free medical services. Chinese society traditionally only provided social welfare services for those who were unable to do so for themselves or who encountered such unexpected crises as floods, droughts, storms, or typhoons. The kaifongs’ work therefore consolidated this traditional welfare ideology. As death rites formed an important part of the Chinese culture, almost half of these influential kaifongs organized death gratuity schemes (Wong 1972a). Emergency relief was the kaifongs’ main contribution to the stability of post-war society. The government’s passive policy toward the refugees resulted in their conditions worsening, with many of them constructing their hovels on hillsides or any other available space. This squatter population increased from 30,000 to at least 300,000 in only two years (Murray 1960). The existence of a large number of squatters created a considerable risk of fire and disease (Hong Kong Government 1951). A much graver problem was that such disasters as typhoons and serious fires made hundreds or thousands of people homeless. Hong Kong experienced thirty-seven serious fires with 124,417 counted victims from 1949 to 1954 (Social Welfare Officer 1954).

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Table 6.2 Some Influential Kaifongs’ Social Services, 1972 ____________________________________________________ Kaifongs Charity Free Medical Interest-Free and Relief Services Loans _____________________________________________________ Aplichau Yes Yes Yes Kennedy Town Yes Yes Yes Wanchai Yes Yes Yes Tsimshatsui Yes Yes Yes Shamshuipo Yes Yes No Tai Hom Village Yes Yes Yes Wong Tai Sin Yes Yes Yes Happy Valley Yes Yes Yes Mongkok Yes Yes No Tai Hang Sai Yes Yes Yes Tai Hang Yes Yes No Causeway-Bay Yes Yes No ______________________________________________________ Kaifongs Aid to Death Gratuity Typhoon Hawkers* Scheme Shelter _____________________________________________________ Aplichau No Yes Yes Kennedy Town Yes Yes Yes Wanchai Yes Yes Yes Tsimshatsui Yes No No Shamshuipo Yes No Yes Tai Hom Village Yes No No Wong Tai Sin Yes Yes Yes Happy Valley Yes No Yes Mongkok No No No Tai Hang Sai No Yes Yes Tai Hang Yes No No Causeway-Bay No No No *people who sold foods on the streets Source: Wong (1972a).

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Table 6.3 Squatter Fires and Victims, 1948-1954 ______________________________________ Year No. of Fires No. of Victims (All Types) ______________________________________ 1948-1949 6 1,312 1949-1950 3 17,957 1950-1951 3 9,100 1951-1952 5 8,576 1952-1953 11 27,210 1953-1954 11 60,262 Source: Social Welfare Officer (1954) These disasters caused incalculable damage to property and sometimes killed many people; a fire on 21 November 1951, for example, made 10,000 people homeless (Hong Kong Government 1952). Hong Kong needed to organise relief measures on a massive scale immediately after such squatter fires and the kaifongs, located throughout the colony, performed such relief work efficiently, the local kaifongs organizing it immediately whenever a fire broke out (Social Welfare Officer 1954). A Social Welfare Officer (1956: 18) report later praised “the enthusiastic contribution of the Kaifong Welfare Associations who produced food, clothing, and cash relief for over 18,000 fire victims.” Due to their important role in emergency relief, the government came to regard them as the Social Welfare Office’s regional offices, “always ready to cooperate with the government in any emergency relief measures” (Social Welfare Officer 1956: 23). Unlike the directors of the Tung Wah, who were from the highest social class and distant from the public, the kaifongs’ leaders were in close contact with the people and could effectively mobilise local residents to do emergency work. The kaifongs also acted as intermediaries linking the public with other Chinese institutions. After collecting donations from various social organizations they would distribute the money to the needy. During the 1953 Shek Kip Mei fire, for example, the local kaifongs set up a relief committee through which they channelled and distributed to the victims all substantial cash gifts donated by other kaifongs or leading Chinese charitable organizations (Social Welfare Officer 1954). Meeting the refugees’ basic needs enabled the kaifongs to prevent welfare problems from transforming into political crises. To summarise, the Hong Kong government had originally created the kaifongs as a result of its short-term policy toward addressing the refugee problem within the colony’s traditional fiscal constraints in regard to social welfare. The government’s utilization of the kaifongs was a cost-effective strategy since it did not directly involve itself in the provision of social services. The kaifongs’ approach helped to maintain the concepts of social welfare as a community duty

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and the personalization of social problems. To some kaifong leaders crimes and delinquency were the result of “a general decline in morality. The remedy prescribed was thus a return to traditional values” (Wong 1972a: 71). They therefore launched many moral education programmes with such names as Morality Revival Campaign, Youth Morality Movement, and Promotion of Morality to promote such traditional Chinese values as filial piety and to encourage people to respect the law and maintain social order. This means that they put the blame upon individuals through the personalization of social problems and families with the familisation of social problems in the belief that deficiencies in socialization caused social problems, a value system that Chapter Four discussed in some detail. By doing this they acted as ideological control agents for the government. As medium-sized organizations they were more effective at mobilizing local resources for providing emergency relief than the large-scale organizations. Their welfare contributions prompted Governor Grantham (1965) to claim that they were the SWD’s most far-reaching achievement.

Family-centered Welfare and Self-reliance Apart from using the kaifongs, the Hong Kong government also dealt with welfare problems with the promotion of self-reliance and mutual help among family members. By defining social problems as personal and family matters it placed the primary obligation to provide welfare on families.

Family-centered Welfare Continuing to follow its established fiscal principles meant that the post-war colonial government had to seek alternative means of satisfying the public’s welfare demands. It identified traditional Chinese families, and the values associated with them, as an ideal unit to do so. Its 1965 white paper declared that: In Chinese tradition, social welfare measures which individuals may need on account of poverty, delinquency, infirmity, natural disaster, and so on are regarded as personal matters which at least in theory ought to be dealt with by the family (if necessary the “extended family”). It is clearly desirable, on social as well as economic grounds, to do everything possible in Hong Kong to support and strengthen this sense of “family” responsibility. (Hong Kong Government 1965: 6)

Such values resulted in the Director of Social Welfare (1962) condemning those engaged in prostitution for exhibiting dangerous morals despite the existence of an official document stating that prostitution in the colony was mainly the result of poverty (Social Welfare Officer 1954). This personalization of social problems provided the government with a moral basis for putting the responsibility for welfare on individual people and their families. The government, moreover, tried to extend the problem-solving network from close family mem-

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bers to more distant relatives, thereby extending the scope of family welfare networks (Lee 1970). The government, furthermore, made its intention to manipulate the resources of extended families unmistakably clear (Hong Kong Government 1965). Since the government regarded a family’s resources as a combination of its members’ individual resources, it promoted a self-reliant ethos to facilitate families’ abilities to take care of their own. The Director of Social Welfare (1962) asserted that its having the values of enterprise and independence was Hong Kong’s greatest asset. The government’s welfare strategy expected those in Hong Kong’s social work profession to consolidate its culture of self-reliance, the Director of Social Welfare (1962: 130) asserting further that “people need help to make them self-reliant and social work is a professionally demanding skill, which comes through thorough training.” As many family problems were primarily the result of poverty (Director of Social Welfare 1959), it is questionable whether using self-reliance as a casework approach could solve the practical family problems.

Self-reliance Hong Kong’s colonial regime adopted harsh relief measures to encourage and maintain the traditional Chinese self-help ethos. After the Second World War it provided free meals daily at six free feeding centres to thousands of destitute people. It then stopped providing them for those who were able-bodied, explaining that they could take care of themselves. Such people could only get help by persuading a charitable organization to supply it (Social Welfare Officer 1954). The unemployment rate, as noted earlier, was relatively high during the post-war period. In addition to maintaining its fiscal targets the government’s relief policy helped to reduce the level of wages by forcing more people into the labor market. After its implementation the number of people who made use of the free meals shrank from more than 2,000 in April 1948 to approximately 1,200 in March 1951 (Social Welfare Officer 1954). By compelling people to seek welfare from voluntary organizations, furthermore, the government defined social problems as community problems. The deterrent policy also clearly defined the criteria for assistance as “families in need because the breadwinner was temporarily incapacitated [and people with] physical or mental handicaps” (Social Welfare Officer 1954: 20). The government’s rationale for denying any assistance whatsoever to unemployed and destitute able-bodied adults was that providing it would weaken their morale and create a dependency culture (Lee 1970). The Hong Kong government, therefore, promoted such traditional Chinese welfare concepts as family reliance and the individualisation of social problems in order to manage welfare demands, continue with its low-tax policy, and maintain a minimal social security system.

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The Impact of the Government’s Welfare Strategies A Powerless Labour Force The colony’s wages had always been too low to provide workers with a decent living, and the influx of refugees formed an extensive pool of labor that proved to be essential for Hong Kong’s industrial development. Unlike pre-war workers who could return to China, the post-war laborers had “no rural safety net to catch the casualties of the industrial system” (Owen 1971: 150), as they were unlikely to return to their homeland due to economic hardship and fear of political persecution. China, furthermore, was unenthusiastic about welcoming home people who had received a taste of life under capitalism. It usually sent the groups of people it did allow back to separate cities, presumably to dilute any counterrevolutionary tendencies as much as it could (Walker 1972). Workers after the war were therefore relatively too weak to bargain over wage levels and to defend their rights. While estimating that the minimum income to make ends meet for a family of two children and two adults was HK$120 to $150 per month, Hambro (1955) found that 72.6 percent of the families of political immigrants, 58.7 percent of those of economic immigrants, 45 percent of those of pre-war immigrants, and 34 percent of those born in Hong Kong had incomes of less than HK$100. The harsh social security system had therefore forced the refugees to work for what was effectively less than a living wage.

Three Dimensions of Suppression Hong Kong’s was a society with a harsh and stigmatizing social security system and in which welfare centered on the family. Families therefore tended to have to send as many members as possible into the labor market in order to survive. One consequence of this was that the young, the aged, and women became what was called inferior laborers. They earned comparatively low wages and suffered from discrimination in the labor market due to perceptions of their low productivity. More married women worked for wages in Hong Kong than in other Asian economies. Mitchell (1972) found that approximately 30 percent of the colony’s women were both married and in paid employment, compared to 20 percent in Malaysia, 18 percent in Singapore and 15 percent in Taipei. He further found that the lower a family’s income the greater the chance that both husband and wife had to have employment, with 66 percent of male workers with monthly incomes of HK$239 or less and 24 percent of those with monthly incomes of $510 or more having an employed wife. He therefore concluded that poverty obviously forced many married women into paid employment, and that poor families in which the married women were not in paid employment tended to suffer economically. Working women therefore provided a pool of cheap labor for the Hong Kong economy. The median monthly income for men working seven-day weeks

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was HK$493 and for those working six-day weeks it was HK$397, while for women it was HK$230 for seven-day weeks and HK$148 for six-day weeks (Mitchell 1972). Chinese women’s traditionally inferior status therefore found expression in Hong Kong’s industrialized society in the form of low wages. Many children also had paid employment to help their families survive. In 1969 one-quarter of Hong Kong’s factories employed children younger than 14 years old. In the same year the Labor Department prosecuted four hundred factory owners for employing 1,387 underage children, fifty-two of whom were aged ten years or younger, paying most of them only HK$2 to $4 for working nine-to-eleven hour days (England and Rear 1981). England and Rear (1981: 224) concluded that child labor being necessary for families’ economic survival was “an indictment of the political system.” Podmore (1971) found that 30 percent of the households in Hong Kong’s resettlement estates had at least one child aged five to fourteen who was in paid employment. Since the government had classified more than a quarter of the population in resettlement estates as being composed of poorer families, most of these children had to work to help their families survive. Table 6.4 Distribution of Chinese Families in Hong Kong by Size in 1954 ____________________________________________________ Size of Family Hong Kong Pre-war Post-war Born Immigrants Immigrants ____________________________________________________ 1 5.3% 7.0% 29.8% 2 6.1% 7.5% 12.7% 3 15.7% 15.7% 15.9% 4 18.4% 18.2% 14.8% 5 to 7 39.5% 40.9% 22.0% 8+ 15.0% 10.7% 4.7% Median Size 5.05 4.77 3.31 Source: Reconstructed from Hambro (1955). Hong Kong’s system, being focused on family-based welfare provision, neglected the needs of those who lived alone. In addition to providing the colony with a cheaper labor force, post-war immigration also brought about a situation in which many single persons lived there. Table 6.4 illustrates how the percentage of one-person families was significantly higher among post-war immigrants than among pre-war immigrants and those born in Hong Kong (Hambro 1955). The government, as noted in Chapter Five, had historically considered older people in Hong Kong to be temporary workers or destitute and had therefore repatriated them to China. Since the post-war immigrants were unwilling or unable to return to their places of origin, this traditional mutual-help concept had become invalid for those whose families were still in China and who had no relatives to turn to for help (Lee 1970). The labor market had therefore become the only means for single old people to survive financially, which explains why 20.8

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percent of those older than sixty-five were still economically active in 1961 (CSD 1969). By 1966 the percentage of those older than sixty-five still in paid employment had reached 39 percent for men and 11 percent for women (Mitchell 1972). Table 6.5 shows how the monthly wages of older workers, similarly to those of women and children, were relatively low, starting to decline after age thirty-five. The average wage of men aged sixty or older was only 75 percent of that of those aged thirty to thirty-four. The situation for older women was even worse, their wages being only 41.7 percent of that of their male counterparts and 40.6 percent of women aged twenty-five to twenty-nine (Mitchell 1972). It is clear that older people who had no children, or whose children were unable to take care of them, were forced to work in their old age for relatively low wages. Table 6.5 Personal Monthly Income Levels by Age ___________________________________ Age Median Personal Income Men Women ___________________________________ 17-19 $255 $225 20-24 $325 $283 25-29 $393 $310 30-34 $403 $217 35-39 $393 $200 40-44 $392 $219 45-49 $382 $198 50-54 $340 $178 55-59 $325 $191 60 & older $302 $126 Source: Mitchell (1972).

Poverty and the Deterioration of Family Welfare Capabilities Although the Hong Kong government had adopted a family-centered, selfreliance approach to social welfare, many Hong Kong families were financially too weak to support themselves. One major factor causing this was that during the early 1950s 8 percent of Hong-Kong-born adults, 11.5 percent of pre-war immigrants, and 15.1 percent of post-war immigrants were unemployed (Hambro 1955). Poverty continued to be a serious problem in Hong Kong throughout the 1950s. In 1960 approximately 500,000 people lived in the squatter settlements and a similar number resided in crowded slums. Thousands who were in casual or unskilled employment could not support a family, and the consequent poverty resulted in abandoned and undernourished children, juvenile delinquency, and

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prostitution (Director of Social Welfare 1960). Poverty had become the overwhelming cause of such problems as neglected and abandoned children, suicide, marital breakdowns, and juvenile delinquency.

Neglected and Abandoned Children The problem of neglected children became increasingly serious in Hong Kong after the war, as many married working women in paid employment had insufficient time to take care of young children, and by the early 1970s 22 percent of mothers whose oldest child was eight years old or younger worked outside of the home (Mitchell 1972). The Director of Social Welfare (1959) also admitted that poverty was the main cause of children being neglected, and that women forced to become supplementary earners often had to leave their children to play on the streets unattended. Child abandonment was another consequence of poverty, with 205 children being abandoned in 1959, 154 in 1960, 120 in 1961, and 141 in 1962 (Director of Social Welfare 1963). This situation resulted from the inability of many people in the late 1950s to get permanent full-time jobs to support their families adequately (Director of Social Welfare 1959). Child abandonment was therefore a direct consequence of families being obviously too weak to succeed as basic welfare units.

Poverty and Suicide The responsibility of members of Hong Kong families to care for each others’ needs in a low-wage environment with poor employment opportunities was often onerous, especially since the traditional culture placed a great stigma on parents if they failed to fulfil their duties. The government’s policies of the individualisation and familisation of social problems further increased the pressure on parents. Some people came to consider suicide to be a way to lessen their financial pressures, particularly when unemployment was high. Table 6.6 Suicide and Parasuicide Cases, 1959-1960 ____________________________________________________________ Cause of Suicide Attempt Deaths Unsuccessful Attempts Male Female Male Female ____________________________________________________________ Financial Difficulties 23 9 128 93 Domestic Strife 4 21 69 228 Sickness 17 16 51 34 Mental Illness 6 2 8 8 Miscellaneous 6 11 47 58 Total 56 59 303 421 Source: Director of Social Welfare (1960).

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Yap (1958) found that the suicide rate was highest among post-war immigrants and people with low incomes and low prestige, and concluded that its primary cause was a combination of unemployment, poverty, and chronic physical illness. A few years earlier the Social Welfare Officer (1956) had noted that a close relationship existed between poverty and suicide, and that family problems and poor health caused by poverty were the motivation for most of the seven hundred attempted suicides in 1955. Table 6.6 details how poverty was still a major cause of suicide in Hong Kong four years later, with financial difficulties being the primary cause of 30.2 percent of all suicide and attempted suicide cases in 1959.

Poverty and Marital Problems The high unemployment rate and low wages forced many workers to work for long hours. As noted earlier, many married women had to get full-time or parttime jobs in order to supplement their husbands’ insufficient incomes. Family financial problems became a common concern for couples, especially those with low incomes. Mitchell (1972) found that more than 71 percent of Hong Kong families with incomes less than HK$249 a month had serious money worries, compared to 17 percent of families with monthly incomes of HK$900 to $1,199 and 9 percent of those with monthly incomes of HK$1,200 or more. Many marital disputes also arose in regard to financial concerns. Mitchell (1972) found that 25 percent of those who worried “a great deal” about their financial situation quarrelled “sometimes” or “often,” whereas only 18 percent of those who worried “sometimes” and 6 percent of those who did not worry at all quarrelled that frequently. Most of the family mediation cases handled by the kaifongs were also related to financial problems. The SCA (1963) reported that three-quarters of the complaints involved wives accusing their husbands of not providing for them sufficiently. Since many Hong Kong two-income couples had to work extremely long hours their working lives eclipsed their family lives, seriously reducing their chances of communicating with each other. Poverty was obviously at the core of many of Hong Kong families’ troubles because “a lack of money restricts the scope of the husband and wife interaction and thereby depresses marital satisfaction, whereas worries over money lead to conflict and thereby to unhappiness” (Mitchell 1972: 114).

Poverty and Juvenile Delinquency Unlike their parents, many of whom had been brought up in a rural environment, many young people in Hong Kong had lived in a poverty-stricken, industrialized, and urbanised environment all their lives. Ho (1965a) found that 70.2 percent of the colony’s delinquents had been born in Hong Kong, 21.5 percent had lived in Hong Kong for more than five years, and only 0.7 percent were immigrants who had arrived from China less than one year earlier, and therefore concluded that

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the colony manufactured its own juvenile delinquents rather than importing them. Ho (1965a: 308) found further that they tended to belong to “the poorest strata of society and [were] used to the most squalid, destitute way of living,” and that they usually lived in such slum-like quarters as rooftop sheds, verandas, cocklofts, cubicles, single-bed spaces, staircases, pavements, and parked lorries. These poor housing conditions meant that thousands of children drifted onto the streets, joined gangs, and became involved in criminal activities. The nature of the crimes further confirmed the relationship between poverty and juvenile delinquency. Of the almost 50,000 cases of youth crimes that Hong Kong experienced annually during the post-war period, most involved attempts to supplement the offenders’ family incomes. Of the 37,231 juveniles brought before the courts in 1952, for example, only 1,441, or 4 percent, involved charges for offences other than hawking, or selling food illegally on the street (Social Welfare Officer 1954). Despite having high expectations for their children’s education, many parents found it difficult to send them to school because of a lack of money. The Director of Social Welfare (1961: 8) reported that approximately 125,000 children were unable to find places in primary schools, and added that “when home for such children is likely to be only a room in a resettlement estate, a bed space in a crowded tenement or perhaps a corner of a gloomy staircase, the lure of the streets must be very strong.” Those children whose parents could not afford school fees, however, were unable to find jobs in the labor market because of an ordinance that prohibited those under sixteen from having paid employment. Davies (1967b: 510) observed that the Hong Kong government’s policies had produced “a built-in gang of unemployed potential hooligans,” and indeed, 41.4 percent of all delinquents were neither employed nor at school (Ho 1965a). The colony’s educational and industrial polices obviously contradicted each other, thereby increasing the number of delinquents rather than reducing it. Young workers were also frustrated by poor working environments and low wages. Davies (1967a: 350) noted that “an undercurrent of discontent with factory conditions” existed among younger workers, who were badly paid and had no confidence in the Labour Department in regard to settling industrial disputes. The Labor Department’s Conciliation Section had adopted a mediation strategy, bringing both sides together and hoping to reach a compromise through a process of give-and-take. This had proved to be ineffective, as the workers were in a disadvantaged position. Goodstadt (1967a: 354) concluded that the department needed to awaken “to the need for prompt, positive action in disputes even where its services have not been invited.” A government report after the 1966 riots also admitted that worksite conditions for young workers needed to be improved (Report of Commission of Inquiry on Kowloon Disturbances 1966 1966). Davies (1967a: 350) warned during the 1967 riots that labor problems could easily provide “new flash points for political disturbances” unless the government took immediate action.

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Welfare Strategies and Social Instability The Hong Kong colonial regime’s efforts to use the institution of the family and the kaifongs’ welfare and political activities to preserve its conservative fiscal measures by shifting its welfare obligations to the community, therefore, had clearly had its failings. Internal population mobility and the emergence of an alienated younger generation had limited the kaifongs’ influence, and poverty and the resulting breakdown of many families’ cohesiveness had weakened their capacity to care for their more vulnerable members. Wong (1972a) found that by the early 1970s Hong Kong’s community leadership consisted of both its traditional elite and the newer industrial and professional elite, which were distinct from each other. Despite the government’s successful co-opting of the newly rich industrialists onto its consultative committees, Hong Kong society was still notably unstable. The most striking difference between the new and old elite was that the former did not exert the same degree of social control over the working class, as social and geographical mobility had weakened their intermediary organizations’ ability to maintain a close relationship with local residents effectively. The development of resettlement estates had led to internal mobility within the colony’s urban areas and both the newly arrived refugees and Hong Kong re-settlers had to adjust to new living environments (Scott 1989). Between 1954 and 1964 the government resettlement programme had re-housed more than 700,000 citizens in new towns, which had accounted for 20 percent of the total population (Director of Social Welfare 1968). Since people living in the resettlement areas came from diverse backgrounds they had little common identity and consequently little social cohesion, so they consequently tended to feel little neighbourliness toward each other (Director of Social Welfare 1965 1968), and lacked community spirit (Commission of Inquiry on Kowloon Disturbances 1967). These unstable and changing living conditions made it difficult to establish traditional mutual-help networks based on extended-family relationships, common dialects, or common places of origin, as Chapter Four described as having previously been the case. Although young people were the largest section of population, with 50 percent of the population being younger than twenty-one years old in 1966, they had little linkage with the traditional welfare associations. Since most kaifong leaders were middle-middle class and the rest were upper class, the new generation regarded the kaifongs as conservative and outdated organizations. The communication gap between the new generation and the leaders of the traditional Chinese community that had consequently come into being had weakened the kaifongs’ base of support and legitimacy (Wong 1972b). More importantly, the post-war social problems were more complicated and beyond the capacity of the Tung Wah and the kaifongs to resolve. All this meant that the previous mode of elite control over the lower classes through the provision of welfare had become less effective.

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The younger generation also had higher expectations of the Hong Kong government. Born in Hong Kong, they had acquired little contact and life experience with traditional Chinese culture and had also not experienced the starvation and political turmoil within China itself. Their expectations of the colonial government, therefore, were far greater than those of their parents. A government report on the Kowloon Disturbances of 1966 1 also noted the emergence of a new culture among the young people that had developed as a result of changing values and by interactions between Hong Kong’s two cultures. It also reported that most of those who had participated in the 1966 riots had experienced comparatively poor educations, housing, and employment, and that they obviously expected the government to take a more active part in providing welfare services (Commission of Inquiry on Kowloon Disturbance 1967). The subsequent 1967 riots2 were the result of “a revolution of rising expectation” (Davies 1967b: 510). The younger generation had become frustrated with their poor working and living conditions and their families were unable to satisfy their needs, which facilitated the communists’ efforts to mobilize them with the promise of an equal society (Chan 1966). Although the 1965 white paper had strongly promoted the family as the main welfare provider it had ignored the question of whether Hong Kong families had the ability to fulfil this role, and the reality was that the situation in Hong Kong had undermined the operations of traditional Chinese family self-help processes (Hong Kong Report to the 13th International Conference of Social Work 1966). Mitchell (1972), for example, found that 24 percent of Hong Kong’s older people who did not have sufficient income to support themselves after retirement also did not have any children in Hong Kong, making them the most desperate group in Hong Kong society. Those in the government who had to confront such problems directly, such as the Director of Social Welfare, understood this, explaining that urban living conditions, particularly in regard to housing and employment, had placed heavy stress on many families’ ability to fulfil their traditional and still binding duties to feed, clothe, and care for such vulnerable members as disabled children, the elderly, and the chronically ill who were unable to earn any money (Director of Social Welfare 1960). The preceding sections have discussed how poverty had caused such problems as child neglect, child abandonment, juvenile delinquency, marital breakdowns, and suicide. The report on the 1966 riots, furthermore, had concluded that some demonstrators had been motivated by frustration at their personal economic situations and the glaring gap between rich and poor in Hong Kong (Commission of Inquiry on Kowloon Disturbance 1967). Ho (1965b: 391) called for “a far more energetic social welfare programme than at present” to address the problem of juvenile delinquency adequately. Lady Williams, who was invited to advise on Hong Kong’s social welfare development in 1966, pointed out that extended families’ caring capacity was breaking down and therefore suggested that the government introduce some form of social insurance, even if only on a limited basis (MacPherson 1993). The Hong Kong

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government finally admitted in 1970 that it needed to provide much more assistance (Hong Kong Government 1971). Before the 1967 riots, however, the government did not seem to be aware of the financial hardships many Hong Kong families were suffering. Its 1965 white paper, as noted earlier, vigorously urged families to fulfil their traditional caring duties. Hong Kong’s colonial regime had obviously failed to respond to a changing environment, and its welfare strategies further accelerated the deterioration of many of the colony’s families. As Ma (1972) pointed out, Hong Hong’s colonial status and its laissez-faire philosophy combined to prevent an enlightened welfare policy. The weaknesses of the government’s welfare strategies had made Hong Kong hyper-proletarian, a potential time-bomb in regard to its social and economic pressures before the confrontations of 1966 and 1967 (Deyo 1989).

Conclusion After the Second World War Hong Kong’s government used families and the kaifongs to fulfil most welfare needs and thereby maintain its minimal social security system. The kaifongs were more effective at mobilizing such social resources as volunteers and material assistance for helping people locally than were the large voluntary organizations. After their establishment the Hong Kong colonial regime created three tiers of welfare providers and social control mechanisms. The Tung Wah was at the top, the kaifongs were in the middle, and families were at the bottom. The government expected these three welfare and control institutions to fulfil the public’s welfare needs and to maintain traditional Chinese welfare practices. The government, however, failed to provide families and the kaifongs with sufficient resources to perform their political and welfare functions in what was a rapidly changing social environment. Although the report on the 1966 Kowloon disturbance tried to deny that the government’s approach to providing welfare services was at the root of the riots, it finally had to admit to its policies’ inadequacy, conceding that “within the economic and social fields there are factors, to which we have drawn attention and that need to be watched, lest they provide inflammable material which could erupt into disturbances should opportunity arise in the future” (Commission of Inquiry on Kowloon Disturbances 1967: 148). The communists, furthermore, exploited the social problems resulting from poverty in the 1967 riot, thereby endangering the colony’s stability and forcing the bureaucratic-capitalist state to change its welfare approach from laissez-faire to positive non-interventionism, which the next chapter will discuss.

Notes 1. The immediate cause of the 1966 riots was public opposition to an increase in ferry fares by Star Ferry Limited, a public company under government supervision. When the

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company applied for the fare increase the general public, including civic leaders, reacted strongly and petitioned the government to turn it down. All newspaper editorials followed the common theme that the fare increases were unjustifiable and should be rejected (Commission of Inquiry on Kowloon Disturbances 1967). A popular urban councillor named Mrs. Elliott presented the government with a 23,000-signature petition expressing dissatisfaction with the proposed fare increase. The government, however, underestimated the strength of public opinion on the issue and allowed Star Ferry to increase its fares. A 27-year-old Chinese man named Sau Cheng So immediately launched a hunger strike at the Star Ferry Concourse to express his anger towards both the government and the ferry company, arousing much sympathy and wide support from the public. Some residents’ organizations and youth groups followed So’s example. When the police intervened the demonstrators threw bottles and stones at them, smashed buses with bamboo poles, set up barriers, lit fires, overthrew vehicles, and threw flower pots and other missiles from elevated positions. The riots lasted for several nights, from the fifth to the eighth of April, and resulted in the arrest of 1,187 people, most of whom were young people. 2. The immediate cause of 1967 riots was a labor dispute at the Hong Kong Artificial Flower Works that started on 13 April 1967. The workers had launched a short sit-down protest to demand the removal of harsh working conditions and such unreasonable requirements as the long working hours, the requirement of an extremely high level of output, and the deduction of pay during periods when machines broke down. The company’s managers at first delayed making any response, then fired all 95 striking workers. Unable to contact the management for discussion, the dismissed workers began to upbraid a foreman of the company named Pui Hung, whom they accused of failing to help them meet with the managers. The government condemned the workers for picketing the factory and trying to prevent the management from shipping goods from it (Hong Kong Government 1968). The police finally used force to arrest 21 workers and charged them with illegal assembly. This official response provoked a strong reaction from the colony’s communists. The communist newspapers denounced the Hong Kong government, accusing it of persecuting and attacking the unarmed workers. The communists then formed what they called the All-Circles Anti-Persecution Struggle Committee to oppose the colonial government. Between April and December 1967 they confronted the Hong Kong government, employing a three-stage strategy of “demonstrations to gain popular support; stoppages of work to paralyse the colony’s economy; terrorism to undermine morale” (Hong Kong Government 1968: 19). The riots killed 51 people, including eight policemen, an army sergeant, and an officer of the Fire Services. They ended after the government took such strong measures to suppress the communists as strengthening the power of the police with emergency regulations, arresting labor leaders, and attacking communist centres.

Chapter Seven:

Social Security & Chinese Welfare Ideologies: 1968-1997 Introduction Chapter Six discussed how Hong Kong’s colonial regime ignored Chinese families’ financial limitations and the deterioration of the kaifong associations’ ability to perform social control, thereby making its welfare strategies become less effective and creating an environment conducive to the riots in 1966 and 1967. This chapter first discusses how the government attempted to enhance its legitimacy after 1967, examines the politics of decolonisation before the end of colonial rule, then analyses the regime’s strategies for minimizing its welfare obligations, and concludes by investigating the impact of those strategies on the wellbeing of welfare recipients and the relationships among the members of Chinese families.

Socioeconomic Background: 1968-1979 Legitimation Needs after the 1967 Riots Chapter Three discussed how capitalist states have to balance their tasks of legitimation and accumulation. Those that fail to provide sufficient goods and services to satisfy the needs of their working class are likely to face legitimation crises. This means that they have to provide a minimum amount of social welfare in order to maintain social stability. 111

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The 1967 riots shook the colonial regime’s foundations severely, forcing its ruling elite to make concessions in regard to welfare and to change their governing approach slightly. After the riots the Hong Kong government focused its policies on the single objective of persuading the colony’s ordinary families “that Hong Kong is a place worth living in, a community worth protecting” (Davies 1967a: 350). Although the UK government had urged the colonial regime to institute labor reforms before the 1966 and 1967 riots, it took those violent disturbances to force the colonial elite’s attitudes in regard to such legislation to change (England and Rear 1981). The need for social and political reform had a new urgency for them after the riots. They considered such reform to be an effective way to prevent the communists from exploiting widespread dissatisfaction (Roberti 1995). In order to prevent further unrest the government had to find a new basis for its claims to legitimacy by addressing the problem of the colony’s working class’s economic and social conditions after neglecting it for decades (Scott 1989). Its welfare reforms’ main objectives were therefore to regain popular support and to weaken the communists’ influence.

From Laissez-faire to Positive Non-interventionism Positive non-interventionism, therefore, replaced laissez-faire as the Hong Kong government’s guiding principle. Although it still maintained that trying to tamper with market forces was an economically destructive exercise in futility (HaddonCave 1980), it conceded that it did have specific obligations (England and Rear 1981). The objectives of its provision of social welfare services were social justice, stability, and allocating resources efficiently to those who were for various reasons unable to take advantage of the opportunities that the market economy made available (Haddon-Cave 1980). It did this overtly to “buttress and legitimate industrial capitalism” (Titmuss 1979: 154). Hong Kong Governor MacLehose (1973) declared that the four social pillars upon which Hong Kong’s future well-being could be built were housing, education, medical and health services, and social welfare. Housing was the most important of these, as it could relieve tensions between the state and the people. He emphasised that the inadequacy and scarcity of housing formed “the most constant source of friction and unhappiness between the government and the population” (MacLehose 1973: 2). His ten-year housing scheme had the objectives of providing employment opportunities for the professional class and creating business for the construction industry as well as of housing the public. A subsequent home ownership scheme also offered more business opportunities for the banking industry. Education was another key area. MacLehose (1973: 5) asserted that “the capacity of Hong Kong to adapt to changing industrial and commercial conditions greatly depends on the programme of expansion of technical education.” The government saw education as a means of providing both social stability and economic development. It published three education white papers in ten years

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and increased its education budget by 550 percent from 1971 to 1981 (Hong Kong Government 1972; Hong Kong Government 1983). Improvements in Hong Kong’s provision of social welfare services after the riots were never dramatic, but came with economic growth. Because of the government’s traditional fiscal constraints it could only increase its social services expenditure as long as the economy continued to grow. It continued to worry that unconstrained welfare expansion would endanger the economy, so its social welfare budget remained at no more than 1 percent of the colony’s GDP, even though its total public expenditure had risen to 5 percent from 1970 to 1989 (Tang 1990). It also emphasized the provision of technical education, healthcare, and housing for workers within this budget, as these enhanced economic growth.

Industrial Capitalism and Co-optive Politics Hong Kong’s economic growth brought about an increase in the number of factory workers and professionals in its population. Since its political processes basically involved consultation and consensus, the government followed its usual methods and co-opted professionals by appointing them into key decisionmaking bodies. This helped to integrate the colony’s elite and thereby facilitate industrial and commercial development (Haddon-Cave 1974). MacLehose (1977: 1) explained that he intended his decision to increase the number of unofficial members in the LegCo from thirteen to twenty-four in 1977 to broaden “the professional and social background from which members of this council are able to speak.” The LegCo’s unofficial members had considerable power over government policy due to the council’s ability to veto the government’s legislation and expenditure proposals (MacLehose 1979). Despite their diversified backgrounds the LegCo’s members did little to change the government’s overall policies, however. The professionals were a by-product of Hong Kong’s industrial capitalism whose interests were similar to those of the businessmen, and they also received only a small number of seats, leaving the economic elite and bureaucrats with most of the power, as before. This undemocratic polity allowed Hong Kong’s business community to pursue its commercial interests at the expense of the public’s well-being. A business leader in the LegCo named Dun, for example, asked the government to “reaffirm its commitment to the maintenance of stable tax rates [and to] control the growth of public expenditure,” and went on to emphasize that financing welfare programmes by raising taxes would be a seriously mistaken policy (Hong Kong Hansard 1979: 114). This opposition to any tax increases or new taxes continued the precedent set by the merchants in the earliest days of colonial rule (Rabushka 1976). The colonial civil servants were also eager to defend their traditional fiscal practices. A former Financial Secretary stressed that he had focused continually on preventing any growth in taxation or public expenditure from endangering economic growth (Haddon-Cave 1974). The Hong Kong government’s fiscal

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policies, based on its political elite’s free-market philosophy, therefore continued to constrain the colony’s welfare development.

Socioeconomic Background: 1980-1997 The UK government, the People’s Republic of China (PRC), and Hong Kong’s capitalists, but not the general public, basically controlled the process of Hong Kong’s decolonisation. It involved little change in ideology or social policy, as the bureaucrats and capitalists retained all political power during the transition.

Decolonisation with Limited Democracy: Pre-1991 The signing of the 1984 Sino-British Agreement, which promised Hong Kong a high degree of autonomy after it became a part of China’s territory on 1 July 1997, settled the issue of its sovereignty. The UK, the Chinese and Hong Kong governments initiated constitutional reforms in preparation for the transition. The UK government started its decolonisation process by publishing several constitutional consultative papers between 1984 and 1987, while the PRC prepared the Basic Law for the future HKSAR by forming the Basic Law Drafting Committee (BLDC) and the Basic Law Consultative Committee (BLCC), inviting influential Hong Kong businessmen and professionals to join them. The Hong Kong government (1984a) stated in a green paper that the constitutional reform’s objective had been to develop a governmental system progressively that was firmly rooted in Hong Kong, could represent Hong Kong’s people’s views with authority, and be accountable to them more directly. A white paper published later that year pledged to introduce a small number of directly elected members to the LegCo in 1988 with the objective of building up to a significant number of directly elected members by 1997 (Hong Kong Government 1984b). Hong Kong’s long-term political development, however, could only be established with the PRC’s consent, as it had no intention of allowing Hong Kong to develop a polity beyond its control, especially since it considered Hong Kong’s capitalism to be essential for its modernization (Lau 1985; Lane 1990). China’s pledge to preserve Hong Kong’s capitalism for fifty years was basically pragmatic and “contingent upon a critical condition: that Hong Kong should be economically viable and useful to China’s economic modernisation. Institutional changes of whatever kind [could] only be contemplated if they are compatible with the accomplishment of the preponderant economic mission of Hong Kong as a component part of China” (Lau and Kuan 1985: 15). The PRC intended to preserve Hong Kong’s colonial polity and capitalism in order to enable it to influence the HKSAR’s future political situation and thereby facilitate China’s economic development. The PRC’s leaders were reluctant to see any tampering with Hong Kong’s undemocratic system, either before or after 1997. Jia-tun Xu, the director of the Hong Kong office of the New China

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News Agency (NCNA), severely attacked the UK government in response to the green paper proposing the introduction of direct elections in 1988 for violating the Sino-British Agreement (Scott 1989). To the PRC’s leaders Western democracy was more of “an anathema than capitalism” (Jao 1987: 69). As a result of the PRC’s strong opposition to direct elections the Hong Kong government’s 1988 white paper on constitutional reforms only increased the number of functional constituencies from twelve to fourteen, reducing the appointed members from twenty-two to twenty, while the number of official members remained ten and those elected by the electoral college remained 12 (Hong Kong Government 1988a). Tables 7.1 and 7.2 detail the LegCo’s composition. The Hong Kong government did promise the introduction of ten directly elected members in the 1991 election in order to satisfy partially the expectations of some democratic groups. The PRC, however, maintained that its position in regard to Chinese sovereignty in Hong Kong was not negotiable, and it was therefore able to force the UK government to abandon its plans to start conducting direct elections in 1988 (Miners 1993; Pepper 2008). Hong Kong’s democratic development was therefore notably slow, with pressure from the PRC preventing the UK government, senior colonial civil servants, and Hong Kong businesses from accelerating the pace of democracy there before 1991, as the UK government considered maintaining a good relationship with the PRC to be essential to its commercial interests (Hicks 1987). Hong Kong businesses also tended to consider decolonisation to mean a change of cooperating partner instead of a transformation of the entire political and economic system. The chairman of the Hong Kong General Chamber of Commerce said that “business is against the idea of direct elections. . . . Business is worried [about] ending up with a system in which we won’t have any influence” (Far East Economic Review 1978: 44). An influential business leader serving in the BLCC claimed that direct elections would turn Hong Kong into a high social welfare society (Scott 1989). Hong Kong’s senior civil servants were unhappy with the idea of curtailing their power during the decolonisation process as well. As early as 1976, Rabushka (1976: 2) quoted an official as saying, “Hong Kong’s government is small and highly centralized. . . . Democracy is inefficient and unsuited for today’s complex society.” Since Hong Kong’s civil servants and businesses were the paramount beneficiaries of an administrative-led government they looked upon constitutional reform of any kind with “alarm and horror,” as democratisation would have weakened their political influence (Lau and Kuan 1985: 6). In addition to being slow to occur, Hong Kong’s democratic reforms therefore also involved little public participation. It seemed that “The British [defined] the path to democracy and the Chinese government [promised] an environment where it [could] be practised” (Hicks 1987: 41).

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Patten’s Political Reforms and a Short-lived Democracy: 1992 to 1997 The UK government changed its approach to Hong Kong following increasing public pressures in Hong Kong and the UK caused by PRC’s brutal suppression of a peaceful protest in Tiananmen Square in 1989. Prime Minister John Major of the UK appointed Chris Patten, his party’s former chairman, as Hong Kong’s governor in 1992. Patten (1992) soon violated the previous understanding between the UK and the PRC about Hong Kong’s future political system by introducing a new constitutional reform package in October 1992, arguing that democracy would benefit Hong Kong’s economy. Democracy is more than just a philosophical ideal. It is, for instance, an essential element in the pursuit of economic progress. Let me give an example of what I mean. Without the rule of law buttressed by democratic institutions, investors are left unprotected. Without an independent Judiciary enforcing laws democratically enacted, businesses will be vulnerable to arbitrary political decisions taken on a whim―a sure recipe for a collapse in confidence and a powerful deterrent to investors from overseas. (Patten 1992: 107)

His reform package included increasing the number of directly-elected seats in the 1995 LegCo election from eighteen to twenty, reducing the voting age from twenty-one to eighteen, and replacing corporate voting for the twenty-one functional constituencies with individual voting by those “who own or control the management of the corporations concerned” (Patten 1992: 134). He explained that the entire system of functional constituencies would gain enormous credibility “if we can show that every working member of the community has a second vote to represent his or her interests at the place of work” (Patten 1992: 133). He also proposed nine new constituencies for the 1995 LegCo election, including (a) primary production, power, and construction, (b) textiles and garments, (c) manufacturing, (d) import and export, (e) wholesale and retail, (f) hotels and catering, (g) transport and communication, (h) finance, insurance, real estate, and business services, and (i) community, social, and personal services. These changes resulted in the thirty functional constituencies including every eligible voter in the colony’s 2.7 million strong workforce (Patten 1992). The reform package also included the abolition of the district boards’ appointed members and the direct election of all board members in 1994, and enabling the Election Committee (EC), whose members would mostly or entirely come from the elected district boards, to select any qualified candidates for the ten LegCo seats it elected rather than just its own members (Patten 1992). Patten (1992: 147) maintained that the new election arrangements were “running on the tracks laid down by the Basic Law,” which meant that all the LegCo members elected in the 1995 election should have been be able to keep their seats after Hong Kong’s reversion to China in 1997. This reform package, however, had actually challenged “Chinese sovereignty by trying to turn Hong Kong into an

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independent or at least self-governing entity with local officials accountable to its own locally elected representatives” (Pepper 2008: 246). The PRC strongly attacked Patten’s constitutional reform package for being made public without being discussed first by the Sino-British Joint Liaison Group, for conflicting with the Basic Law of Hong Kong, which stipulated that any political reforms should develop gradually, and for violating the series of existing agreements reached between the PRC and UK governments. Ping Lu, the most senior Chinese official attending to Hong Kong affairs, branded Patten as “the sinner for a thousand years” and declared that the reforms were “undermining Beijing’s looming sovereignty” (Hong Kong Standard 2005: n.p.). Having failed to resolve the constitutional reform conflict with the UK government, the PRC announced that it would abolish Patten’s system and replaced it with a new set of political institutions after 1997 reclaiming sovereignty in 1997. It then proceeded to set up a Provisional Legislative Council (PLC) in Shenzhen, a Chinese city near the colony, in December 1996 to prepare for the colonial administration’s departure. The PLC’s announced purpose was to ensure that the HKSAR had a legitimate legislature following the dissolution of the last colonial LegCo. Hong Kong’s decolonisation therefore failed to result in a democratic polity to replace the colony’s administrative-led one. Before the introduction of Patten’s constitutional reforms in 1992 the Hong Kong colonial government, the PRC government, and the capitalists combined to offer Hong Kong’s people limited democracy, with the bureaucracy and the business community retaining most of the political power. Although Patten’s reforms granted voting power to most Hong Kong workers following the 1995 election, they only lasted for two years before the PRC government re-established the traditional administrativeled polity. Patten’s reforms were therefore just a political experiment and a belated display of the UK’s obligations to Hong Kong’s people during the final stage of decolonisation. The UK government had obviously been too late to allow the people of Hong Kong to have political power at the end of its 150 years of colonial administration.

The Domination of Bureaucrats and Capitalists Hong Kong’s democratisation’s slow progress, therefore, involved for the most part indirect elections to functional constituencies rather than direct elections. The composition of the functional constituencies reflected the weight that the government afforded to the representation of the economic and professional sectors, which it considered to be “essential to future confidence and prosperity” (Hong Kong Government 1984b: 3, 5). To some extent this only formalised its past practice of appointing some professionals into the LegCo. As functional constituencies only occupied one-third of the LegCo’s seats, government officials and the government appointed members together were still able to determine legislative outcomes. Table 7.1 shows the LegCo’s make-up in the 1980s.

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Table 7.1 The LegCo’s Composition, 1985 &1988 Nature of Membership Official Members Appointed Members Members Representing Functional Constituencies Members Selected by the Electoral College Total Membership

1985

1988

10 22 12

10 20 14

12 56

12 56

Source: Hong Kong Government (1984b); Hong Kong Government (1988a). The indirect elections helped to ensure that political activists would remain disunited and ineffectual (Hicks 1987). It was difficult for political groups to gain power by appealing to broad interests, issues, grievances, loyalties, or identities, as the functional constituencies’ representatives were only interested in issues that affected their own occupations (Lau 1985). Because the functional constituencies included only those in industrial and commercial circles, moreover, they tended to be concerned with their own interests, paying little attention to the needs of the poor. With only limited democracy involved in selecting the members of the LegCo, Hong Kong’s political power remained with those who had always had it, especially through the use of co-optive politics. Leung (1990b) found that the government had co-opted 5 percent of the 458 people holding one directorship in the colony’s 100 largest public companies in 1982 into the ExCo, the LegCo, and other key advisory committees, 19 percent of the 94 who held two directorships, and 35 percent of the eighty who held three or more directorships. This means that the more resources that people controlled, reflected by how many directorships they held, the greater their likelihood of being co-opted. The introduction of indirect elections therefore had little impact on the unequal distribution of political power. The distribution of the twelve seats of the functional constituencies in 1985 included two from the commercial, two from the industrial, and one from the financial sectors, two from labor unions, one from social services, and one from the medical, one from the educational, one from the legal, and one from the engineering and associated professions (Leung 1990b). Representatives of the business communities and professions therefore clearly dominated Hong Kong’s legislature. In 1987 65 percent of the LegCo’s members were from business corporations, compared to 70 percent who had been appointed by the governor in 1982. As Leung (1990: 23-24)concluded, “the inclusion of indirectly elected members in the LegCo has not substantially altered the proportion of business representatives in Hong Kong’s second most important policy-making body.” Business interests’ domination of the ExCo was also remarkable. Table 7.2 illustrates this. The capitalists’ obvious influence within the colony’s highest decisionmaking bodies protected their interests during the transitional period. Their

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domination was the result of both their numbers in the councils and their cohesiveness in putting forward their demands, a cohesiveness enhanced by interlocking directorships. In 1982 the Hong Kong Bank, the largest public company in Hong Kong, was linked to twenty-two of the colony’s fifty largest public companies through interlocking directorships, and six chairpersons of the colony’s ten largest companies were on its board of directors. The Hong Kong Bank and its interlocked companies occupied six of the ExCo’s nine unofficial seats (Leung 1990b). The highest policy-making bodies in Hong Kong were “like a meeting ground between top government bureaucrats and the major resource controllers” (Leung 1990b: 22). Table 7.2 Positions of the ExCo’s Non-government Members, 1987 ________________________________________________________________ Name Directorships Held, Occupation, or Both ________________________________________________________________ Sze-yuen Chung Chairman, Sonca Industries Director, China Light and Power Director, Swire Properties Director, World International (Holdings) Lydia Dunn Executive Director, Swire Pacific Ltd. Director, John Swire and Sons (HK) Ltd. Director, Cathay Pacific Airways Director, Hong Kong and Shanghai Bank Quo-wei Lee Chairman, Hang Seng Bank Shou-lum Chen Director, The Hong Kong Electric Co. Ltd. Director, Cable and Wireless (HK) Director, Hang Seng Bank Allen Peng-fei Lee President, AVA International Ltd. Director, Elec and Eltek Co. Ltd. Director, British American Tobacco (HK) Ltd. Director, Playmate Holdings Ltd Peter C. Wong Solicitor Non-executive director, Chow Sang Sang Holding Co. Ltd. Non-executive director, Asia Insurance Co. Ltd. William Purves Chairman, Hong Kong and Shanghai Bank Director, British Bank of the Middle East Director, International Commercial Bank Director, Marine Midland Bank Maria Wai-chu Tam Barrister-at-law Hin-kwong Chiu Medical practitioner Daniel Chi-wai Tse President, Hong Kong Baptist College Source: Far Eastern Economic Review 1987 (cited in Chan 1996: 145).

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Decolonisation and Positive Non-interventionism As noted earlier, the positive non-interventionism philosophy, which successfully satisfied such basic needs as education, housing, and medical care and which also created a favourable environment for capitalism, was the Hong Kong government’s guiding principle throughout the transitional period (Jacobs 1987). The government also continued to accumulate a significant budget surplus. For example, the reserve for the tax year of 1991-1992 accounted for 65 percent of expenditures. Following the practice of the 1970s, the government in the 1980s and 1990s emphasized the provision of essential factors for economic expansion, particularly the importance of upgrading Hong Kong’s infrastructure (Jacobs 1989). Table 7.3 Annual Hong Kong Economic and Budget Growth, 1975-1991 ________________________________________________________________ Year Increase Size of Increase Increase Social Services’ in GDP Public in Public in SocialProportion of Sector Expenditure Services Total Public Relative Budget Expenditure to GDP ________________________________________________________________ 1975-76 4.2% 14.2% -1.8% 79.0% 43.7% 1976-77 27.7% 12.4% 11.8% 6.5% 41.6% 1977-78 16.1% 13.3% 24.6% 21.9% 41.8% 1978-79 17.8% 14.9% 32.2% 35.5% 42.8% 1979-80 31.9% 14.6% 28.8% 31.2% 43.6% 1980-81 28.2% 16.1% 41.2% 42.8% 44.1% 1981-82 20.5% 17.8% 33.2% 18.8% 39.3% 1982-83 13.0% 19.1% 21.4% 25.6% 40.6% 1983-84 11.1% 18.6% 8.2% 13.0% 42.4% 1984-85 19.8% 16.0% 3.3% 9.4% 44.9% 1985-86 5.0% 16.7% 8.9% 8.6% 44.8% 1986-87 15.2% 15.9% 10.3% 9.7% 44.5% 1987-88 22.8% 14.5% 11.9% 14.2% 45.4% 1988-89 14.6% 14.9% 20.8% 25.9% 47.3% 1989-90 18.0% 16.4% 26.5% 19.5% 44.7% 1990-91 12.0% 17.0% 16.2% 19.0% 45.8% Sources: 1973 to 1982 data from Nelson Chow (1986); 1983 to 1991 data from Financial Secretaries’ speeches to the LegCo and Hong Kong annual reports. Since the Hong Kong government’s top priority was clearly to maintain a favourable economic environment it continued to subordinate social policy to economic policy. As noted earlier, Hong Kong’s dominant economic ideology repeatedly asserted that only economic growth could reduce social problems. A

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Financial Secretary in the early 1980s insisted that his task was to narrow the gap between rich and poor by improving economic conditions for the poor, not by over-taxing the rich (Bremridge 1983). When the tax base expanded rapidly during economic booms, therefore, the government was able to allocate more funding for developing social services, but when that expansion slowed during recessions its spending on social services remained relatively unchanged (Chow 1986). Table 7.3 illustrates several features of Hong Kong’s budgetary policy. The size of the public sector was relatively small, averaging 15.7 percent of GDP during the period shown. This indicates the strength of the ideology that private enterprise should be the prime force driving Hong Kong’s economy and that the public sector should not compete with it for resources. It also shows how increases in public expenditure depended on economic growth. When, for example, the size of the increase in Hong Kong’s GDP dropped from 1982-1983 to 1983-1984 the size of the increase in its public expenditure also dropped, and when the size of the increase in its GDP rose from 1985-1986 to 1986-1987 the size of the increase in public expenditure also rose. More importantly, changes in social welfare expenditure also followed the same pattern. The principle of positive non-interventionism therefore constrained the development of Hong Kong’s social welfare services.

The Utilization of Chinese Welfare Ideologies The Hong Kong government’s unchanged fiscal policies therefore continued to constrain its expenditure on social welfare services, which meant that it continued to need Chinese organizations and families to provide them. It also continued to promote such basic capitalist values as individualism and the work ethic, which it feared that generous social policies and redistributive fiscal policies would damage, and continued to try to use the traditional Chinese concept of the family to preserve them as well (Haddon-Cave 1980). The following section examines how it continued to employ traditional Chinese welfare practices to minimize its welfare expenditure and enhance its legitimacy even after the riots.

Social Security Policies and the Chinese Family The government did make a few changes to improve its provision of social welfare services after the 1967 riots in order “to ameliorate and reduce social conflict [in order] to protect the rights of property and avoid resort to violence by the dispossessed” (Ngai 1979: 31). Before the riots it had provided public assistance to poor people in the form of cooked food and dry rations. Only charitable organizations provided cash assistance and they did so only with strict conditions. After 1967 the SWD authorised cash payments to the aged and the disabled in lieu of food. It also took into account rent, education, and other vital household expenses it had previously ignored. After a public assistance review in

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1968 it discontinued providing cooked meals in January 1969, issuing poor people dry rations weekly or fortnightly instead. The government also increased its public assistance expenditures by 74 percent from 1967 to 1968 (Director of Social Welfare 1969). Hong Kong’s public assistance scheme still had several problems despite these improvements. The amount of assistance remained too low and “the issue of dry rations took insufficient account of the basic household needs required to maintain a minimum standard of living and special needs arising from any particular disability suffered by any member of a family” (Director of Social Welfare 1971: 16-17). The government finally introduced public assistance in the form of cash payments in 1971, four years after the riots. The new scheme marked a turning point in the development of Hong Kong’s social welfare policies by being proactive rather a reaction to a crisis (Kwan 1986). The government based its assistance levels, however, on a family means test, and those who were aged from fifteen to fifty-five but unemployed were ineligible. Families who had monthly incomes after deducting for rent and education and travelling expenses of less than HK$50 per person for their first three members, HK$40 each for the next three members, and HK$30 for each succeeding member were eligible to apply for assistance. A single adult aged over sixty and with a monthly income of less than HK$70 was also eligible for a monthly cash allowance up to that amount (Director of Social Welfare 1971). In 1973 the government launched what it called the Disability and Infirmity Allowance Scheme, later the Special Needs Allowance Scheme, which consisted of an old age allowance, a higher old age allowance, a disability allowance, and a higher disability allowance. It provided assistance to any people who were at least seventy years old, had suffered severe physical injury, were blind, or required constant medical care. In 1991 this scheme assisted 444,517 people at a total expenditure of HK$2.36 billion (Hong Kong Government 1991a). The government announced its new approach to providing social security services in a 1977 green paper called Help for Those Least Able to Help Themselves. The paper’s title summarized the approach’s objective. It asserted that the new approach involved making the government’s provision of social security services more effective rather than changing the basis of its policies (Hong Kong Government 1977).

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Table 7.4 Social Security Expenditure as a Percentage of GDP, 1985-1990 ___________________________________________ Year GDP Social Security % (in millions) Expenditure of GDP (in millions) ___________________________________________ 1985 HK$261,070 HK$1535.1 0.58% 1986 HK$298,515 HK$1634.6 0.54% 1987 HK$367,603 HK$1728.8 0.47% 1988 HK$433,657 HK$2153.3 0.49% 1989 HK$496,385 HK$2626.9 0.52% 1990 HK$553,243 HK$3098.1 0.56% Source: CSD (1991). Table 7.5 Social Security Provision in Hong Kong, 1991 ________________________________________________________________ Public Assistance Old Age Allowance Disability Allowance ________________________________________________________________ Financing taxation taxation taxation Beneficiaries impoverished (a) age 65/69* the disabled people (b) age 70+ Entitlement means test (a) demogrant demogrant Basis (b) means test Monthly  $745 (