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SCMP sale another step in Hong Kong's real transition

From being a place that prided itself on a distinctive identity separate from the system and influence of China, Hong Kong is inexorably becoming a mere part of the Chinese mainland.

     The announced sale of the South China Morning Post, the city's premier English-language newspaper, to Alibaba Group Holding, owned by Jack Ma, the e-commerce mogul and one of China's richest men, is but one more step on a journey that began in earnest with the return of the former British colony to Beijing's control in 1997 and which will formally end when the guarantee of "one country, two systems" runs out in 2047.

     Even now, however, not even midway along this path, Hong Kong's distinctiveness has been compromised, with universities, regulators and the press feeling political pressure from the mainland and even the courts facing fears of politicization.

     The question is whether if Hong Kong becomes just another Chinese city, it can offer any significant advantage to the companies that are based there or to the people who live there. The thousands of people who took to the streets in demonstrations in 2014 showed that they expect more than what China has been prepared to give.

     China does not seem to value the benefits that Hong Kong's unique culture, history and status give it and instead seems determined to assert its dominion.

     The South China Morning Post is emblematic of the change.

     The paper, founded in 1903, for most of its life was the key media for the colonial ruling class and the business interests that prospered in that system. When that establishment worried about China in the years before the handover of sovereignty, the newspaper responded with tough reporting on the country. When the Hong Kong business and financial establishment saw opportunity in China, the newspaper reacted by eschewing much incisive or critical political reporting and concentrating on business stories.

     Now in its next phase, the newspaper will acknowledge the new, more mainland-oriented establishment in Hong Kong and stake out a Chinese point of view that is different from other media in its coverage.

     This was explicitly stated by Alibaba Executive Vice Chairman Joseph Tsai, who said: "Today, when I see mainstream Western news organizations cover China, they cover it through a very particular lens. It is through the lens that China is a communist state and everything kind of follows from that. A lot of journalists working with these Western media organizations may not agree with the system of governance in China and that taints their view of coverage."

     The Hong Kong Journalists Association expressed immediate worries that this call for a different angle would simply be code for restrictions on the Post's reporting and a compromise on press freedom.

     When institutions see the world through Beijing's lens, and respond in ways they hope will find favor in Beijing's eyes, the results may be antithetical to the values that made Hong Kong into the center of finance, commerce and, yes, freedoms that it has been.

     Johannes Chan, a constitutional and human rights legal scholar, was blisteringly criticized by China's media after he emerged a year ago as the leading candidate for a senior administrative position at the University of Hong Kong. His promotion was delayed and eventually blocked in what he believes is retaliation for his failure to restrain a colleague's efforts to lead last year's pro-democracy demonstrations.

     In a Human Rights Day address to the Hong Kong Foreign Correspondents' Club on Dec. 10, he said: "Academic freedom does not exist in isolation. When it is at risk, it is a warning that other fundamental rights and freedoms would be endangered."

     Financial regulators in Hong Kong, too, say they have seen their interactions with their Chinese counterparts move from being exchanges where Hong Kong's long experience in global markets was valued to being meetings where China's will has implicit precedence and is expected to be implemented. They privately fume about Chinese authorities bypassing Hong Kong regulators entirely and investigating and demanding information directly from companies in the city. But China's size, importance and power mean that no one will actually object.

     Hong Kong's history has given it expectations for its future.

     The rule of law, an independent judiciary, freedom of expression, freedom of the press, freedom of movement, freedom of conscience and freedom from arbitrary arrest -- these are all explicitly part of the Basic Law, Hong Kong's post-handover constitution, and part of the amalgam that has made up Hong Kong's uniqueness.

     That Alibaba made a point of promising editorial independence -- "We will let the editors decide the editorial policy and direction of coverage for any story. That's our basic principle" -- is hugely encouraging. However, it will be in the implementation that uniqueness is formed, preserved, and even enhanced.

     A newspaper's owner creates a tone by hiring, paying or firing the editor. The owner exerts control by making budget decisions and influencing personnel changes.

     Similarly, Hong Kong's government controls its universities by hiring and firing their heads and controlling their finances; it influences its courts through the appointment of judges; it determines the city's regulatory stance by appointing the heads of regulatory bodies and controlling the civil service.

     How Hong Kong navigates the remaining years of the "one country, two systems" pledge and beyond will be through the accumulation of a myriad decisions, many of which might seem small at the time but all of which will add up to something of tremendous import to the 7 million residents of the city and to all the businesses that depend on it.

     For the city to prosper, the inexorable and natural "mainlandization" of Hong Kong must happen in concert with an explicit and clear understanding of the parts of the city's ethos that are essential to its success and which must be preserved, maintained and strengthened.

David Schlesinger is managing director of Tripod Advisors, which advises companies on Chinese political risk, media and technology issues. He was previously the chairman of Thomson Reuters China and editor-in-chief of Reuters News.

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