SCMP on the Lam

The South China Morning Post goes into a painfully contrived and disproportionate democrat-bashing frenzy today – devoting the front-page lead, laborious backgrounders, in-depth blah, a tedious editorial and pliable hack-columnists #1 and #2 to the Howard Lam saga.

At best, this is a sad tale of an obscure member of a faded political party who is undergoing a mental-health crisis. At worst, it is an illustration of the climate in Hong Kong today, where reasonable people cannot rule out the possibility that Communist Party thugs would abduct and punch staples in an opposition figure, and do not feel they can trust the police to be politically impartial. (On cue, the HK Police almost instantly arrested Lam on suspicion of misleading them.)

The SCMP’s overdone orchestrated freak-out over the story could just be cack-handed misjudgment of an opportunity to attack and smear enemies of the state. It could be a muddled smear against the cause (espoused by Lam) of the disappeared Liu Xia. More likely, editors eager to please the government calculated that a mass-mouth-froth on the issue would help discredit opposition to the location of Mainland law-enforcement at the West Kowloon rail terminus.

But also, by ramping up the Lam story, the paper conveniently distracts readers from the re-sentencing – and jailing – of activists from the storming of the Legislative Council back in 2014. (The coverage goes into the City section.)

A similar case comes along tomorrow, involving international name Joshua Wong, Nathan Law and Alex Chow. The government’s use of appeals to get harsher sentences for opposition activists can be seen as part of a bigger trend in which Hong Kong people, denied representative government, are heavily punished for protesting against bad governance.

What the Communist Party wants (Hong Kong officials are simply pawns here) is a population that plays no part in politics and is intimidated or cajoled into silence and acquiescence. Creating what will look uncomfortably like ‘political prisoners’ will be part of that process.

The SCMP, with its avowed mission to explain China positively to the overseas audience, will perhaps be pushing much more Howard Lam in the next few days – or maybe it will be panda bears.


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Airline serves as partial metaphor for city

The glory days of Cathay Pacific are ancient history, an analyst says.  Others are forecasting that Hong Kong’s major airline faces more financial losses and further cost-cutting.

The ‘glory days’ would most likely have been the mid-80s to mid-90s.

During that time, Asian air travel boomed. Japanese tourists started flooding into the region and beyond, and Taiwanese businesses poured into just-opening China. Airlines couldn’t expand fast enough, and non-stop Taiwan-Mainland flights were forbidden.

Cathay managed to grab market share by buying a load of second-hand L1011 TriStars from the US, and offering crazy packages to lure cockpit crews from the UK and Australian militaries. With a preferential government policy and only one runway at Kai Tak, the airline didn’t have to worry much about competition. Profits rolled in.

But it couldn’t last. Hong Kong’s high inflation pushed up Cathay’s costs much faster than its regional rivals’, and started to undermine its competitiveness. To complicate things, the coming handover of Hong Kong created uncertainty and led the British owners – the Swires – to sell stakes to Chinese state aviation interests.

Still, the airline went on to expand massively, notably on the back of the China growth/Chinese tourist phenomenon, growing a major cargo business, and developing Dragonair as a classy rival to nasty, cheap and even scary Chinese carriers on Mainland routes. It went through labour problems, fuel-price surprises and outsourcing, but nothing unusual by industry standards – though it has long suffered exceptionally whiny employees and customers.

Fast-forward to today. Mainland carriers have matured into big, serious regional and global operators, as have Middle-Eastern ones; Hong Kong has inevitably declined in relative prominence as a hub linking Asia to North America and Europe. And budget airlines like Air Asia and Peach have become a low-cost choice for regional travellers who don’t mind arriving at the destination late and hungry. Meanwhile, Hong Kong’s costs still drag on the city’s comparative advantage as an old-style airline’s home base.

Cathay is not alone in the industry in struggling to adjust. It has to charge a premium to survive, yet it can’t differentiate its product – modern air travel is basically a longish bus-ride, and only pretentious bores and ad agencies think ‘service’ and ‘quality’ and slinky, doe-eyed cabin attendants are deal-breakers.

But CX has additional burdens. The Swire system of appointing eager British ‘chaps’ as core managers is a curious colonial hangover. It is also a reminder that the company hails from one of Hong Kong’s family-run cartel/landlord-conglomerates. And as Hong Kong undergoes Mainlandization, it can only be time before Beijing wants the airline in more dependable party-state-linked hands.

But, like Hong Kong, it was amazing for a while.


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Just time for…

…a quick update on the mysterious Maison de Paris that now graces the neighbourhood around the Mid-Levels Escalator. The proprietors have placed a board outside listing what the business sells, and the teddy bear in the window is now sitting on a wickerwork chair…

Astute observers will notice that the teddy bear has a more assertive, even truculent, attitude than before. This could be related to comments here pondering whether one possible explanation for the new French fragrance/chandeliers emporium is no less than – money laundering.

I’m with the teddy bear on this. Aside from the obvious fact that We Don’t Do That Sort of Thing in the Mid-Levels, this would make a terrible money-laundering front. The classic set-up for re-cycling proceeds of crime is a currency-exchange, a bar, a pawn shop, an amusement arcade, maybe a New Territories railings supplier or some other business with a heavy cash-flow. Not sure that’s very likely in this case.

(Or, of course, a bank – but obviously that would never happen in Hong Kong.)

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Another retail concept to the slaughter

Next to the Mid-Levels Escalator around Rednaxela Terrace, before you get up to the Mosque, is one of a series of humble storefronts. It used to be a Dutch pickled-herring-and-Edam bar called the Orange Tree, popular with the clogs-and-Heineken crowd (maybe). Then, a couple of years ago it became the Butcher’s Barrel.

I went in once and found a classic example of that perverse rule of Soho (and other Hong Kong) retailing: whatever you sell, make sure it’s something no-one needs or wants. It was an up-market deli with organic steaks, hand-crafted sausages, ‘fine wines’, artisanal cheeses and plump olives – all at seriously eye-popping prices. The idea was that expat/yuppie residents would drop by on the way back from their Central investment banks and pick up these luxurious ingredients to make a lavish gwailo-feast in their exclusive little apartments.

The problem, as any residential-property agent in the neighbourhood could have pointed out, is that the 20-something single foreign-banker set don’t cook. They dine at nasty Lan Kwai Fong places, or get pizza delivered, or – when feeling ambitious – grab a frozen meal at Marks & Spencers down the hill and microwave it. Even my recent pickled eggs recipe would leave them wondering how you can tell when the water’s boiling.

So, obviously, it soon closed. (It might have worked in a Disco Bay-type family district – or if the lavishly exorbitant food had been for dogs.) And, obviously, the place stood empty for at least six months, if not longer, while the landlord waited and waited and waited, even though no rent was coming in, for a tenant/sucker willing to pay the idiotic amount he demanded.

His patience was finally rewarded a few weeks ago when the premises became Maison de Paris.

As you glide past on the Escalator, you get a hazy glimpse of lacy and wooden stuff behind the reflective glass. A close-up inspection reveals a sofa with teddy bears, some (indeed lacy) curtains and clothing, and some elaborate lighting. It is hard to tell what is product and what is for show – I would guess that in the interests of revenue-per-square-foot, all the garments, furnishings and fittings are for sale. In any case, we can politely describe the theme as chichi.

Who are the customers supposed to be?

No man would touch such hideously vile items. No Western women would either, apart from a few girls going through the age 7-9, post-pink/princess phase (but again, this is not a family area – and I don’t see a rocking horse inside).

That theoretically leaves Asian females, but the ones living here are hard-bitten professionals who are into kick-boxing rather than teddy bears (the concept might suit a private estate of nouveau-rich Mainlanders). So we narrow down the demographic to Korean office-lady tourists, who are quite possibly into the Beatrix Potter sort of thing – but are hardly going to pick up a lampstand as they chew their egg tarts and consult their maps.

I have no idea. But if it was a restaurant it would appear here.

I declare the weekend open with a plea to anyone with delusional egotism and a lust for publicity and power to consider helping Regina Ip, who needs someone to take over her – slightly used but almost as-new – political party.

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A word from Hong Kong’s real boss

Just in case you needed reminding that Beijing’s Liaison Office is now running Hong Kong, its boss Zhang Xiaoming delivers a Policy Address and Update. He describes recent subversion of the city’s legal principles as ‘rule of law’ and the overturning of democratic election results as ‘a heavy blow against independence’. He also declares himself satisfied that the local masses now better understand ‘One Country Two Systems’, and they think the stationing of Mainland cops at the new West Kowloon High-Speed Rail Station is just fine and dandy too.

Zhang is now in effect our Party Secretary, representing the higher authority and watching over the local administrative appointees in China’s ‘church and state’ system. We can be pretty sure that he and his malevolent sidekicks are behind the continued hounding of evil counter-revolutionary elements, such as the attempt to bankrupt disqualified lawmakers a la Singapore. It is a Rectification Struggle no-brainer – banish the dissidents from public office, deprive their radical groups of fat Legislative Council allowances, and scare the monkeys.

This also goes for the even more questionable/intriguing/harebrained effort to jail Joshua Wong et al for the Great 2014 Storming of Civic Square and Triggering of Umbrella Mayhem.

To Communist Party Commissar Zhang, hurling the deviant foreign-influenced enemy and dissident into a dungeon is a matter of patriotic duty, to defend the Glorious Motherland from hostile forces. And a particular type of grumpy loser – certain newspaper columnists, for example –will get a kick out of seeing the annoying little twerps put behind bars. But for local officials like Chief Executive Carrie Lam, wringing their hands and hoping to create unity and harmony, this could be at least a minor nightmare.

Leave aside the local impact. To some influential audiences overseas, Joshua Wong is famous – probably the only Hongkonger they’ve ever heard of (give or take an aging uncool actor). He is the city’s mop-topped teen heartthrob, geeky rebel and fighter for freedom and justice, covered by trendy journalists and even featured in a documentary film for demanding democracy.

The courts hearing this case are, if Zhang is correct, now just tools of the executive. So are Beijing’s ogres and their local minions really dumb enough to turn an icon of Hong Kong soft power into a prisoner of conscience?


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Armageddon approaches

Is the world heading towards nuclear confrontation? If it is, no-one has told the Hang Seng Index, which – perhaps hardened by Hong Kong’s inundation with palm oil – opens today with a very mild and probably overdue touch of profit-taking.

Back in the days when grown-ups ran the world, North Korea’s formulaic ranting and contrived freaking-out was predictably wacky: a measured-if-apparently-extreme counterpoint to the calm and sober US/global leadership norms. Now the troll becomes the trolled. Kim Jong-un’s regime faces a self-regarding fantasist blurting threats, not merely of any ‘fire and fury’, but a sort ‘this world has never seen before’ – from one of his golf courses in New Jersey.

In a competition to be the most loopy, victory goes to the authentically, shockingly unexpected. North Korea is essentially backing down if all it can do is answer Trump with an even higher level of berserk shrieking-maniac tantrum stuff. The unimaginably scary scenario is that Kim suddenly goes statesmanlike, gets a proper haircut, and starts acting straight and moderate.

As a humanitarian gesture in these dark times – a preparation for Armageddon in the form of pickled eggs. Method: hard-boil, cool and peel the things, place them in a plastic bag, then massage them seductively with garlic, soy sauce, salt, vinegar, whatever, etc, but especially and mostly chili sauce (eg this), then leave in the fridge for a week…

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Today’s lesson: what does Article 136 say?

A week ago, Hong Kong Chief Executive Carrie Lam assured the public that she had no plans to expand ‘National Education’, the euphemism for Communist Party-approved brainwashing of kids. Now China’s Education Minister – one Chen Baosheng – contradicts her by ordering local public schools to strengthen their teaching of Chinese history, culture and constitution. (He also mentions the Basic Law, so the little ones will presumably learn the correct reading of Article 136, which appears to state that the Hong Kong government has full autonomy over the city’s education policy, but obviously means something else).

In response, Carrie blathers about how she takes education so seriously she is boosting expenditure on it, and she gamely maintains that local kiddies should learn ‘national awareness’ as well as ‘emotional attachment with Hong Kong and an international vision’. Education Minister Chen seems not to have mentioned these last two – it could well be that the whole idea of ‘emotional attachment with Hong Kong and an international vision’ makes him want to vomit.

Thus she puts him in his place, since as CE she is on a par with a Vice Premier and outranks him. Or at least, that’s how it works in theory – but that’s what they said about Article 136.

Carrie’s mission here is to convince the leadership in Beijing that she is indeed imposing ‘National Education’ on Hong Kong’s impressionable little minds, while at the same time convincing Hong Kong parents that she isn’t.

Logically, this must mean misleading one side or the other. As a hand-wringing bureaucrat, she probably hopes to find some sort of loosely defined grey area/question of balance/compromise/let’s-change-the-subject/win-win outcome that makes everyone happy. As a politician, she might (indeed damn well should) plan to dump this on the new patriotic loyalist Education Undersecretary Christine Choi, whose over-eagerness to cram Communist brainwashing propaganda down schools’ throats could easily prompt a backlash and victory for the pan-dems.

Unless, of course, the pan-dems manage to mishandle the issue…

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We’re at Peak Panda

The South China Morning Post describes Hong Kong uber-tycoon Li Ka-shing’s strategic shift from Greater China property to international utilities and infrastructure. Li’s model – make big easy profits in Hong Kong and Mainland real estate and buy revenue-generating assets in the West – goes back years. But as the SCMP notes, even Cheung Kong’s property arm is moving out of property.

A Bloomberg story provides some context about China’s rise topping out. Even the Communist Party’s most loyal admirers must concede that the huge gains of the last few decades have run their course. The leadership is now trying to keep growth going artificially through a credit binge while it figures out a way to move on to a higher-productivity economy without relaxing Communist Party control over markets, or pretty much anything.

The accepted wisdom is that the CCP keeps itself in charge by delivering economic growth. According to this rosy view, Xi Jinping’s Clampdown on Everything and Everyone – now approaching its fifth anniversary – is calculated, prudent preparation for the next bout of liberalization.

Some, perhaps including Hong Kong’s nimbler ‘instant-noodle patriot’ tycoons, might have a more cynical interpretation. That is that the CCP will in fact sacrifice economic growth to keep itself in charge – if that’s what it takes. The clampdown is to avoid economic (social/political/all-the-same-thing) liberalization.

Look at it this way: why are Chinese elites and the upper-middle class moving their assets offshore, sending their kids to overseas universities and acquiring foreign passports?

The stock answer is that they are concerned about air pollution, tainted food and overpriced housing, which makes it sound like a passing lifestyle trend. But it looks more like a long-term hedge against permanently worse conditions at home – relative economic stagnation, an unpredictable government, possible foreign adventurism, looming demographic horrors. (On the subject of ditching the old country: at this stage in its rise to global might, the US was processing millions of migrants at Ellis Island. Huddled masses yearning to breathe free are still giving China a miss.)

Oddest thing of all, China’s elites are moving their wealth and families to decaying English-speaking sunset-empires whose degenerate liberal democratic capitalist model is dragging them into the quagmires of Trump and Brexit.

Meanwhile, the Hong Kong government announces the latest instalment of your endless Belt and Road Opportunities.


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CCP vs Holy Romans

A shift in Mainland vexillological protocol causes controversy. It appears to be part of Chinese leader Xi Jinping’s consolidation of his and the Communist Party’s supremacy. Not only does the Party flag take precedence over the national one, but Xi has the PLA ranks address him as ‘Chairman’. A commentator says the CCP: “regards the country as spoils of war which, after their victory in 1949, they are now free to do with as they please.”

Meanwhile, Hong Kong has a new Catholic Bishop – Michael Leung. Many would note his startling resemblance to composer Brian Eno if they were not distracted by his pronouncements. After backtracking on a comment that homosexuality is similar to drug abuse, he suggests that Chinese authorities remove crucifixes from churches for reasons of building safety.

The Catholic Church and the CCP have certain things in common. Both hijacked earlier idealistic beliefs and turned them into movements of political power that ended up becoming self-serving oligarchies atop large administrative structures. Both apparently command large numbers of followers, but agonize over loyalty, cohesion and even purpose. Both claim to be pious and righteous, but are riddled with corruption and indiscipline. Both use extensive ritual. And both relish absurd organization; while Xi has lost count of his job titles, Michael Leung was formerly Bishop of ‘Mons in Numidia’ – a non-existent church jurisdiction in North Africa. (Also, ever noticed the similarity between a cassock and the ‘Mao’ or at least Zhongshan suit?)

There are, of course, differences. The Catholics no longer use violence, persecution and censorship (much) to enforce their ideology, while the CCP still does. And obviously, one venerates the metaphysical and supernatural, while the other has a strictly materialist outlook. Most of all, perhaps, the Catholic Church is global, while the CCP is regional and ethnic-based.

Despite natural mutual loathing, they find themselves at least pretending to want to co-exist. Perhaps as humanity’s last huge, centralized, non-pluralist powers they find each other rather fascinating.

In the near term, the CCP will eat the Catholics for breakfast. The Pope is a softy for Communism (his roots are in fascist South America, where the far left were oppressed good guys). The Vatican, already poised to re-label Hong Kong ‘Xianggang’, will ditch Taiwan and let Beijing appoint the Church’s bishops – in the same kowtowing fit of mesmerized Panda-sucking that afflicts slow-on-the-uptake Western governments and multinationals.

In the longer run, the smart money must be on the Catholics. They have an air of permanence going back to the Roman Empire, while the CCP’s attempt to co-opt Confucian antiquity looks desperate. Despite horrors from heretic-burning to child-molesting, they’ve successfully developed a warm-and-cuddly force-for-good image, while Xi still hasn’t even released his response to the Pope’s contemporary pop album. And they have that effortless quiet, almost smug, confidence that no doubt has its roots in the Lord’s infuriatingly effective turn-the-other-cheek act. Compare with the insecure, mouth-frothing histrionics of the CCP. Plus, the Catholics’ ceremonies and symbolism are way cooler.

Hong Kong Catholics, who are mostly pro-democracy by nature, will just have to put up with Bishop Michael Leung’s uncool and awkward attempts to be Beijing-friendly. We all have our cross to bear. Unless you’re a church building in the Mainland, ha-ha.

I declare the weekend open with some reading: this (for the hardcore fans only) on the development of the Catholic Church(1) and five China Quarterly articles taken out from the usual paywall for the Hong Kong 20th anniversary.

(1) It starts: “…I wondered what happened to Christianity between the Sermon on the Mount and the Spanish Inquisition. How did the teachings of Jesus become so completely reversed in Christian practice? For the first 300 years, Christianity spread without violence … preaching a better God and a Master worth following, and by demonstrating a better way to live both here and hereafter. Then, sometime between AD 300 and 400, everything changed. Suddenly, Christians were the persecutors, instead of the persecuted, and remained so until modern times.”


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Buggle in a muddle?

Has Buggle lost his mind? Buggle Lau, the Hong Kong media’s most reliable quote-provider on property issues, works for a real-estate agency. He therefore usually cheerfully proclaims that every day is a good day to buy an apartment or three. This suits the newspapers, which depend on developers, developer-run conglomerates and mortgage-providing banks for much of their advertising, and whose tycoon proprietors are best buddies with the land-owning families.

So it comes as a shock to find Buggle blurting out something along the lines that you would be nuts to buy a home in Hong Kong at these prices…

The obvious explanation is that the poor guy has ingested hallucinogenic mushrooms and has no idea what he is saying. Another is that the property intermediaries are suffering from low transaction volumes and calculate that business might pick up if prices fell.

Former Chief Executive CY Leung’s policies, ostensibly to cool the housing market, just so happened to reduce turnover of second-hand properties while pushing buyers into bidding up prices of new-build apartments with easy financing from the developers. The prices making headlines today are high because (among the other distortions) there is an artificial premium attached to the primary market, and much of the secondary market is ‘missing’.

Even by Hong Kong standards, it is a perverse situation where the crappiest, most overpriced products (brand-new flats) seem the most affordable, or at least accessible

To state the obvious: as soon as a brand-new apartment is sold, it becomes second-hand and thus instantly loses some of its supposed value. Buggle and his colleagues would benefit from a more liquid second-hand market, and – happily – they can perform a socially useful service by warning suckers away from the developers’ lures.

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