US, Fatty Pang unite to interfere in China’s internal affairs

November 21st, 2014

Hong Kong’s last colonial Governor, Chris Patten, appears before a hitherto unheard-of US body called the Congressional-Executive Commission on China, which is holding ‘hearings’, no less, on The Future of Democracy in Hong Kong. To give you an idea of how thorough the commission is, its previous hearings were on Pet SCMP-ChrisPattenTreats and Processed Chicken from China: Concerns for American Consumers and Pets. Honest.

If you read Section 302 of the numerologically intriguing US House of Representatives bill 4444, you will find around two dozen items numbered (a) (1) to (c) (7) describing many of the functions of the commission. But in fact, they all add up to exactly the same single purpose: irritate the Chinese government in every way possible.

Not there’s anything wrong with that. And Fei Pang naturally cannot resist. He repeats his warning to governments against falling into the grubby and unbecoming habit of kowtowing to China in the belief it is necessary for trade access. He also offers avuncular advice to our protesting pro-democracy students, referring to boy-wonder Joshua Wong virtually as the city’s leader-in-waiting. And he drops in a dash of snark about how plutocracy may fit in nicely with socialism with Chinese characteristics. In short, he set out to get up Beijing’s nose. Squeals of outrage about foreign interference will follow in the next few days.

This comes as the Congressional-Executive Commission on China updating the 1992 Hong Kong Policy Act with a Hong Kong Human Rights and Democracy Act. The likelihood that China’s communist one-party state will give true universal suffrage to Hong Kong are essentially zero in the first place, but such a pointed and, by any standards, presumptuous gesture will go down like a cup of cold sick in Beijing and confirm the need to keep Hong Kong undemocratic on principle. More squeals of outrage, etc to come.

As well as organizing grand-sounding discussions to address China-related concerns for American pets, the commission offers a lesson on the dangers of bureaucratic sprawl and Parkinson’s Law. Behold the 55-page User’s Manual explaining, as if to infants, how to use the on-line Political Prisoner Database. There’s no point in getting up Beijing’s nose to the max if you don’t make really really sure even people who have never used or seen a PC before can join in.

I declare the weekend open with the latest hidden subversive message in the Standard’s ever-popular ‘Character Builder’ feature, which is brought to you today by the word ‘ga’. As in ‘ga yau’ – ‘add oil’, or ‘step it up’ – motto of the Umbrella-Occupy movement…

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By ‘weather’, we mean ‘government’.

The Great Legco Door Massacre of 2014

November 20th, 2014

SCMP-MaskedMenHong Kong’s pro-Beijing politicians and media drool with glee this morning, while pro-democrats and Occupy Central activists squirm in discomfort. After 53 days of non-violent civil disobedience, someone broke a couple of windows. It’s the Great Legislative Council Door Massacre of 2014 – an orgy of wanton savagery and carnage, Hong Kong-style, and a gift to establishment forces determined to portray the students and protestors as blood-crazed CIA-backed psychopaths and enemies of the people.

The details are hard to get excited about. Some of the most impatient and radical elements in the leaderless Umbrella/Occupy movement were gripped by (or spread) rumours of imminent introduction of a proposed (and nonsensical-sounding) law on Internet copyright that could criminalize (more likely, provoke tons of) parody. Mysterious masked men seized bricks and metal barriers and attacked a couple of innocent and defenceless Legco building doors. Mild-mannered campaigners for democracy, freedom and justice reel in horror, imagining government agents provocateurs as the only reasonable explanation. Odious pro-Beijing lawmakers act outraged and taunt their opponents, who desperately rush to condemn the violence. The cops arrest half a dozen guys.

Thus Occupy Central – this particular bout of sit-ins by kids in tents on streets – pretty much, you would think, jumps the shark. Observers maintaining for the 50th straight day that now is the time for the protestors to go home may finally be right. Gloating officials and pro-establishment figures feel confident quietly suggesting that the recent bailiff-led action to clear a small portion of occupied Admiralty is just a test and just the start.

Admiralty is full of middle-class school kids who will soon start feeling the cold. Their maids will be coming down the hill to wrap them up in woolen scarves and march them home for warm milk and cookies. The challenge for the authorities is over the harbour. Comedian Chris Rock once mocked the George W Bush administration’s hubris after toppling the Iraqi regime in two weeks by daring them to try taking Baltimore in that time. In our case, that would be Mongkok. ‘Gritty’ Mongkok, as the overseas press calls it. Or, as you can’t help noticing on passing the third Chow Sang Sang in 75 yards, ‘awful-lot-of-windows Mongkok’.

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Tech corner

November 19th, 2014

Much extreme mouth-frothing and outrage in Hong Kong today, after protesters break a glass door and sort of get into the Legislative Council building at Admiralty. Anyone wanting a live, blow-by-blow account of the action could have followed the squabble, or – since it happened in the early hours – caught up with it first thing this morning, on Twitter…

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The Umbrella-Occupy movement has probably doubled the amount of time I ‘devote’, shall we say, every day to Twitter. The ‘social networking service’ (as it’s officially termed) also conveys profound thoughts from the most authoritative of sources…

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…and occasional bits of pointlessness that manage to get through, even though – in the interests of squeezing some sleeping and eating into my schedule – I limit myself to following less than 100 Tweeters, or whatever they’re called…

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WhatsAppScreenshotsThe other social-media thing I do is WhatsApp, which is essentially a simple and instant email system (so instant, it makes email seem stupid and pointless unless you want to attach a document or contact any of the 99% of people not on WhatsApp). When everyone was in a panic about Occupy Central occupying the main business district and requiring workplace closures, my office’s contingency plan relied on WhatsApp messaging to let Zenky, Panny and the rest know whether to come in. As the thumbs-up on the right show, it worked.

As we can also see on the right, WhatsApp can be used to send photographs – in this case essential guidance to the depraved on how to cut a lemon with a driver’s licence in order to make gin and tonic with the latter-day Hogarthian beverage known as King Robert.

Until recently, the main nagging problem facing WhatsApp users was that one day the company providing the service would follow through on its longstanding threat to implement charges, specifically of US$0.99 a year. Instead, however, it has implemented a system of ‘blue ticks’ in the outgoing-message box, which let the sender see whether and when the recipient has read the missive. What the engineers probably saw as a modestly useful new function has now become a nightmare of our modern, on-line existence.

In Saudi Arabia, a man divorced his wife after finding that she hadn’t bothered reading his latest boorish pronouncement. But the problem doesn’t end with people ignoring messages. The real complication arises from the fact that many users want to be able to read messages – but pretend they haven’t. Someone wants to tell you something; you know what it is that they want to tell you – but they don’t know that you know, and that basically means you’re in charge. Senders’ ability to use the blue ticks to find out at what time you read the message even further undermines your privacy and mastership of your own destiny.

The WhatsApp people, grief-stricken by the mayhem they had unleashed on the world, hurriedly designed a way to make the blue ticks optional. And so the trauma comes to an end. But, of course, no.

The Standard surveys a number of Hong Kong users, starting – quite rightly – with former weathergirl Icy Wong. Icy is minded to disable the blue ticks for privacy reasons, but she’s a bit dim. One KK Chan is smarter, reasoning that if you switch the function off, others will wonder why you did so, and what it is you are trying to hide. From them.

The game now looks like this: someone wants to tell you something; you know what it is that they want to tell you; they don’t know that you know; and they know you don’t want them to know that you know. And they will obviously never trust you again, for being such a devious, secretive, deceitful, underhand piece of slime. Yet another improvement to our lives brought to us by modern technology.

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Witnessing history with a yawn

November 18th, 2014

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Weeks and months of jumping up and down in excitement reached a crescendo yesterday as many of the Big Lychee’s most important puffed-up men in suits banged a gong and launched the Shanghai-Hong Kong Stock Connect. The men in suits laughed, shook hands and clinked champagne glasses as if they were ‘going to witness history’, to quote the actual words of HK Exchanges Chairman CK Chow.

Stan-SouthboundThis was in line with the build-up. Mainland authorities announced the cross-border stock trading system as a major breakthrough in opening China’s capital account. Some commentators couldn’t resist suggesting it might also be a ‘gift’ from Beijing to help out poor Hong Kong; when the arrangement was delayed, they claimed it was to ‘punish’ Hong Kong for pro-democracy students’ occupation of city streets. When the scheme was back on track, it emerged that Chinese officials had been sorting out such minor last-minute details as whether the cross-border trading would be subject to Mainland capital-gains tax. And after all that, Stock Connect doesn’t open China’s capital account at all: all the money flowing up and down the system remains sealed off and must ultimately return to its own side of the border.

Like the Shanghai Free Trade Zone, Shenzhen’s Qianhai Financial Blah-blah Zone Hub, the CEPA HK-Mainland trade arrangement and dozens of cross-border Pearl River Delta Co-operation and Partnership Agreements, it’s basically baloney. China’s leaders crave the might and glory of the Renminbi replacing the US Dollar as the global currency. But the Communist dictatorship must rig exchange and interest rates to stay in power. So it’s out of the question. (Some experts would caution a developing economy like China against lifting capital controls anyway.)

The problem with all the hype and backslapping and champagne is that, apart from some credulous overseas media, we become immune to it, and more cynical. Yet another make-believe Big Breakthrough to take our minds off the fact that China’s economy is trapped by the corruption, cronyism, protectionism, bad debt and misallocation of capital that keeps the Communist Party in power. What will happen if they ever introduce a real post-Deng reform of significance and substance? The bores in suits will be grinning away as usual with their banners and gongs, while the rest of us just yawn through a chance to genuinely witness history.

So how did the Shanghai-Hong Kong Stock Connect go on its first day? Essentially the ‘wall of money’ associated with the original ‘through train’ concept years back didn’t materialize (indeed can’t, owing to a strict cap on volume). Hong Kong funds did rush northward. The South China Morning Post reports that local and international investors couldn’t resist Shanghai’s cheap railway and liquor plays. A contrarian thing, perhaps: what better time to buy, when Mainland railway bosses are getting sentenced to death or jumping from tall buildings, or when maotai sales are plummeting owing to anti-corruption drives? Some funds of questionable taste are apparently chasing Looming East Asian War-plays in the form of defence-related companies. Another explanation is that investors are switching to this new way of buying Mainland equities to avoid the capital gains tax. A tax-break like this is of course essentially a subsidy – or to put it another way, ‘desperate eagerness on someone’s part to attract traders and save face’.

As for the southbound flow of funds – well, whoops. Where were they? Even the Standard and Sing Tao, which never fail to cheerlead vacuous cross-border hype, register disappointment and clutch at flimsy excuses. While any Hongkonger can access the Shanghai market, subject to the quota, only wealthy Mainlanders can invest in the other direction. We are told they need time to learn about the Hong Kong market, and they find the high valuation of locally listed stocks a turn-off. The high valuation reflects Hong Kong’s far higher standards of corporate governance and regulatory oversight (cue indelicate thoughts of pearls before swine). Hong Kong does have its share of mom-and-pop day-traders in penny stocks and covered warrants, which serve as glaring loopholes in the city’s strict laws against gambling. But Shanghai is by many accounts pretty much a risky, fraud-ridden casino. Hong Kong must look weird to them.

One winner from any increase in volume will obviously be Hong Kong Exchanges and Clearing, which makes its billions by slicing a little bit off every trade. In this respect, the Stock Connect is just another of those Cram More Stuff Into Hong Kong schemes that our rent-seeking tycoon-bureaucrat elite see as economic development. As with the increasing flood of Mainland shoppers, the Zhuhai Bridge, Disney, additional airport runways, more malls, more churn, more turnover, more money going in and out – it’s all about intermediaries and landlords raking off a piece of the action each time, and any budding entrepreneurs or innovators should get used to being luxury retail assistants. Not the sort of history we need to witness any more of.

Mr Wong doesn’t go to Beijing

November 17th, 2014

If the Chinese government had some halfway decent public-relations advice, it would have allowed the three Hong Kong student activists to visit Beijing on Saturday. It would have given them a meeting and photo-op with a barely medium-ranking official from a vaguely ‘relevant department’, arranged a brief tour of the Great Hall of the People, and seen them off at the airport with a pat on the head and goody bags full of T-shirts and panda bear refrigerator magnets. In other words, humour them as a busy but generous-spirited mature adult would any naïve kids.

But of course, no. The Chinese Communist Party could never get its head around something so subtle. In a world divided between abject shoe-shiners and enemies to SCMP-TimeNewLeadershipbe crushed – and nothing else – Beijing had to make itself look childishly vindictive. By barring entry to its own citizens as if they were undesirable foreigners, the Chinese government also blatantly contradicted its own official line that Hongkongers belong to the motherland. (Asia Sentinel has a good piece on how the insistence that Party = Nation is alienating younger Hongkongers and Taiwanese.) And by acting scared of a clutch of geeky teenagers, Beijing made itself look pathetic and the scrawny bespectacled kids look strong.

The Hong Kong government, meanwhile, sits on the sidelines looking clueless. South China Morning Post commentator Peter Guy today writes that when an 18-year-old conveys more credible leadership than anyone in the oh-so elite establishment, the game is surely up. The Basic Law offers no solution. His suggested Beijing-compatible method of stripping the tycoon-bureaucrat crapocracy out of the equation: a directly appointed Mainland official as governor with a fully elected legislature as a source of legitimacy and ministers. (This is not a new idea. Traditionally, ‘Hong Kong people running Hong Kong’ has been sacrosanct as a guarantee of rule of law and press freedom – but maybe that seems less persuasive now.)

Officially, as the three students found out, China’s leadership cannot accept that the Umbrella-Occupy movement is a symptom of poor governance: that would be an admission of Communist Party fallibility. Changing the Basic Law would also be an unacceptable loss of face. So for the time being we will have nothing but ranting about CIA-funded plots and the inadequacy of Hong Kong’s patriotic education.

Attempts to salvage anything from the proposed 2016-17 electoral reform package will presumably come to nothing. It looks very much as if anything that will fix Hong Kong’s governance problem is unacceptable to Beijing, and anything that is acceptable to Beijing won’t work.

One reason why the protestors might think about packing up and going home at this stage: you’ll be needing those tents again sometime.

An obituary appears in today’s SCMP

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A long time ago, back in the mid-90s, there was a tall, dark, serious, almost-sinister businessman with an extreme and obvious yearning to be Hong Kong’s Chief Executive after the 1997 handover. No – not the one you’re thinking of: a guy called Lo Tak-shing. To prove his loyalty, he started a pro-Beijing English-language magazine called the Window. It was one of those publications that people don’t actually buy – it just turned up on the desk. Among the more readable features was a column on Hong Kong history by one Solomon Bard. I always thought it was an anagram (blood ransom, slob doorman). Later, I noticed the name elsewhere and gathered it was a real person, but thought little more about it. Anyway (if I had been paying more attention to the local music scene I would have realized sooner), it seems he was as interesting as he was long-lasting.

A modest suggestion, to put it mildly

November 14th, 2014

After all the defiance, euphoria, bitterness and recriminations surrounding Hong Kong’s Umbrella-Occupy revolt, it’s hard to imagine everyone getting back to the SCMP-BallotBlockstiny details of electoral reform as if nothing had happened. But Carine Lai, manager at think tank Civic Exchange, evidently feels up to it, outlining a suggestion on corporate voting in today’s South China Morning Post. Civic Exchange having a reputation for being a real think tank rather than a front for pro-Beijing propaganda, we will pay some attention.

First, some background.

Anyone following Time, Guardian, Vice, NYT, FT and other overseas coverage of Hong Kong in the last eight weeks will have noticed the foreign media’s difficulties in understanding our election system, especially the Functional Constituencies that have so many seats in the legislature, on the Chief Executive Election Committee and on the proposed Nomination Committee. This is hardly surprising: the system is designed to be as bewildering as possible. This is to hide its true purpose, and it works.

Chinese officials and apologists claim this byzantine structure, with its underlying layers of fisheries associations, Chinese medicine organizations, neighbourhood aid societies and weird cultural groups, guarantees all sectors a say. They call it ‘balanced representation’ or something similar. The overseas – and much local – press see through this garbage. They declare that the whole framework is designed to give undue influence and power to pro-Beijing interest groups, especially the tycoons, and they congratulate themselves on their insight. But actually they are wrong.

Forget the stuff about how Mussolini used functional constituencies. Forget the fact that the British introduced the first ones in Hong Kong as a tentative 1980s step towards representative government. And forget the myth perpetuated by most of the press that these privileged elites get to choose the Chief Executive (and forget the fact that many of these ‘elites’ themselves tend to believe it). The Functional Constituency system is simply about stuffing a supposed electoral body with enough puppets that it can serve as a rubber stamp.

If Beijing wants to veto a vote in the Legislative Council, it phones dependable, loyal FC lawmakers, and a bill or motion gets voted down. The outcome of the Chief Executive ‘election’ is similarly decided beforehand in Beijing, with the word going out telling obedient Election Committee members how to cast their votes. (Even if the tycoons vote for someone else. We saw this in 2012, when a large swathe of EC members – patriotic DAB leftists and subservient fisheries and Chinese medicine morons – insisted they were still ‘deciding’ between Henry Tang and CY Leung up to the last minute.)

The servile dummies get a pat on their head for their loyalty; their ‘sectors’ might get a free lunch, like the sports associations with their new stadium, but otherwise they are just useful fools. Note that the property tycoons prosper merrily regardless of the fact that they voted for the ‘wrong’ guy in Henry Tang. When ‘electing’ the Chief Executive, Functional Constituencies as a mass do not bring or wield any power of their own: they simply exist to disguise direct Beijing control.

Civic Exchange’s Carine Lai proposes the abolition of corporate votes – non-human voters that make up the electorate in some (mostly small, mostly commercial) Functional Constituencies. This is the most blatantly rotten part of the system; she gives the example of conglomerate Hutchison Whampoa, which is said to have 36 votes via various subsidiaries. She also points out how the associations and groups that serve as non-human electors gain their FC franchise either through selection by officials or by their peers or even themselves (with guidance from Beijing, of course).

Replacing corporate votes with humans would widen some tightly restricted franchises slightly. Rather than one Chairman having 36 votes, a bunch of directors and others would get a vote each. This could in theory introduce a little more competition into the small-circle business FCs like banking and the chambers of commerce. The ‘losers’ would be tycoons with multiple votes, who could lose a bit of clout when it comes to picking (or leaning on) legislators, and maybe a bit of face.

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Other than that, such a reform achieves nothing very meaningful in practical terms, though you could say it’s a step forward symbolically. The FCs as a whole would go on feeding reliable automatons into the CE Election Committee and (if it happens) the Nomination Committee picking the CE candidates in 2017. And this has to be the case, because in a Communist state, the ruling party must maintain its monopoly of power and absolute control. That’s the bottom line: the FCs as a bloc do not have power or represent power, they – or at least the plurality of them that are puppets – simply channel it.

The think tank’s founder Christine Loh is Environment Under-Secretary in the current much-loathed government, and is usually seen as a potential Chief Executive if Beijing decides to take a wild risk and let Hong Kong have a leader with a brain of her own. So the researchers may prefer to err on the constructive rather than radical side. But, even so, we can declare the weekend open with this thought: it says something about the shifts and splits in public sentiment following Occupy that good old Civic Exchange now comes across as a rather lonely-sounding voice of moderation and reason.

Out of the mouths of judges and innocents

November 13th, 2014

When Hong Kong’s Umbrella-Occupy movement no longer spreads a little occasional mirth, it will be time for the protestors to go home. So far – amid controversy, drift and uncertainty – at least a few laughs keep coming, suggesting that the ‘tented communities’ should be around for a while yet.

Today’s amusement comes from Court of Final Appeal Judge Henry Litton, in personal comments at an event at HK University. He admits to being ‘intrigued’ by the SCMP-TopJudgeQuestionsapplications for injunctions against the sit-ins, which resulted in Monday’s judgment authorizing bailiffs to clear the streets.

In effect, he questioned why private plaintiffs were taking civil action in a public-order case, while the government, with its clear powers and duty to take action against people committing criminal acts, was sitting around doing nothing. He also wondered why the hearing was ex parte, behind occupiers’ backs, when the matter did not seem to be hugely urgent.

Judges (stereotypically) reinforce their reputation for being out of touch by asking innocent questions that make ordinary folk roll their eyes. However, Justice Litton reveals that he, like thousands of common people, has trudged around the Occupy site at Mongkok to find out more. His questions and his claim to be mystified by the injunction look more rhetorical and indeed part of the joke. (He was speaking at a forum on the Umbrella Movement and rule of law, which is a sort-of giveaway.)

We can have a stab at answering the questions. Associations of taxi operators and other United Front-linked groups applied for the injunctions at the behest of the local and Central governments. This is supposed to create the impression that the ‘silent majority’ people of Hong Kong are in conflict with the selfish, foreign-funded, National Education-skipping, economy-wrecking, splittist criminals inconveniencing society by blocking the streets. It is also presumably intended to help the government avoid enforcing the criminal law directly and delivering moral victory to the side of non-violent civil disobedience.

Ultimately, of course, it isn’t funny. Under pressure – indeed orders – from Beijing, the Hong Kong government is undermining rule of law in its desperate attempts to portray Kids in Tents on Streets as a mortal threat to the city’s well-being and thus avoid addressing the underlying problem of bad governance.

This is not a sustainable pattern. Either Beijing ends up reducing Hong Kong to a Mainland-style dictatorship, or the Hong Kong authorities have to backtrack at some point and admit that their bad policies and practices are the root cause of revolt. Most likely, cooler heads months down the road will attempt a face-saving way out where jolly officials vaguely resolve to do better in return for a few pro-democrats expressing some sort of grudging remorse for unspecified excesses and sins, and everyone SCMP-HKGovUnableknows everyone’s lying.

Meanwhile, ingenious officials propose the most hopelessly unconvincing face-saving device ever, in the form of a public sentiments report to Beijing that proudly boasts no known purpose. This is the government’s main tactic for now: stunning and silencing the enemy with bizarreness and idiocy.

Meanwhile, back at the public consultation exercise…

November 12th, 2014

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The call on protestors to withdraw du jour comes from lawmaker Felix Chung. He seems deeply concerned about the impact of the pro-democracy Umbrella-Occupy road closures on small enterprises, some of which are known to be struggling to pay the rents that go to his Liberal Party’s tycoon and landlord constituents.

Despite exaggeration by hypocrites and sycophants, the Umbrella movement has undoubtedly harmed some businesses (and benefited others, like camping equipment stores). A recent court judgment even refers to the damage as ‘not evanescent’…

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…and authorizes bailiffs, with police support, to clear some of the occupied streets.

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OC-MKsignMedia today quote ‘sources’ as saying that 7,000 cops could turn up in Mongkok tomorrow. Why would officials give advance warning of the timing? Maybe they expect the demonstrators to meekly pack up and go home this evening to avoid unpleasantness. Or maybe this is a trick – that’s what they want you to think! – and the multitudes of bailiffs and police will descend on the site in 10 minutes, or in a few days. (I was wondering where they’ll find 7,000 cops. Since this is a civil matter, and the police won’t be directly involved, the real question is, where do you find 7,000 bailiffs?)

The occupation does have a sort of getting-to-the-end feel about it – but then this must be the 10th or 12th getting-to-the-end feel we’ve had since it all started in late September. Do the authorities have what it takes to, yet again, screw things up and provoke reinforcements and renewed public sympathy for the students just as the occupation would finally be waning? I’d give it a good 50-50 chance. The tactic of waiting for exhaustion to set in among both protestors and public opinion requires a lot of patience. And the government, with Beijing’s opposition-crushing advisors growling down the phone, seems frustrated and itching to act.

One reason is that – lest we forget – a public consultation on the electoral arrangements for 2016-17 is underway. This might seem an obscure, laughably irrelevant, downright evanescent detail now, but the bureaucrats have a Beijing-written script to act out, and a timetable to keep to. A climactic, once-a-generation, everything-changing political uprising accompanied by the biggest outbreak of unrest in decades can’t get in the way.

Chief Secretary Carrie Lam would like us all to move on and (dare we say it) get back to normal. Let’s talk and achieve universal suffrage! We shall see. This second round of the consultation will go into the nitty-gritty of things like the composition of small-circle functional constituencies and how the Nominating Committee will produce its ballot of screened Chief Executive election candidates. Just the sort of thing to remind everyone what triggered the students’ sit-in in the first place.

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Last gasp of the has-beens

November 11th, 2014

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For what seems like the second – maybe third – time, former Hong Kong Chief Executive Tung Chee-hwa launches his new think-tank. With its honorary advisors having an average age of 91, my hopes of succeeding as a parodist lie in tatters.

SCMP-TungLooksAlso involved: former Chief Justice (and former Sir) TL Yiang, former Hospital Authority Chairman Anthony ‘barred for two years’ Wu, and former (but you guessed that anyway) Financial Secretary Antony ‘Lexus’ Leung.

Maybe we should call it the Former Club, or just plain Has-Beens City – or perhaps the United Ex-Reptiles of Big Lychee Bureaucrat-Plutocracy. But, as we were told at its previous unveiling, its official name is the Our Hong Kong Foundation. In Filipino and some other languages, there are three ways of saying ‘us/we’. One means ‘you and me and no-one else’. Another means ‘you and me and others’. The third means ‘me and some others but not you’. No prizes for guessing which ‘our’ applies here.

In reality, this was the launch of Lexus Leung’s trial quasi-campaign for Chief Executive in 2017. (By saying that God will decide whether he goes for the job, he means Beijing.) This opening bid would have been planned before the Umbrella-Occupy movement crashed onto the scene, and we can imagine the League of Has-Beens dithering before hastily deciding to use (‘leverage’ they would say) the student uprising as an issue.

Thus Leung boldly ‘hits out’ at the terrible way the government has ignored the young for years and years, including back when he was FS. His plan: ‘discussion’ on how to address young people’s needs – discussion involving ‘government and developers’ (you can’t make this up). Tung adds some blather about technology and innovation as a way to help youths, which brings to mind his generosity to Li Ka-shing’s son Richard, who got the Cyberport luxury-apartment ‘tech-hub’ project (you can’t etc).

I haven’t seen a full membership list. But so far as I can see, the big property tycoons are conspicuous by their absence in the think-tank/campaign (middling Peter Woo of Wharf Holdings comes closest, and the boy Richard appears). With pro-democracy students building barricades in the streets, it must have dawned on even the dimmest Lexus Campaign member that the cartel bosses best stay away. Instead, the organizers roped in some publicly subsidized Olympic cyclists in a desperate attempt to bring the average age down, and presumably connect with the kids. Also apparently absent: any meaningful representation from the pro-Beijing DAB, young or old. They’re not dumb.

By contriving the Needs of Our Youth as a platform, the campaign is obviously trying to make a virtue out of a necessity. Not cynical, just embarrassingly naïve – a deluded and out-of-touch gang of yesterday’s old, grey, clapped-out clown-cronies who failed last time and expect to get another chance without riots breaking out. The Chinese Communist Party and Hong Kong’s rebellious, unpatriotic students could surely speak as one here: Forget it…

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Further to my recent suggestion that they rename our schools’ most troublesome subject ‘Radical’ rather than ‘Liberal’ Studies, I am delighted to see that great minds think alike. Indeed, China Daily never ceases to amuse: how about White Guy Opposes Brown People Working in Hong Kong?

HK in tears as Ferragamo struggles to pay rent

November 10th, 2014

French, Japanese and American purveyors of overpriced junk are silent, but Italian luxury goods brands are squealing: Hong Kong’s pro-democracy Occupy Central movement is hurting their profits, and they are pleading with their landlords for rent cuts.

The Italian Chamber of Commerce was in the forefront of the mass-mouth-frothing orchestrated by Beijing’s United Front among overseas business-community shoe-shiners a few months back. Right-thinking people found this distasteful at the time and will have little sympathy if PradSCMP-ItalianBrandsa, Ferragamo and Gucci shrivel up and die tomorrow. Nor will most of us be especially grief-stricken if landlords had to slash rents. It is possible that many of us have some exposure to the property/retail/tourism sector through pension funds, but something deep down makes us feel all warm and happy at the thought of real-estate tycoons’ profits sliding.

It is often wrong to see zero-sum systems at work in economics. A classic example is the ‘lump of labour fallacy’ – the belief that only a fixed amount of work is available, so if one person gets a job, someone else must lose one. The error is to see work (or wealth, or health care, or bananas) as a cake that can only be sliced up 90-10, 50-50, 30-70 or whatever, when you can make the cake bigger.

It’s a lousy metaphor – crummy, indeed. If you could make a cake bigger, you could ‘have it and eat it’, and declare ‘let them eat’ the stuff without sounding crass. Calling it a ‘pie’ (as in ‘chart’) helps a bit. But the principle is correct: unlike energy in physics, which can only be recirculated or redistributed, new wealth can be created.

That doesn’t mean zero-sum is a myth. Every prudent family on a weekly budget has to go without one thing in order to afford another. And economic theories that say everyone should enjoy at least a slice of society’s growing prosperity tend to assume a perfect and open market not distorted by – just to take an example at random – the Hong Kong property cartel.

So we might consider the possibility that in the Hong Kong economy, real zero-sum systems (or at least major I-win-you-lose imbalances) are at work. And the plight of the poor Italian fashion retailers might prompt us to ask about the big-picture role of rents for residential and commercial premises.

We have an artificially tight supply of space, thanks mainly to Hong Kong land policy. And we have an artificially exaggerated demand for space, thanks to Mainland shoppers and ‘investors’ diverted offshore by Chinese policy on private consumption and savings. This means big increases in incomes for landlords. It also means rents have risen far faster than most local people’s ability to pay them. We know all this.

Now take it one step further. Is this a zero-sum game? Can we say that for every dollar extra in rent Hong Kong landlords make, the rest of the Hong Kong community must lose a dollar (or a fixed proportion) out of their pockets, or in purchasing power, or in higher entry barriers to trade?

If true, high rents are a tax on the whole non-landlord population. Anything that reduces rents will therefore be the equivalent of a tax-cut for the vast majority of residents. And any pro-capitalist think-tank will tell you what that means for the economy: higher disposable incomes, more incentives for entrepreneurs, more prosperity for all – a growing cake.

FerragamoTake it one more step. Would it make overall economic sense for a Hong Kong government to commit itself to lower rents as a policy priority? To do whatever it takes: scrapping of the high-land price policy, looser zoning rules, sensible relaxation of building codes, punitive taxes on unoccupied premises and – not least – a bar on Mainland shoppers. In other words, forget all the stuff about ‘pillar industries’ and ‘reputation for free markets’ and just systematically unwind every distortion that pushes rents up.

There would be losers as well as winners, and not all would be Ferragamo (God that stuff’s ugly) or tycoons. But would it on balance benefit the whole economy as measured by, say, median household income/purchasing power, or the propensity of students to camp on the streets? It would be fascinating to know.