Photograph by Xaume Olleros–AFP/Getty Images
TIME

Hong Kong Stands Up

Hong Kong International Cover-Asia Sopac 141013
Photograph by Xaume Olleros–AFP/Getty Images

Why the territory’s fight for democracy is a challenge for China

This story appears on the cover of the Oct. 13, 2014, Asia edition of TIME.

The typhoons that lash Hong Kong make quick work of umbrellas, the squalls twisting them into Calder sculptures of disarranged fabric and metal. On the evening of Sept. 28, prime typhoon season in this South China Sea outpost, flocks of umbrellas unfurled on the streets of Hong Kong. This time, they guarded not against rain and wind but tear gas and pepper spray. One of the world’s safest and most orderly cities — a metropolis of 7.2 million people that experienced just 14 homicides in the first half of this year — erupted into a battleground, as gas-mask-clad riot police unleashed noxious chemicals on thousands of protesters who were demanding democratic commitments from the territory’s overlords in Beijing.

As the first rounds of tear gas exploded in Admiralty, a Hong Kong district better known for its soaring bank buildings and glittering malls, demonstrators armed with nothing but umbrellas and other makeshift defenses — raincoats, lab glasses, ski goggles, milk and plastic wrap — defied the fumes and surged forward. The protests, drawing tens of thousands of people from all walks of life, were galvanized by mounting anger over Beijing’s decision in late August to deny locals the right to freely elect Hong Kong’s top leader, known as the chief executive (CE), in 2017.

When the onetime British colony was reunified with China in 1997, Hong Kong was promised governance under a “one country, two systems” principle that guaranteed significant autonomy for 50 years. But residents fear that, just 17 years after the handover, the freedoms that differentiate Hong Kong from everywhere else in China are eroding. Shocked by the volleys of pepper spray and tear gas, which injured dozens, the protest movement was energized by desperation. “We are not afraid of the Chinese government,” said Kusa Yeung, a 24-year-old copywriter helping to distribute water to fellow protesters just past midnight on Sept. 29. “We are fighting for a fair democracy.” The Umbrella Revolution had unfolded.

Hong Kong’s civil-disobedience campaign — which began Sept. 28 as the Occupy Central With Love & Peace movement, after the Central city district where it originated — soon occupied the city’s downtown, along with two key shopping and tourist districts. But while the sit-ins, with their umbrellas and yellow ribbons, captured the world’s attention, they will not topple China’s ruling Communist Party. The People’s Republic celebrated its 65th year of existence on Oct. 1 with a blaze of fireworks and militaristic pageantry in Beijing, a symbol of the party’s unquestioned grip on the country — though the fireworks were canceled in Hong Kong.

Still, the protests engulfing this tiny splinter of the motherland present China’s strongman President Xi Jinping with an unexpected dilemma at a time when the party is already facing scattered discontent at home. The side effects of three decades of unfettered economic growth — a poisoned environment, a growing income gap, rampant corruption — have contributed to an uneasy sense that, for all of China’s remarkable rise, things are not quite as they should be. “The Hong Kong protests are the last thing Xi Jinping wanted to see,” says Jean-Pierre Cabestan, a political scientist at Hong Kong Baptist University. “He has so many other problems to tackle.”

A canny nationalist, Xi and his coterie regularly blame “foreign forces” for fomenting social disorder in China. A scathing Sept. 29 online opinion piece in the People’s Daily, the Chinese Communist Party’s mouthpiece, accused the Hong Kong protests of being orchestrated by “anti-China forces … whose hearts belong to colonial rule and who are besotted with ‘Western democracy.’” But, if anything, the mess in Hong Kong, along with other instances of social unrest, are self-inflicted by China’s centralized leadership, which has done little to win hearts and minds on the country’s periphery. In his National Day speech in Beijing, Xi proclaimed that China’s leaders “must never separate ourselves from the people.” Yet, at the same time, the authorities detained mainland activists who expressed solidarity with the Hong Kong protesters.

Instead of taking advantage of Hong Kong’s inherently pragmatic temperament, the Chinese government spent the summer rubbing the territory’s nose in its political powerlessness. First came a Beijing white paper that asserted the central government’s “comprehensive jurisdiction” over Hong Kong and trod on treasured local institutions like rule of law. Then on Aug. 31 the Chinese government ruled that Hong Kongers could vote for their CE — but only after a Beijing-backed committee presented the electorate with two or three candidates it deemed suitable. (Currently, an electoral college selects the CE.) “Rejecting democracy in Hong Kong has dramatically backfired,” says Maya Wang, a Hong Kong–based researcher with Human Rights Watch. “People here have now lost confidence in the central government. Trying to clear the protests has just led to bigger protests.” Even if the demonstrators eventually disperse, this breach of trust fundamentally changes Hong Kong’s political calculus.

Protesters block the main street to the financial Central district, outside the government headquarters in Hong Kong
In a massive show of civil disobedience, protesters block the multi­lane thoroughfare leading to Hong Kong’s financial district. Carlos Barria—Reuters

The Umbrella Revolution
If the other democratic upheavals of recent years are defined by a single season or hue, the choice of an umbrella to symbolize Hong Kong’s dissent is as fitting as it is improbable. Umbrellas come in a riot of colors, matching a polyglot city that was birthed by quarreling Eastern and Western parents, neither of which gave much thought to gifting democracy to a few hunks of South China Sea rock.

Umbrellas are also a practical instrument, unsexy but vital, much like this financial hub that has long served as an entrepôt to the vast markets of mainland China. Efficiency is the city’s motto. This being Hong Kong, the protesters picked up their trash after the tear gas subsided. The volunteers who ferried in donated supplies even had sparkling water on tap, offering San Pellegrino to the parched hordes at nearly 3 a.m. on Sept. 29.

Neither the lingering memory of tear gas nor the advent of the workweek in this workaholic city diminished the crowds on Monday and Tuesday. As riot police withdrew amid a barrage of criticism for their tear-gas blitzkriegs, protesters further packed what are already some of the most densely populated places on earth, young families staking out spaces with bright parasols. William Ma, 47, brought his daughter Dorothy, 11, to one protest site on Sept. 30. “When I was young, democracy never came,” he said. “Maybe I’ll have died already, but she can have a better life, she can have democracy.”

The weekend’s anxious mood was replaced by a carnival gaiety, as stockbrokers mixed with the students who had helped kick-start the protest movement. High school kids did their homework on the pavement, squinting at their scientific calculators in the scorching sun. Some of the demonstrators admitted they were newbies, galvanized into political action by the heavy-handed police response. “[People] were just raising their hands without any weapons, and they used tear gas without any warning,” said Raymond Chan, a math teacher, who joined the movement on Monday. “But the fact that they did that just makes us stronger, more unified.”

Such a movement in Hong Kong threatens the national unity Xi and Co. are so keen to maintain. For all of Beijing’s emphasis on enhancing national security — the surveillance apparatus gets more official funding than does the military — China’s fringes are fraying. Beyond Hong Kong, the vast ethnic enclaves of Tibet and Xinjiang are rebelling, with violence in the latter largely Islamic region claiming hundreds of lives over the past year. Taiwan, the island that Beijing has desperately wanted back ever since Chiang Kai-shek’s Nationalists fled there after losing the civil war in 1949, has been assimilating economically with the mainland. But the Hong Kong crisis has spooked even ardent integrationists in Taiwan, making it hard for Xi to argue that “one country, two systems” can bring the island back into the fold. Even activists in tiny Macau, the former Portuguese outpost that slid back into Beijing’s embrace in 1999 even more eagerly than Hong Kong had two years before it, are demanding more latitude in choosing their local leader.

Hong Kong’s cry for freedom resonates far beyond its 400 sq miles (1,035 sq km); it directly challenges the narrative of a unified People’s Republic. “The truth is Hong Kong is more than ready for democracy,” wrote Anson Chan, Hong Kong’s former chief secretary, the No. 2 leadership post in the territory, in an exclusive commentary for TIME. “It is China that is not ready for a democratically governed Hong Kong it fears it cannot totally control.”

Alternate Universe
Three decades ago, when prime ministers Margaret Thatcher and Zhao Ziyang signed the Sino-British joint declaration setting the conditions for Hong Kong’s return to China in 1997, the then colony was considered an apolitical place, a striving city of businessmen and bankers who would obey whoever was in charge — as long as there was money to be made. Back then, it was communist China that was in the throes of political tumult. Five years later, tanks crushed the pro-democracy student protests at Tiananmen. Hundreds, if not thousands, of students and other peaceful demonstrators were massacred. Political passion was cauterized on the mainland, and the Chinese leadership learned the perils of allowing idealistic students to preach reform in public places.

Xi has used nationalism to argue for an even stronger central command. As China’s military chief, he has taken a more assertive stance on territorial disputes in regional waters, irritating China’s neighbors. Since assuming power in late 2012, Xi has also presided over a civil-liberties crackdown, detaining hundreds of human-rights defenders, from lawyers and bloggers to journalists and artists. He has shown no allergy to repression if it means protecting the party from the people. In September, Ilham Tohti, a moderate academic from the Uighur ethnic minority that populates Xinjiang, was handed a life sentence for separatism. His true crime? Calling on the Internet for China to respect its own regional autonomy laws.

Meanwhile, Hong Kong was busy finding its political voice. Each Tiananmen anniversary, tens of thousands gather for candlelight vigils in Hong Kong, the only place in China where such remembrances are allowed. In 2012 locals balked at a proposal to incorporate patriotic dogma into their education system; a protest movement actually succeeded in scrapping that school legislation.

At the same time, Hong Kongers discovered that their territory’s competitive advantages — unfettered courts, a vibrant press, financial transparency, a clean civil service and a welcoming attitude toward foreigners — were precisely what kept the enclave from becoming just another Chinese city. If Beijing threatened these core values, what were Hong Kong’s prospects? “Hong Kong is still unique, but we see the relentless downhill trajectory,” says Willy Lam, an adjunct professor at the Center for China Studies at the Chinese University of Hong Kong.

One Country, Two Systems
It’s easy, now, to track the seemingly inevitable collision course between Hong Kong and China, between these two vastly different systems trying to coexist in a single nation. Any attempt to narrow the gap looks clumsy. Leung Chun-ying, the unpopular, Beijing-backed Hong Kong chief executive, tried to bridge the disparity, amid calls for his resignation. “Hong Kong is a democracy within the context of ‘one country, two systems,’” he said on Sept. 28, before the pepper-spray charge began. “It is not a self-contained democracy.” Leung went on to characterize the chief-executive selection process as “not ideal, but it is better.”

Better isn’t good enough, particularly for the young generation that has taken to Hong Kong’s streets with the greatest numbers and the greatest passion. Like their counterparts on the mainland, these youths struggle with the realization that their material lives might not improve as expansively as their parents’ once did. Hong Kong’s prime method of wealth creation needs to diversify beyond real estate, just as the rest of China’s must. Housing prices have spiraled so high that ordinary young people in big cities must save their whole lives to afford their own homes.

Han Dongfang, a labor activist who was jailed for helping to organize the Tiananmen protests 25 years ago and who now lives in Hong Kong, says the territory’s young activists today “know more clearly what they want” than he did back when he was a youth leader. On Monday night, in the sweaty, swarming district of Mongkok, a 76-year-old tailor named To Fu-tat gave great consequence to Hong Kong’s students. “They’re the hope for China,” he said.

Yet student activists — no matter how much civility they display with their civil disobedience — are precisely what Beijing fears most. It is within the Chinese establishment’s political memory that the Tiananmen tragedy looms largest. Regina Ip was forced to resign as Hong Kong’s security chief in 2003 after half a million locals marched against the anti-subversion legislation she supported. Today she is a legislator heading the New People’s Party. “My own feeling is that the [Occupy] organizers have arranged the whole movement to replicate another Tiananmen incident in Hong Kong,” she says. “What about the interests of Hong Kong people like us? We want peace and stability. Issues … should be resolved through constructive dialogue not through street protests.”

Polls taken in Hong Kong show that a significant chunk — roughly half of the populace, by one estimate — is willing to accept Beijing’s electoral formula. Protests are bad for business and, for all the Tiananmen scare­mongering, it’s hard to imagine Xi ordering Chinese troops to crack Hong Kong heads. Still, given his antipathy thus far toward political reform, it’s equally hard to see him ceding significant ground to Hong Kong’s democratic forces. Even the protesters themselves don’t imagine their full demands — both the resignation of CE Leung and true electoral freedom to choose the territory’s leader — will be met. “It’s very unlikely that Beijing will reverse its position,” says Audrey Eu, chair of the Civic Party, which has supported the Occupy movement. “But the people of Hong Kong must stand up and defend themselves.”

The Umbrella Revolution has already gained a wider significance. “People in China think Hong Kong belongs to China,” says Julian Lam, a 20-year-old student. “But people in Hong Kong think that Hong Kong is part of China but belongs to the world.” With each Hong Kong citizen who emerged, coughing and crying, to face another round of tear gas, a conviction grew: a quest for liberty is not, as the Chinese government charges, some Western-imposed frippery designed to undermine Beijing’s authority, but a universal aspiration. Let the umbrellas of the world unite.

— With reporting by Elizabeth Barber, Rishi Iyengar, Emily Rauhala and David Stout / Hong Kong

— Video by Helen Regan / Hong Kong

TIME Economy

Our Dysfunctional Financial System

Tapes of what really happens between bankers and regulators show how far we have to go

In some ways, the most shocking thing about the 46 hours of secret audiotapes made by former Federal Reserve bank examiner Carmen Segarra in 2012 is that they are no shock at all. Did anyone ever doubt that the New York Fed was in hock to Wall Street? Or that Fed bank examiners–the regulators tasked with monitoring the risks banks take–might fear alienating the powerful financiers on whom they depend for information or future jobs?

It’s one thing to know and another to hear in painful, crackling detail how the Fed’s financial cops slip on their velvet gloves to deal with Goldman Sachs. Or how Segarra, one of a group of examiners brought in after the financial crisis to keep a closer watch on the till, was fired, perhaps for doing her job a little too well. One can only hope that this latest example of regulatory capture by Wall Street will focus minds on the fact that six years on from the crisis, we still have a dysfunctional financial system.

Consider one of the shady deals highlighted on the secret tapes of New York Fed meetings, which Segarra made with a spy recorder before she was let go and which were made public on Sept. 26 in a joint report by ProPublica and This American Life. The 2012 transaction with Banco Santander, initiated in the midst of the European debt crisis, ensured that the Spanish bank would look better on paper than it really was at the time. Santander paid Goldman a $40 million fee to hold shares in a Brazilian subsidiary so that it could meet European Banking Authority rules. The Fed employees, who work inside the banks they examine (yes, it’s literally an inside job), knew the deal was dodgy. One even compared it to Goldman’s “getting paid to watch a briefcase.” But it was technically legal, and nobody wanted to make a fuss, so the transaction went through.

It’s hard to know where to begin with what’s problematic here. I’ll focus on the least sexy but perhaps most important point: existing capital requirements–the cash that banks are obligated to hold to offset risk–are pathetic. Despite all the postcrisis backslapping in Washington about how banks have become safer, our system as a whole has not. No too-big-to-fail institution currently is required to keep more than 3% of its holdings in cash (a figure that will rise to 5% and 6% in 2018), which means banks can fund 97% of their own investments with debt. No company outside the financial sector would dream of conducting daily business with that much risk. As Stanford professor Anat Admati, whose book The Bankers’ New Clothes makes a powerful case for reining in such leverage levels, told me, “We’ve got to get rid of this idea that banking is special and that it should be treated differently than every other industry.”

Of course, if you start telling financiers they should use more than a few percentage points of their own money when they gamble, they’ll throw a fit. They will tell you that would make it impossible for them to lend to real businesses. They will also uncork lots of complex financial terms–“Tier 1 capital,” “liquidity ratios,” “risk-weighted off-balance-sheet exposures”–that tend to suffocate useful (a.k.a. comprehensible) debate. Financiers use insider jargon to intimidate and obfuscate. This is something we need to fight. In banking, as in so many things, complexity is the enemy. The right questions are the simplest ones: Are financial institutions doing things that provide a clear, measurable benefit to the real economy? Sadly, the answer is often no.

One thing we’ve learned since the crisis is that bailing out Wall Street didn’t help Main Street. Credit to individuals and many businesses plummeted during and after the bailouts and remains below precrisis levels today. Numerous experts believe that the size of the financial sector is slowing growth in the real economy by sucking the monetary oxygen out of the room. Banks don’t want to lend; they want to trade, often via esoteric deals that do almost nothing for anyone outside Wall Street.

This disconnect between the real economy and finance is now being closely studied by policymakers and academics. Adair Turner, a former British banking regulator, thinks that only about 15% of U.K. financial flows go to the real economy; the rest stay within the financial system, propping up existing corporate assets, supporting trading and enabling $40 million briefcase-watching fees. If the New York Fed really wants to redeem itself, it might consider commissioning a similar study to look at Wall Street’s contribution to the U.S. economy. After all, if finance can’t justify itself by showing it’s actually doing what it was set up to do–take in deposits and lend them back to all of us–what can justify it?

TIME Books

Alan Cumming’s Boyhood Was No Cabaret

Alan Cumming attends the HRC Marriage for Equality USA celebration at the Calvin Klein Boutique on April 17, 2013 in New York City.
Alan Cumming attends the HRC Marriage for Equality USA celebration at the Calvin Klein Boutique on April 17, 2013 in New York City. Andrew H. Walker—Getty Images

The actor's funny, heartbreaking new memoir recalls his struggles with an abusive father and his journey from the Scottish Highlands to Broadway

When Alan Cumming arrives for brunch at a café not far from his apartment in Manhattan’s East Village, he’s wearing a blue baseball cap with a big white yes on the front. It’s been almost two weeks since Scotland voted no to separating from the United Kingdom, but Cumming, a Scot who campaigned heavily for the yes side from New York, hasn’t quite gotten over the loss. He heard the results in his dressing room after a performance of Cabaret, a revival of the 1966 musical that brought him a Tony for his electrifying performance as the androgynous Emcee when it returned to Broadway in 1998. “I just cried,” he says. “I felt like it was the difference between choosing imagination and hope and positivity or being cowed and doffing your cap and letting the establishment tell you what to do.”

Scotland still defines the effervescent 49-year-old Cumming in a way that nothing else does. He grew up there on a vast estate called Panmure where his father was the head forester. The men who worked the 21 sq. mi. (54 sq km) of woodland addressed the authoritarian elder Cumming as “the maister.” Alan and his brother Tom might as well have called him that too. Doing grueling chores under his unforgiving eye, they were always fearful of paternal rages that often ended with a beating. Cumming once wound up with a vicious haircut administered with sheep shears that left the 12-year-old bleeding and half bald.

How Cumming finally freed himself from the grip of that painful past is the subject of his new memoir, Not My Father’s Son. “I wrote the book partly to say that this kind of abuse is not normal,” he explains. “Abusers make you feel like it’s acceptable. And for the world who knows me one way, now they’ll know me in a different way, and I’m glad, because it’s all a part of me.”

It’s hard to fathom how the terrorized little boy grew up to be the slender, joyful man who can’t stop cackling as he shows off photos of the pink neon sign saying “Club Cumming” that he had made for his dressing room at Cabaret. Reading the book, you understand how he got so enmeshed in the Scottish campaign. Self-determination and liberation–of himself and others–from old conventions, gender restrictions or just boredom have been Cumming’s quest since he left home at 17 to study at the Royal Scottish Academy of Music and Drama.

He began writing his memoir after his father’s death in 2010 while working his day job as the Emmy-nominated co-star of CBS’s The Good Wife, now in its sixth season. On that show, Cumming plays Eli Gold, the tightly wound, manipulative political adviser to Chris Noth’s Governor Peter Florrick and his wife, played by Julianna Margulies. His book takes us from his primary school in the Scottish Highlands to London, where he played Hamlet in a cast that included his then wife Hilary Lyon as Ophelia in 1993. His father came back into his life a few years later when a British tabloid wrongly reported that Cumming had been sexually abused in childhood. (Harking back to his father’s beatings, Cumming had told another publication that he had been “abused,” a quote the tabloid misinterpreted.)

Cumming weaves into this story his 2010 turn on the British version of the TV show Who Do You Think You Are? which researches the family histories of celebrities. The program’s producers focused on Cumming’s maternal grandfather Thomas Darling, a much decorated World War II vet who died mysteriously in Malaysia. The effort to unearth the truth about his death sparks a crazy journey that sends Cumming around the world, from the former battlefields of France to a graveyard in Asia. It turns out that his grandfather died in a fatal game of Russian roulette. To complicate things, Cumming’s father hears of the family research and announces that Alan is not his son but the product of an extramarital affair of Alan’s mother’s. DNA tests eventually prove the father’s claim is false, but the episode leads Alan and his brother to confront their dad about his lifetime of cruelties toward them–after which, they never see him again.

Cumming leaves off a few years after his 2007 marriage to Grant Shaffer, an illustrator. (His first marriage ended in the mid-1990s, and soon after, he declared himself bisexual.) Now happy, settled and extraordinarily busy, Cumming suspects that not really getting to be a child when he was young might be what keeps him so preternaturally youthful now. (Holding his own in a Cabaret kick line of 22-year-olds is no easy trick.) A friend, British theater director John Tiffany, jokes that there must be a Dorian Gray–style portrait of Cumming in an attic somewhere. He just doesn’t age. “J.M. Barrie could have written him,” says Tiffany. “Alan’s got an incredibly impish, Peter Pan sense of humor. In fact, he’s a gorgeous combination of Peter Pan, Captain Hook and Mrs. Darling.” (Let it be noted that Cumming’s mother’s name is Mary Darling.)

The ongoing tension in his nature between dark and light, so evident in the book, is part of what gives Cumming’s work such breadth. It allowed Tiffany to cast him at various times as both Macbeth and Dionysus, the god of wine and ecstasy. Cumming can slip from playing a movie Smurf to the übersexual host of Cabaret’s Kit Kat Club and then host Masterpiece Mystery on PBS without dropping a sequin. He combines a Calvinist work ethic with an eternal party-boy vibe. And the party is almost always on. Not only do legions of friends show up nightly at Club Cumming after the show, but he even has a kind of Camp Cumming–a second home in upstate New York where the landscape reminds him of Scotland. He often invites the entire cast of whatever show he’s in for weekends.

Cumming’s brother also thinks that in his offstage and offscreen life, his famous sibling may be re-creating a childhood he didn’t have. As evidence, you could point to the big trampoline that Cumming installed at the house. When guests ask about it, he’ll insist they try it. “‘It’s really great,’ I tell them. They say, ‘No, no, that’s not for me.’ People are so afraid of being judged. But as the weekend goes on, you look, and there they are, bouncing away. I love seeing that. It makes my heart swell.”

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