A sudden interest in traffic

Ch-monozgot

Bans against looking out of the window. Xi Jinping in a Zhongshan suit standing through the sunroof of his ugly Hongqi limo. Apparently monozygotic thousands of soldiers marching against fascism. Peace-promoting nuclear missiles capable of hitting Hawaii. The South China Morning Post’s owner Robert Kuok in his own paper, patriotically bewailing the Opium Wars and the Kempeitai. For those of us suffering an overdose of this surrealism, the perfect antidote: Hong Kong traffic…

A week or so ago, some former civil servant proposed banning trams from Central to reduce traffic congestion. This was before yesterday’s display of history-warping militaristic overload, so it seemed shocking and bizarre. It was hard to tell if the guy was serious, and afflicted with a bad case of Post-Retirement Serving-the-Community Disorder. Or maybe his submission to the Town Planning Board was intended as satire – the bureaucrat’s equivalent of piece of Banksy street art. Either way, he sparked off some major chatter…

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Some background on illegal parking here and – all in the SCMP today – here, plus this and this on the subject of cutting traffic in Central. And it’s not only columnists, the police WellingtonStreetseem to be joining in, suddenly writing out more parking tickets. This is usually such a rare sight that you photograph it; the example here was last weekend (note that the usual line of illegally parked cars has mysteriously vanished). There has been a noticeable recent increase in traffic enforcement in Central’s streets, with police motorbikes and vans parked menacingly in several illegal-parking spots.

The flurry of interest in this issue offers officials an opportunity to do something highly unusual and bold: listen to what people are saying and take the initiative to deliver. In other words, the exact opposite of the Avenue of Stars/New World/collusion screw-up.

This sounds mightily naïve. Cynics will say that the transport/retail lobby will veto moves to ban commercial vehicles from Central during daytime, and tycoons or quasi-tycoon buddies of our officials will howl in protest if their luxury cars are similarly barred. There are people out there who insist in all seriousness that bus services should be cut to free up space for their Mercedes.

On the other hand, the situation is getting critical. The de-facto policy of allowing illegal parking is now encouraging drivers to double-park, to hold up traffic while lingering for a vacant space, to occupy bus stops, and to occupy sidewalks, and (according to a cop on the radio a few days ago) they reduce visibility and thus endanger pedestrians. Something has to change at some point simply in order to avoid gridlock. Or major loss of patience – I can’t be the only one temped to kick these assholes’ wing mirrors off. Which brings us to ‘rule of law’. The Liaison Office-government is contorting due process to make examples of student protestors, while car owners genuinely occupy Central with impunity. If only a pro-democrat politician had the wits to make something of this hypocrisy.

There are only so many entitled, selfish and arrogant screw-everyone-else vermin you can stuff into a given physical space, so eventually something has to give. I declare the weekend open with the scintillating thought that, after the private car owners, it’ll be the turn of… golfers.

SoWhat

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Rush to ditch Yuan savings continues

To mark The Year China Goes Broke (if you predict something for enough decades, it’ll Stan-RushToDumpeventually happen) Hong Kong savers are getting out of the Renminbi. One way to do this is to convert your holdings back into dollars. Another is as follows…

On Sunday I strode into the charmingly modest border control point at sleepy Shataukok, tucked away in the undergrowth in the far northeast of the New Territories. After going through the dozy Chinese immigration, I stepped out into Yantian. This suburb of Shenzhen is separated from the main city by mountains and so has a small-town feel to it.

Small town – but the first thing I see is a very very very long line of people stretching along the sidewalk. After several hundred yards, the line ended and was being let into a police station in batches. People were emerging soon after. With excited looks on their faces, they then headed in the other direction. Most puzzling, until…

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…I came across the Yakult-packing hordes just across the road. The crowds were applying for permits to enter Chung Ying Street. Wikipedia says its days as a magnet for Mainland shoppers are over, but this appears not to be the case. It has obviously become a parallel-traders’ enclave, conveniently out of everyone’s way in the Closed Boundary Area.

Further along, closer to the port, you see China’s other rusty ex-Soviet-scrapheap aircraft carrier…

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It’s Minsk World, a ‘military theme’ tourist spot. It’s probably fascinating and in excellent taste, but I had other things to do.

On through a new development called One City. Or, as I hereby rename it, One Deserted City…

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Spiky-haired real-estate agents – exact ripoffs of the Hong Kong variety (indeed, they were from Centaline) – were lurking in a dingy little office in the corner of one block. They eyed me up, but I put on an extremely convincing impression of someone not interested in buying an apartment or leasing commercial premises in this wasteland, and they slunk away into the darkness.

I naturally had to know what these places look like inside, even if it meant a bit of surreptitious underhand window-opening. Voila…

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The nearby residential area is inhabited and quite pleasant in a because-it’s-newly-built way, with play spaces and greenery. There’s a Starbucks, which has Wi-Fi only for people with a registered Mainland phone number, so the People’s Anti-Rumour Enforcement Agency can arrest you if you cause a stock-market meltdown. And there’s a mall, including a sprawling Vanguard supermarket with an amazing sausage display and pretty much everything else you need…

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I mean – Hello Kitty booze. Thought I’d died and gone to heaven.

And so, to my reason for coming here: dumping Renminbi. I have a giant wad of the stuff – leftover laisee from New Year. I chose a Shaanxi restaurant because it was one of the first I found, plus it looked fairly classy, and my previous experience with this cuisine has been very good (think Sichuan-meets-Xinjiang).

With cash to fritter away, I ordered generously (though not gluttonously – this meal was for two). Last time I ordered donkey, I got something like corned brisket of beef. This happened here too. Conclusion: maybe donkey actually tastes like beef, and I have been expecting something too viande de cheval. The bean shoots and greens were infused in chili, Sichuan pepper and nutty oil, and seriously crunchy. Then there was the biggest, flabbiest noodle in the world, with a meat and vegetable sauce including some sort of rare and secret vinegar; this is the classic Shaanxi dish. Bamboo shoots, which like the bean sprouts you could binge-munch all day. And not least, an outstanding hot and sour soup – quite subtle on the hot and sour, with tomato, coriander and something hard to pin down, possibly anise but maybe not…

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Including a couple of blueberry juice drinks, with real live berries at the bottom of the glass, the bill came to RMB160. That’s 16% of the Yuan foreign exchange reserves I was trying to offload. But wait! There’s a 20% discount today, the waitress reveals. And so I get change from RMB130.

I am left with no choice but to buy Yakult-case quantities of 3.8% Hello Kitty peach brandy.

Tomorrow is the ‘Death to the Little Japanese Devils’ Occupy Beijing with Peace and Love Parade, which is a clumsily Mainland-sounding day off here in Hong Kong, which in turn suggests a need (for the lucky few not being dragged up there in the Mega-Delegation from Shoe-Shine Hell) for some holiday viewing. I declare the sub-weekend open with China journo par excellence John Garnaut in conversation with academic Hugh White.

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Beijing woos pro-dems (not pretty)

It seems at least someone in Hong Kong made use of the Ashley Madison website. The city’s Democratic Party recently hooked up with Hong Kong and Macau Affairs Office deputy director Feng Wei for a discreet no-strings bout of constructive exchange of views in a spirit of mutual respect.

To opposition militants, this is befriending the devil. To pragmatists, it would be pointless to pass up an opportunity to make the pro-dems’ case to a Mainland official. True – with elections coming, they need to be mindful of Beijing efforts to divide and weaken the pan-dem camp. But that could go both ways. The HKMAO has a tradition of rivalry with the SCMP-BJ-seekslocally based Liaison Office, which is openly acting as Chief Executive CY Leung’s puppet-master and sees the whole opposition as untouchable lepers.

To Beijing, differentiating between the militants and the pragmatists might not be a calculated (indeed predictable) ploy to split the pro-dems so much as an attempt to come to terms with the existing divide in the camp. At one end of the pan-dem spectrum, groups like the LSD and People Power openly call for the overthrow of the Communist regime. At the other end, the DP and fellow moderates can live with the one-party state so long as it grants Hong Kong autonomy and democracy. While full democracy is clearly incompatible with one-party rule, the DP seem pretty reasonable compared with a younger generation of Hong Kong radicals, who disown ‘China’ – whoever runs the place – and claim the city to be sovereign. Even if the Liaison Office sees all pan-dems equally as an enemy to be crushed, the HKMAO could have cause to be more subtle.

‘Subtle’ by their standards, that is. Just in case DP leaders like Emily Lau risk are not sufficiently seduced by the HKMAO’s come-ons and promises of cuddly warmth and intimacy, along comes pro-Beijing academic Lau Siu-kai with his own blandishments. He says the Central Government would like the DP to be a ‘loyal opposition’. This he defines as a group that is ‘allowed to have contrary views on many issues’ provided it accepts the Communist one-party structure. Who can resist such sweet talk?

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CY administration death-watch

After making dozens of arrests, Chinese authorities get an array of reporters, bankers and others to confess to rumour-spreading and illegal trading. Caijing journalist Wang Xiaolu admits responsibility for ‘inflicting huge losses on the country and investors’. So the story is that these individuals caused the recent stock market crash, and Xi Jinping and his administration are just innocent victims along with everyone else.

This is how to do blame-shifting: implicate a generous-sized group of unconnected people, extract not only confessions but remorse, and pile on the shameless lies until your propaganda-fed public have no sense of perspective. Whether it’ll work is another matter. But at least the leaders in their bubble will feel they’ve kept some face.

Contrast this with the dismal performance of Hong Kong’s government when the lead-in-LamTakSumwater scare broke out a few weeks back. In their panic to offload responsibility, our valiant officials found a scapegoat in the form of one Lam Tak-sum, a plumber. They could at least have had the wits (let alone decency) to find someone who isn’t in a wheelchair – but oh, no… What a bunch of amateurs.

They have more to panic about. At any given moment, parts of China’s United Front in Hong Kong will be out of step – this is inevitable in an unnatural alliance of born Communist Party believers, co-opted tycoons, opportunist politicians, shoe-shiners and plain losers. But Chief Executive CY Leung seems to be testing the pro-government camp’s unity to its limits. Among pro-establishment lawmakers to go off-message in the last few days are Priscilla ‘Rat Queen’ Leung, who has criticized the administration over the lead crisis, and James Tien, who has accused the government of interfering in Hong Kong University’s internal affairs. Meanwhile, a semi-senior Beijing official has held private discussions with members of the opposition Democratic Party.

Now Legislative Council president Tsang Yok-sing expands on his previous comments apparently deviating from the official line. He questions the way ‘One Country, Two Systems’ is going. SCMP-1C2SAtRiskThe target here is not just CY Leung but Beijing’s local Liaison Office, which over the last couple of years has assumed more control within the Hong Kong power structure in order to apply Mainland-style bullying, smearing, manipulation and other tactics to crush opposition forces. These crude attempts have been polarizing, leaving the opposition intact, while causing greater divisions within the loyalist camp.

Tsang was born into the Communist faith, while CY is a pre-1997 convert and zealot. There now seems to be a conflict along these lines, between the local traditional patriots and the CY-Liaison Office bloc. This suggests that the top policymakers in Beijing are not impressed with Hong Kong’s management since 2012, bungling the political reform package and ‘losing’ the post-colonial generation. No-one outside China’s ruling clique can be at all sure what is happening, but we do know that Hong Kong’s DAB/FTU milieu, of which Tsang is a/the leader, is the CCP’s local front, and by definition does not pick the wrong side.

SCMP-OfficialsToGetAnd to add to the CY administration’s woes – we now learn that Hong Kong’s better-paid civil servants are getting a monthly, no-strings allowance equivalent to around 80% of median household income, because, er, well… no-one seems to know.

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Two styles of government

Hong Kong ends the week looking at two contrasting styles of government. The Leisure and Cultural Services Department under Lau Kong-wah spits in the public’s face with a display of mendacity and misinformation. Eddie Ng’s Education Bureau, on the other hand, shows refreshing honesty, openness, courage and integrity. Both concern the relationship between public and private interests.

Most taxpayers probably vaguely assume that the LCSD exists to provide the Hong Kong people with parks, museums and concert halls. But, like most government departments, their priority is non-residents – or specifically the landlords or ‘tourism industry’ that benefit from visitors’ apparently endless and mindless expenditure. Hence the widely unpopular plan to ‘revitalize’ the Tsimshatsui waterfront by sealing it off for three years and then letting property giant New World run it for another 20 years.

In order to counter allegations of collusion with property tycoons, the LCSD is insisting that ‘no luxury shops or high-end restaurants’ will be opened on the promenade. It is ‘not a SCMP-nothingfancyproperty or commercial project’, and therefore New World can’t possibly make any money out of it.

However, this extension of the tacky and dreary waterfront will lead right up to a New World-owned property and commercial project, namely a hotel, which is where luxury shops and high-end restaurants will be.

It’s not the scummy, ‘tourism first, screw everyone else’ nature of the deal that really offends; it’s the insult to our intelligence in expecting us to imagine a big local developer doing something and not making money out of it. It’s the pretense that’s pathetic.

This nicely unfolding little controversy is also a classic example of the Hong Kong bureaucracy’s demented stubbornness when trying to ram through a stupid and unpopular idea. They could have anticipated hostility. They could have listened to critics and considered other options. But no – it’s going to be ‘we are right and you are wrong’ all the way. It could be a gift to the pro-democrats as a way to stir up public feelings (though they seem to have chosen this moment to get bogged down in a bleat-fest over a meeting with a Beijing official).

By contrast with the LCSD, the Education Bureau provides an example of no-nonsense transparency and truthfulness that gives us hope for governance in Hong Kong.

It appears that some schools, along with other buildings in the city, have unsafe levels of SCMP-FreeSchoollead in the water. Education officials are taking action. The children most at risk of suffering brain damage from this poison are the little ones in kindergartens. Therefore, the bureau announces, ‘we will fund water filters for all establishments except kindergartens’.

Wow. It’s not often we get that sort of frankness from these government people, but there you heard it straight: to hell with the little bastards.

The logic is that kindergartens are privately run. If government paid for water filters, the owners could capitalize on this advantage in the market – ‘We’re not giving kids brain damage any more’ – and charge higher fees and so make more profit. Transfer of benefits! This principle could be applied to other dangers to kids in kindergartens. So if a little child is bleeding to death following an accident with scissors, public paramedic and hospital services could just shrug and put the phone down. ‘Privately run’, sniff. Think of the money we’d save.

I declare the weekend open with the cheerful thought that exposing kindergarten kids to lead will in time improve the supply of intellectually suitable workers to fill the dead-end tourism jobs that New World will be creating at the Hung Hom end of the waterfront promenade. A win-win!

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Tourist crowds ‘figment of imagination’ data prove

GnusIf I lived in Africa, I would get annoyed having to push and squeeze through the thousands of wildebeest cluttering up the place and getting in everyone’s way. But I am up the hill from Hong Kong’s Central, and the herds are mainly of Korean tourists.

The younger ones stick together in pairs – typically two females. The one with page-boy-style ginger hair and shocking cherry red lipstick carries the guide book; the other looks more normal and wields the selfie stick. Sometimes, like when they mistake the Mid-Levels Escalator for a relaxing ride at Disneyland, residents have to give them a firm but polite shove to get them to move aside.

KoreanRefugeesThe older ones move in packs of one or two dozen, mixed male and female. They wear baseball caps, and their wizened faces have a slight but unmistakable look of alarm. For some reason their handlers require them to assemble outside Marks & Spencers. Their generation endured terrible hardship and trauma back in the 1950s, so I personally try to keep physical force to a minimum when they get in the way – a gentle elbow at the most.

The daily presence of these hordes in my neighbourhood is something of a mystery. The SCMP-CrowdedOutKorean culture of fanatical and unquestioning obedience must play a part: the guide book instructs them ‘go to the overrated egg-tart shop’, so go they must. In truth, we don’t care why they come here. We just wish they wouldn’t. Nothing personal – there’s just not enough space.

At least, that’s what we thought. However, today’s South China Morning Post uses what it calls a ‘formula devised by statistician Nate Silver’ to calculate whether Hong Kong is really overcrowded with tourists. Essentially, it’s the annual number of visitors divided by average length of stay as a percentage of the population. There are two key findings:

  1. The smaller a place is, the more crowded it gets.
  2. The Koreans, Mainlanders and others who crowd Hong Kong’s sidewalks are not there at all, but merely figments of our imagination.

Lawmaker Michael Tien ‘hails’ the data as proof that Hong Kong can easily cram more tourists in. The SCMP mentions in passing that the research results do not reflect the possible clustering of tourists by districts or season, but the general impression is that this is a minor and barely relevant point. The extra visitors would not, presumably, all hang out in particular crowded spots – like the cash registers in the G2000 clothing stores of which Tien is chairman – but be scattered around the city so sparsely that you would not even realize they are there, like the thousands of Koreans who it seems are not, after all, pouring into the neighbourhood every day.

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Today’s Key Subliminal Message is…

Greedy, evil America caused the current market mayhem unleashed from China.

Repeat until you are convinced. Scattered with subtlety here and there in the South China Morning Post, the notion hits some important pro-Beijing buttons, notably Chinese victimhood and Communist Party infallibility.

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It seems to partly be a reaction to the anti-Chinese ravings of US presidential hopeful Donald Trump – apparently someone up there on the other side of the Great Firewall doesn’t get the joke and takes the clown-act literally. But mainly this is a patriotic distraction from the glorious motherland’s ongoing ‘challenges’: panicky leaders sense the SCMP-TheresMoreeconomic game is up, while Tianjin port explodes and everyone pretends to rejoice that Vanuatu is turning up for next week’s Grand Anti-Turnip-Head Parade.

Can we trace today’s global gyrations in stocks, commodities and morale to Alan Greenspan’s policy as Fed Chairman all those years ago? Yes. It’s not disputed. Nor is it very interesting, or especially relevant. In fact, it’s a rehash of the fuss several years back, in which wastrel/consumer/debtor USA and mercantilist/saver/exporter/lender PRC blamed each other for the imbalances that, by definition, each could not have had without the other.

We can go further back. Why not blame the goldsmiths of medieval Italy? They held neighbours’ bullion for safekeeping, and noticed that people were using the receipts as cash. So the scoundrels started to issue more of these IOUs for interest – even though no-one had strictly speaking put any extra gold in the strong room. It was second only to the invention of sex. Or we could get right down to the root of the problem and blame those bastard Sumerians for thinking up wacko ideas like buying and selling grain that still hadn’t been grown.

Obviously, the US/Western culture of maxing out on credit cards and dumping it all on the next generation is reprehensible and not democratic civilization’s finest achievement. Obviously, Australia, Brazil and other resources producers will have to get new jobs now China isn’t gorging itself on all the coal and iron on the planet. But equally obviously, China’s unfolding economic mess is the making of the Communist Party.

We all know the dilemmas they face in Beijing: the easy post-Maoist gains are over, and now they have to solve debt, bubbles, vested interests and potential social unrest, or lose any mandate to rule. It has come to this not because of weakness and indecisiveness – the curses of Western democracy – but because of the wonderful Beijing Consensus. It has happened because they are so accustomed to total, unquestioned control, and so wrapped up in their own Key Subliminal Messages and propaganda, that they couldn’t believe anything could go wrong. No-one else forced them into this. And saying it’s someone else’s fault won’t help.

Oh dear – somebody at the SCMP didn’t get the memo…

Tw-GeoChen

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Concrete box ‘possibly not worth HK$23mn’ shock horror

The news media sometimes deliver grievous and heartbreaking stories that shake us. It might be an elderly and infirm woman beaten senseless by thugs, or the plight of a starving orphaned infant refugee. Or, in the case of Hong Kong’s Standard, the man who has to cut the asking price of his property to sell it. A Tai Koo Shing apartment, the paper painfully reports, went for 24% less than a similar unit the week before.

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Stan-ButVictLest we get overly depressed, the story ends on a cheery note. A senior manager at Sun Hung Kai Properties assures everyone that silly little stock-market swings (like the trifling one you probably missed yesterday) mean nothing. He adds that ‘more people’ have had the tremendous foresight to move their money out of stocks and, in the blink of an eye, put it into real estate, because home prices are bound to carry on zooming up and up, forever.

Could this be the same Sung Hung Kai Properties that is offering special discounts and waivers on repayments – of the sort that suggest desperation to shift inventory – on a new development at Tung Chung?

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Yes it could!

According to a little bite-size morsel tucked away in the South China Morning Post, Chief SCMP-GovtMustActExecutive CY Leung ‘hits back at critics of his call for proactive government involvement in the market’. Since no-one has a clue what his ‘proactive’ measures would be, it seems a pointless debate. But some commentators suspect he wants some sort of 1970s Korean-style industrial policy of picking winners, and even some of his own officials have distanced themselves from his remarks.

He now justifies the ‘proactive’ whatever-it-is as a response to market failure, such as moves to ‘curb property speculation’. The problem here is that these measures – extra stamp duties – have themselves failed.

If he had been serious about minimizing the real-estate bubble, he would have barred non-residents from buying Hong Kong residential property and introduced punitive taxes on empty homes. (We know this would work because of the deafening squeals from those who insist it wouldn’t.) But of course this would have cut developers’ profit margins, or ‘damaged our reputation as a free market’, as opponents like to phrase it. Now, his administration is reduced to sitting helplessly, wondering what Xi Jinping or Janet Yellen might do next, and waiting – fearing property prices rising further, fearing property prices staying where they are as the least affordable in the world, and fearing property prices falling.

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An optimistic start to the week

Hong Kong’s biggest post-1997 buzzword has been ‘integration’. Other than the fact that it is with the Mainland, no-one agrees exactly what it entails. Most accept that it is primarily to do with the economy – trade and investment. Some also see a social dimension involving personal and household mobility. To encourage correct thinking, the government started to use the term ‘boundary’ for the border. Only cynics with a sense of irony apply the label to political matters, like the creeping influence of Chinese officials in the city’s administration.

The basic message has been that, whatever it is, this ‘integration’ is obviously a good thing, allowing Hong Kong to ride China’s rise to global superstardom. Officially, it would not take place at the expense of the city’s international connections. Until recently, only a few throwbacks to the 1980s like former Chief Secretary Anson Chan have asked whether the city would be better off remaining relatively insulated from Mainland influence (as envisaged in much of the Basic Law). In the last few years, of course, such sentiments have taken root among younger radical ‘nativist’ or ‘localist’ groups.

China’s economy is now approaching some sort of disruptive transformation or upheaval – in the absence of reliable data, no-one knows what. (See comments from Willy Lam and others here on the leadership’s dilemma; and slides 2-6 here for a big-picture summary.) But whatever happens, Hong Kong’s Integration-is-Wonderful economy can only suffer. We are already seeing this in the luxury-retail/Mainland tourism sector…

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All right-minded Hongkongers rejoice in reading about the closures of stores selling overpriced garbage (in which landlords feel pain, and Bloomberg amusingly describes Burberry as a ‘trenchcoat maker’). Some observers, peeved at the city’s ingratitude, feel or hope that everyone will be hurt…

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William Pesek puts this in the context of Hong Kong’s dismal governance…

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Even he, like so many others, makes the mistake of believing Hong Kong ‘has become Bl-HKCantreliant on … the tens of millions of shoppers’ from the Mainland. It looks like that. But what we are really seeing is – surely – a tourism industry reliant on Hong Kong, not vice-versa. It’s just massive, distorting, unsustainable arbitrage. The city was a happier, more comfortable and certainly no less prosperous place 10 years ago before the unmanageable deluge of Mainland shopper-tourists struck.

The government is off on its hallucinatory fantasy in which we must cram yet more tourists in, and simultaneously pick winners in tech and creative sectors (so long as they don’t, like Uber, compete with established anti-innovative Beijing-favoured tycoon interests). Hence the deal with New World to expand Avenue of Stars. There’s almost a parallel here: China’s leaders can’t think beyond more debt-fueled investment in infrastructure; Hong Kong’s can’t think beyond cramming more tourists in.

There is no reason for Hong Kong people to pay any attention. ‘Integration’ is very much incomplete, of debatable value and meeting popular resistance. The impact of China’s economic slowdown (and factors like a stronger US Dollar) could or should include: fewer crowds, lower rents, lower living costs, more space for smaller companies, and more opportunities for innovators and entrepreneurs. To our bureaucrats and tycoons, these are Bad Things. To the rest of us, China’s dreaded downturn might offer an alternative – not a moment too soon – to an increasingly gloomy ‘Mainland’ future.

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The economic price of CCP security

Like Hong Kong’s pre-1990s British administrators, but with extra added paranoia, China’s Communist Party took care to co-opt business and other interests as a support base in its new colony. To Beijing, it seems, loyalty bought from supposed ‘elites’ is essential to control over the foreign-infested city. The alternative – winning local hearts and minds through enlightened governance – is too alien and perhaps anarchic for a one-party state to contemplate.

One result is that Beijing sees the population beyond its United Front network as hostile. This means the central government appoints senior Hong Kong officials only from the narrow and shallow pool of people it deems trustworthy. This inevitably reduces the amount of talent available; the resulting poor governance increases public hostility, which drives Beijing to rely on an even more-select group of inept loyalists – and so on in a saga of plummeting quality, the next ghastly chapter of which will be Whoever They Choose After CY Leung.

Such favouritism is also affecting the economy. We all know that the property tycoons are a caste apart, with a Beijing-granted right to skim off a fat percentage of the wealth Hong Kong people create. The luxury projects they build serve as stores of wealth for corrupt money-laundering Mainland officials. The tycoons further prosper from the influx of tourists that just so happens to wear away Hong Kong’s unique identity. Other interests, from import-export to toys to banking, get perks, protection or just flattery in return for obeisance to the Communist Party.

No doubt following the examples of the Phoenicians, Romans and Mongols, the British in 1950s-60s Hong Kong groomed dependable supporters among Shanghai industrialists. Cantonese businessmen were a bit suspect, having perhaps collaborated with the Japanese or possibly having links with the Communists. The colonial government granted these Shanghainese precious textiles quotas for selling garments to Western countries. The lucky recipients got rich without getting their hands dirty by selling the quotas on to actual manufacturers. Their descendants walk among us today – look at any flaky or slimy pro-establishment politician called Tien or Tang.

Which brings us to taxi licences and Uber. In his column yesterday, Jake van der Kamp HKTaxi50swrote that the Hong Kong government will never let Uber displace taxis because the holders of taxi licences form the biggest bloc in the Transport functional constituency, which in turn is part of the ‘safe patriot vote’ in the Legislative Council. In other words, the holders of taxi licences, currently valued at HK$7 million apiece, having been co-opted by the Communist Party, are immune from competition and the 21st Century.

In New York City, where taxi medallion holders have not been co-opted by the Chinese Communist Party, the value of their investment peaked a couple of years ago at just over US$1 million. They have since lost 20-25% of their value, according to this, and it’s happening in other cities. (Unlike Hong Kong, US cities at least auction additional medallions occasionally.)

The Hong Kong taxi licence holder is the beneficiary of a rigged system. He has bought a bit of paper that allows him to rent a taxi out to drivers. The government keeps these pieces of paper artificially scarce, so he makes a ton of money gouging the drivers and seeing his speculative investment rise in value – while sitting back and not lifting a finger. Our landlords are in a similar position (though their investments are at least homes that someone can live in). You could call them parasites. Economists call it rent-seeking. The Communist Party calls them patriots who love the motherland.

So here’s the deal in Hong Kong today: an economic activity must be protected from change, innovators must be denied opportunities, and consumers must be denied better service/value, just so a totalitarian one-party regime can relax and think it has some friends. It’s not just taxi licences, of course. Look at the list of functional constituencies and think of all the vested interests that might beg Beijing for protection.

The Standard’s Simon Lee concocts a solution to the taxi/Uber dilemma – essentially compensating the speculators who were happy when licences rose in value but are now angry that their monopoly/free-lunch might be over…

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By this reckoning, we should compensate Chow Sang Sang when declining tourist numbers force them to close gold shops. We should set up a special fund to benefit Li Ka-shing if a competition law cuts into his conglomerate’s retail profits. (If we were examining the dynamics of the relationships here, if anyone should compensate the taxi licence holders, it should be the Chinese Communist Party.)

Meanwhile, the Hong Kong government is obediently protecting the co-opted taxi licence guys at all costs, arresting Uber staff and angering citizens who want a choice. Maybe this is how it’s going to be. If you’re an outsider like Ricky Wong who wants to start a TV station, you can’t; but if you’re a property tycoon and gambling scion, who knows? Maybe when son-of-CY takes office, if you’re a patriot who loves the motherland and you want to store tons of sodium cyanide next to Taikoo Shing, you’ll be able to do that too. What price do Hong Kong innovators and consumers – the economy – have to pay to keep the CCP feeling secure?

I declare the weekend open with another delightful look (through a grimy car windscreen) at Dr Vienna Lau, the dentist promoting herself and her ‘vision, willpower and ample compassion’ at considerable expense as something-but-we’re-not-sure-what-yet, this time on a minibus. Presumably, it’s something to do with November’s District Council elections. To our horror, she’s doing dogs…

ViennaDog

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