Frog to make individual assessment on boiling water

David Neuberger explains why is one of three British non-permanent CFA judges who haven’t resigned…

“My feeling is that so long as I can do good by being there and so long as I think that I might cause harm by leaving, I want to stay and support my judicial colleagues in Hong Kong and support the rule of law as long as I can,” Neuberger said.

Neuberger, 76, said he understood the views of those who suggest that foreign judges should leave the city’s top court, and he is not suggesting that fellow British judges Jonathan Sumption and Lawrence Collins were wrong to leave the Court of Final Appeal.

He said he is aware of the “boiling frog syndrome,” adding: “It is a matter of individual assessment as to when the water gets too hot.”

Not perhaps the most ringing endorsement.

Your weekly Hong Kong government long angry response, this time to a (‘so-called’) annual report on Hong Kong issued by the European Commission. One of 22 paras…

“The HKSAR steadfastly safeguards national sovereignty, security and development interests, and fully and faithfully lives up to this top priority of the ‘one country, two systems’ principle. The HKSAR Government will resolutely, fully and faithfully implement the Hong Kong National Security Law (NSL) and the Safeguarding National Security Ordinance so as to address, combat, deter and prevent in accordance with the law acts and activities endangering national security. At the same time, it will safeguard the rights and freedoms enjoyed by Hong Kong people in accordance with the law. Its overarching goal is to ensure the steadfast and successful implementation of ‘one country, two systems’. The HKSAR Government strongly urges the EU to discern facts from fallacies, respect the international law and basic norms governing international relations, and immediately stop interfering in Hong Kong matters, which are purely China’s internal affairs.”

Bloomberg does another ‘Hong Kong falling property prices’ story, with a dash of ‘resigning overseas judges’…

Like other urban centers from New York to London, Hong Kong is suffering from a mix of rising interest rates, financial-sector job losses and changing work habits. But for many in the city, the property slump has also become one of the clearest market proxies for a more alarming phenomenon: a steady loss of faith in Hong Kong’s status as Asia’s premier financial hub.

…Resignations this month by two overseas judges from Hong Kong’s top court, along with the retirement of a third, have put a fresh spotlight on a legal system that underpins investor confidence in everything from property to the stock market and corporate contracts.

…Existing homeowners are increasingly contemplating what once was unthinkable — selling at a loss.

In the “real estate sector, we are seeing the biggest structural change in 50 years,” Ronnie Chan, former chairman of property conglomerate Hang Lung Group Ltd., said during the Bloomberg Wealth forum in June. “The whole asset value has to adjust in Hong Kong. If you don’t accept it, if you don’t recognize it, I will say you will be a very unhappy person.”

…Lilian Liu’s experience is emblematic of this new reality. When the 35-year-old accountant listed her sea-view apartment for HK$9.5 million last February, she thought it was fair. Two subway stops from Hong Kong’s financial center, the 26-square-meter (280-square-foot) unit boasted a rare balcony and soaked in the morning sunlight through giant windows. Chic cafes and bars dotted the streets below.

No buyers came, so she slashed the asking price by 3%. Then 15%. And another 5%. More than a year on, she still hasn’t secured any offers and already faces a loss of HK$1.2 million.

Can you get giant windows in a 280-sq-ft apartment?

A couple of weekend links, on China’s middle-class woes…

A Forbes column says China’s middle class is ‘disappearing’. Let’s say ‘shrinking’…

In January and February, the most recent months for which data are available, personal income tax receipts were measured at about 362.2 billion yuan ($45.1 billion), fully 16 percent below prior year levels … Since individuals earning less than 100,000 yuan a year effectively pay no personal income taxes, the drop in individual income tax revenues, according to the [Finance] ministry, reflects a movement of households to incomes below this level. And since this 100,000-yuan annual income figure also marks the low end of what China considers middle class, the revenue shortfall speaks to how many have fallen out of this coveted status.

… Gucci reports that its China sales have slumped 20 percent this quarter from levels a year ago, and Swiss watch exports to China have fallen 25 percent from levels in 2023. High-end restaurants in China also report declines, especially telling since traffic has picked up a lower end eateries. In another telling anecdote, second hand piano inventories have risen so high they have put significant downward price pressure on prices. Since a piano has long served as a sign of middle-class status, the inventory glut speaks to how many have had to give up the quest.

The SCMP talks to middle-class Chinese rushing to emigrate as Western immigration rules are tightened…

“…even if I continue to hold on to the properties I currently own, there is a high probability that they will continue to depreciate over the next year, or in years to come.

“So, selling some of my domestic properties in exchange for an apartment and citizenship in Europe for the family sounds like a better deal than it ever has.”

…“Children can get a more international education in Hong Kong, and you can invest in gold and foreign currencies more freely in Hong Kong, with higher interest rates than in domestic banks.”

…“You could say that this year may be the last chance to hop on the easy train for immigration, so everybody is sort of going crazy for fear of missing out,” she said. “The number of inquiries has increased significantly, and clients will have to go all-out.”