Big Lychee, Various Sectors

In the mainland, October 1^st marks the beginning of a big holiday, with some people getting a week off.  Even in plucky little Macau they get three days to celebrate the 60^th anniversary of the establishment of the People’s Republic of China.  In Hong Kong, where 1949 marked the beginning of a decades-long influx of refugees fleeing communism, National Day is what it says: a 24-hour deal.  Or, to hear citizens of the Big Lychee tell it to opinion pollsters, maybe an ordeal…

This pie chart was purloined from a presentation by political scientist Michael DeGolyer of Baptist University to the HK Democratic Foundation.  While the survey methodology was no doubt faultless, it is hard not to look at the data and wonder about the integrity of the respondents.

For example, 9% of them claim to feel excited, which the dictionary defines as “very happy and enthusiastic because something good is going to happen, especially when this makes you unable to relax” – not a feeling we associate with the joint Home Affairs/Leisure and Cultural Services Departments’ National Day Carnival at Victoria Park at 3pm.  Not with the best will in the world.  People are giving this answer because they want the opinion poll to show Hong Kong to be loyal to Beijing.

Similarly, a massive 56% claim to be indifferent.  Unless they are working, which some will be, this is also a lie.  It’s a holiday.  You can go out the night before, you can stay in bed late, you can hang around at home in your pajamas half the day.  You don’t have to go into the office.  What is there to be indifferent about?  These people are giving an exaggerated answer in order to influence the result of the survey and show Hong Kong to be more negative towards the motherland than it really is.

Or maybe it’s the other way round.  Maybe 56% of us are going to be dragged off to sing Wo Ai Ni Zhong Guo and are candidly admitting to the Baptist U interviewers that the whole thing will be a bit of a drag, while 9% of us are planning to spend all day in our pajamas and are feeling uncontrollably thrilled by the prospect (I know I am).  In which case, everyone’s being extremely honest.

Most likely though, my first theory is correct.  There is nothing to celebrate about what happened in China from 1949 to 1977.  In the name of ideology, millions of innocent people were killed or tortured because of their families’ social status; then millions (as in 30 million or so) were starved so officials could pretend there were food surpluses; then millions more were killed or tortured or sent to pig farms just to be sure.  Since 1978, the government has gone with whatever works, and a once-impoverished people now find themselves up at El Salvador’s level in terms of GDP per capita and inequality.  That’s a drastic improvement, but does it really merit that much excitement or pride when coming from such a wretched and artificially low base?  This is simply where they should have been all along.  If the country had 2% of the world’s population instead of 20%, we would never have noticed.  It’s the scale rather than the substance of the achievement that makes it hard to be indifferent.  And the fact that it’s a day off.

By the grim standards of mainland officials at the time, Lu Ping was an all-round good guy when he served as Beijing’s top man in Hong Kong from 1990 up to the handover in 1997.  So who can fail to be touched by his wistfulness in today’s South China Morning Post?

Hong Kong should stop relying on favours from Beijing and improve its competitiveness, says Lu …

“While the central government has been offering policy favours for Hong Kong, you can’t ask Shanghai and other cities not to develop as a means to maintain Hong Kong’s edge. Hong Kong people should have a sense of crisis and strive to enhance the city’s competitiveness through their own efforts…” he said…

The central government has endorsed Shanghai’s goal of becoming an international financial centre by 2020, and Shanghai is developing Yangshan, a deep-water port [which] would be a major rival to Hong Kong’s port operations when its third phase was completed next year, since its handling charges were much lower than Hong Kong’s…

Lu, now 82, said neither the Closer Economic Partnership Arrangement launched in 2003, nor the scheme allowing mainlanders to visit Hong Kong on their own rather than in tour groups, which began the same year, could resolve the city’s fundamental economic problems.

Apart from those last four words, it is mostly standard fare: myths and misunderstandings that seem to have become received wisdom over the years.  Beijing’s much-vaunted favours to Hong Kong are mostly symbolic or irrelevant, and seem to be designed to nurture a sense of humility and gratitude – helplessness, even – into the city’s once-confident people.

CEPA, in theory a free-trade agreement, is an inflated public relations gimmick; most of the trade and investment taking place “under its auspices,” as officials carefully put it, would be happening anyway.

The decision to allow more mainland tourists to visit Hong Kong is simply part of a bigger deregulatory process covering travel to Southeast Asian destinations and elsewhere.  And it is no act of magnanimity.  For all we know (the government has never done a cost-benefit analysis) mass-scale, come-shop-leave tourism destroys as many jobs as it creates.  Landlords and brand-label licensees pocket the cash, while the rest of us suffer the higher rents, congestion and air pollution.

As for Shanghai becoming an international financial hub by official diktat…  That would take a freely convertible currency, its value at the mercy of foreign markets.  It would need rule of law, and an independent judiciary beyond the control of the Communist Party.  A free press, ditto.  Clusters of world-class financial, accounting, legal and other talent to fill up all the empty space in those ugly skyscrapers.  The Smiths did a song about Shanghai.

And where did this idea come from that a port in City A threatens another deep-water facility in City B 750 miles away as the crow flies, or three days’ sailing time by cargo ship?  And why are we supposed to want our streets full of trucks carrying containers anyway?

So it’s mostly the usual bilge that our local officials here in the Big Lychee repeat over and over, to the point that it occurs to you, with a sudden sense of dread, that they might actually believe it.  However, the SCMP also reports that…

Lu is … critical of local officials – saying that many are incapable of independent thought, having been trained during the colonial era merely to implement policies dictated by their British superiors…

“There is an urgent need for Hong Kong to speed up economic restructuring….” Lu said.

This isn’t part of the official Hong Kong-needs-Beijing-charity, Shanghai-will-take-over mantra.  This is Lulu, a sweet old man in his 80s, still very bright but prone to occasional moments when he wanders off-script and blurts out the truth.  Our local bureaucrats are good administrators, but they can’t get conceive of reform, of new ideas.  To chief executive Donald Tsang Yam-kuen, government must just build more roads and bridges, as if it was still the 1970s.  Financial secretary John Tsang Chun-wah’s idea of a bold policy initiative is to turn the Big Lychee into a wine hub, or an Islamic banking hub.  His recent heart attack was nothing: suggest scrapping the high land price policy, or using our bloated fiscal reserves for something, and his brain would seize up.

And who put them in charge?  We have 7 million people, at least a few of whom are pretty smart.  The SCMP could have asked Lulu why, in his opinion, Beijing forces Hong Kong to suffer this rule by incompetents.  Next time, maybe.

Long, long ago, back in the days when you could buy a can of San Miguel for 90 cents, it was considered noteworthy that Hong Kong had become wealthier than certain western economies.  Our per-capita GDP, we were told, had surpassed that of Portugal, then Greece.  In the following years, the government and media proudly announced that we had overtaken the UK, and then Canada.  What they didn’t bother mentioning more recently was that this process seems to have gone into reverse.  The Big Lychee now trails Canada and the UK, is on line to fall behind Greece before too long, and could on present trends find itself poorer than Portugal again in a few years:

The figures are, of course, averages for whole populations.  There never really was a time when most Hongkongers were wealthier – adjusted for purchasing power, welfare subsidies and so on – than most Brits.  Throughout the 1980s, 1990s and 2000s, a stroll around the bulk of our neighbourhoods outside Hong Kong Island revealed a city that in terms of living standards looked roughly on a par with Kuala Lumpur.  But why has the trend taken a turn for the worse in the last 10 years or so?

Before the great global crash of 2008, our officials tended to blame the Asian financial crisis. But this was wearing pretty thin seven, eight, nine years after the event.  There was some talk about the British leaving ‘time bombs’ behind after they left, out of spite, but that one never took off.  Understandably, the government doesn’t want to accept that incompetent policymaking, especially an inability or unwillingness to implement structural reforms, is a factor.  Specifically, they don’t want to dwell on the impact of immigration.

The decision after 1997 to speed up the flow of mainlanders coming to live in Hong Kong to over 50,000 a year, mainly with little cash and few skills, may have been partly humanitarian: most of the newcomers were entering on what was essentially a family reunion scheme.  But it would also have met with the approval of Hong Kong’s industrialists and tycoons, who had been lobbying in the 80s and 90s for looser controls on incoming cheap labour.

It would also have pleased Beijing to see the wayward, foreign-influenced city’s demographics weighted more heavily toward core, home-grown 100-percenter Chinese; after all, they do it to Tibet and Xinjiang.  Add over half a million loyal citizens untainted by exposure to western ideas, subtract maybe a quarter of a million middle-class Hongkongers who left in the years leading up to the handover, and you have a noticeable boost in the percentage of the population taking part in nationalistic activities and voting for patriotic parties.

You also increase the ranks of the low-earning, and thus the number of people falling below the HK Council for Social Service’s poverty line, now one in six.  (If we were truly paranoid, we would ponder the possibility that Beijing saw an injection of poor people into the once-vibrant and confident colony as another way of bringing the place to heel, but in the joyful spirit of the 60^th anniversary of the PRC, we’ll let that one pass by).

So we come to the minimum wage.  Back in the days of 90 cents-a-can beer, it would have been unthinkable that Hong Kong, bastion of capitalism, would have considered such a heresy of free markets.  But the government is going to go ahead next year.

So far, the frenzied chattering about this issue has been among the middle classes determined to preserve their right to hire Filipino and Indonesian women as house servants on unlimited hours for less than US$500 a month – which they will.  The real debate, which Labour and Welfare Secretary Matthew Cheung Kin-chung gently skirts around in a boring article in all newspapers today, will be between bosses and workers over the minimum in dollars per hour for everyone else.

Some staff in fast food chains and cleansing companies are currently paid as little as HK$18-19 an hour.  Employers might hope to get away with a HK$25 figure, but the government – petrified at the prospect of disharmony – will probably make it HK$30 or so.  At today’s exchange rates, and adjusted for an eight-hour day and 20-day month where jurisdictions use daily or monthly rates, that would leave Hong Kong ranking as follows:

From some people’s point of view, we’ve already dropped below Portugal.

In a mutually beneficial exchange of limelight, the two desperate publicity-seekers Hong Kong and Sarah Palin met up yesterday, exchanged greetings and parted ways, each no doubt quietly thankful that it would be a while before they would have to encounter such alien freakishness again.

Sadly, when I checked my diary a few weeks ago, I found that I was already booked for a session of Flood-It, so I didn’t make it to the CLSA investors’ conference at the Grand Hyatt.  Although the press was supposedly barred, Palin’s comments are open to all once you sift through the jokes about what she can or can’t see from her window.  Take the lady seriously, as the Wall Street Journal feels a need to, and it was sensible stuff.  Of course it was: it was written for her by people who think she could be a vote-winner in 2012 and want her to sound like she is fit for the job.  Come to mock, like the UK’s leftist Independent, and it was a farce.  And there is a valid point here too: the idea that the US will elect her president is laughable.

Speaking of jokes, what were the hosts up to?  Unlike most brokerages that try to spice things up by being funny from time to time, CLSA actually succeeds.  These are the analysts who brought us the Feng Shui Index.  Not satisfied with snickering up their sleeves at people who read that annual prank and think it’s real, they now proudly present Sarah Palin.  If anyone accuses them of being cruel, they can always point to her hefty appearance fee.  Hong Kong needs more corporate jesters like this.

Were the audience members who left after an hour being rude?  No – as Castro or Gaddafi would find, if they turned up in the Big Lychee and delivered one of their rousing orations, Hongkongers are busy.

Palin promised “A view right from Main Street, USA.”  Maybe Main Streets in Alaska are buzzing, but the one I know is in a pitiful state.  The railroad closed down decades back, then they built the Interstate 10 miles west, then the hotels shut, half the stores and gas stations closed, people moved out, there’s only one doctor left, there aren’t enough kids for the school.  The parking meters take nickels.  The star student – she dreams of starting her own theatre company one day – won’t be seen again once she gets a drama college place in the distant city.  People have views, but not Sarah Palin’s quasi-worldly simplicities.  The pros and cons of a Wal-Mart is a hot topic.

If Palin wants a metaphor, she should say she speaks for the suburbs.  That’s where most people live these days.  Where presidents get elected.  But somehow it doesn’t sound right.  People read newspapers in the suburbs.

Still, Sarah Palin and her supporters can fairly argue that she is the best thing from Alaska to hit Hong Kong since the invention of refrigeration.  Ask anyone who knows the origins of the big, straw-wrapped chunks of glacier that used to be stored in what is now the Foreign Correspondents and Fringe Clubs at the top of Ice House Street.

“Combined with state contracts, loans, and grants for the more fortunate among the well-to-do Parliamentarians, and with the profits made from money-lending and land speculation, the system … helped to widen the gap between rich and poor, and to exacerbate relations between landed and moneyed men.”    Christopher Hill, The Century of Revolution, 1603-1714

The violent overthrow of Britain’s semi-feudal system in the 1640s, and its replacement after the glorious revolution of 1688 with constitutional rule by nice, decent people like us, will not be repeated in the Big Lychee.  One reason is that, as the above passage reminds us, in England the interests of aristocrats who lived off land were at odds with the interests of merchants who lived off trade.  In Hong Kong, they are the same people.  To say they have reconciled any possible conflicts between these two highly esteemed of our various sectors would be putting it mildly.

Another reason is that Britain’s civil wars, religious persecution, decapitation of a king, Puritan dictatorship that banned Christmas, bloody restoration and ultimate ejection of a secretly pro-French/Papist monarchy all suggest a certain absence of harmony.  In Hong Kong, on the other hand, we have the Chinese General Chamber of Commerce.

The details in the Standard are cruelly buried under a mutual exchange of platitudes between Hong Kong and mainland officials, but the CGCC plans to mark the forthcoming 60^th anniversary of the founding of the People’s Republic of China by dispensing coupons for cheap meals to thousands of the Big Lychee’s poor and hungry.  Cynics will scoff.  How, they will ask, can such petty, patronizing and facile gestures by a few wealthy men address the misery, injustice and inequality inevitably driving our restless millions to riot and rebellion?  But, unlike their British forbears, our plutocrats and oligarchs – mindful perhaps of the rise of the Communist Party to which they today pay fealty – understand how the underclass think.  Nothing is being left to chance.  The ragged penniless hordes won’t be hit for extras like tea and sauce.  We can all sleep at night.  Peace still reigns throughout the land.

Public broadcaster Radio Television Hong Kong will, it seems, remain part of government rather than become an independent entity.  At least until next time.

Within a few years of the handover in 1997, RTHK became the subject of much frothing at the mouth among pro-Beijing patriots like Xu Simin eager to support the new administration (or maybe embarrass it; they had been left out from the post-colonial power structure and were disgruntled).  They loudly berated the station for giving airtime to opponents of official policy – not just local policy, like sympathizers of ‘right of abode’ migrants, but big, national Beijing policy, like the Taiwanese speaker who suggested that the renegade province had equal status to the PRC.  After the latter episode in 1999, the administration banished fragrant RTHK boss Cheung Man-yee to a trade post in Tokyo, and she was never heard of again.  The hate-filled hardliners called for RTHK to become a government mouthpiece.

Chief Executive Tung Chee-hwa fobbed them off with the sort of nodding and smiling that everyone got from him.  Wise heads in officialdom knew that turning RTHK into a propaganda station would decrease rather than bolster the government’s credibility.  It would be a gift to detractors, an object of international scorn, and a boost to the city’s fledgling alternative, radical, underground-type media.  Unless you go the whole Singapore way, and ban freedom of speech and protest, a public broadcaster without meaningful editorial independence is a laughing stock and a waste of electricity.

The government pushed and prodded RTHK a bit.  The station upped its output of inane ads promoting startlingly childlike official campaigns covering dental hygiene to grand-sounding policy announcements; a satirical show critical of politicians came off the air; anti-corruption agents and government auditors took a curiously intense interest in station employees’ expenses and other transgressions; newspapers owned by pro-Beijing tycoons turned up the criticism and the negative coverage.

In 2006, Chief Executive Donald Tsang Yam-kuen appointed a group of sensible, non-troublesome but reasonably decent media types to a commission, which – no doubt under expert guidance from high-flying civil servants – recommended that an independent public broadcaster be established, but that RTHK should not be it.

He opined that public broadcasting could be separate from commercially viable operations, like horse racing coverage or pop music events, and he promised a full public consultation on what to do next.  But every possible option for change would have set alarm bells off in his head.  Even for a panicky administration that postpones and abandons consultations and initiatives (sales tax, health care financing, political reform, etc), scrapping this project was understandable.  It is not every day that Donald says something that everyone agrees with, but he is certainly right when he says that the RTHK issue is “sensitive and complex.”

Commercial free-to-air broadcasting in Hong Kong is controlled by two TV and two radio companies, all of which are owned by pro-Beijing tycoons or mainland-linked companies.  As with other cartelized industries, it seems to be government policy to maintain this lack of competition.  Their news and current affairs coverage is limited and designed not to offend the local and Chinese governments (re-titling Taiwan’s president ‘leader’, for example).  They have no interest in serving as platforms for questioning of policy; they make a point of giving opposition figures little airtime except when they say or do something stupid.  So we have a situation where the government’s own station is the only one offering objective news coverage.  To tamper with that would not only invite commotion about press freedom but demands to allow a wider range of broadcasters on the air, which would have both commercial and political repercussions.  Meanwhile, the venom-spitting patriots have calmed down.

To further complicate things, the RTHK debate is not simply about editorial independence, unbiased coverage or restrictions on commercial and community access to the airwaves.  To labour activists and civil servants, it is about an issue that massively overrides such frivolous matters: public-sector workers’ jobs and perks.  To Donald – living proof that you can take the boy out of the civil service but not vice-versa – this would be a deciding factor.  No consultation; no reform; no corporatisation; no need to deprive any screeching, overpaid, unsackable bureaucrats of their precious iron rice bowls.  Peace reigns throughout the land.

A letter in today’s Standard catches my eye:

I was traveling on public transport last week and in front of me, facing me, was a child and his father. The father for about three to four minutes picked and cleaned his son’s nose. I felt compelled to [interfere and kick up an embarrassing fuss].

He took offense to my social etiquette critiquing and found some backing from an Irishman several seats behind me.

My point is this, regardless of gender, creed, race or nationality, I plead with you, please refrain from nose picking, nail-clipping, ear picking and shaving, yes shaving, on public transport.

I for one have had enough. Furthermore, if you see it being done, feel free to voice your opinion because if you don’t you are condoning this kind of behavior.

Jeff Bell

There are two possible explanations.

One is that this is a concocted item aimed to push the Sing Tao-owned Standard’s profit-driven, pro-Beijing agenda.  It patriotically shows the Western protagonist in a bad light, wantonly intruding into others’ domestic affairs – just like foreigners do by consorting with the Dalai Lama.  It curries favour with the Communists by urging disturbingly Singaporean-style curbs on longstanding and cherished civil liberties; today nose-picking, tomorrow freedom of speech.  And of course it serves the Standard’s own commercial interests.  If all these other activities were banned on buses and trains, there would be nothing left to do while commuting except sort out your partner’s zits or read the free newspaper. The giveaway is the obviously made-up ‘Jeff Bell’.   You don’t fool me.

The second explanation is that there really is a Jeff Bell, who really does witness acts of father-on-son nasal burrowing while riding to work, who remonstrates, and who gets rebuffed, and who writes to the newspapers about it.  But that’s just too much to believe.

An email:

Look D, I’ve been scooped by The Economist!  Could you put The Diary Entry That Never Made It Owing To Geocities’ Malevolence onto the blog?  Many thanks…

Wed, 16 Sep

The day gets off to a wonderful start when I stroll into the IFC branch of Pacific Coffee and find wild American friend Odell deep in conversation with a cheesecloth-wearing, beaded backpacker girl ostentatiously clutching a book called Teach Yourself Swahili.

“You shouldn’t call them that,” she is telling him sternly. “They’re officially known as less advantaged or developmentally challenged countries.”

“Look,” my possibly hungover ex-Mormon friend replies, “I’ll stop calling them Third World countries when they stop having stinky toilets!”

Whatever you call them, I helpfully suggest to the pair, you know one when you see it.  Neither seems impressed by this wisdom, but it sticks with me as I read in the newspapers that the Cato and Fraser Institutes have announced their annual list of Freest Economies in the Solar System.  And the winner is…

Even the Hong Kong Government has grown weary of trumpeting our city’s repeated success, year after year, in this index of states ranked by adherence to classical economic principles, as defined and adjudicated by the think tanks concerned.  While we come top in this one, we perform miserably in dozens of other exercises that claim to gauge countries by their quality of life or social justice – usually dominated by Scandinavians and the farther-flung, less messed-up English-speaking places.  Nor do we perform outstandingly by many more specific measures, like, to pluck a topic at random, construction worker safety.  So we don’t make too much fuss, leaving Our Man in Washington to utter the pleasantries.

(If I were a cynic, I would be tempted to wonder whether Sunday’s deaths of six workers at International Commerce Centre played a role in the Hong Kong Government’s decision to be especially low-key this year about the Freest Economy title.  Thank God I am not one – it must be terrible to go around thinking like that all the time.)

There is another reason to be discreet about our perpetual triumphs in doing as Adam Smith, channeled via modern ideologues, wants.  And that is that China, our adored motherland, comes in 82^nd with a score of 6.54.  At best, bringing attention to this difference would be disrespectful.  At worst, it would attract allegations of deviationism – if Beijing and the Communist Party are always correct, as some among us profess, the Big Lychee is exhibiting a woeful failure of governance by not achieving a rating in the 6.5-to-6.6 range.

This is compounded by the company we keep in the top 10.  The two places that stick out in Cato’s list are Chile and Switzerland, because they are… well, foreign.  Perhaps it is to make the table look a little less ‘British Empire’s Greatest Hits’ that the Fraser people omit their Canadian homeland in their version of the list and insert plucky little Estonia – last seen disappearing down an economic vortex of collapsing asset prices as free-markets-plus-currency-peg bites back.  Whether it is cultural bias or hard-headed reality that stuffs the Top 10 with Anglo and Asian-Anglo territory, it is difficult to square with Hong Kong’s new role as patriotic and keenly engaged member of the happy, smiling Chinese family.  With the 60^th anniversary of the PRC fast approaching, Cato’s is the wrong flag to wave.

A glance at the exceedingly murky bottom of the list shows that the Cato methodology has definitely got something going for it.

The bad news is that I made a promise – to do a blog.  The following email from Hemlock explains:

D – remember I told you that with Geocities being shut down, Odell, Winky, the Big Boss and I were all going to be evicted – abandoned on some waste ground on the edge of town like a sack of unwanted kittens?  Well, they’ve gone and done it, a month before they said they would.  And of course it’s all my fault because (wait for it) they hadn’t been billing me!  To quote them…

And now I can’t get in to my own site.  You promised that if the worst came to the worst you would start up a blog of your own and – a) store the entire Hemlock’s Diary archives on the site for posterity, b) do a blog on HK (to which I might contribute occasionally), and c) store the entire Hemlock’s Diary archives on the site for posterity.  So – over to you.

Thus another Hong Kong blog.  I can’t match Hem, so it will be serious, dry, dull, mature and inoffensive, consisting mainly of comment on the city’s political, business and social affairs.  Maybe some self-indulgent reminiscences.  Occasional attacks of discursiveness, perhaps.

In all fairness, he paid the setup costs.