Quotes of the Day

Ray Au, a 24-year-old district councilor living in the industrial suburb of Tai Po, wants a freer Hong Kong. Two weeks ago he carried a bullhorn to a local train station to encourage people to attend the big pro-democracy rally to be held this week. A passerby cursed Au, went chest to chest with him, and accused the territory's pro-democracy advocates of being "fools" and "Chinese traitors." A crowd gathered, and another stranger interceded, punching Au's antagonist in the nose and drawing blood.

That was an ugly demonstration of how polarized Hong Kong has become since July 1 last year, when 500,000 people poured into the streets to vent against the local government. But a lot has changed since then, and indeed since Au's unpleasant encounter. Consider some very different scenes from just last week. Lawmaker Martin Lee, who's been bullhorning democracy for Hong Kong since 1989—and who has taken more rhetorical bloody noses from the mainland than anyone can count—stood up in the territory's Legislative Council (Legco) and made a motion for the people of Hong Kong "to join hands with [China's] central government." (That will be a lengthy stretch for Lee: China's leaders have called him a "traitor" and have forbidden him to set foot on the mainland since 1989.) Lee's motion passed unanimously. A few days earlier fellow libertarian and former legislator Christine Loh had suggested that the rally this Thursday, to mark the first anniversary of July 1, be dubbed a "celebration" rather than a protest. Tough-talking Bishop Joseph Zen, whose I-answer-to-a-higher-power attitude never fails to irk Beijing, met with the Liaison Office, the central government's main representative in Hong Kong, just two months after he was permitted a sentimental journey to his hometown, Shanghai—the first time he's been allowed on the mainland in six years. The meeting, Zen said, was "a breakthrough in a small way."

And that was just the start for this new mood of reconciliation. Hong Kong's Old Guard leftists and tycoons, who spent the spring fulminating about the territory's questionable patriotism and telling locals they should stick to commerce and stop talking politics, have been conspicuously silent of late. On the other side of the fence, some of the supporters of Thursday's rally got cold feet over a slogan that's already been daubed on banners and silk-screened on T shirts: RETURN POWER TO THE PEOPLE. Too provocative, they said. They encouraged marchers to stick with a less offensive motto: WE ? HONG KONG.

There's so much talk of rapprochement between Beijing and Hong Kong these days that you would think the Chinese characters for "one country, two systems" had been rejiggered to read "one big happy family." Hardly. The bridge building, which includes an array of economic gifts from China to Hong Kong (see story), probably reflects a sincere attempt to reduce tensions. But there is also a strong element of tactical realpolitik, much of it to do with the July 1 anniversary rally and with the election for Legco in September. By appearing reasonable and by engaging some members of Hong Kong's pro-democracy camp, Beijing is trying to reduce anti-mainland sentiment during the march, split the democrats and blunt their electoral performance in September. By talking to Beijing, those democrats willing to do so have plenty to gain, too: they come across as less confrontational and therefore more appealing to the middle ground of voters who want greater freedoms without jeopardizing Hong Kong's relationship with the mainland.

Whatever their intentions, after months of confrontation, the two now find themselves in an awkward, almost accidental bear hug that "one country, two systems" was engineered to prevent. Hong Kong is supposed to be run by its own residents with "a high degree of autonomy," and that's how it worked in the years following the 1997 handover to China. But after last July's massive rally against the local government of Chief Executive Tung Chee-hwa, Beijing set up an 18-member committee to directly oversee Hong Kong policy, chaired by Vice President Zeng Qinghong, 74, who is now China's go-to man for the territory. At first, Zeng merely watched Hong Kong closely, dispatching additional intelligence officers and diversifying Beijing's sources of information beyond its usual channels to include even Hong Kong democrats. "The Liaison Office has done a lousy job of reflecting what's happening in Hong Kong," says tycoon James Tien, head of the pro-business Liberal Party. "They don't go out enough, they don't hear enough people, they keep talking to the so-called leftist camp, but don't get a whole perspective."

So when pro-democracy candidates swept the District Council elections last November, Beijing was caught unawares. Within weeks, says Shiu Sin-por, head of the pro-China One Country Two Systems Research Institute in Hong Kong, "the central government stepped in; they wanted to get involved from the beginning to the end." Zeng immediately upped the head count at the Liaison Office by appointing several trusted allies, established a new think tank on Hong Kong policy (headed by a former classmate), and deployed a swarm of fact finders. In January, says Shiu, the central government launched a propaganda campaign. Legal experts defended Beijing's constitutional supremacy over Hong Kong, and pro-democracy figures were derided as "clowns" and "traitors." Further asserting its authority, Beijing also spelled out the limits of democracy in Hong Kong: the Standing Committee of China's legislature decided in April to disallow direct elections for the Chief Executive in 2007 and for the entire Legco in 2008.

Against this backdrop, Thursday's rally has become a confused struggle for Hong Kong's political soul. The issues that brought people to the streets last year—dissatisfaction with Tung, the desire to directly elect the local government—haven't gone away, but have receded in the face of Beijing's new dominance over the territory. So what are Hong Kongers to do? On the one hand, they could heed the call of Bishop Zen to don white clothes (as a symbol of protest) and head to the rally's gathering point in Victoria Park. "We have to tell Beijing how sad we are, and frustrated, and even how angry we are," says Zen. "We have been completely disregarded, we have been insulted, we have been taught a lesson as if we were not patriotic, and this is so unfair." Or they could choose to take a very different signal from Zeng, who interrupted a state visit to Tunisia last week to comment on faraway Hong Kong. Asked about the recent attempts at rapprochement by the territory's liberal lawmakers, Zeng told reporters that there was no need for reconciliation because China had no conflicts with anyone. In jittery Hong Kong, that comment was played up as an expression of goodwill.

Hotheads—and even pragmatic Hong Kong has some—are quick to say that Beijing's behavior in recent months has destroyed the "one country, two systems" formula or fatally undermined it. That's not the view one gets at the studios of Commercial Radio in the suburb of Kowloon Tong. Five mornings a week, an engineer cues the signature theme for Teacup in a Storm, Hong Kong's most-popular radio call-in show, and housewives, commuters and taxi drivers tune in religiously. Teacup was caught in a tempest of its own in May, when shock jock Albert Cheng resigned, saying he received threats for being so outspoken. His successor, Allen Lee, lasted barely three weeks before quitting for the same reason. But Teacup is still undeniably lively. Its topics are the big issues of the day: China's pressure tactics, "one country, two systems," the need for greater democracy. The 12 buttons on the telephone board are blinking incessantly as eager callers wait to get on the air. Says Peter Lam, co-host of the show for its entire nine-year run: "It is very difficult to shut Hong Kong up."

Teacup's topic this particular morning is by Lau Chin-shek, a labor unionist and champion of democracy who launched the recent campaign to befriend Beijing, saying it was time for "alternative" thinking and "big reconciliation." One of the buttons on the console blinks, the engineer patches the call through, and Legco member Szeto Wah comes on the air, giving Lau hell. Szeto, 73, is one of Beijing's least-favorite Hong Kong figures, and no wonder: his Alliance in Support of the Patriotic Democratic Movement in China demands the end of one-party rule in the country and organizes the annual memorial in Hong Kong for the victims of the 1989 Tiananmen Square massacre. In a deep, clear voice, Szeto brands Lau, a fellow Alliance member, a traitor for cozying up to Beijing, and goes further: in terms of betrayal, Szeto fumes, Lau is like Judas and St. Peter combined.

But democrats like Lau say that's the only way forward. "If there's no change in the current relationship," Lau tells TIME, "there can be no movement toward democracy—because Beijing isn't going to budge first." This issue has developed into a kind of theological schism within the pro-democracy camp, both in principle and in planning for Legco's September election. At one time it looked like the democrats would do extremely well. (Although winning an actual majority is barely feasible: only half of the legislature's seats are directly elected from voting districts; the rest are chosen by mostly conservative trade and social groups such as bankers and property barons.) But the intervening months of brimstone from Beijing have changed that projection. Some politicians, fearing a voter backlash against anyone who confronts Beijing too loudly, now believe that a show of friendliness with the mainland is necessary if they don't want to frighten off voters—or get frozen out of Hong Kong politics. "No matter how big our differences," says Democratic Party founder Martin Lee, "there must be room for cooperation."

Others, of course, think this is mere mollycoddling. Lee Cheuk-yan is a former ally of Lau and his colleague in the Confederation of Trade Unions, but the two men are on the outs. "He believes that to push toward democracy, Hong Kong needs to improve relations with Beijing," says Lee as he leads a small rally of slogan-shouting, pro-democracy lifeguards in singlets and shorts to exhort people to march this week. (One of Hong Kong's lifeguards' unions is in Lee's confederation; the other is not, being pro-Beijing.) Lee thinks the democrats must stay united to give voters a clear choice. He suggests that Lau's tactic might backfire. "What he did is confusing people," says Lee. "The people on the street are really angry with him."

Meanwhile, on the other side of an even greater divide, a different group of politicians are deeply worried that voters are going to punish them in September: those who belong to pro-Beijing political parties. The biggest of these is the Democratic Alliance for the Betterment of Hong Kong, or DAB. Since the handover, the DAB has positioned itself as a political "bridge" to the mainland, and that went down well with voters. The DAB currently holds 10 seats in Legco, compared with 22 for the democratic camp. But given Beijing's recent unpopularity in Hong Kong, the DAB admits it will be lucky not to lose any seats in September. Chairman Ma Lik predicts that if the voters are still as angry as they were last July "and they still believe that on the mainland the ruling Communist Party is suppressing people and there's no freedom, then that's going to be tough for us." Ma saw that anger last November in the lower-level District Council elections, when the DAB lost a third of its seats.

The paradox is that the DAB is known for both its support of China and its local work: of all the parties in Hong Kong, it has the largest and most-proactive grassroots organization. When residents want a bus-stop shelter in their neighborhood or help with housing-estate issues, the local DAB office is a good place to go. Christopher Chung, a district councilor in the eastern part of Hong Kong island, has worked hard for the 2,000 fishermen of Shau Kei Wan typhoon shelter; last year he helped get government loans for them to buy freezers for their boats. He calls the fishermen his "iron votes," and they've helped him get elected for 13 straight years as a local councilor. But Chung wants to take the step up to Legco this September. On a visit to the typhoon shelter to drum up support—chatting with fishermen mending nets and smoking tobacco from homemade bamboo bongs—Chung admits that the mood is against him. "I have no chance," he says. No matter what he's done for the constituents, his party's closeness to Beijing is an inescapable albatross. "I don't think the DAB is finished," he continues, "but we will have to wait until our platform is more in line with public opinion." Running for re-election to his current job isn't a problem. But Legco is different: that election isn't about freezers or boat loans. It's about the big things. Hong Kong. China. Democracy.

A year after finding a political voice—and then ending up in a new relationship with Beijing—Hong Kong is searching for the center. Lau, the legislator compared to Judas, used interesting language when he explained why he decided to get conciliatory with China's leaders. "I have to make a judgment on the crucial question: Does Beijing want to rock the boat of Hong Kong? If the answer is yes, you only have two choices. You can either pack up and go, or put up a big fight." But Lau concluded that Beijing didn't want to rock Hong Kong's boat if it didn't have to, and that the best way forward was to find common ground. The pro-reconciliation camp hopes that Beijing will allow some of the banned democrats to visit the mainland and start some kind of dialogue. Then, perhaps, matters of substance can be discussed down the line, such as changes to the way Legco is elected, or how the territory's Chief Executive is chosen (he is currently appointed by a Beijing-picked congress).

Skeptics say this vague road map assumes too much flexibility from Beijing. "Dialogue won't come before the September election," scoffs Yeung Sum, chairman of the Democratic Party. "That's part of Beijing's scheme to swing support away from the democrats. It's all about political muscle." Shiu Sin-por of the One Country Two Systems Research Institute adds that Beijing has scant interest in forging a better relationship with Hong Kong's feistier democrats, who it believes are "trying to subvert the central government."

Bishop Zen gets angry at any such charges of subversion and disloyalty. "We have done nothing wrong," he insists, saying Hong Kong people shouldn't be expected to "kneel down to implore for understanding" from Beijing. Zen continues, "If you suppose that what they have done comes really from a monolithic leadership from Beijing, then it's useless to fight back." But he remains more upbeat, taking solace from moderate statements on Hong Kong not only by Zeng but by President Hu Jintao and Premier Wen Jiabao. "If you still have hope that there are much more open-minded people in the leadership, then it is useful to make them understand the real situation." In other words, Hong Kong has to get its true feelings out—as loudly as possible—and the truth might set it free.

Ray Au, the district councilor in Tai Po, sees the fight on a much lower and nastier level. Last week Au received a call in the middle of the night from the security department at the Tai Wo Estate, informing him of a fire at his office. When he arrived there at 3 a.m., he found that an arsonist had torched several posters on the outside wall and left behind a gas cylinder, which had fortunately not been ignited. But a message was scrawled in blue Magic Marker on the front wall: "All Chinese traitors must die." The bullies are turning into bad guys, and Au says backing down from them is no longer an option. "If we stop now, there is no hope for Hong Kong people."

• Anthony Spaeth | Hong Kong
• One year after Hong Kong's half-million man march, Beijing and the pro-democracy camp are both fighting to win the hearts and minds of the territory's people