Episode 928: Hong Kong : Planet Money In 1960, a 12-year-old boy left mainland China, hidden in the bottom of a fishing boat. He later became one of Hong Kong's richest people. His story is the story of Hong Kong.
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Episode 928: Hong Kong

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Episode 928: Hong Kong

Episode 928: Hong Kong

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JACOB GOLDSTEIN, HOST:

Just a quick warning - there's a little profanity in today's show.

In 1958, Jimmy Lai was 10 years old. He lived in southern China, and he made money carrying suitcases at the local train station. One day, a guy got off the train and told Jimmy he had just come in from Hong Kong. Jimmy had heard stories about Hong Kong before. It was supposedly this magical, unbelievably wealthy place. But, you know, Jimmy figured, whatever; people tell stories.

As Jimmy was carrying the guy's bags through the station, the guy started eating a chocolate bar. When they got to where they were going, Jimmy put the guy's bags down, and the guy gave Jimmy the rest of the chocolate.

JIMMY LAI: So I turned my back and tried it, and I said, s***. Wow, what's this? He said, chocolate. I said, wow, Hong Kong must be heaven.

GOLDSTEIN: You had never tasted chocolate before?

LAI: No. I never heard about chocolate, you know? So at that moment, I determined that I'm going to escape to Hong Kong.

GOLDSTEIN: Escape to Hong Kong.

In the late '50s, Hong Kong was not part of China. It was a British colony. And this was a moment when China was closed off from the rest of the world. Chinese people were not allowed to set foot outside the country without special permission from the government - from the Chinese Communist Party.

And the party was radically remaking China. They had forced farmers to give up their land and work on collective farms. And partly as a result, at this moment when Jimmy Lai first tasted chocolate, China was in the middle of a famine that would kill tens of millions of people.

So to get out of China, Jimmy found a smuggler who hid him in the bottom of a fishing boat with a few dozen other people. They left around midnight and were in Hong Kong the next afternoon. He didn't have any money. He had to go that night to start working at a glove factory. He's, like, 12 1/2 years old. But the next morning, as he walked through the streets around the factory, he saw all these little food stands where ordinary people - you know, poor factory workers like him - were eating these big bowls of noodles and rice porridge. Food was just everywhere.

LAI: Food everywhere, and then the people sitting with you were cheerful. It was such a new phenomenon for me.

GOLDSTEIN: That's when he realized that all the stories he'd heard about Hong Kong - they were true.

LAI: I knew that moment, I'm in a different world.

(SOUNDBITE OF JOSSELIN BORDAT AND LE FAT CLUB SONG, "FRENCH URBAN KIDS")

GOLDSTEIN: Hello, and welcome to PLANET MONEY. I'm Jacob Goldstein. Hong Kong is this sort of impossible place. It's this capitalist city with a free press and freedom of assembly and an independent judicial system. Also, Hong Kong is part of China, a country with none of those things. And Jimmy Lai is an embodiment of all of that. He's one of the richest people in Hong Kong, and also one of the loudest critics of the Chinese government.

Today on the show, the story of Jimmy Lai is the story of Hong Kong. And the story of Hong Kong is the story of the 200-year relationship between China and the West - I mean, more or less.

To really understand the story of Jimmy Lai and of Hong Kong and China and the West, you have to go back to the 1830s. At the time, China was almost entirely closed to foreigners. If you were a trader from Europe or from the U.S., there was only one place in China you were allowed to go, a town in southern China that Westerners called Canton. Actually, foreigners weren't even really allowed in Canton. I talked about this with Stephen Platt, a historian at the University of Massachusetts.

STEPHEN PLATT: The foreigners had to make do with a little, tiny compound of about 12 acres outside of the city down sort of a muddy spot by the river.

GOLDSTEIN: So why would these traders sail halfway around the world to stay in a muddy 12-acre compound down by the river? To get rich.

PLATT: It was an incredibly lucrative trade. Basically, the - I mean, the world's source of tea at that point in time was entirely from China, and Canton was the only place you could buy it. Twelve acres was - it was the center of an engine for the world economy, essentially.

GOLDSTEIN: But these traders who were getting rich in their little 12-acre compound started to bump up against a problem. The world, and especially Britain, wanted all this tea, but China didn't want that much stuff from the world. For a while, traders were just paying for the tea with silver, so much so that all this silver just started flowing into China. Eventually, the traders did find a product that the Chinese really wanted - opium. The British traders became big-time international drug kingpins, which then, as now, was a very profitable business.

PLATT: They started ramping up opium production in India, shipping it over illegally to China, where it was being sold off of the coast to wholesalers. And by the 1830s, opium had become the largest foreign import into China, and it had, in fact, undone the trade imbalance to the point that the British were not only getting all the tea that they wanted, but now they were starting to drain all the silver out of China.

GOLDSTEIN: Opium was illegal in China, but until this time, the government had sort of looked the other way. Then, as more and more people became opium addicts, and as silver started leaving the country, the emperor was like, OK, enough of this. And he sent one of his top advisers, a guy named Lin Zexu, down to Canton to try and crack down on opium.

The British traders' opium is on ships that are offshore; it's not there in the compound. So Lin Zexu - he got to Canton, and what he did was he locked up the British merchants in that 12-acre compound. And he said, I'm not going to let you out, and I'm not going to let you trade anything else until you give me all your opium.

There is a British admiral who is in charge of trade at Canton. His name's Charles Elliot, and he wants to settle this. So he says to the traders, OK, the British government will buy all of your opium from you if you just turn it over.

PLATT: So they signed the entire season's supply over to him, and he signed notes promising them 2 million pounds in payment.

GOLDSTEIN: And then Admiral Elliot gave this mountain of opium to Lin Zexu, who dumped it all in the river - who destroyed it. Word gets back to London about what's happened, but the British government does not send 2 million pounds to make good on Admiral Elliot's promises. Instead, the British send warships to force China to pay for the confiscated opium.

PLATT: The fact that this was a war fought over illegal drug dealers was not at all lost on the British public, and there was a huge outcry in Britain against this.

GOLDSTEIN: The opponents started calling it the Opium War, but by the time it ended, it was about way more than opium.

PLATT: By the time the war ends in 1842, it's turned into something much, much bigger than what Elliot had believed Britain had any kind of a right to, and it had turned into a war to force China open to British trade.

GOLDSTEIN: In the treaty that ended the war, the British demanded not only their 2 million pounds back; they also made China let foreign traders into a bunch of foreign ports - Canton, and also Shanghai, and also a few others. And the British decided, we don't want to run the risk of some Chinese emperor locking up our traders again. We need our own base of operations. We need a little British colony. So they made China give them this little rocky island right off the coast of southern China, Hong Kong.

This is the beginning of what China calls its century of humiliation. Up until this time, countries in the West had thought of China as this rich, powerful empire. Now they see it can be pushed around. The Germans and the French get their own colonial concessions from China. In 1898, Britain makes China give them a chunk of the land on the mainland of China across from Hong Kong. It's about 300 square miles. They call this piece the New Territories. And this particular land grab, the British say, is not forever. It's for 99 years. They say they will give the New Territories back in 1997.

When the British took over, Hong Kong was this rural place, a few thousand fishermen and farmers. But then in the 1850s, a civil war broke out on the mainland, and Hong Kong became a place people started fleeing to from China.

PLATT: There's a huge amount of fighting and a really vicious government crackdown in south China, and a lot of wealthy Cantonese start moving to Hong Kong to be safe under the protection of the British. And it becomes a place where they can conduct their trade outside of the civil war area. And from there, it really takes off.

GOLDSTEIN: This really is the Hong Kong where Jimmy Lai climbs out of the bottom of that boat in 1960, this trading center that is attached to mainland China that was created in the sort of original sin of the Opium War that exists under the laws and norms of the British Empire and that has been populated mostly by people like Jimmy, people who have fled China, and the descendants of those people.

So you work in the factory making clothes. Is that what your first job...

LAI: Yeah. The factory was making knitted gloves.

GOLDSTEIN: Gloves - making gloves - knitted gloves.

LAI: Correct. Yeah, gloves.

GOLDSTEIN: OK.

LAI: Yeah, knitted gloves.

GOLDSTEIN: And you're, like, running a sewing machine. Or what are you doing?

LAI: I was - first, I was sweeping the floor, cleaning.

GOLDSTEIN: Sweeping the floor, yeah.

LAI: You know, eventually, you know, they trained me to be a knitter, so I, you know, I operated the knitting machine. Yeah.

GOLDSTEIN: He works his way up, and by 21, he's running a factory. Hong Kong, by this point, has become an international financial center. It's a place where lots of Western money flows on its way to Asia. And Jimmy starts speculating in the Hong Kong stock market. And he does well. He makes enough money to go in with a partner and buy a factory.

Like a lot of factories in Hong Kong at the time, his factory made clothes for foreign retailers. And he sees these foreign companies buying from him and selling at a huge markup, and he thinks, I should be the one selling at that huge markup. So he decides to start a retail clothing company. He doesn't know what to call it until he goes on a business trip to New York. He's meeting with a clothing importer here in New York, and on the way out of the office, one of his friends at the company gives him this, like, this little treat for the road.

LAI: One of the importing company, somebody gave me a - it's a chocolate biscuit, you know...

GOLDSTEIN: Oh, like, a cookie - like, a chocolate cookie.

LAI: Yeah, like, cookie - yeah, the chocolate cookie, actually. I thought it was a chocolate, but - the chocolate with some marijuana there. So I took it. I was so high. I was so hungry after I ate it. I never was that hungry. So I just went into a pizza place, you know, in Manhattan.

GOLDSTEIN: Sure. OK.

LAI: A pizza place - so, you know, the napkin that I, you know - I cleaned my mouth - I just put it into my pocket after that, you know, because when I was high, I didn't know what I was doing.

GOLDSTEIN: Sure.

LAI: So next morning when I woke up, I was - at that time, I was thinking about the name for the retailing shop that I'm going to start. You know, I saw Giordano.

GOLDSTEIN: Giordano, the name of the pizza place.

LAI: Oh, that's great. You know, people would think that I'm a Italian brand name.

GOLDSTEIN: Yeah.

LAI: So I just use it.

GOLDSTEIN: Is that a true story?

LAI: Yes.

GOLDSTEIN: That's - it seems too good to be true.

LAI: Well...

GOLDSTEIN: I want it to be true.

LAI: Yeah. I - well, I - it's not too good to be true because when - I was not very well educated. You know, for me, the thing about a brand name is not easy...

GOLDSTEIN: Sure.

LAI: ...Especially - I think it's a stupid idea to use Italian name and thinking that people would assume you to - as Italian, right?

GOLDSTEIN: (Laughter).

LAI: You know, I think - I - you know, I wouldn't do that now, you know? But at that time, you know...

GOLDSTEIN: OK.

LAI: ...What the hell I know?

GOLDSTEIN: Jimmy launches Giordano in 1981. Eventually, there will be Giordano clothing stores in more than 30 countries around the world. Giordano will make Jimmy rich.

As Jimmy is building Giordano in the '80s, there is, like, this cloud hanging over his future. In 1997, Britain is supposed to give the New Territories in Hong Kong back to China. And in China, almost everything still belonged to the government. In most of China, you just could not be a rich entrepreneur like Jimmy.

At the same time, though, the British Empire was basically over. Britain was, like, getting out of the business of being a colonialist, but they were governed as a straight-up colony - run by a British governor, appointed by the queen of England, controlled by British law. And the extraordinary thing is how well it seemed to work.

Hong Kong had become, like, this essential node between Asia and the West so that by the late 20th century, people in Hong Kong were not only profoundly better off than people in mainland China; people in Hong Kong were richer, on average, than people in Great Britain. So in the early '80s, the British Prime Minister Margaret Thatcher and the Chinese leader Deng Xiaoping start meeting to figure out what to do about Hong Kong. Thatcher told Deng, of course we'll give you back the New Territories like we promised, but we never said anything about Hong Kong Island. So she asked him, what if we just hold on to that? Here is Thatcher years later, describing Deng's response.

(SOUNDBITE OF ARCHIVED RECORDING)

MARGARET THATCHER: And he said, look; I could walk in and take the whole lot this afternoon. And I said, yes, you could. There's nothing I could do to stop you. But the eyes of the world would now know what China was like. Everything would leave Hong Kong. You'll have taken prosperity, and you would've suddenly lost a lot.

GOLDSTEIN: Just to be clear, this is Great Britain lecturing China about how it would look bad to take Hong Kong by force.

Deng Xiaoping was, in some ways, a practical leader. He was introducing capitalism in mainland China, and he knew that workers in capitalist Hong Kong were much more productive and had a much higher standard of living than workers on the communist mainland. He didn't want to mess that up.

So in 1984, Deng and Thatcher made a deal. Great Britain would agree to give all of Hong Kong back to China in 1997, and China would agree to basically let Hong Kong keep being its own special thing governed by its own special laws for 50 years - until 2047. And then at midnight on July 1, 1997, it happened.

(SOUNDBITE OF MUSIC)

GOLDSTEIN: There was Prince Charles.

(SOUNDBITE OF ARCHIVED RECORDING)

PRINCE CHARLES: All the people of Hong Kong who have been such staunch and special friends over so many generations.

GOLDSTEIN: There was Chinese President Jiang Zemin.

(SOUNDBITE OF ARCHIVED RECORDING)

JIANG ZEMIN: (Foreign language spoken).

GOLDSTEIN: And at midnight, they lowered the British flag, they raised the Chinese flag, and that was it. A hundred and fifty-five years after the end of the Opium War, Hong Kong, a place as devoted as any on Earth to capitalism and free trade, was part of communist China.

After the break, what the handover meant for Jimmy Lai.

By the time Britain handed Hong Kong back to China, Jimmy Lai was running a new kind of company - a kind of company that made this a dangerous moment for him. A few years earlier, he'd been inspired by the Tiananmen Square protesters who wanted, among other things, more freedom of speech and less censorship in mainland China. And after the Chinese government declared martial law and killed hundreds of the protesters, Jimmy started a pro-democracy media company in Hong Kong.

LAI: I said, look; you know, the best way to use my money is to go into the media because to deliver information is actually delivering liberty.

GOLDSTEIN: Liberty.

LAI: Freedom.

GOLDSTEIN: Yeah.

LAI: Yeah. So let's go into the freedom business.

GOLDSTEIN: When the handover happened in 1997, Jimmy was running a weekly magazine and a major daily newspaper in Hong Kong. Both of them were openly critical of the Chinese government.

Well, were you worried you were going to get arrested the next day?

LAI: No. No. That never happened, of course.

GOLDSTEIN: I know it didn't happen, but you didn't know the future at the time.

LAI: No. I don't know the future, but I just live my life day by day.

GOLDSTEIN: OK. Well, what was the day like? So the first day when Hong Kong is no longer a British colony and is now a special administrative region...

LAI: Right, right, right.

GOLDSTEIN: ...Of the People's Republic of China - what was that day like?

LAI: Nothing change.

GOLDSTEIN: Nothing changed.

LAI: Very little change. I'm sure people were, you know, apprehensive about what's going to happen...

GOLDSTEIN: Yeah.

LAI: ...OK? But nothing change.

GOLDSTEIN: And did you think, still - you know, I feel like the conventional wisdom in the West, at least, at that time was...

LAI: Yeah.

GOLDSTEIN: ...Well, China is getting richer, and we know that when countries get richer, they become more democratic and get civil freedoms.

LAI: Exactly.

GOLDSTEIN: And so that's what's going to happen to China. That's what we thought. Is that...

LAI: That's the consensus thinking.

GOLDSTEIN: Is that what you thought at the time?

LAI: That's what we thought. But that, of course, didn't happen.

GOLDSTEIN: China has not allowed more freedom of speech. Publications can still be shut down for criticizing the government. And yet, China has gotten richer. It started to develop its own financial center in Shanghai. Foreign money can now flow into China without going through Hong Kong, so the Chinese Communist Party doesn't need Hong Kong as much as it used to.

This has led to more and more tension between people in Hong Kong and the Chinese Communist Party, the Chinese government. In 2014, there was a fight over how to choose the government official who runs Hong Kong, and a million people in Hong Kong took to the streets to protest. Just last month, the government official who runs Hong Kong wanted to pass a new law that would allow people in Hong Kong to be extradited to China to stand trial. The people in Hong Kong said, we don't trust your mainland courts. Two million people protested in the streets, including, by the way, Jimmy Lai, who is now in his 70s.

What was it like? What was it like walking that day?

LAI: I was very excited - when you see so many people, you know, is fighting for a moral issue. We don't have guns. We don't have tanks. We don't have anything. The only thing we have the Chinese government don't is the moral authority we have, the moral courage we have.

GOLDSTEIN: The moral authority and courage, yeah.

LAI: Yes.

GOLDSTEIN: A few weeks later, on July 1, on the anniversary of Hong Kong's return to Chinese rule, protesters broke into the Hong Kong legislature buildings, smashed glass walls and spray-painted graffiti. Chinese leaders see these protesters and Jimmy Lai, for that matter, as agents for foreign influence - as, you know, basically latter-day colonialists. His house has been firebombed, and there was an assassination plot against him.

LAI: I stopped thinking about this because if I let the fear frighten me, I cannot go on, you know, because with what I have taken up, I have to sustain it. I will be the last to leave. That is like a captain who cannot jump the ship.

GOLDSTEIN: I mean, you're rich. You could leave if you wanted.

LAI: Yeah. If I'm rich but an a**hole...

GOLDSTEIN: (Laughter).

LAI: ...What my kids will think about me?

GOLDSTEIN: Yeah.

LAI: You know, being rich, you can be very poor...

GOLDSTEIN: Go on. Say more.

LAI: ...Because if you only have money, you lost the meaning, you lost the dignity, you lost everything as a human being. What else do you have?

GOLDSTEIN: In the end, the big risk that Jimmy Lai and the Hong Kong protesters posed to Beijing is not really about Hong Kong itself. It's that people on the mainland could look at Hong Kong and say, hey, we're going to break some windows, too. We're going to start protesting here. If that happens, Beijing could send in the tanks in Hong Kong and shut down the protests once and for all.

(SOUNDBITE OF SACHA JAMES COLLISSON SONG, "KUHULA")

GOLDSTEIN: You can email us. We're at planetmoney@npr.org. Over on Facebook and Instagram and Twitter, @planetmoney.

Today's show was produced by Darian Woods. Alex Goldmark is our supervising producer, and Bryant Urstadt is our editor. Special thanks to Samuel Mok, Anson Chan and David Webb (ph), all of whom spoke to me at length about Hong Kong. Stephen Platt, the historian I talked to on the show, wrote a book about the Opium War. It is called "Imperial Twilight: The Opium War And The End Of China's Last Golden Age."

I'm Jacob Goldstein. This is NPR. Thanks for listening.

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