Think China’s Worried About Hong Kong Going Too Far?

You want to really know what’s going on in Hong Kong? Protesters there are feeling their oats. It’s as simple as that, and as dangerous as that.

That’s what happens when people get rich. They reach a point when the price of things takes a back seat to more priceless things; things that for all their money, Hong Kong residents cannot buy because they’re forbidden to buy. And it’s not just bugging them; it’s as if out of nowhere someone lit a match and it’s infuriating them.

The suddenly over-heated protests in Hong Kong actually are neither sudden nor that much more over-heated. They’ve been festering for years now -- not for things residents of this “separate” but supposedly equal China can have but something far more fundamental that their ruling government won’t let them have.

The freedom not only to succeed in life, but decide for themselves how they will run their lives. The difference for protesters in Hong Kong right now is that they feel it in ways China cannot understand, or appreciate.

Young and old in Hong Kong want the freedom that comes with freely making more money -- unencumbered by a government in their political affairs as they are unencumbered by a government in their financial affairs.

China has no problem with the former -- but it clearly has a very big problem granting Hong Kong the latter. And therein lies the biggest challenge to Beijing since Tiananmen Square: How does it hold onto the economic success that is Hong Kong without risking freeing the independent genie from the same bottle?

It’s not that Hong Kong residents aren’t free to vote. They just resent having China decide on which candidates they will vote. This Beijing practice of pre-ordained “ballot slates” isn’t new. What is new is that Hong Kong has been pushing for more freedom to expand those slates, even swap out those slates in Hong Kong-run primaries, very similar to political primaries we have here in the United States.

That’s where China drew the line. And that’s when Hong Kong protesters started forming lines -- outside Beijing government offices, then banks, then brokerage houses, then pretty much any place of authority. What started as relatively sporadic uprisings among a few hundred soon turned into thousands, and over the weekend, close to a million young and old, shutting down businesses and banks and grinding any economic activity to a halt.

China has already made it clear it has no plans to relent, and has upped the ante, promising wider tear gas and worse attacks on protesters who dare defy its orders to disband.

The fact that protesters aren’t disbanding -- they’re actually mobilizing in even larger numbers -- has socked Hong Kong stocks. The Hang Seng index tumbled nearly 2% overnight. Particularly hard hit were the region’s giant banking institutions, including HSBC Holdings, BOC Hong Kong Holdings, Chong Hing Bank and Bank of East Asia.

Local players such as jewelry heavyweights Luk Fook Holdings and Chow Tai Fook Jewellry swooned on growing concerns retail sales in general would suffer, if not outright freeze in the near term.

Hong Kong’s cold has also sickened Australia’s and South Korea’s markets, each down about 1% since the trouble started.

It’s been a remarkable turn of events for Beijing, which little more than a week ago, celebrated Alibaba’s (NYSE:BABA) record-setting initial public offering as a sign of the new China, and the economic potential of that new China. Alibaba’s biggest selling point on its celebrated road show ahead of its American debut was that it was a different kind of Asian powerhouse -- encouraged by China, and not remotely encumbered by China.

Investors might not be so sure now. That’s why what China does with Hong Kong now has so much importance. A Tiananmen Square-type crackdown would be devastating not only for those involved, of course, but the investment sentiment toward China, and perhaps the entire Asian region as well.

It would serve notice to the world that Beijing isn’t what it says, and doesn’t remotely exhibit the capitalist qualities it attests it uniquely appreciates. It would just as well reinforce the image of many Hong Kong doubters that there is no two-China policy -- only one ... Beijing’s way or the bloody way.

The irony of Alibaba’s offering and this Hong Kong uprising isn’t lost on a flummoxed Beijing that now must carefully navigate a far more Internet-savvy and social-media-skilled world. Cameras are everywhere, and freedom-loving Hong Kong protesters are popping up on microphones everywhere.

Most are young, but not all. And most have no trouble venting to the world. The question is: For how long? China pulling off another Tiananmen Square crackdown isn’t out of the question, but likely hurts China more than it might protesters in Hong Kong. In one dramatic and violent gesture, it could erase more than two decades of what Beijing has tried to make the world forget.

Is China at its core what it was? Or is it willing to risk going outside its communist safety zone to experiment with what it could be? The real fear for Beijing officials is what happens on the mainland when residents assess what’s happening on that other land -- the other China -- that might in the end be no different than mainland China.

Richer. But not necessarily happier.

Free to make money, but not free to enjoy the freedoms that usually come with making money.

That’s why this Hong Kong democracy movement isn’t just about protesters having their say; but whether China itself has anything approaching … a future.