Big Lychee, Various Sectors

The Standard calls it tit for tat.  Predictably, many of Hong Kong’s pro-Beijing lawmakers parade out of the Legislative Council, depriving the proceedings of a quorum and forcing the meeting to adjourn.  The five pro-democrats resigning to force a de-facto referendum are left to deliver their personal statements to the crowd and media outside.

To loyalists who see the struggle between the two camps as a sort of boxing match, this is a punch on the nose to the troublemakers who are resorting to wilder and wilder tactics in their campaign for reform.  The walkout gives them the pleasure of getting their own back on the opposition for the resignation ploy with another legal but arguably underhand gimmick.

But it is not tit for tat, as this is not a symmetrical conflict.  The fight is not taking place on a level playing field.  One side largely comprises representatives elected in democratic elections, while many members of the other side had their positions of influence handed to them on a plate.  When the former exploits rules and procedures for tactical gain they can at least point to a popular mandate and a bit of moral high ground.  When the latter pulls a similar stunt, it is from a position of unfair advantage.

If we cast our minds back to 2003 when the Article 23 national security legislation was being pushed through Legco, we might recall the pro-Beijing lawmakers emerging from the chamber one day with smug grins on their faces.  While their pro-democracy colleagues (and some officials) had been away attending an academic conference on the proposed law, they had used their momentary overwhelming majority on the bills committee to wave the remaining parts of the bill through and pass a motion declaring the discussion finished.  As a parliamentary tactic it was legal, and they thought they were being clever.  Fifteen days later, over half a million people were on the streets.

In asymmetric struggles, two sides have unquantifiably different resources and methods.  In Vietnam, one side had the support of B52 bombers while the other had the support of peasant villagers and urban infiltrators.  Hong Kong’s League of Social Democrats, with their Trotskyite influences, have always seen working within the system as a snare; losing their seats in a by-election means nothing to them.  The post-80s generation protesting the high-speed rail link don’t know or care what a quorum is.  The Civic Party are increasingly seeing their presence in the weak, rigged Legco as pointless and are becoming open to other, maybe less lawyerly, forms of action.

The Democratic Party, the grandfather of the pro-democracy struggle, is divided.  Since two of its founders, Martin Lee and Szeto Wah, were kicked off the Basic Law Drafting Committee, its members have invested over two decades of effort into prompting change through logical argument and moral suasion – to zero effect.  Perhaps the DP will divide into two strands: traditionalists dreaming that Beijing will one day sit down and treat them as equals and concede universal suffrage, and activists with their sights on tycoons, cronyism and all the other uneven features of the day-to-day social and economic, rather than abstract ‘political’, side of the playing field.

To those in the pro-Beijing camp enjoying the prospect of more punches of pro-democrat noses, it looks good: the pro-dems are falling apart, and the by-elections look like becoming a humiliating farce apparently boycotted by the vast majority of the voters.  But to the opposition, such setbacks will simply confirm that they should quit the uneven playing field and take their anger and frustration elsewhere.  Not really good at all.

The Hong Kong government, possibly sensing the presence of death in some form, “deeply regrets” the decision of five pro-democracy legislators to resign in order to trigger by-elections that they intend to present as a de-facto referendum on universal suffrage.  Among other things, officials loudly mourn the loss of the HK$150 million it will cost to organize the polls.

Could this be the same government that spends HK$67 billion on a 16-mile rail link?  More to the point, could this be the same government that in 2007 deliberately held the high-profile, Anson-vs-Regina Hong Kong Island by-election two weeks after the District Council polls, rather than on the same day – presumably spending an extra HK$30 million – in an attempt to minimize the opposition vote in the latter?  Yes it could.

If the panicky cadres from Beijing who increasingly micro-manage local affairs had kept their mouths shut, a series of by-elections would have been held and the pro-establishment camp could even have picked up one or two seats.  The radical League of Social Democrats’ Albert Chan, for example, won his New Territories West seat in 2008 with just 8.1% of the vote and might have struggled to match the pro-Beijing camp’s hard-core base of, say, 20%, which will turn out to vote at the drop of a lunchbox.

But the very game of make-believe – pretending by-elections can be a referendum – sent the Beijing officials into a fury.  Like any form of democracy, a referendum is incompatible with one-party rule: you can have one, or you can have the other, and that’s it.  Logically, if a referendum takes place, it is because the Chinese Communist Party is no longer in power.  Calling a by-election a referendum as a gimmick wasn’t funny or cute; it was a symbolic challenge to CCP rule.  Declaring it to be a plebiscite on an issue already overruled in an interpretation of the Basic Law made it doubly so.

So Beijing has pressured the pro-Beijing parties not to contest the by-elections, though the Democratic Alliance for the Betterment etc of Hong Kong would probably like to.  They can justify boycotting the polls on various grounds.  The fact that the pro-democrats’ demands have already been ruled out in the Basic Law interpretation makes the quasi-referendum constitutionally illegitimate (despite being perfectly legal).  It is a farce.  A waste of money.

Typically, the pro-democrats handed their detractors another excuse on a plate by urging a citizens’ ‘uprising’, supposedly conjuring up images of disemboweled officials dangling from meat hooks and street lights.  That sealed it for the Liberal Party; at least it sounds better than “Beijing won’t let us run.”

The elections are a few months off.  The pro-democrats could still tear themselves away from their self-indulgent obsession with reaching the Holy Grail of Democracy and turn the by-elections into a vote on overpriced infrastructure, greedy property tycoons, polluted air and here-and-now bad governance in general.  Make a carnival of it and get, say, 40% of the voters to turn up, and Chief Executive Donald Tsang will be in Zhongnanhai having the biggest spanking of his life within hours.  But it would be out of character.  More likely, the five will be faced with the humiliation of re-winning their seats against a clutch of nonentities and attention seekers on an 18% turnout amid public indifference.  In which case, they would have been better off joining the boycott.

We all know that Voltaire said: “I may not agree with what you say, but I will defend to the death your right to say it.”  I would add: “Mind you, when it’s a paranoid communist dictatorship grappling with a bunch of tedious and creepy mystical wackos, I tend to just sit back and watch the fun.”

On the face of it, what we have here is an outrageous infringement of Hong Kong’s supposed autonomy in immigration affairs.  The US-based Shen Yun Performing Arts company is cancelling seven ‘traditional Chinese dance and music’ shows here because the Big Lychee won’t give certain members visas.  According to the artistes, officials said that personnel with those particular members’ technical skills are already available in Hong Kong.  This would fool no-one; artistic groups bring their own lighting, sound and other crew all the time.

The troupe is linked with the anti-Communist Party, quasi-Buddhist, qigong-style cult, Falun Gong.  Although local FLG adherents are free to practice their weird breathing and other exercises, their overseas brethren are routinely turned away at Hong Kong’s borders.  This is, although no-one admits it, on the express orders of Beijing.  Led by the vaguely sinister Master Li Hongzhi in New York, FLG is the nearest thing China has to an opposition, having pulled such stunts in the past as hijacking mainland satellite TV broadcasts.  After the group suddenly revealed its organizational capacity in protests in the late 1990s, members were ruthlessly persecuted, and the movement now presents two faces: one of menace, to Beijing, and one of innocent victimhood to the rest of the world.

It claims millions of members in over 100 countries, and certainly has impressive resources, including newspapers like Epoch Times, a TV channel and websites in every language on such intriguing matters as Fa Rectification Cultivation (followers’ righteous thoughts) and Truth Clarification to Save Sentient Beings (press releases, basically).  Its members also mount various forms of street theatre and silent protest about FLG members’ treatment in China; in photogenic spots in Hong Kong, Macau, Malaysia and elsewhere (though Singapore bans them) they pester horrified mainland tourists by handing out gory leaflets showing practitioners’ mutilated corpses.  Chinese diplomats overseas maintain running battles with the movement, even assaulting them at gatherings – and urging foreigners to avoid the evil cult and its performing arts groups.

Shen Yun (formerly Divine) Performing Arts blends anti-CCP and pro-FLG propaganda into its works, and not very subtly, by some accounts.  It would have known all along that it would not be allowed to enter Hong Kong.  Although China promised Hong Kong autonomy in immigration affairs, only a naïf would imagine that Beijing would keep its word where FLG is concerned.  To the central people’s government, it is a national security matter; allowing Hong Kong to admit FLG is as thinkable as Washington DC letting Puerto Rico invite Osama Bin Laden to visit.  So the returning of cash to ticket-holders and laments about the shows’ cancellation are part of the script.

The FLG and CCP have more in common than either would think.  They are both prone to irrational, mouth-frothing diatribes. Both rely on the use of impenetrable code to avoid facts or admission of a lack of them.  Both claim a morally pure lineage and ideology but are run by people at the top who (I would wager) are stuffing their pockets at the expense of the little people.  One difference: the Hong Kong Immigration Department can’t turn the CCP away.

It has often been said that when a man is tired of IFC Mall, he is tired of life, and what more evidence do we need than the news that a British fashion house will be paying a monthly rental of HK$620 per square foot for a hair accessories and scarves outlet in the shopping centre?  There are few things I enjoy more than buying scarves, and it will be impossible to drag me out of the Burberry, Jaeger, or whatever it is when it opens.  It will be an exciting addition to what the mall calls its ‘diverse tenant mix’ – vendors, with their improbably exotic names, of women’s shoes, women’s handbags, women’s cosmetics, women’s perfumes, women’s lingerie, women’s watches, golfer’s strange pale yellow pants, a multi-screen cinema and a supermarket selling such delectables as a HK$39 green capsicum.

According to the South China Morning Post report, one of the scarf company’s products is a hair clip that sells in the UK for HK$63.  If they sell 4,920 of these a month, or around one every three and a half minutes assuming 10am-8pm opening hours, this would just cover the rent for the 500-square-foot premises of HK$310,000.  (Time taken at this rate of sales before every woman in Hong Kong has a clip: 59 years.)

IFC Mall's tasteful barrage balloon Christmas decoration, 2009

It is unlikely that this boutique will allocate precious shelf space to anything going for HK$63.  Apart from the green capsicum at the high-end supermarket and the trendy, bright purple, HK$30 caramel and jojoba iced mochas at Pacific Coffee, nothing in IFC Mall sells for double-digit figures.  That is because, apart from high rents, the shops must also pay salaries/commissions to lithe ladies of precisely 22 to 23 years of age who can sell scarves (or whatever) in Cantonese, Putonghua and English, and they must cover other management costs and still yield a reasonable profit to their owners.  Let’s say anything less than HK$400,000 turnover a month, and the scarf place will be unviable.

This works out at HK$1,333 in revenue per hour, which happens to be, roughly, the average sort of price that designer scarves go for in the US/UK, according to Google.  The challenge is simply to induce 10 or more people a day, many living in a sub-tropical climate, into buying a brightly coloured oblong of cashmere or a big square of silk.  Helped by the bizarre spending habits of mainland tourists, who sometimes buy such items by the dozen or more, this is probably quite easy.  Some mainlanders also take pleasure in telling each other how expensive various possessions were to buy, so the shop could probably increase sales by adding an extra thousand bucks to each price tag.

All the shop needs to do is wait patiently for a small number of the right sort of customer to come along.  One mainlander a week who buys 20 at a time, plus a couple more per day who buy an average of three, plus one local taitai a day, two guilty husbands a week and the occasional gwailo banker shmuck from Two IFC wooing his secretary (all one each) – and you’re easily making a few hundred thousand above breakeven.

Which is how all these luxury downtown shops, with only a few pieces of stock on display at any time, and usually no sign of human life beyond zombified assistants, can thrive in a city where the average person has maybe 150 square feet of living space and supermarkets are so tightly crammed with goods a thin person blocks an aisle.

The SCMP mentions that turnover for all stores in IFC Mall last year was HK$6 billion. It adds that the Rolex store on Queen’s Rd pays HK$1.2 million a month for its 1,000-square-foot emporium – almost double the scarf shop’s rent psf.

A pure guess: after giving staff, Inland Revenue and (property cartel-owned) utilities their slices, this take is divided 45% for the landlords and 45% for the overseas-based luxury brands.  The percentages may be a bit different, but essentially that’s where that flood of lovely money brought into the Big Lychee by the ever-so important tourism industry goes, if you’ve ever wondered why you never seem to see it anywhere.  It’s also why Sun Hung Kai – part-owners of IFC Mall – must be so thrilled and delighted that the taxpayers are donating HK$10,000 each for an express rail line delivering Wuhanese and other scarf-craving visitors straight to the doorstep of their West Kowloon mega-mall, Elements.  I would be.

Interesting Hong Kong events of the last few weeks:

• On January 9, activist Christina Chan was arrested by police after leaving Radio Television Hong Kong, where she had given an interview, and questioned about an alleged assault of big burly cops outside Beijing’s liaison office after the New Year’s Day pro-democracy march.  While at the station, she said, police insisted on photographing her tattoo.
• On January 16, police used pepper spray on anti-Express Rail Link protestors during the siege of Legco.  Radical arty-type Banky Yeung Ping-kei later wrote [Google translation] that he recognised plain-clothes police among the crowd and believed they had acted as agents provocateurs and were involved in the (superbly aimed) bottle-throwing incident that resulted in lawmaker Philip Wong getting a bump on the head.
• On January 17, Chief Executive Donald Tsang Yam-kuen launched into an uncharacteristic and not especially convincing macho-man routine and denounced the anti-XRL protestors as ruining order and acting against the city’s core values, public interest and the rule of law.
• On January 18, magazine Oriental Sunday carried a front-cover paparazzi photo (you don’t have to look) of Christina Chan at home, in her undies, brushing her teeth.  Activists complained that this was a part of a pro-Beijing pressure campaign to intimidate them.  They had unlikely bedfellows in the form of the Christian hyper-conservative Truth and Light Society, who complained to media watchdogs at the wanton exposure of nubile flesh.
• On January 19, someone broke into the office of Civic Party legislator Tanya Chan (the thinking man’s Christina).  She is one of the lawmakers who are resigning in order to force a by-election in each constituency – the ‘five-district referendum’.
• On January 23, the South China Morning Post reported that detectives from several districts were being drafted in to Hong Kong Island to go through all the video footage the police had filmed outside Legco on the night of the ‘siege’.  An anonymous source said such redeployment of officers was very rare.
• Also on January 23, someone told me that Banky Yeung had claimed that he had suffered a break-in, and the intruders had taken the chip from his camera, which was otherwise left intact.

By the standards of the US or UK, hardly any of this would be remarkable.  Hong Kong people are extremely sensitive to police scuffles and political vandalism, however, so it is understandable that these incidents have aroused concern.  The agents provocateurs/camera chip charges are disturbing, but a cynic would note that Banky Yeung is a theatrical, self-confessed ‘urban prankster’ who may not be totally reliable.  A real cynic would suggest the limelight-loving Christina Chan, not averse to being photographed in a bikini, arranged the Oriental Daily shoot.

Not wishing to be cynical, we seek a rational explanation.  And that is that Beijing has turned the heat up on the Hong Kong authorities after this little outbreak of unrest on the streets and in the legislature.  The politicians and cops are appearing to get tough so they can show the Central People’s Government, and local pro-Beijing sneaks, that they will ‘strike hard’ against plots, splittists, black hands, bad elements, etc.  The break-ins – not unprecedented – can be put down to over-zealous patriots who know people who know guys with tattoos who need some cash.  The salaciousness of the Big Lychee’s glossy magazines needs no comment.

Seen this way, the only sinister bit of this is Banky’s allegations.  Are top officials really dumb enough to run the risk of being caught ordering plain-clothes cops to create artificial trouble to justify subsequent harsh measures?  Or mount a Watergate-style burglary?  (And would Philip Wong accept that the blow to his head was all in a good cause?)

Some would say yes.  In which case, the explanation is that the screws really are being turned, and the Big Clampdown is coming.  But as we saw in 2003, there are hundreds of thousands of people here who will get off their backsides and take to the streets if pushed too far, and fewer than 10,000 prison spaces (mostly occupied – unless they use stadiums or send everyone off to the gulags).  So good luck with that.

Or is it the government’s cleverest-ever subliminal dental hygiene publicity campaign?

The Standard reports that the resignation of five legislators to force by-elections is “not a part of a campaign … to seek independence for Hong Kong.”  Damn.  What a bitter disappointment to those of us who assumed that the founding of the Big Lychee Free State was just weeks away.  I’ve even been designing a new flag.

The article goes on: “Pro-Beijing stalwart Tsang Hin-chi said anyone trying to promote a referendum is ‘brainless’ as Hong Kong is part of China.”  Could this be the Dr the Hon Tsang Hin-chi GBM who has two convictions for using falsified trade documents and an asteroid named after him?  Last seen scowling in his wheelchair while carrying the Holy and Sacred Olympic Flame last year.  I thought he was dead.  Being capable of such flawless logic, obviously he is not.

Just to make everything clear: “…Liberal Party chairwoman Miriam Lau Kin-yee [said] her party will be working closely with the Democratic Alliance for the Betterment and Progress of Hong Kong in fielding candidates in the by-elections … But DAB vice-chairman Ip Kwok- him said views are split in his party and that it would only join in the by-elections if they are not seen as a referendum.”

Seen as a referendum?  By whom?  Not by the boss: “A [government] spokesperson reiterated … that any kind of referendum has no legal basis.”  For good measure, the government issues yet another press release in which the word ‘referendum’ is used repeatedly to emphasize the point that one isn’t going be taking place.  I suppose simply referring to the polls solely as ‘by-elections’ is too difficult?

The South China Morning Post meanwhile reports that a nine-year-old girl who named her hamster ‘referendum’ has been arrested and the creature humanely destroyed.

Actually, what the SCMP gives us* is Lau Nai-keung – patriot, scourge of pro-democrats, and compelling study in mental fracturing, week by week, column by column.  Just when you thought his mouth-frothing hatred and loathing for the world couldn’t get any more pathological, he manages to get just that little bit more psycho.  It is far and away the best reading in the newspaper:

I can hear the rumbling of the tanks trundling across the border, squashing anti-rail protestors and hamsters in their path.  Must hurry and finish that flag.

* In the print version only – today’s op-ed page isn’t on-line

Middle-class pressure group Professional Commons are already loathed by our benighted policy-makers for their presumptuous and impertinent contributions to the HK$66.9 billion Express Rail Link debate, namely embarrassing suggestions on how to slice billions and billions off the bill.  Officials, desperate to avoid the humiliation of wasting less taxpayers’ money, resorted to bad-mouthing (as in slandering) the group’s work, which in turn earned them a stern lawyers’ letter.  So what better way for the PCs to bring a little brightness and cheer into our leaders’ lives at this time than to denounce the government’s proposed political reforms for the 2012 elections.

They don’t exactly pull any punches, declaring of Chief Executive Donald Tsang Yam-kuen:

1.  He has completely reneged on his election promise, and has decided not to resolve the question of universal suffrage during his term;

2.  He has abandoned his constitutional authority which would allow him to kick-start the process by submitting a report to the Central Authorities that contains a roadmap to universal suffrage;

3.  He has chosen a policy to try to confuse people, expand political privileges, and aggravate social conflicts.

They go on to slam the functional constituency system, pointing out that 14 of 18 business sector seats in the Legislative Council were not contested, and suggesting that some are quite possibly controlled by a few barons with multiple votes.

Functional constituencies were established in Hong Kong in the 1980s as a way to introduce a vestige of representation into the colonial government.  Such group representation is a classic part of corporatism – as practiced by Mussolini and fascist regimes in Latin America in the mid-20th Century.  The idea is to

…eliminate spontaneous interest articulation and establish a limited number of authoritatively recognised groups that interact with the governmental apparatus in defined and regularised ways. Moreover, the recognised groups in this type of regime are organized in vertical functional categories rather than horizontal class categories and are obliged to interact with the state through designated leaders of authoritatively sanctioned interest associations.

James M. Malloy, Authoritarianism and Corporatism in Latin America, 1977

To Beijing, the FCs are primarily a way to guarantee a pro-government bloc that can serve as a rubber stamp/veto in the legislature.   In exchange for offering a bit of privileged access to influence, the ruling power wins the undying loyalty of people like, say, lawyers and engineers.

Except it seems someone forgot to tell Professional Commons members.

Click to hear Uncle Frank!

In a faintly amusing attempt to mollify popular outrage over transfers of public resources to private interests via pointless infrastructure projects, the Hong Kong government expresses dismay at the commercial performance of the world’s smallest, and only state-owned, Disneyland.  Commerce Secretary Rita Lau’s claim that the Mouse has contributed to the local economy can be dismissed; after you factor in an estimated (in 2005) opportunity cost of some HK$290 billion, the headline loss of HK$4.4 billion is a bit of loose change rolling away from the mountain of net wealth squandered on the theme park.  It will never be in the black.

Then we have what economists like to call externalities, and what humans call ‘a pain in the ass for you and me’.  By pulling in more and more mainland and other visitors, the tourism industry increases traffic congestion, air pollution, urban crowding and shop rents, thus damaging Hong Kong people’s health, opportunities, finances and sanity.  The main beneficiaries of this endless flood of shoppers and gawkers are the interests that own the hotels and the malls – essentially the handful of families that run the property cartel.

The ability of pro-democrats to get their heads around this and articulate it effectively to the population has been developing at roughly the same snail-like rate as representative government in the Big Lychee.  But the recent mini-uprising over the HK$66.9 billion high-speed rail boondoggle seems to have helped raise awareness, and this time it just might be dawning on people: this whole infrastructure/tourism/property mega-sector, which we are told is one/two/three of the four/five/six ever-so important and vital pillars/legs/foundations of our vibrant economy, is a scam.

It is a parasite, and after sucking the blood out of us for years it is so engorged that there is little space left here for small and medium companies, innovators, start-ups and entrepreneurs.  That leaves us with only two serious economic activities to live on.  One is all the fixing and dealing between investors, producers, shippers and consumers of tacky but highly popular junk made in China.  This productive service to mankind largely takes place outside our city, so our property tycoons can’t leech much out of it.

The other is financial services.  At the tawdry end of the business, our banks undoubtedly play a role in the pyramid scheme known as the property market, and they occasionally sell bad investments to the unwary.  But for the most part, they make the city richer and better, allocating capital efficiently, creating the liquidity that oils commerce, helping old ladies cross streets and retrieving kittens stuck up trees.  You never hear the industry whining for cheap land, lobbying for huge construction projects, or even begging (much) for favours from Beijing.

We are frequently invited – urged, even – to believe that this keystone of our prosperity is in danger of being usurped by a city 760 miles away that has tight controls on international capital flows, a joke legal system, corrupt officials, a heritage of central planning, high taxes and strange-smelling regulatory and accounting systems.  The only things it has to recommend it are pedestrianized streets and really good dumplings.

So it gives all friends of the Big Lychee’s banking industry great delight to note that Hong Kong and Shanghai officials signed an agreement yesterday on dual development and co-operation between the two cities’ financial services sectors.  It is the 23rd (or is it the 24th? – it’s hard to keep up) pact to enhance cooperation between the two hubs in the last 12 years.  Cooperation is now so enhanced that you can eat off it, see your face in it and warm your hands off its life-affirming and seductive glow.

Click to hear Steve Earle!