Originally published on July 22, 2020.
This article presents a dialogue between University of Tsukuba Professor Emeritus Hiroshi Furuta and international political scholar Genki Fujii on the historical relationship between the Chinese Communist Party and Britain, Hong Kong’s role in international finance and investment into China, money laundering, Huawei, and the internal power struggle between Xi Jinping and the Jiang Zemin faction.
It concludes with Furuta’s observation that when China does something seemingly incomprehensible, one should think “destroy the enemy,” whereas in the case of Korea, one should generally think “give us money.”

July 22, 2020
This article was originally published on July 22, 2020, and continues the dialogue between Hiroshi Furuta and Genki Fujii introduced in the preceding chapter.
Its central subject is Hong Kong.
Fujii discusses the historical relationship between the Chinese Communist Party and Britain, investment and capital flows through Hong Kong, British financial interests, and Britain’s approach to Huawei.
The latter part interprets Hong Kong as a base of the Jiang Zemin faction and examines Xi Jinping’s policy toward Hong Kong from the perspective of an internal Chinese Communist Party power struggle.
【English Translation】
July 22, 2020
When China does something incomprehensible, you will usually be right if you think, “Destroy the enemy,” and in the same situation with Korea, “Give us money.”
The following continues from the previous chapter.
What Was Hong Kong?
Fujii: When Trump was a presidential candidate, he frequently used the term “Western civilization” in his speeches.
In other words, there was a sense of pride that Western civilization was being upheld with the United States at its center.
But if an ancient state such as China were to seize global hegemony, the civilization of modern rationalism would be driven toward destruction.
That is why confronting China now is, in a sense, only natural.
Furuta: Hong Kong has fallen as well.
Fujii: In Britain, there are cunning people who inherit the tradition of old colonialism—the old guard, or the tax-haven faction.
Hong Kong was precisely the place where the Communists and these people joined forces.
When I read the first volume of the collected works of China specialist Shinichiro Sato, who had been active since before the war, Standing by the Depths of the Miluo and Watching China’s Turbulent History, I suddenly realized something.
Sato wrote as follows.
“What nurtured the Chinese Communists to the present day was not the Soviet Union, but Britain.
From the military funds to the weapons used when Mao Zedong raised his banner at Jinggangshan, everything came from British assistance.
Later, even when the Chinese Communists were subjected to Nationalist suppression, they were able to succeed in their flight of twenty-eight thousand li because Britain, which had interests along the Yangtze River, protected them both openly and covertly.”
The relationship between the Chinese Communist Party and Britain was that deep.
Furuta: When the People’s Republic of China was established, Britain was the first to recognize it, wasn’t it?
Fujii: There was also a motive behind that.
There was a diplomatic calculation that China and the Soviet Union could be made to clash, thereby exhausting the Soviet Union.
Hong Kong followed the same line.
Britain and China joined hands and continued to use Hong Kong as a center of international finance even after the handover.
Seventy percent of investment into China went through Hong Kong, and British financial capital made enormous profits.
Over roughly the past twenty years, Chinese officials who had made vast sums through bribes first moved their money to Hong Kong and then transferred it overseas.
Furuta: A convenient form of money laundering.
Fujii: Macau played the same role.
Through Macau’s casinos, illicit money was converted into legitimate money and then transferred overseas.
The United States had originally been excluded from the mainstream of the Hong Kong network, so the region was not of particularly great interest to it.
Even in the expansion work at the former Hong Kong airport, American companies could not participate, and a British company won the contract.
The real American position is that destroying democratic politics in Hong Kong is unacceptable, but the disappearance of Hong Kong as a tax haven is welcome.
Furuta: What will happen to relations between Britain and China from now on?
Fujii: Britain ultimately decided to exclude Huawei from 5G, but there is something behind this as well.
It is expected to approve the establishment of a Huawei research facility on the outskirts of Cambridge. [Laughs.]
Furuta: Very British indeed.
Like the British American Tobacco factory in Pyongyang. [Laughs.]
Fujii: In other words, if Trump fails to win reelection, the relationship between Britain and Huawei can be revived.
Furuta: The ancestors of the British were Norman Vikings, so at heart they are adventurers and speculators.
Fujii: Hong Kong is a base of the Jiang Zemin faction, which opposes Xi Jinping.
Xi Jinping does not even regard the pro-democracy forces as worth considering.
It is the Jiang Zemin faction that he finds troublesome.
The Jiang Zemin faction consists of the second generation of the revolutionary elite, and it has expanded its power by channeling money into Hong Kong and investing it there.
For Xi Jinping, if destroying the Jiang Zemin faction means losing Hong Kong’s function as a financial center, that does not matter at all.
From the outside, it is extremely difficult to understand why anyone would destroy a “hen that lays golden eggs” such as Hong Kong.
But from Xi Jinping’s personal perspective, it was necessary to destroy the Jiang Zemin faction, the largest opposition force within the Party.
Furuta: Hong Kong was destroyed for the sake of that kind of power struggle.
When China does something incomprehensible, you will usually be right if you think, “Destroy the enemy,” and in the same situation with Korea, “Give us money.”
To be continued.