Greater Bay Area opportunities found!

A Bloomberg story…

Hong Kong’s third-largest supermarket chain U Select, run by state-owned conglomerate China Resources Holdings Co., has almost halved its network in less than a year as the city’s retailers struggle with economic headwinds and residents flock across the border for cheaper shopping.

…Sales at Hong Kong’s supermarkets plunged 14% year-over-year in January and have been in decline for 18 consecutive months, the longest stretch since record-keeping began in October 2005, according to government statistics.

…Hong Kong travel agencies even offer package tours including membership cards and hours of shopping at Costco and Sam’s Club in nearby mainland Chinese cities. Neither has a branch in Hong Kong, where space is limited, rents are high and the market is dominated by local giants.

Whatever the exact reasons for U Select’s downsizing, a lot of stores and restaurants are having a hard time in Hong Kong these days. Some never recovered from Covid, and others have lost customers to NatSec-spurred emigration. And then there’s the Shenzhen factor. 

For years, Carrie Lam, CY Leung, John Lee and others have implored Hong Kong people to ‘seize Greater Bay Area opportunities’. Meanwhile, governments on both sides built faster rail connections and more, bigger, faster immigration checkpoints, with more coming. Now, for many residents of the New Territories, Shenzhen is as quick and easy to get to as Causeway Bay or TST. And the Yuan has weakened. Obviously, people will ‘seize opportunities’ to save money by crossing the border where shopping, dining and ‘night vibes’ are half the price. 

Did Hong Kong bureaucrats – who are petrified of falling land valuations – think ‘integration’ through? If you make the border more porous, what will keep Hong Kong retail prices double or treble those in the rest of the Greater Pearl River Delta? What will keep commercial rents here around five times higher than those a few miles north in Shenzhen (per another recent Bloomberg article)? A narrowing of the price gap will be inevitable as consumers vote with their wallets.

Remember Ross Perot’s ‘giant sucking sound’? 

This doesn’t factor in any decline in the ‘Hong Kong premium’ that people and groups are/were willing to pay to be in a place with freedom and rule of law. Can you differentiate and integrate at the same time? As a little reminder: the government complains about a British newspaper saying Hongkongers could be jailed for having old newspapers. The fact is…

The government also said only individuals who possess a publication that has a seditious intention, without a reasonable excuse, would be deemed to have committed the offence, according to the proposed national security legislation under Article 23 of the Basic Law.

“Whether a publication has a seditious intention will have to be determined after all relevant circumstances are taken into consideration, including the context and purpose of the publication. Relevant provisions of the [national security bill] also stipulate circumstances that do not constitute a seditious intention,” the spokesperson said.

“As regards the offence of possessing a publication with a seditious intention, the prosecution has to prove that the defendant possesses the publication concerned without reasonable excuse before the defendant may be convicted by the court. It is not possible for a person who does not know that the publication concerned has a seditious intention to be convicted.”

And as Andy Li – currently held at a psychiatric facility – starts to give evidence, Asia Times offers a background on the Jimmy Lai trial…

Lai is accused of “conspiring to collude with foreign forces” under China’s national security law for the HKSAR and conspiring to “print, publish, sell, offer for sale, distribute, display and/or reproduce seditious publications” under the HKSAR’s sedition law. If convicted, Lai could be sentenced to life in prison.

On January 2, 2024, Lai pleaded not guilty to all charges. However, given how Hong Kong’s once-independent judicial system has operated since China promulgated the national security law in June 2020, Lai’s conviction is almost a foregone conclusion. The only real outstanding question about the show trial is the length of Lai’s prison sentence.

The author ‘taught at Hong Kong Baptist University from 1991-1992 [and] served as the Hong Kong Trade Development Council’s assistant chief economist from 1994-1998…’