POP goes Beijing’s ‘HK patriots’ bubble

Another item for Beijing’s Hong Kong Mainlandization ‘to do’ list: the HKU public opinion survey on residents’ self-identity. The pollsters are now joining the 21st Century and conducting surveys over mobile phone as well as landlines, so they are in theory questioning a more representative, younger sample of respondents. This will not help deliver the numbers Beijing would like to see. The latest data show, very broadly, that 66% currently identify primarily as Hongkongers versus 32% as Chinese.

HKUPOP has been annoying all the right people ever since its extremely thorough monitoring of then-Chief Executive Tung Chee-hwa’s relentlessly declining popularity ratings. Rectification is long overdue. That goes for everyone else at HKU, too.

On a related note: socio-political analysis from the FT’s former local correspondent on the forthcoming national anthem law. (We will also be hearing more on the legal side. I recently heard a pro-Beijing figure, asked about the vagueness of the proposed legislation, confidently say it’s no problem because ‘the courts will sort all that out’.)

And your Fun Statistic of the Day: from 2007 to September 2018, mortgage debt in China has grown 823%, ‘which even after accounting for nominal GDP and wages is an amazing number’.

 

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CCP out of the closet?

This HKFP article concludes with an interesting question: will, or when will, the Chinese Communist Party operate openly in Hong Kong?

The Hong Kong government virtually never mentions the phrase ‘Communist Party’. And the rising use of nationalistic symbolism in town (flag-raising, national anthem, national education, etc) looks deliberately secular – focusing on the state and omitting the CCP-church. We are a long way from having the CCP out itself on this side of the border.

The main demand for this radical step comes from local pro-Beijing quasi-politicians and apologists, typically under the DAB/FTU (CCP front) umbrellas. Despite help from Beijing’s local Liaison Office, rigged elections and shoe-shining media, they are tragically unhip and easy to mock. With the might of the CCP visible behind them, no bully would dare kick sand in their faces again. We would have to take them seriously.

However, it is hard to see the CCP operating openly in an even slightly pluralistic environment. It could not handle the humiliation of losing in a District Council election or otherwise competing as an equal with rival groups or ideologies. It would only materialize as a party people can join or vote for when all other opposition groupings are banned or reduced to Mainland-style ‘democratic’ stooges. The CCP cannot even tolerate losing a debate or being publicly criticized, so this scenario presumes a fully censored media and Internet as well. It is a Leninist organization: all it knows is control, and monopoly of power.

Keeping the CCP underground here should suit Beijing, anyway. Xi Jinping is sealing the Mainland off from evil foreign hostile ideas and forces, while projecting CCP influence overseas via United Front and other activities. Hong Kong is a unique environment, where Western influences are projected into a small and distinct part of the Motherland. The local population are still too brainwashed by colonial oppressors to accept Marxist and Maoist truth. And the city is a place where patriotic or co-opted Chinese businessmen are accepted and indeed prominent in international circles. The foreign businesses are eager for deals, and ripe for being suckered into ‘win-win cooperation’. It would be counter-productive to creep them out with hammer-and-sickle posters in the boardroom.

That assumes Beijing’s leadership is rational. A regime that (for example) holds Canadians hostage might be insecure and stupid enough to let the CCP blunder onto the local stage, like setting up campus branches or overtly guiding listed companies. It is almost tempting to hope that it does.

 

 

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It’s not that Hong Kong is run by morons…

…the surprising part is that the morons manage to be in so many government functions. Today, they seem to be everywhere.

First, the main part of a new highway along (largely beneath) the shoreline from Hong Kong Island’s Causeway Bay to Sheung Wan is described as a ‘Central-Wanchai Bypass’, though much of it supplements earlier roads designed to bypass even older streets along the same route. Obviously, at HK$36 billion, it is a money-no-object taxpayer-plundering white elephant – improvement of transport links is just an excuse for the project.

The initial impact probably delights transport bureaucrats: not many people are using it, yet it still somehow manages to create more traffic jams. They are no doubt considering yet more roads to relieve the new pressure at the new bottlenecks they have created.

The fiscal philosophy – billions in the pig trough for construction cronies – is just scummy. But the planning mentality is pure moronic: let’s counteract traffic congestion by making private-car use more convenient.

Second, Hong Kong has the Solar System’s most expensive housing for the 18th decade in a row.

In the government’s defence… The Demographia survey ignores factors like low taxes, low commuting costs, and virtually free housing for a third of the population in public rental accommodation. So our affordability ratio might not be quite as extreme as the data show (ie Hongkongers wanting private-sector housing probably have higher purchasing power than equivalent Vancouverites). And of course, there are global factors like low interest rates and the clustering of high-value skills in certain cities.

But the fact is that government policy decisions have driven prices up and, just as bad, apartment sizes down. We could guess that maybe half the ‘excessive’ pricing is due to local official actions/inaction.

According to popular legend, the government’s unwritten aim is to enrich developers, with the accumulation of huge budget surpluses as a fortuitous side-effect. Maybe it’s the other way round. Even back in the 1980s-90s, Beijing showed a fascination with Hong Kong land sales and revenues. Perhaps Beijing has ordered post-1997 administrations to prioritize the accumulation of reserves – and the inflated cost of housing is in fact the side-effect. Either way, the economic distortions have been damaging. Since housing prices are a root cause of anti-Beijing and pro-independence radicalism, this is moronic squared.

Third, a window falls from a hotel and kills a passer-by, and the valiant police arrest the hotel cleaner. Actually, this is not moronic, because the cops know something the rest of us don’t: the window frames are specially designed to detach if opened, and the cleaner is a well-known murderous psychopath.

 

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Two strange things to start the week

Our Hong Kong Foundation, a think-tank/lobby backed by property/construction tycoons, has another go at convincing us we need to spend half a trillion bucks on the Lantau Mega-Reclamation White-Elephant Vision. First time round, it tried a direct appeal – let’s fill in the sea to get decent housing. Now it gets subtle and, in a nice twist, frames its self-interested ‘research’ as hip-and-trendy-sounding criticism of the government, for miscalculating housing needs.

But no mention that under-supply of housing as policy goes back to Chief Executive Tung Chee-hwa, who is OHKF founder. Nor of the inflow of Mainland immigrants, vacant military and farm land, or the government-developer interplay that creates the overpriced land/luxury apartments. Strange!

If you want to read a fawning South China Morning Post article that repeatedly reminds you that developer (and, goes without saying, OHKF member) Ronnie Chan knows Henry Kissinger – here you go. According to the well-connected tycoon, Western wonk-types he hobnobs with have gone nuts over the last year or so. They used to be sensible mild Panda-huggers, but now they’re suddenly turning skeptical about China. (Latest example.) He does see technology as a bigger issue than just trade, but avoids getting into the Huawei-type stuff. The profound thinker puts it all down to… Donald Trump’s tweets.

No mention of South China Sea, threats against Taiwan/HK, a million Uighurs in camps, Belt and Road debt-traps, holding Canadians hostage, United Front activity, or Xi Jinping in general. Nor of Ronnie’s own role in furthering Beijing’s influence (here and here). Strange, again!

 

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It’s all Kruschev’s fault

Human Rights Watch releases a depressing report on Beijing’s assault on Hong Kong’s freedoms over the last year.

The Hong Kong government’s official line is that nothing is happening, there has been no change, rule of law and freedom of expression are fine, so calm down – One Country Two Systems is completely intact. They cannot admit that Beijing’s officials are now directing the local administration in what everyone previously thought were internal affairs.

This denial of the obvious will continue to sap the administration’s less-than-amazing credibility. Another ‘next step’ we might predict in Mainlandization would be for Hong Kong to be dragged into Beijing’s deteriorating relations with other countries. We already see a glimpse of this with our officials having to talk up ‘Belt and Road’ even as more BRI infrastructure debt-trap scams come to light.

Say, for example, China intensifies its perversely belligerent response to the arrest of Huawei’s Ms Meng, and it gets to the stage where patriots and shoe-shiners are expected to publicly shun Canada. How could the local administration avoid joining in – maybe by boycotting diplomatic receptions, or even hassling Canadians at immigration? (Update on Huawei here.)

China’s extreme reaction to the Ms Meng case is taking Panda-tantrums to a new level. Canada enforced the law according to due process in line with international convention, and Beijing takes a couple of hostages – one a diplomat – and suddenly slaps the death penalty on a previously sentenced drug smuggler.

With a clown in the White House, China has had a unique opportunity to assume the role of senior sensible, mature, constructive partner in the international community. Instead, it is bolstering its reputation as a predatory rogue-nation that makes Trump look like a firm believer in the post-1950 world economic and security order.

China’s emergence as an enemy of international norms has been losing it friends overseas. Skepticism that a few years ago was the preserve of fringe Cold-Warrior hawks is now standard among academics, politicians and media. Journalist and Australian government advisor John Garnaut says that in the past he briefed officials on a soft, relatable nation-state: “Taking the ‘Communist Party’ out of ‘China’ was a way of de-activating the autoimmune response.” Now the mask is coming off.

These are the deep roots of what Human Rights Watch are seeing in Hong Kong. I declare the weekend open with compulsory reading: Garnaut’s speech ‘Engineers of the Soul’ on Xi Jinping’s ideological lineage…

We hear a lot about how Xi and his peers blame Gorbachev for the collapse of the Soviet state but actually their grievances go much further back. They blame Kruschev. They blame Kruschev for breaking with Stalin. And they vow that they will never do to Mao what Kruschev did to Stalin.

….

The Western conspiracy to infiltrate, subvert and overthrow the People’s Party is not contingent on what any particular Western country thinks or does. It is an equation, a mathematical identity: the CCP exists and therefore it is under attack. No amount of accommodation and reassurance can ever be enough – it can only ever be a tactic, a ruse.

Without the conspiracy of Western liberalism the CCP loses its reason for existence.

 

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Can Carrie outdo CY for dislikable-ness?

It would take super-human effort and determination to be a less popular Hong Kong Chief Executive than CY Leung. CY came across as vindictive, creepy, menacing-going-on-Satanic, and most of all, so avidly pro-Communist Party even pro-Communists found it embarrassing. Yet, the way Carrie Lam is behaving, we will soon start to look back at him as warm and cuddly – much as we have come to do with hapless first post-handover leader Tung Chee-hwa.

Of her recent screw-ups, the biggest is raising the age limit for elderly welfare payments. This SCMP analysis sums it up – overpaid technocrats condemn a group of already-poor to greater hardship by shaving a miniscule sum from the budget to make a contrived demographics point.

The public mostly opposes the measure. This is obviously a shock to Carrie – maybe she is amazed that the masses disagree with her, but more likely it is their impertinence in expressing an opinion at all. She pretty much snaps back that it’s old policy, passed by lawmakers, and therefore final, so shut up. Pro-democrat legislators gleefully take the opportunity to stick the knife in, and their usually obedient pro-government colleagues feel compelled to join them.

Common sense tells us that, after much glowering and muted tantrums, the administration will reluctantly and gracelessly decide to act like a grown-up and scrap the plan. (Though common sense isn’t worth listening to much these days.)

In the meantime, Carrie makes what is for her a big concession and says she will try to be more diplomatic in future. To translate: ‘Being totally correct, I have nothing to apologize for, but I will remember to make my life easier in future by not rubbing your noses in my superiority so hastily’.

Not knowing how to buy toilet paper means never having to say sorry.

 

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Going off the rails

A few mid-week links with a bias towards trains. Lawfareblog does a good summary of what the High Speed Rail arrangements mean for the Hong Kong legal system. And before we feel too sorry for ourselves, how badly China shafted (railroaded?) Kenya on the SGR project.

On other matters, an intro to how the United Front works, a tour of United Front Land with “overseas Chinese representatives” from the US, Malaysia, Australia and elsewhere – and the thread branches off here to include our own Tung Chee-hwa.

On the cultural side, what the author calls ‘…a love letter to & from Hong Kong. It’s ostensibly a profile of one person but really, it’s an ode to an island’, but don’t let that put you off – New Yorker on on Denise Ho. And the really serious stuff: beer – history, and specifically the marketing of the stuff in Mao’s China (click link to pdf).

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In all fairness…

Time to give credit where it’s due and recognize the hard work of the Hong Kong government’s Stupid Ideas Department.

Some time ago, it dreamed up a proposal to recycle some of the vast budget surplus to property owners via a rebate in Rates, or property tax. Tiresome critics pointed out that the biggest benefits went to the biggest landlords holding multiple properties. The bureaucrats devised a system to limit the handout to one per property owner, carefully constructing it to be so costly and complex that it’s hardly worth it. Enter Chief Executive Carrie Lam, who points out that this tight-fistedness will also prevent the city’s legions of selfless, kind-hearted landlords from passing the rebate onto their tenants. Detractors are confounded – are we supposed to be helping the rich or the poor here?

After all, these policymakers also came up with the idea of cutting social security payments for needy 60-64-year-olds on the grounds that ‘60 is the new 40’ and these semi-oldies are living for decades longer than the indigent by rights should. Carrie rather wittily blamed rubber-stamp shoe-shining lawmakers for obeying Beijing’s vision of ‘executive-led government’ and passing the thing in the first place. She also sternly pointed out that she is over 60 and works very, very hard. The shoe-shining legislators now feel a need to join opposition to the measure. Officials counter with more complex fixes, whereby impoverished not-so-elderly can claim a different sort of welfare to help cover the difference (subject to enough conditions to make clear who’s boss).

It can’t be easy to craft policies that strike everyone as immensely stupid – it must require considerable effort. Most impressive, however, is the Chief Executive’s own Sociopath from Mars act in the face of protests. The most gifted wordsmiths among us can only dream of drafting such dramatically offensive and insulting responses. And for her next trick: we defend Justice Secretary Theresa Cheng to the hilt.

It all shows – when the Hong Kong government really wants to achieve something, it can.

 

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Yes, but what IS it?

What better way to start the week than with some sort of sneak-preview of the Greater Bay Area Initiative Vision Plan from the South China Morning Post? The paper reports that Vice Premier Han Zheng has approved the Tech/Innovation Integration Hub-Zone Blueprint, which will be unveiled on February 21 ‘barring unforeseen circumstances’.

Will we finally learn what on earth the thing is?

The basic proposition is that you have a bunch of coastal cities clustered around a river delta/estuary, and if you do something (to be revealed on Feb 21, fingers crossed) it will start to perform a similar ‘powerhouse’ economic function as the Silicon Valley area around San Francisco Bay, or maybe the vast industrial region around Tokyo Bay, because an estuary is sort of like a bay. Voila – the world’s top bay area.

Regional geography types might point out that the Pearl River Delta is already performing such a function, with its vast swathes of factories, banks, sea ports, airports, power stations, residential areas, road and rail links, malls, schools, 7-Elevens, pet-grooming salons and everything else an economic dynamo needs.

Promoters of the concept excitedly insist that the extra yet-to-be-announced something can unlock the area’s great additional potential. They note that it is currently divided among a dozen or so municipal jurisdictions, whose mayors and other leaders compete with one another, and two of which are de-facto city states with their own currencies and laws, separated by international-style borders.

Skeptics point out that while merging Guangzhou, Zhuhai, Shenzhen and other mainland cities’ planning and other functions might produce economies of scale and efficiencies, it is difficult, if not unconstitutional, to absorb Hong Kong and Macau into the Mainland this way.

Some fear the whole thing is a plot to subsume Hong Kong politically and economically within a bigger cross-border entity. Others suspect the idea is more psychological or symbolic – aimed at encouraging the idea or feeling that Hong Kong is just a part of something bigger. In other words, to dilute Hong Kong’s separate identity. As in ‘We will no longer be Hong Kong people, but Greater Bay Area people’.

According to the SCMP, Beijing’s outline is some sort of Stalin-era central plan dictating where to locate all the tractor factories and where to put the cotton production:

Hong Kong will be the international finance, navigation and trade centre, as well as a transport hub. It will have the role of pushing finance, trade, logistics and professional services towards the high-end market. Macau will be an international tourism city and a platform for trade with Portuguese-speaking countries. Guangzhou will take a leading role as a national central city while Shenzhen will take a leading role as a special economic region and an innovative city…

What does Hong Kong’s exciting new role in ‘navigation’ entail? Which city will be the platform for trade with Spanish- or French-speaking countries? Will Guangzhou notice that it is being fobbed off with a silly title of ‘national central city’ instead of getting a real trendy modern sexy-sounding mission in life?

Sinister or stupid? Find out on Feb 21. Maybe.

 

 

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Xi in a rush

Some possibly interesting Friday reading… A dummy’s guide on how you should finance infrastructure in developing countries versus how ‘Belt and Road’ does it. (Basic money stuff – eg, low returns call for long-term debt. Bottom line: if a high-speed rail in Laos made sense, where were the non-Chinese institutions interested in funding it?) And the retreat of Confucius Institutes from American campuses. They seemed like a good idea at the time, and in theory they could have been a PR boost for Beijing.

As with all sorts of problems China is getting into – from Huawei’s sanction-breaking, to United Front infiltration in the West, to alienating Taiwan and Hong Kong, to genocide-lite in Xinjiang – there’s a common thread in these two cases: over-reach, over-aggressiveness and over-hastiness.

There are several reasons why Xi Jinping might be in such a hurry to restore China’s rightful position as the world’s supreme civilization. The economy is running on empty, relying mainly on additional inputs to generate growth. The country faces potential environmental horrors, notably with water and soil. And its demographics point to an aging and shrinking population, so time is tight for a big vision like displacing the US and establishing a Eurasian/Indo-Pacific ‘Belt and Road’ Co-Prosperity Tian Xia.

But another possible reason for Xi’s apparent impatience is simply hubris: he has no idea how all this looks to the rest of the world, his advisors don’t dare give him any bad news, and he believes his own propaganda.

In fairness to him, even overseas audiences have been taken by surprise by the rapid deterioration of the country’s image. Just a year ago, poor old Jeffrey Sachs was the soft-rock star of developmental economics with an unremarkable, mildly sympathetic position on China. Today, he finds himself vilified as an extreme Panda-hugger, hounded from Twitter after taking an up-until-recently predictable and trendy Beijing-leaning position on Huawei.

Not all the oldies are struggling to keep up. I declare the weekend open with Hong Kong’s last Governor Chris Patten on how Xi Jinping is damaging Hong Kong.

 

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