I was fast asleep at home in the US in early June 1989 when a Hong Kong broker woke me up to tell me troops had opened fire on the crowds that had been occupying Tiananmen Square in Beijing.  That should let you know that I observed what was going on fback then from afar–as well as through the lens of a stock market investor.

Although I think there’s always the possibility of a mistaken escalation of the student demonstrations now under way in Hong Kong into Tiananmen-like violence, I see a number of important differences between the two situations.  Among them:

–Tiananmen Square took place in the heart of China’s capital, not in a politically marginal SAR

–1989 was a time of considerable political/economic unrest in China, with the economy unable to create jobs and, in consequence, hundreds of thousands of unemployed workers roaming around the countryside looking for work.  This was very scary for Communist Party leaders.

–during the months it took the Tiananmen situation to come to a head, many of the students who had originally occupied the square left, and were replaced by older unemployed workers, whose motives were less political and more economic.

–local units of the Peoples Liberation Army (PLA) were ordered to use violence on demonstrators to remove them from the square.  They refused–and were replaced by units from distant areas that had few cultural and ethnic ties with the demonstrators

–the careers of the soldiers–especially the commanders–who obeyed the orders to fire on the crowd were ruined

–world outrage at Tiananmen resulted in significant diplomatic and economic sanctions against China.  Private companies reallocated their capital away from China; highly skilled foreign workers, a key source of potential technology transfer, rethought their plans as well.

In sum:  I think media suggestions that the current student pro-democracy demonstrations in Hong Kong are the new Tiananmen are way off base.

I can see potential worries, though.  Clearly, Tiananmen taught the authorities not to use violence against demonstrators.  However, teenage student leaders may genuinely not realize where they live–that, just as there’s no crying in baseball, there’s no democracy in China.  It may also be that opponents of the current administration in Beijing would regard a political incident in Hong Kong as a way of derailing its anti-corruption campaign.  So there is a non-zero chance of a tragic accident.

What I’m doing:  I’ve found myself buying odds and ends on the Hong Kong stock market over the past few days, since the Hang Seng is down almost 10% from its pre-demonstration high.  I may nibble a bit more.  Ultimately, though, while I believe the current situation is very un-Tiananmen-like, I’m not going to bet the farm on my (limited) ability to analyze political events.  So I’m going to make up a shopping list, but wait for clear signs that the situation is being defused before doing much more.