Big Lychee, Various Sectors

The Hong Kong government’s statement on the conviction of Chow Hang-tung and Lee Cheuk-yan…

The Hong Kong Special Administrative Region (HKSAR) Government today (August 22) expressed strong dissatisfaction with and firm opposition to, and strongly condemned, the baseless slanders and smearing against the HKSAR by various western countries, anti-China media, organisations and politicians, using the court’s verdict of conviction yesterday (August 21) concerning the incitement to subversion case of the “Hong Kong Alliance” (the Alliance).  

…The spokesman stressed, “The reasons for verdict handed down by the court clearly emphasised that the defendants were put on trial not because of their political views or beliefs. The court would only consider the laws and evidence relevant to the case to decide whether the prosecution is able to prove the charge beyond reasonable doubt. The court also pointed out that the defendants had all along been hostile towards the CPC and the Central Government under its leadership. After the implementation of the Hong Kong National Security Law (HKNSL), the defendants refused to pull back from the brink and were bent on embracing the resistance line of the Alliance to the very end. Even though the defendants knew that what they had said and done might have already gone beyond the scope of lawful freedom of expression, they paid no regard to it.”  

And a not vastly different one from the Legislative Council…

The Legislative Council (LegCo) of the Hong Kong Special Administrative Region (HKSAR) Government today (22 August) expressed strong opposition and dissatisfaction with, and strongly condemned, the malicious attacks, slanders and smearing against the judicial system and national security laws of Hong Kong by various western countries, anti-China media, organisations and politicians, using the court’s verdict of conviction concerning the case of “incitement to subversion of state power by the Hong Kong Alliance”. 

…The LegCo spokesperson stressed that the reasons for the court’s verdict were detailed, clearly pointing out that the trial of the case was never targeted at the defendants’ political views, but was based on objective law and evidence, strictly following the Hong Kong National Security Law (HKNSL) and other relevant laws. After the HKNSL came into effect, the defendants still persistently pressed ahead with subversion activities, and their acts clearly went beyond the boundaries of lawful freedom of expression.

The Guardian on Britain’s response to Friday’s HK Alliance guilty verdicts…

The UK Foreign Office’s Indo-Pacific minister, Rosie Winterton, said: “This verdict is a further demonstration that even peaceful acts of remembrance in Hong Kong are now treated by the authorities as threats to national security. The extensive use of Beijing’s national security law to punish and restrict peaceful expression undermines the commitments China made to Hong Kong under the 1984 Sino-British joint declaration. We reiterate our call for the national security law to be repealed, and for rights and freedoms to be respected in the Hong Kong special administrative region.” 

HKFP summary of statements from Hong Kong and overseas, including former Alliance participants and family members.

Via Brian Kern, a translation of two Witness articles on Lee Cheuk-yan – with a lot of old photos.

For enthusiasts of ‘fake history’ stories from China: a post suggesting that online Tang Dynasty denialism is actually aimed at mocking ‘western pseudohistory theory’ (ultranationalist claims that, for example, Ancient Greece didn’t exist). Makes sense. And quite amusing.

And the SCMP reports (paywalled) that China is criticizing US historians for not echoing Beijing’s official line on the Manchu-but-actually-Chinese Qing Dynasty. (More here.)

For years after 1989, the HK Alliance were free to organize annual Tiananmen vigils, which included calls for an end to one-party rule in China. Then, in 2021, its leaders were arrested and charged with inciting subversion under the NatSec Law. The trial of Lee Cheuk-yan and Chow Hang-tung didn’t start until earlier this year, and the verdict is due today. Maximum sentence: 10 years. AP story…

…prosecutors argued they incited others to use unlawful means to topple China’s fundamental system and central political bodies, including inciting the overthrow of the Communist Party’s leadership through calls for “ending one-party rule,” which was one of the alliance’s core demands.

The defense denied they meant to end the party’s leadership, arguing the slogan was about moving toward democracy and urging the party not to enforce “dictatorship.” It insisted the alliance had not asked people to adopt any illegal means.

…critics consider this case and its result a litmus test of Hong Kong’s civil rights and judicial independence.

The existence of the alliance and the city’s annual vigil have been considered key characteristics of Hong Kong under China’s “one country, two systems” governing framework in the past, said Eric Lai, a senior fellow with the Georgetown Center for Asian Law.

…He noted the charge of inciting subversion was commonly used in mainland China to criminalize the acts of human rights lawyers, activists and intellectuals, including late Nobel laureate Liu Xiaobo.

“We can see to what extent the court in Hong Kong falls into the level of the party-led judiciary in the mainland through the criminal verdict,” Lai said. 

The Straits Times reports…

Friday’s verdict “will be a significant indicator of how far courts are willing and able to interpret broadly drafted national security offences in a way that is compatible with fundamental rights and freedoms”, Urania Chiu, a law lecturer at Oxford Brookes University, told AFP.

…”So far, in applying the national security law, the courts have arguably prioritised ill-defined national security concerns over other common law and constitutional values,” said Chiu.

HK Labour Rights Monitor asks…

…can advocating an end to one-party rule, without calling for any illegal or violent means, amount to incitement to subvert state power? 

Some history weirdness, via CNN… The Tang – 618-907 AD – were partly Mongol and ruled territory from Korea to what is now Afghanistan. A wacky theory that the dynasty never existed has taken off on China’s Internet, and the government is not pleased.  

It all appears to have started when a history influencer named Qiao Yu deployed some baffling astrological data in a video in May, to “prove” the Tang had never existed. 

The outlandish claim has since spread far and wide. Reports later emerged that people were calling up the tourism bureau in Xi’an, the site of the ancient Tang capital, to demand it close down because the dynasty itself had been shown to be a hoax. 

…The Tang dynasty has been criticized in the past by Chinese nationalists as its founding emperor was not from the Han ethnic group that makes up most of China’s people. The basis of Qiao Yu’s claim is that the succeeding Song dynasty actually began far earlier than traditionally accepted, therefore canceling out the Tang. The Song dynasty was of ethnic Han origin. 

Some stats from a contributor here. A quarter of Hong Kong’s population is over 65. It’s amazing things are still ticking over.

Joel Chan at Numberwang goes into detail…

Looking back in time, the population has hovered around 7.5 million since 2018. 

…Readers of this blog might remember me saying there was an outside shot that births in 2026 would be below 30,000 for the first time since the Second World War … the odds of that occurring have increased.

…in the last 7½ years, the number of people in Hong Kong that are aged 61 or older have increased by 642,300, while the number of people in Hong Kong that are 60 or younger have decreased by 576,600. Hong Kong has a demographic crisis on its hands, but– as illustrated in its failed baby bonus scheme– the government is not taking the issue seriously. 

In fairness, no government has found a way to induce citizens to have more children. And Hong Kong is not an outlier: around a quarter to a third of Korean, Japanese and Taiwanese 30-somethings have never dated.

As everywhere in the developed world, more Hong Kong women want their own lives and careers, and don’t see marriage as appealing. People who do marry find the financial and opportunity costs of kids daunting. For many Hong Kong couples, memories of high-pressure schooling convince them that having a dog is less of a nightmare. Everywhere in the world, the next generation are so preoccupied with smartphones that they simply don’t socialize as much as people used to. In Hong Kong specifically, government policy is, in effect, to keep homes unaffordable and/or too small to decently accommodate a family. Even if you want more than one baby, there’s no space for it – keeping land valuations high is all that matters.

Although China has its own demographic problems, it can easily spare half a million or so underemployed younger people to top up Hong Kong’s dwindling supply of under-50s. And what better way to Mainlandize the city? In Japan, meanwhile, they are making immigration harder.

Hong Kong’s population reaches 7.58 million – a 0.3%/19,400 increase year on year. After some 30,000 births and 50,000 deaths, that means a net inflow of around 40,000…

The government spokesman said that various measures to attract talent and import labor continued to bring people from around the world to Hong Kong…

Brian Kern has another angle…

…[his estimates] should be regarded as indicative rather comprehensive—an incomplete portrait and an almost-certain undercounting. But the updated numbers do give a fuller picture of emigration patterns and provide more concrete evidence that a substantial exodus of about five percent of Hong Kong’s 2020 population of 7,481,800 has occurred.

Kern says the main destinations for emigrating Hongkongers from 2020-mid-2026 have been: the UK (234,000); Taiwan (59,000); Canada (54,000); and Australia (33,000). 

Compared to countries like Syria and Venezuela, which have seen immensely higher levels of emigration, five percent may not seem like so very many, but it’s worth emphasizing that about one in twenty people moving away from a well-developed, economically stable society that is not at war or suffering some other catastrophe is almost unheard of.

…That brings the total number who have left Hong Kong with the intention of settling abroad to 384,269—about 5.1 percent of Hong Kong’s population in 2020, when the exodus began. And that’s including only the four countries for which statistics are most readily available. An educated guess is that the overall number by now most surely exceed 400,000.

From 2020 to 2024, there was an average of about 5,625 Hong Kongers per month emigrating. From 2025 to the middle of 2026, the average has been 2,595. That’s a reduction of more than half, a big decrease, but emigration is still occurring at a pace perhaps somewhat faster than expected, especially considering, as we will see below, that there are backlogs in Australia’s and Canada’s processing of applications for residency through Hong Kong-specific immigration programs.

Anecdotal evidence, falls in junior/secondary school enrolment and Census Dept district population figures from the last few years all suggest that much of the 5% are younger people with kids and/or educated/middle class. In other words, an even larger portion of those groups left. Hence the Hong Kong government’s strenuous efforts to attract more immigrants from the Mainland (or ‘around the world’).

A thorough HKFP account of Hong Kong’s clampdown on bookstores, which seems to be expanding into a broader official fear of books imported from Taiwan…

This year alone, staff from four bookstores were arrested by national security police. In March, staff from Book Punch were arrested, and in June, staff from Hunter Bookstore were apprehended.

The arrests also came on the heels of independent bookshops being barred again from the annual Hong Kong Book fair earlier that month.

Since 2022, a litany of new, independent bookshops – which had carved out space in the national security law era – found themselves barred from the annual fair. But Elmtree, which has since also announced its closure, and Luck Win, were unassuming retailers with decades of history. They were atypical targets, not known for attracting government scrutiny.

This time, the arrests have put the close relationship between Hong Kong booksellers and Taiwanese publishers in the spotlight, sparking fresh concerns about the future of the city’s independent bookshops.

The article also mentions tax audits and frequent inspections by various government departments, plus the impact of increased attention on Taiwanese publications on the courier companies that handle the shipments. 

No word on whether direct on-line orders of books by consumers are being intercepted by Customs. Or on whether the authorities might attempt to bar Hong Kong residents from downloading digital versions of ‘bad’ publications. Nor is it currently clear whether or not people can be arrested simply for possessing such material in their homes. 

A dash of weirdness from the Standard…

Hong Kong cryptocurrency tycoon Harry Yeh Chun-tak recently plunged to his death from his mansion in Paraguay, sparking suspicions amid a growing trend of extortions and murders of crypto asset holders. 

A well-known crypto magnate with connections spanning the United States and the Middle East, Yeh was reported to have fallen from the 30th floor of his mansion in Paraguay on August 7, being entirely naked at the time of the fall. 

Investigators later found his apartment door wide open and the interior severely ransacked…

From the HK Uncensored Substack…

A hard-hitting Observer investigation by Danny Vincent reveals the extraordinary lengths Hong Kong’s authorities have gone to keep Jimmy Lai isolated — clearing entire floors of Stanley Prison to cut him off from other inmates.

At 78, Lai can sometimes barely stand on his own, Vincent reports, as he suffers his sixth sweltering summer in solitary confinement. Aug. 8 was the hottest day ever recorded in Hong Kong, hitting a brutal 98 degrees Fahrenheit (36.9 degrees Celsius). Inside Stanley Prison’s heat-soaking concrete, with no air conditioning, Lai endures conditions that would test a man half his age. 

…CFHK Foundation President Mark Clifford told The John Batchelor Show that while Xi Jinping’s persecution of Lai is personal, allowing Hong Kong’s most famous political prisoner to die behind bars would be disastrous for the Chinese Communist Party’s reputation. 

Bitter Winter looks at televised confessions…

This [Stalinist and Maoist] logic has resurfaced in Hong Kong through a new media environment shaped by national security enforcement. The televised series “NS [National Security] Files: Decoded,” produced by the Security Bureau and launched on June 30, presents political cases as morality tales. The first episode opens with Leon Tong, the first dissident arrested under National Security Law. On July 1, 2020, the day the National Security Law came into force, Tong was arrested while riding a motorcycle with a flag protesting the statute. 

A host visits Tong in jail in “NS Files: Decoded,” episode 1, and the dissident states, “I understand the things I did seriously harmed the country,” a line that echoes the tone of earlier Communist confession rituals. The series uses interviews with national security police, dramatic footage of arrests, and a narrative structure that guides viewers toward predetermined conclusions. The accused appear as characters in a story crafted by the authorities. 

…“NS Files: Decoded” is promoted as a search for truth. Posters declare that the truth lies within the files. The presentation suggests discovery, yet the program’s structure offers conclusions before questions can form. Confession becomes the opening act, and the rest of the episodes reinforce the message through interviews and footage selected to support the storyline. Journalism becomes a device within a larger script.

This approach carries consequences for the city. Media outlets that once operated independently now collaborate with authorities on productions that frame dissent as danger. The same establishment that prosecutes journalists and publishers also produces content that defines acceptable speech. The boundaries between reporting and enforcement fade, and the public is invited to watch political cases as serialized drama.

The Stalinist and Maoist confession ritual has returned in a new setting. It no longer takes place in factories or stadiums. It unfolds on television screens, in online videos, and in competitions for schoolchildren. The machinery of remorse has adapted to a modern media economy, and Hong Kong has become one of its stages.

For those who missed it: Stephen Roach’s reply to the responses to his recent ‘Hong Kong is over’ comments…

Beijing’s actions, as condoned by a pro-Beijing Hong Kong government, resulted in a forceful takeover of the city rather than a spontaneous, organic evolution of a dynamic urban center. Would the large outflow of expats have occurred had there not been such a forced development? Would six foreign judges have not resigned? Would bookstores not have been closed? Newspapers not shut down? More so-called dissidents not rounded up?

It’s one thing to love your city for all its history and traditions. It’s another thing to conveniently look the other way and ignore a much bigger force that connects the dots. The questions I raise are not about normal occurrences, nor spontaneous coincidences, for any city. They all happened after Beijing’s takeover. Right before your eyes. Resilience is Hong Kong’s timeworn battle cry. To me, it looks more like forced capitulation.

Foreign Affairs asks if China’s economic imbalances could cause a worldwide crisis…

…the world’s ability to absorb Chinese overcapacity is approaching a breaking point. And if that breaking point comes, the consequence could be a global economic crisis at a time when governments are particularly ill equipped to manage the fallout. 

…The political appetite for accepting the deindustrialization and critical dependencies that come with the flood of Chinese imports is finite and shrinking. As these trends continue, protectionism is likely to rise, cutting off Chinese manufacturers’ market access and thereby short-circuiting Beijing’s strategy, introduced in 2020, of “dual circulation,” which promotes both domestic economic self-sufficiency and continued engagement in international markets. 

…China has a much larger economy and cannot continue on this trajectory without eventually running out of customers. Put simply, Beijing has outgrown its economic model. 

…Firms invest more to produce more to export more at lower or negative margins, subsidized by local governments whose own fiscal health depends on the factories’ staying open. The result is an industrial machine that cannot stop and cannot slow down—but that, owing to the limits of demand, cannot keep going. 

…Over the first two months of 2026, China’s trade surplus grew by more than 20 percent year-over-year. Meanwhile, the International Monetary Fund has projected that the global economy will grow only 3.1 percent this year. This trend is unsustainable: global demand is not rising fast enough to absorb Chinese exports at this pace, in key sectors or in aggregate. Eventually, the market for new factories in China will run dry, as did the market for property. China’s trade surplus could, in effect, collapse on itself. 

China’s exports are out-competing industries and swamping markets in both developed and developing economies. Beijing’s leadership surely realize how vulnerable this makes the country. If (or when) the rest of the world puts up serious trade barriers, it would cause a major economic shock in China.  

Spent yesterday morning getting my first proper physical in a decade at a place in Central. They must do dozens of people every day – a three-hour long conveyor belt of form-filling, examinations and tests, plus some waiting in between. 

First, you’re not allowed to eat or drink anything since the night before because they’ll be taking blood (a surprising amount of it). So they cover your chest with electrodes and make you stroll, then walk, then run uphill on a treadmill while you’re starving. Next thing, you need a full bladder ahead of an – extremely slimy – ultrasound exam. 

There are two ways to check a man for signs of prostate cancer: a blood test or a doctor’s finger. Here you get both. Better safe than sorry.

Couldn’t help noticing that men are laid back about walking around carrying little plastic jars containing their stool and urine samples, while women coyly wrap the receptacles up in layers of tissues and paper bags. 

Good luck getting an appointment with this doctor…

A little weekend reading: Steve Roach compares and contrasts the Chinese and Japanese economies.

Lingua Sinica examines the links between pro-Beijing media outlets attacking the HK Journalists Association last week…

Without evidence, and in remarks that seemed a clear public setup stemming from the Wen Wei Po question [at a press conference on a different subject], Tang issued an unambiguous threat on national security grounds. “Regardless of the name or guise you adopt,” he said, “if you seek to endanger national security, collude with foreign forces or subvert state power, I can assure you that I will nail you, and you will bear the consequences.”

More concerning still was the apparently coordinated media campaign that unfolded before and after Tang’s Friday remarks. Over a period of five days, at least six pro-Beijing outlets in the city piled on with strongly-worded coverage questioning the HKJA’s legitimacy and representativeness.

For what? Its audacity in continuing to exist? And does these outlets’ content really count as journalism?

Desmond Shum tweet on Beijing’s tax clampdown on offshore wealth…

Article 11 states that even someone who has obtained foreign nationality or permanent or long-term residence overseas may still be deemed a Chinese domiciled tax resident if his or her “main economic interests” derive from China.

I suspect Beijing’s immediate target is mainland Chinese wealth owners—including those who have recently relocated to Hong Kong while retaining their businesses, assets and economic interests in mainland China.

Those cases are relatively straightforward.

The difficult question is: where do you draw the line?

And another…

For China’s wealthy, the implications extend well beyond paying more tax. Offshore trusts lose much of their value as asset-protection vehicles. Many families will now be looking to diversify not only their assets, but also their residency, citizenship and long-term wealth structures further away from China before additional restrictions emerge.

It is also difficult to see this as positive for China’s domestic investment environment. Private investment has already been in decline since 2023 as economic growth slows and business confidence deteriorates, reached minus 3.8% in 2025. Policies perceived as retrospective and highly discretionary will likely accelerate that trend.

Capital markets are also likely to feel the effects. Hong Kong’s, and to an extent Singapore’s, offshore wealth-management industry has been built in large part around mainland Chinese clients… 

China faces serious long-term fiscal challenges on the spending side as well. Dragonometry on Beijing’s drive to boost enforcement of social-security payments… 

China’s growth model systematically shifts income away from households and toward producers and the state. As a result, every attempt to patch a symptom without addressing that structure ends up reproducing it. Here is a clean illustration of it. Social security shortfalls are themselves a symptom of an economy that underpays labor relative to what it produces. The fix for that underpayment, as implemented, is to enforce accurate reporting of wages that are already too low, which raises the cost of employing people without raising what they take home. It is, in the plainest terms, private-sector Peter being robbed to pay private-sector Paul. Nothing about the aggregate flow of income between households and the state improves. The accounting gets tidier. The underlying problem does not move.

It would be a mistake to read this as mere incompetence, or a leadership that has failed to notice the contradiction. The more troubling reading is that they have noticed, and are choosing the option that does not require confronting vested interests among employers, local governments and the fiscal authorities who benefit from the current arrangement.

Attendees at a Guangzhou academic symposium in June argued that the Batanes Islands – part of the Philippines – are actually Chinese. China Global South Project on the ‘bizarre claim’…

The most immediate explanation for the surprise claim on the Batanes is that it was a reaction to a May 28 decision by Japan and the Philippines to open formal talks on their maritime boundary, a development that Beijing viewed through the lens of Taiwan and its broader maritime claims.

The Batanes argument also comes at a contentious time for Beijing’s maritime history: it is likely no coincidence that Chinese scholars made their dubious claim less than two weeks before Manila was set to commemorate the 10^th anniversary of the ruling in its favor at the Permanent Court of Arbitration (PCA) on July 12^th.

After all, the PCA invalidated Beijing’s expansive sovereignty claims in the South China Sea under its “nine-dash line,” which encompasses roughly 85 percent of the sea based on historical rights and in contravention to the UN Convention on the Law of the Sea (UNCLOS) that China itself both signed and ratified.

The Court of Appeal allows 11 of the HK47 – convicted of ‘conspiracy to commit subversion’ over the 2020 pan-dem primary elections – to go to the Court of Final Appeal…

The defendants feature some of Hong Kong’s most prominent pro-democracy activists, namely Clarisse Yeung, Helena Wong, Owen Chow, Winnie Yu, Gwyneth Ho, Lam Cheuk-ting, Gordon Ng, Cheng Tat-hung, Kalvin Ho, Raymond Chan, and Leung Kwok-hung. 

What will happen? Two possible hints… The CFA has already upheld the law making it illegal to urge others to boycott elections, rejecting the notion that the law is a straightforward violation of freedom of expression. And under the NatSec Law, Beijing – through a NPC Standing Committee ‘interpretation’ – can override court decisions. 

Meanwhile, also from HKFP, the HK Bar Association…

…has asked a court to overturn its own disciplinary board’s decision clearing pro-democracy figure Margaret Ng of misconduct linked to her 2019 [unauthorized assembly] protest conviction. 

The legal challenge comes after the Barristers Disciplinary Tribunal decided in June that the complaint against Ng was unsubstantiated.

The complaint was linked to Ng’s conviction five years ago for taking part in an unauthorised assembly during the protests and unrest in 2019. She was cleared in 2023 of organising the demonstration.

Note the words “its own”. The Barristers Disciplinary Tribunal is part of the Bar Association. This is sort of like publicly slapping yourself on the face to show contrition. Maybe if the court fails to satisfy, the Bar Association will sue itself.

Stupidest AI rendition of Hong Kong I’ve seen for at least two days: landmark towers in the wrong places; a bay where there is no bay; a cruise liner where there are no cruise liners; a distant vast mountain range with ski resorts where there is no etc etc. Cobbled together to promote a ‘Wiki Finance Expo’, which sounds like it must be some sort of crypto, Web3, blockchain and AI bullshit-fest for ‘leaders, innovators and visionaries’. And indeed it is. (Speakers include Chivy Chan, a chief compliance officer.)