Big Lychee, Various Sectors

Hong Kong retail sales down 7.3% in November year-on-year, and 8.3% by volume/inflation-adjusted. Big falls in cars, electronics, Chinese medicine, furniture and many other consumer items, except supermarket goods. In volume terms, sales are around 30% lower than in 2015-19. 

With China’s economy doing badly and tourists not spending like they used to, Hong Kong chose a bad time to lose several hundred thousand middle-class residents. I would like to help – but I’ll be in Taiwan for the coming week.

Some other things…

Gwulo – of the superb Hong Kong history website of the same name – gets a British Empire (that’s what it’s called) Medal in the UK’s New Year Honours. I don’t think he has been awarded so much as a Bronze Bauhinia Thing in the city itself. 

ChineseCiv Substack review of a contemporary political philosopher/polemicist Zhao Tingyang’s book Redefining a Philosophy of World Government, which proposes a Chinese-influenced system of world government system…

Most of Zhao’s arguments are founded on what can only be described as extreme ethnic bias. His historical claims about Western civilization are almost all negative while his claims about Chinese civilization are bizarrely optimistic. His definition of “China” is based on three “consensuses” about Chinese history, but none of them are accepted by mainstream international scholars outside the PRC. The oft repeated and increasingly ridiculous claim that China is the only civilization that is “uninterrupted” begins his list of three fake consensuses. He claims many times, against even the most cursory reading of Chinese history, that the current extensive land area of the PRC was slowly collected in a completely peaceful way and never through imperialism, war, or genocide. Is there a single international historian who would agree with this? So much of his book is founded on these myths. In one section, he spends numerous pages discussing the imaginary battles of an ancient deity as if these events were actual history that provided proof for his historical interpretations.

…The problem with Zhao’s thinking, and one that has increasingly infected PRC society over the last few years, is that China is now so isolated that it no longer knows how isolated it is. 

… it’s clear by Zhao’s shrill angry denunciations of Christianity and the West that he suspects, on some level, that the Christian church and America have already achieved a more substantial world system than anything China has ever built or is likely to build in the foreseeable future.

CNN investigation of China’s expansion of anti-corruption detention facilities…

Since taking power in 2012, Xi has launched a sweeping campaign against graft and disloyalty, taking down corrupt officials as well as political rivals at an unprecedented speed and scale as he consolidated control over the party and the military.

Now well into his third term, the supreme leader has turned his relentless campaign into a permanent and institutionalized feature of his open-ended rule.

And increasingly, some of the most fearsome tools he has wielded to keep officials in line are being used against a much broader section of society, from private entrepreneurs to school and hospital administrators – regardless of whether they are members of the 99-million-strong party.

The expanded [extra-judicial] detention regime, named “liuzhi,” or “retention in custody,” comes with facilities with padded surfaces and round-the-clock guards in every cell, where detainees can be held for up to six months without ever seeing a lawyer or family members.

…The lawyer, who requested anonymity due to fears of retribution from the government, said many of their clients had detailed abuse, threats and forced confessions while in liuzhi custody.

“Most of them would succumb to the pressure and agony. Those who resisted until the end were a tiny minority,” the lawyer said.

…High-profile liuzhi detainees include Bao Fan, a billionaire investment banker, and Li Tie, a former English Premier League soccer star and coach of China’s national men’s team. (Li was sentenced to 20 years in prison for corruption this month.) At least 127 senior executives of publicly listed firms – many of them private businesses – have been taken into liuzhi custody, with three quarters of detentions taking place in the past two years alone, according to company announcements.

The New Year means a ton of novels, art, film, music and other things coming out of copyright. This year (depending on jurisdiction): Popeye, Tintin and works by Frieda Kahlo, Virginia Woolf, Charles Ives, Hemingway, Duke Ellington, and others. 

The COMAC C919 aircraft makes its first commercial scheduled flight into Hong Kong, receiving a rapturous reception from RTHK…

The homegrown passenger jet, operated by China Eastern airlines and carrying around 160 passengers, took off from Shanghai Hongqiao International Airport at 8.15am on Sunday and landed in the SAR about two and a half hours later.

Passengers were treated to an exceptional travel experience, with each of them receiving a special framed boarding pass – printed with the flight number, date, as well as the letters “C919” – as a souvenir.

…13-year-old Joe, a flying enthusiast, flew solo.

“I think the control of noise is very nice. Because it’s the first aircraft of China and in some ways it’s even better than Boeing and Airbus. The seats… are really comfortable,” he said.

“The meal was really good… We had this sort of Shanghai cake and another cake that had C919 letters on it and it was very delicious.”

This is its first ‘international’ flight, though no-one wants to use that word. Local officials do all they can to talk it up…

The inaugural flights of the domestically-produced C919 aircraft between Shanghai and Hong Kong have opened a “new chapter” for the SAR as an international aviation hub, transport and logistics chief Mable Chan said on Wednesday.

…Speaking at a welcoming ceremony at the Hong Kong International Airport, Chan said she feels honoured to witness the historic moment on New Year’s Day.

“Hong Kong is the first city beyond the other mainland cities to have this kind of commercial flight. So we are especially happy to see this flight materialise on the first day of 2025,” she said.

“We hope that through this commercial flight, we can bring this historical innovation breakthrough in the mainland’s production of civil aviation aircraft to our Hong Kong citizens, as well as to the international visitors coming to Hong Kong.”

An expert says the new model will help Hong Kong become an aviation engineering hub…

“In the past 50 or 60 years, Hong Kong has worked as an [aviation hub], but due to the lack of a local aircraft manufacturer, it is not an aircraft or aviation engineering hub,” Jason Li told RTHK.

He noted that Commercial Aircraft Corporation of China (COMAC), the Shanghai-based manufacturer of the C919, was increasing its engineering investment in the SAR.

“Now, as you can see… COMAC is putting more China-produced C919 into Hong Kong. They are building an engineering team in Hong Kong,” said Li.

“You can see that aviation [requires] a comprehensive engineering team. There are so many different parts; mechanical, electronic etc. So there will be much more career opportunities for local young people,” he said.

He said the choice of Hong Kong as the C919’s first destination outside mainland China shows the city’s important role in advancing the national aviation sector.

“China is encouraging and letting more enterprises demonstrate their newest technology and the business in Hong Kong,” he said.

Any new model of aircraft flying into any city will generate some extra maintenance requirements. That’s it. 

So what is the C919? The name was deliberately chosen to echo Boeing’s system of classifying aircraft – B707, B727, B737, etc. Although it is touted as China’s first wide-bodied airliner, the most important parts – like the avionics and engines – are mainly Western-designed. The model is similar to an Airbus A320/Boeing 737, aimed at serving short- to medium-range routes. But, despite being more recently developed, it has a shorter range, lower passenger capacity, and higher per-passenger fuel consumption than its rivals, plus (as a new model) higher operating costs. But it is cheaper to buy (by some estimates, half the price). It is still awaiting certification in major international markets. Maybe the C929, C939 etc will be more impressive.

The WSJ wishes China a happy new year…

China’s property meltdown has since 2021 destroyed around $18 trillion of Chinese household wealth [equivalent to US$60,000 per household], according to an estimate by Barclays, eclipsing the losses suffered by Americans in the financial crash of 2008-09. That hit, along with the trauma of Beijing’s heavy-handed response to the Covid-19 pandemic, helps explain why Chinese consumers aren’t spending freely. 

The article goes on to say that the wealth ‘destroyed’ is equivalent to the entire market cap of China’s stock market, or one year’s GDP. No overtaking the US economy before mid-century – if ever. And then: the shrinking population; government, household and corporate debt approaching 300% of annual GDP; and over-investment (including 80 million empty homes) and outsized industrial production, causing looming disputes with overseas trading partners.

From Sixthtone, one of the millions of personal stories behind the bursting of China’s property bubble – a 28-year-old woman who bought an apartment that was never finished, but she moved in anyway…

As the building had no electricity, during the decoration phase I had hired an electrician to help wire my apartment to a temporary power box in the hallway. The developer’s workers would disconnect the wire every night. I didn’t know how to connect it myself, so on that first night in my new home I remained in near darkness.

For the first few nights, I’d turn on a tiny light. The developer had issued a statement saying that, as the site was still under construction, people were not allowed to live there. Security guards patrolled with flashlights at night, so I didn’t dare make my room too bright. But no matter how small the light, because the whole building was pitch black, I think it could still have been seen from outside.

Sometimes the security guard would knock on my door and ask why I hadn’t left yet, thinking I was just working on the place. I said I’d leave immediately after installing something. He didn’t think I actually lived there. But sometimes I would think, “This is my apartment. Why should I act like a thief and hide every day?”

The government’s new tourism blueprint – looks a lot like all the existing banal initiatives bundled up into one document, plus something called ‘bleisure travel’. Eco-tourism, mega-events, East-meets-West culture, ‘coastal platforms’, pandas, Lantau, Lamma, hotels, spas, horse-racing, cruise tourism, and so on. Whole thing here. The objective is to create jobs, which might need to be filled by imported workers (don’t ask).

A social worker loses his licence for five years for national security reasons. Security Secretary Chris Tang talks of the struggles he endured while working on the Article 23 legislation…

“I remember the time when I suffered from inflamed eyes due to a lack of sleep. My frozen shoulder and gout also relapsed. However, witnessing all my colleagues tirelessly working day and night, I forgot about these minor inconveniences. At that time, none of us could even keep track of how many takeaway meals we had,” he said.

“We were driven by a determination to face challenges head-on, so we persevered. Eventually, the legislation was passed unanimously, allowing me to feel truly honoured to have completed this historic mission hand in hand with my comrades. Upholding national security is our mission. Promoting national security and patriotic education is also our duty.”

Another quote from HKFP…

“I faced slander, attacks and threats from the outside…”

Can’t resist mentioning the all-you-can-eat hotpot/buffet at the Aquatic Market in Tsuen Wan Plaza (I think they have a branch in Kowloon Bay as well). The deal is around HK$380 per person for two hours, during which time you get unlimited beef, lamb, chicken and grilled stuff (for the first 90 minutes), and shellfish, sliced fish, live prawns, fish maw, squid, greens, mushrooms, noodles, fishballs, soup refills, sauce components, etc that you collect yourself at the supermarket-type shelves for the hotpot, plus equally unlimited all-you-can-consume soda, juice, beer, shochu, ice cream etc, etc from 7-Eleven-size fridges. Think I saw salad.

Obvious question is: how does the company make money? Obviously, the ingredients are not top-quality (though not terrible, either). The place is massive, serving hundreds of families and groups, so presumably they rely on high volume. They could cut corners on staff, but there are lots of them constantly delivering the meat (ordered on an app) and carrying away empty plates. And they are – by Hong Kong standards – quite friendly, which suggests they are not too undermanned. 

The customers are certainly having fun. Even if the food is not top-of-the-range, there is something almost hilarious about thousands of square feet of tables full of raucous happy Hongkongers determined to eat more than they pay. My party was a bit disorganized, but seasoned professionals seem to come with choices of ingredients already planned, and then assign people to urgently gather them all up. Deserves four stars for the people-watching.

The government strips pro-democracy veteran Martin Lee of his ‘Justice of the Peace’ title. Insofar as JPs have serious duties (such as visiting prisons), surely they should all relinquish the office at a certain age, well before Lee’s 86 years. But among Hong Kong’s traditional establishment, having the letters ‘JP’ after your name is a big symbolic deal, with many tycoons over the decades begging officials to grant the bauble to their kids. (You may or may not think there’s more than a few riffraff on the list.) To today’s patriots-only crowd, an office dating back to 14th Century England (Edward III, 1361) should surely be abolished as a colonial hangover anyway. Lee himself is probably enjoying the ironies.

The police extend seasonal cheer to people visiting a book fair in Sheung Wan, checking IDs and bags…

Books were also on display at former bookstore Mount Zero, which bid farewell to hundreds of book lovers in late March. The shop had announced its decision to close last December, citing a string of inspections by authorities following alleged anonymous complaints.

On Friday afternoon, a HKFP reporter at the scene saw uniformed police stop a car leaving the former Mount Zero bookstore. In the vehicle was the bookstore’s former owner and pro-democracy figure and barrister [and author] Margaret Ng. The police let the vehicle go after around five minutes.

I hope no visitors to Hong Kong were caught up in this apparently pointless exercise – it’s the sort of thing that puts tourists off.

Of the six people added to the NatSec wanted list on Christmas Eve – with HK$1 million rewards going – one is 19 years old. Chloe Cheung’s photo used in the official publicity was taken when she was 11. She describes hearing the news here.

And we interrupt this Christmas Day to announce…

In response to the slanderous remarks made by the United States, the United Kingdom, Canada, officials of the European Union, politicians and anti-China organisations regarding the further actions taken by the Hong Kong Special Administrative Region (HKSAR) Government against offenders absconded overseas who continue to engage in acts and activities endangering national security as announced yesterday (December 24), the HKSAR Government today (December 25) expressed strong dissatisfaction and opposition.

…”…Legislation that safeguards national security only targets a very small number of organisations and individuals that endanger national security.”

…”These seven abscondees are hiding in the United States and Australia and continue to blatantly engage in activities endangering national security, inciting secession and requesting foreign countries to impose ‘sanctions’ or blockade and engage in other hostile activities against the People’s Republic of China and the HKSAR. More so, they continue to collude with external forces to be covered for their evil deeds. It is therefore necessary to take such measures to make a strong blow … Foreign government officials and politicians, as well as anti-China organisations, deliberately smeared and spread irresponsible remarks on the measures and actions taken by the HKSAR Government in accordance with the law in an attempt to mislead the public…

…”Absconders should not think they can evade criminal liability by absconding from Hong Kong. Ultimately, they will be liable for their acts constituting serious offences endangering national security and be sanctioned by the law,” the spokesman stressed…

A column in Asia Times raises the possibility of the ‘offenders absconded overseas’ theatrics nudging the incoming Trump administration into dropping an H-bomb on Hong Kong…

The new arrest warrants may provide more fuel for hawkish American lawmakers to advocate for more sanctions against Hong Kong officials and companies or even more extreme measures such as the removal of some Hong Kong-based banks from the SWIFT financial transfer system, which if implemented could trigger a de-pegging of the Hong Kong dollar and to the US buck. 

John Moolenaar, chairman of the US House Select Committee on the Chinese Communist Party (CCP), sent a letter to US Treasury Secretary Janet Yellen in late November to express the committee’s “deep concern” regarding Hong Kong’s alleged “increasing role as a financial hub for money laundering, sanctions evasion and other illicit financial activities.”

“In the wake of the National Security Law of 2020, which subjected Hong Kong to the rule of the CCP, Hong Kong has shifted from a trusted global financial center to a critical player in the deepening authoritarian axis of the People’s Republic of China (PRC), Iran, Russia and North Korea,” he wrote. 

“We must now question whether longstanding US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate.”

Moolenaar said the US Treasury has taken preliminary action against entities based in Hong Kong, where the city has now become a global leader in practices such as importing and re-exporting banned Western technology to Russia, creating front companies for purchasing barred Iranian oil, facilitating the trade of Russian-sourced gold and managing “ghost ships” that engage in illegal trade with North Korea.

Just a hint of de-SWIFTing/de-pegging would create more havoc in Hong Kong than a million teenage girls inciting secession.

Still time before New Year to pull out an earlier angry government statement to response to a WaPo editorial…

A Hong Kong court last month sentenced 45 pro-democracy politicians and activists to prison terms ranging up to 10 years for the crime of conspiracy to commit subversion…

…[Hong Kong’s] judiciary, which was once widely respected as independent, has become another tool in the Chinese Communist Party’s attempt to subjugate a formerly free people.

Consider what the 45 convicted politicians and activists were accused of doing that so threatened the Hong Kong government. They hatched a widely publicized plan to hold a primary election to select the strongest candidates from the pro-democracy camp to run in legislative council elections originally scheduled for 2020. The general election was delayed when Beijing realized its unpopular pro-China candidates would lose. More than 600,000 Hong Kong citizens voted in the primary, so they must have all been part of the conspiracy, according to the Communist Party’s twisted logic.

…China’s ruling Communists, knowing they could not win a free election in Hong Kong, created a puppet version, with rules drawn to exclude opposition candidates. They then arrested most of the city’s legitimate politicians…

…The trial was a charade and the guilty verdicts a foregone conclusion; many of the 45 pleaded guilty hoping to get a slightly reduced sentence. The judiciary has long ago proved that when national security cases are concerned, it is there only to do Beijing’s bidding.

And a Japan News op-ed by Patrick Poon…

…no matter how the Hong Kong government and the judges in this case tried to justify the arrests and the heavy sentences imposed on our friends, I think many of us are still very puzzled. Can organizing and participating in a primary election be considered “conspiracy to subvert” a powerful authoritarian regime like that of China? Should organizing and participating in the primary election be an offense at all? Would those of us who cast our votes be accused of aiding and abetting an offense, too? Ask yourself if such a view could ever be acceptable in a free country like Japan.

Does this mean that the over 600,000 of us who voted in the primary election could also be considered “criminals”? 

The Congressional-Executive Commission on China issues its annual report, putting Hong Kong together with Xinjiang and Tibet as a place where Beijing ‘most brutally’ violates human rights. HKFP says…

“The façade of an alternative system of political governance that was promised to last 50 years… has withered away as Hong Kong becomes nearly indistinguishable from any other neon-lit city on the Chinese mainland,” the report read. “Indeed, Hong Kong officials may now be more zealous than their mainland counterparts in enforcing national security laws.”

In response, the Commissioner’s Office of the Ministry of Foreign Affairs in Hong Kong said in a Chinese-language statement on Saturday that the “so-called report” was a tactic which “grossly interferes” in the internal affairs of mainland China and Hong Kong.

The Office said the report “fully exposed the ignorance, prejudice, and arrogance of certain U.S. politicians.”

The 300-page report is here.

Are human rights more repressed in Hong Kong than in the majority-Han provinces and municipalities of the PRC? On the one hand, you could say it feels like it. You never hear of people being jailed for a T-shirt in the Mainland. On the other, it’s perhaps a bit of a stretch. Trials of dissidents are not yet held in secret, for example.

Perhaps the CECC thought it might as well give Beijing and Hong Kong authorities both barrels, since they would be equally infuriated either way. Which is indeed the case…

The Government of the Hong Kong Special Administrative Region (HKSAR) today (December 21) strongly disapproved of and opposed the so-called “2024 Annual Report” issued by the United States (US) Congressional-Executive Commission on China (CECC), which made malicious smearing remarks against multiple areas in the HKSAR.

     An HKSAR Government spokesperson said, “The HKSAR Government strongly disapproves and opposes the CECC’s repeated tactics to interfere in the affairs of the HKSAR through the so-called annual report, and make slandering remarks against Hong Kong, where ‘one country, two systems’ is successfully implemented. The US is once again making unfounded and fact-twisting remarks. Such attempt to undermine the prosperity and stability of Hong Kong and interfere in Hong Kong’s law-based governance is smack of despicable political manipulation with ill intentions.”

     The spokesperson said, “The CECC openly clamour for so-called ‘sanctions’ with an aim to intimidate HKSAR officials who resolutely safeguard national security. The HKSAR Government strongly condemns its political grandstanding rife with ill intentions, which have been seen through by all. The HKSAR despises the so-called ‘sanctions’ and will not be intimidated by such a despicable behaviour. The HKSAR will resolutely continue to discharge the duty of safeguarding national security.”

The Standard sneaks in an editorial raising the ultimate no-no of all: the huge pensions civil servants hired before 2000 receive…

While a little more than HK$50 billion is committed to paying retired civil servants pensions this financial year, the sum is forecast to increase steadily over the next 10 years as life expectancy lengthens due to improved medical services and an increase in the number of retiring civil servants.

It is estimated that, based on today’s value, the government would have to set aside HK$559 billion for the payment of civil service pensions for the next 10 years…

Nothing a quick Basic Law ‘interpretation’ can’t fix.

Hong Kong hosts how many hubs? Full list here. I stopped counting at 50 or so. (If we exclude ‘thriving’ and ‘sustainable’ ones, it would be fewer – so it’s not quite as absurd and demented as it sounds. Maybe. Except it is.) 

A lady who says she didn’t coin the term ‘menstruation police’ offers a vid of a Chinese official berating a man in his early 30s for not reproducing. ‘Hopefully’, she says, ‘it will put a smile on your face’. Probably won’t, unless you think the whole thing is staged – which it doesn’t seem to be. (Starts about nine minutes in. She believes China’s real population is around 500 million, so is perhaps not the most reliable source.)

We wish a merry blah-blah to all our blah-blah, etc.

Hong Kong bureaucrats tasked with boosting the tourism industry furiously organize mega-events in an attempt to meet arbitrary targets for visitor numbers. As a HKFP op-ed points out, the results are mixed…

The idea that events should be supported by an all-purpose body selecting items on the basis of their prospects as tourist attractions is another. How are meaningful comparisons to be made between – say – a golf tournament, a performance of Aida and a chance to be bored in a conference centre by the CEOs of several international companies?

Money will be spent, certainly, but much of it will be wasted on events which would have happened anyway, or events to which the “mega” label is a polite joke. What is to be done?

… as the government is wallowing in a financial crisis, perhaps it could start by cancelling the Mega Events Coordination Group and saving HK$100 million. The government’s role in fostering mega events should be confined to ensuring there are suitable venues for them.

Left to themselves, the relevant industries will produce a steady flow of conferences, festivals, shows, opportunities to buy expensive items or to watch Lionel Messi watch a football match. The SAR government can stay out of show business.

Soccer star Messi was supposed to play in a match earlier this year but didn’t, leading to public anger and something of a diplomatic mega-incident. Now, history has sort of repeated itself, as the SCMP reports…

Hong Kong football fans who forked out almost HK$7,000 each for a chance to meet their Real Madrid heroes were left angry and disappointed, after many were prevented from even catching a glimpse of their idols.

Real Madrid and Barcelona legends teams played an exhibition game in Hong Kong Stadium on Friday, and for HK$6,880 fans could buy an “Experience Set” ticket, which included a meet and greet session with stars from either team before the match.

However, June Lee, president of the Real Madrid Hong Kong Official Fans Club, said its members were among those who did not get what they paid for, and had reported the incident to the Consumer Council.

Note that, although both these sports events were officially endorsed as part of a campaign to boost visitor numbers, they especially appealed to Hongkongers. It’s almost as if things tourists like are also things local residents enjoy.

Conferences and major sporting events will attract some outsiders to Hong Kong. But people on vacation mostly don’t visit a city to see inauthentic attractions contrived by the local civil servants. They might take in some public museums or parks, but they generally prefer things not created by a government. It might be scenery, it might be food, it might be shops selling things they don’t get back home, and it will probably reflect the overall ambience and feel. The sort of things that make Japan, Taiwan or Thailand unique are the same things that make them popular destinations. 

Ultimately, it comes down to the quality of life and the happiness of the place. If a government is responsive to its community’s wishes and needs, then the chances are that outsiders will find it a nice place to visit. So for Hong Kong: focus on keeping public transport good and improve the pedestrian environment, rather than encourage more and more cars everywhere; use land to increase affordability and comfort for everyone, rather than trying to push property prices up and up; and let Hong Kong be Hong Kong, rather than try to reshape it into something else. For example, replacing old iconic neon signs with a lame ‘festival of lights’ is a bad idea. Replacing old freedoms with jail sentences for wearing T-shirts is a bad idea. And so on. Make Hong Kong a good place to live in, and the tourists will come.

The trial of Jimmy Lai continues, with judges suggesting that more of his opinions – eg that Xi Jinping has put China onto a dangerous path – could be ‘inciting hatred’…

Lai, 77, told his national security trial on Thursday that he thought Xi did not understand international affairs and that the Chinese president’s “ascendance” had changed “everything” in the Communist Party.

…The court heard that, in an episode from September 17 that year, Lai warned that China was a threat to the world and said the country’s “war wolf attitude” would not change unless Xi stepped down.

“I was just stating the fact that Xi Jinping doesn’t understand world affairs, he thinks that to deal with the world is the same as to deal with the people in China,” he told the court.

Lai said he was not suggesting that China wanted to make the world “subservient” but maintained that the country was forcing its way in international affairs.

These are simply ideas. They are hardly unique, or original, or in many quarters even very controversial. If such thoughts are criminal, half the world’s journalists, economists and IR academics will need to be jailed.

The Standard’s editorial dismisses claims that civil service pay cuts would lead to lower salaries in the private sector…

It is a fallacy to say that cutting civil service wages would lead to a major impact on the private sector payrolls.

If both were, indeed, ever connected, it was due to the annual pay trend survey commissioned by the Civil Service Bureau. However, even this connection has been one-way only: the administration refers to private payrolls as it reviews the wages of the civil service.

It would be rare for private firms to give equal weight to civil service pay as they conducted staff pay reviews.

…[Lawmakers’] argument is a total fallacy…

George Magnus on the Chinese government’s economic priorities for next year. Like many commentators, he expects much of the focus to be on stimulating consumption. Except this seems to go against the leadership’s basic economic instincts. 

Despite running what is supposedly a socialist system, Xi Jinping has a bias against welfarism. So measures to broaden health and retirement coverage, which would encourage consumer spending, will probably be limited. Beijing’s leaders also seem to have a hang-up about consumption in general, which they see as a ‘wasteful’ use of wealth that could be channeled into investment and production. The obsession with output is an authentic socialist/Leninist/Stalinist thing. 

Both these tendencies are based on an assumption that the people serve the economy (or state), not the other way round. After all, what is the point of an ‘economy’ – which at heart is a bunch of people – if not to enjoy the benefits of productive lives? 

Magnus is also on DW on YouTube.

For fans of whataboutism: for all its problems, the PRC has not so far come close to having nominees for top public-health positions who say polio vaccines are bad and unpasteurized milk is healthy, or Treasury wannabes proposing the conversion of reserves into Bitcoin magic beans. 

The Wall Street Journal on China’s slide into deflation…

Prices for goods leaving Chinese factories have fallen year-over-year for 26 consecutive months, dropping 2.5% in November from a year earlier, and there is little sign of them turning up again soon. China’s gross domestic product deflator, a broader gauge of price levels across the economy, has been in negative territory for six consecutive quarters, the longest stretch since the late 1990s.

…The fear is that deflation is becoming ingrained in China. As falling prices sap profitability, companies could postpone investments or shed workers, leading more people to cut back on spending. Others might put off purchases because they think prices will drop even more.

Perhaps the greatest problem is that debts grow in real terms – the opposite of being inflated away.

Japan struggled for decades after its bubble burst. Hong Kong went through a five-year period of deflation ending after SARS in 2003. 

One textbook solution is a serious currency devaluation, which gives everyone a big pay cut but also gets consumer prices moving up again – so at least they have an incentive to spend. This would massively annoy trade partners already upset at China’s excess production being dumped in their markets.

Another way to stimulate inflation is to lower interest rates, but this could encourage more debt and more excess investment, which created China’s bubble in the first place. It also encourages capital flight.

Japan considered negative interest on bank savings (so the bank would deduct money from your account) in an attempt to boost spending. They even sort of considered putting an expiry date on banknotes, so people couldn’t stuff cash under their mattresses.

Ultimately, it’s likely to be a long, slow grind.  One thing Hong Kong officials did to get property prices moving again was (in effect) encourage sales of real estate to Mainlanders. China doesn’t have an equivalent option. 

In Asia Times, Bill Emmet, former Economist editor, on a bad month for dictators…

The proven weakness of the anti-Western axis means that the attractiveness of China as an alternative global leader has diminished. China’s economy remains important but is now suffering from the sort of slow growth and debilitating deflation that made Japan stagnate during the 1990s. Countries of the so-called “Global South” will not want to antagonize China nor to lose its money, but they will be more open to alternative offers from the West.

YouTube video of Japanese complaining about over-tourism. ‘Too many gaijin!’. The perils of having a cool country. Should resonate with Hong Kong people who resent their neighbourhoods being swamped with squatting, cake-buying Mainland selfie-takers. Local officials and tourism-related workers wish that foreign tourists would get away from predictable districts of Tokyo and Kyoto. (Rule of thumb: if you’ve ever heard of it, don’t go there. Far more interesting to get a bus or train to a small town and wander around in a place where people might actually be happy to see you.)

Also on YouTube, from a few years ago – a UK documentary about growing up in a Chinese takeaway.

It’s one of those times all-patriots folk find themselves opposing the government: legislators derail a plan for ‘smart ballot boxes’…

But within just two days, the bureau decided to withdraw the initiative after the backlash.

“The original intention of the proposal is to help voters confirm their ballots were marked correctly to further protect their voting rights,” a bureau spokesman said. “After listening to opinions from lawmakers and the public, the government is willing to reconsider.”

The containers would be fitted with scanners that would somehow detect invalid ballots and ask voters if they wished to amend them. No opposition candidates are allowed to run these days, so it seems the ‘marked correctly’ rationale is an attempt to reduce the number of blank or spoiled ballots. It’s hard to take pride in being a legislator when everyone knows many voters stayed at home and you got a fraction of the votes won in the old days by pro-democracy politicians who are now in prison. Chances are that lawmakers – who are now pre-screened and essentially nominated by the authorities – fear that turnout will shrink even further if voters think some fancy tech is examining their supposedly secret ballots.

HKFP adds… 

Chief Executive John Lee on Tuesday did not directly answer a reporter’s question as to whether the ballot scanners would infringe on the right to cast a blank or spoiled vote, saying only that electoral procedures would be conducted smoothly and satisfactorily.

HKFP report on the latest from Jimmy Lai’s trial, in which judges ask if Lai was ‘inciting hatred’ when he talked about the police twisting facts after the Yuen Long attack and China’s assimilation into the global system. Is that what used to be called criticizing?

Tina Brown, former editor of Vanity Fair, New Yorker, etc, names Jimmy Lai as her Man of the Year…

I love this guy, Jimmy Lai. His heroic stand against Chinese authoritarianism may result in his never leaving his cockroach-infested prison cell again. But my profound hope is that he is not only freed but comes to live in the U.S. and buys the Washington Post. I’d be a cub reporter for him in a heartbeat.

AFP story on Macau’s vanishing civil society…

Today, public protests in Macau are just a memory after Beijing launched sweeping measures in the past five years that ousted opposition lawmakers and chilled free speech.

Ahead of the anniversary, multiple Macau democrats told AFP they were warned not to make critical remarks in public.

Apparently, ferry services between Hong Kong and Macau were suspended yesterday as Xi Jinping arrived to mark the 25th anniversary of the city’s handover in 1999.

The Lowy Interpreter looks at China’s ‘panda diplomacy’ (article especially recommended for those who like using the word ‘gifted’ instead of ‘given’ or ‘donated’)…

The sudden influx of pandas to California reflects the pro-China stance of Californian officials, which contrasts with nationwide efforts to bolster defences against perceived threats from China.

…Beijing also leverages pandas to enhance its image in territories it controls or seeks to control. Hong Kong has just received its third pair of giant pandas. In Taiwan’s case, Beijing sent two pandas (aptly named Tuan-Tuan and Yuan-Yuan or Unification) to Taipei in 2008 following the inauguration of the China-friendly Ma Ying-jeou administration. This transfer bypassed the Convention on International Trade in Endangered Species, thereby underscoring Beijing’s assertion regarding Taiwan’s provincial status.

…Zoos hosting pandas must pay up to US$1 million annually to support panda conservation efforts in Sichuan Province. However, The New York Times suggests that the money does not necessarily go towards conserving pandas in their natural habitat. Additional expenses involve building special facilities, providing veterinary care and sourcing tonnes of bamboo.

…Cuddly pandas symbolise a generous, friendly and peaceful China. Panda loan announcements, often made during state visits by Chinese leaders, receive extensive local and international media coverage. 

…However, there is little evidence to support the claim that panda diplomacy “benefits China as a tool of public diplomacy”. 

I hate to encourage those less-talented pub quiz question-setters who rely on ‘a murder of crows’ and similar idiocies, but did you know the collective noun for pandas is an ‘embarrassment’? Rather apt, you might think. We should really spell out the truth about these animals: they are not ‘friendly’, just immensely stupid. And there’s this…

Pandas have been ridiculed for their decidedly non-bearlike vegetarian diets, their apparent lack of interest in—and aptitude for—sex, their tendency to spend the majority of their time sitting, eating, scratching … and defecating (about 40 times per day)—even for being, shall we say, plump. These rather “unfit” characteristics have made the giant panda a favorite animal of creationists, who argue that the panda’s survival proves the existence of God. How is it, they ask, that such a species could have “evolved” to be so poorly suited for survival and could have lasted these “alleged” tens of thousands of years without a little help from a higher power? 

They also smell utterly repulsive if you get up close to them.*

On the subject of warm and cuddly, a Global Times Twitter post says…

In response to an inquiry regarding claim by the Taiwan island’s “defense ministry” that it had received 38 advanced Abrams battle tanks from the US, Chinese Foreign Ministry spokesperson Lin Jian said on Monday that there is no such a thing as the so-called “defense ministry” in Taiwan. 

Well someone took delivery of the things.

_{*Maybe – I have no idea.}