Category Archives: GBA View

Macau’s new chief has a plan: don’t mess up

Farah Master pays more attention to Macau than any other Hong Kong-based journalist, SCMP included, and so we were pleased to see today that she has a thoughtful piece out on the “other SAR”. 

The timing is great. Hands up any reader that knew Macau was anointing a new Chief Executive this weekend? Didn’t think so.

Ho appears to be stepping into the job with gusto. Although initially reluctant to take a high-profile approach to his “campaign,” he has recently been a daily fixture on the front page of Macau Daily, constantly visiting local communities, pressing the flesh with leaders of grassroots associations and their rank-and-file alike. He has been able to do this, unlike his counterpart in Hong Kong, because he need not fear being petrol-bombed in public. Macau is a relative oasis of calm, even though it is a short hop across the bridge from the tinderbox of Hong Kong.

It’s not really fair to compare the two, however. If Carrie Lam had only Wan Chai to govern, her job would be a lot easier, too. Macau has less than a tenth of Hong Kong’s population. Nevertheless, it is inarguable that the people of Macau have seen the quality of their lives appreciate immeasurably since the Portuguese dumped it back on Beijing’s hands in 1999. There is little wonder they haven’t had the same fiery response as their Hong Kong counterparts to anything from the central government that might seem pushy, like the extradition bill.

For this, the casinos deserve some thanks. No, seriously. These companies, dominated by foreign investors, have been pillars of the community, even though they have been responsible for bankrupting more than one gambler – mostly from across the border – over the nearly 20-year run of their current concessions. 

List the ways, you say? Well, for a start, unlike business leaders of similar economic clout in Hong Kong, Macau’s casinos haven’t had the chutzpah to try to do a run-around on the local government. (Not more than once, at least.) They pay well. They provide career training. They arrange visits to elderly homes. They make ambitious, world-class art festivals happen at the drop of a hat. They bring mandopop king Jay Chou to perform there. Need we say more?

There are some things the casinos can’t do, of course. They can’t build world-class healthcare facilities, and they can’t get the trains to run on time, because those are jobs reserved for the people to whom the casinos pay 40% of their revenues in taxes. But pretty much everything else good about Macau’s development since 1999 is theirs to take much credit for. Edmund Ho was a genius for bringing them in within a couple of years after he became Macau’s first CE. One can only imagine what Hong Kong would be like today if its first CE had possessed the vision and courage to break up its property oligopoly in 1997.

Since 2009, Macau has had some challenges, to be sure. But that looks likely to change. Ho Iat Seng seems determined to address the perception that the executive branch has been less active over the past decade. He has already put forward all sorts of ideas for building better infrastructure and improving people’s livelihoods. He sounds like a go-getter. And he looks like one, too.

His Hong Kong counterpart had said she wanted to do the same thing back when she was campaigning for the job. She had talked about focusing on bread-and-butter stuff and putting aside the contentious issues that had seen her predecessor leave office after one term. Perhaps now she will have the opportunity to really do so. Ho is fortunate that he won’t be coming to the job under anything like the same pressure that she stepped into. And it could be said that he is fortunate to be able to see, thanks to her, what troubles lie ahead if he fails to deliver on his campaign pledges. 

Nevertheless, there is a sense in Macau that its best days are still ahead of it, and that the city is getting the leader it deserves.  Put this together with the gift of the Greater Bay Area masterplan, and we, too, see a long, clear runway ahead for the other SAR to enjoy a spectacular takeoff in the coming decade.

Anthony Neoh parts the waters in HK

When the person overseeing the police on behalf of the public says that a political solution is needed to the city’s unrest crisis, it’s best to take notice. Anthony Neoh, former head of the SFC and a widely respected barrister, is currently head of the Independent Police Complaints Council (IPCC). The IPCC has been given the unenviable task of looking into police conduct during the protests. Thankfully, it has someone like Neoh at the helm.

As Neoh told the SCMP over the weekend, the police cannot be expected to put this protest down. It is political in nature; it needs political solutions. Demanding that the protests end before discussions or reviews can begin is not pragmatic, he points out. As long as the violence subsides, and the trend toward calmer demonstrations is evident, the initiative needs to be seized. This should start with properly acknowledging the spark that set the prairie on fire, the extradition bill, and properly put it out by formally withdrawing it from the Legislative Council.

Read more of his level-headed, common-sensical advice on scmp.com.

It remains to be seen, however, whether Chief Executive Carrie Lam is up to the task at hand. She does appear to have better support now, as the pro-establishment camp has been whipped into line by the HKMAO. But there is still a lot of hard work ahead. Neoh has parted the waters; but will she lead her people to the promised land?

Pardon the exaggerated metaphor, dear readers. But to continue it, to get through the turbulent waters in which Hong Kong finds itself will require more than the right direction. Lam is going to have to come up with some bold initiatives if she wants to show that she really is sincere in addressing the protesters’ grievances.

Here, too, she has had some good guidance from commentators recently. One is by the SCMP’s former editor, Wang Xiangwei. Wang argues that any attempt to address the underlying causes of the protests is going to have to result in taking action against the property barons and other vested-interest groups.

As he says, Lam needs to unveil a bold vision to tackle the “grey rhino” risks long associated with Hong Kong – sky-high property prices, worsening inequality, lack of social mobility for youth, and woefully underfunded social security. Previous chief executives have all talked about it. None has acted.

To do this, Lam must “bite the bullet”, says Wang, and seek the full support of the central government to take on vested interest groups, including property tycoons, the Heung Yee Kuk, and even environmental groups.

If Wang is writing this, it is highly likely that this is, in fact, what Beijing is already thinking. All she has to do is ask.

Read more on scmp.com

HK heading toward a violent climax?

The past weekend’s protests in Hong Kong marked the tenth since they began. There are seven more to go until China celebrates the 70thanniversary of its modern era. The question on many minds at the moment is whether the protests will fizzle out gradually once university classes get under way, or whether National Day will be spent cleaning blood off the city’s streets.

Continue reading HK heading toward a violent climax?

Rising hope for HK as Beijing gets hands-on

It may be hard for many young, idealistic protesters to see it, but Beijing’s tried and trusted carrot-and-stick approach to managing unrest is being deployed with greater determination in Hong Kong. Zhang Xiaoming’s visit to Shenzhen on Wednesday is clearly the start of a more hands-on approach by the central government. This gives hope, in our view, for a solution to the crisis gripping the city.

Continue reading Rising hope for HK as Beijing gets hands-on

Is HK descending into its own Cultural Revolution?

Hong Kong is being brought to a standstill today, as promised, as shops close and staff either stay at home or don black T-shirts to go out marching in scorching heat. Protesters, police and journalists are just about the only ones carrying on with business as usual. Flights are being delayed or rerouted as airport staff join the citywide strike; buses and MTR services are being severely disrupted; and increasingly violent clashes between protesters and police seem all but inevitable as the hours pass.

The video footage is getting more worrisome. Scenes of a driver ramming through a road barricade are going viral (it is amazing nobody was hurt). Crowds are swelling in shopping malls and streets, and protests are no longer confined to a few places. They are breaking out all over the city, and police forces are thinly stretched. It is all but impossible for established news media to keep on top of everything that is happening.

This is not the Cultural Revolution of 1965-76. That was sheer lawlessness, encouraged and at times directed from the top. But it is starting to feel like it. Communities are splintering. Facebook groups are breaking up. People that went to college or high school together have stopped talking. Parents are losing touch with their kids. It is no longer only an anti-government movement. It is increasingly becoming a counter-cultural movement. Society is being split sharply into Blue and Yellow, with the Yellows standing for radical change and the Blues standing against. No one is talking about principles anymore – only chanting slogans. There is no hope for negotiation. There is no one that can negotiate.

The government is paralyzed. The hapless Chief Executive, Carrie Lam, can do nothing but read out wooden statements at press conferences that no one bothers to watch anymore. One meme trending on Facebook shows TV viewers ticking Bingo cards with her favorite clichés in the blocks instead of numbers.

The police are mostly just running around, chasing the flame, trying not to go nuts, following procedure when they can and cracking heads – sometimes the wrong ones – when they can’t. There are hotheads, and likely worse, among them, but their fear is understandable. Bricks and bars are being upgraded to petrol bombs. Police stations are being attacked. Police families’ living compounds are being pelted by neighbors.

The Hong Kong and Macao Affairs Office, meanwhile, has set the speculation fires burning by announcing it will say “something new” at a press conference tomorrow: Could it be the imposition of a State of Emergency? Are reports of riot police massing at the Shenzhen border, arrayed like stormtroopers from Star Wars, to be believed this time?

There is a palpable sense in the air here that there is no going back. Hong Kong is not just blowing off steam. This all appears to be heading inexorably toward a violent, probably bloody, climax that will surely go into the world’s history books. We hope and pray for a change, but at this stage, a calamitous showdown is starting to look unavoidable.

Shenzhen takes the lead from HK?

Guangdong leads the country: In the first half, the province’s GDP broke the RMB5 trillion mark, ahead of Jiangsu (RMB4.86 billion) and Shandong (RMB4.18 billion).

Shenzhen leads Guangdong: Its economy is not only the province largest, RMB1.213 trillion over six months, but the fastest-growing, up 7.4% YoY.

Who leads the Greater Bay Area?

Continue reading Shenzhen takes the lead from HK?

HK protests’ endgame comes into sight

Scenes from Hong Kong yesterday were shocking for observers accustomed to thinking of the city as a bastion of community harmony. For them, Hong Kong’s image as a safe place policed by “Asia finest” was greatly tarnished by videos showing gangsters attacking protesters on their way home. White-clothed, tattooed heavies wielding sticks, chasing protesters inside subway trains and around the station in Yuen Long, were disturbing, to say the least. 

For those who understand how the city’s triads have always played a major role in enforcing the city’s apparent community harmony, or stoking disharmony when called upon to do so, these scenes come as less of a shock. More interesting was how restrained most of the white-clothed troops were. Sergeants and lieutenants were clearly running the show, and many of the videos show frontline soldiers swiping the air or smashing umbrellas rather than striking protesters. If the intention had been to maim rather than scare, nurses and doctors at Hong Kong’s hospitals would have been working overtime shifts last night.

We would not go so far as to say these triads were ordered into the fray by anyone who may or may not be overseeing the government’s reaction to the protests. But readers who understand how the United Front Department works would not be surprised if that was what happened.

We personally feel sorry for the protesters. Most were, and continue to be, dedicated to peaceful protests. But it is becoming clearer that an endgame is now being put into motion by the forces aligned against them. More aggressive deterrent action is likely to continue to rise, whether that be by triads in short spells before the police show up, or by police using teargas, then rubber bullets, then the nastier stuff.

The specifics of what comes next will likely depend on what the people enjoying their summers at Beidaihe this month decide. We would place an educated guess on a firm stance continuing. Whether that results in further tightening of protesters’ right to free speech and association seems unlikely. But tolerance of those straying outside the bounds placed on their physical movements, as well as people who think throwing eggs at national symbols is harmless, is going to zero, from what we can see. We continue to hope and pray that none of these protesters are carrying the idea of becoming martyrs, such as those, if proved true, who have been caught in an alleged bomb plot.

Read more on SCMP.

Temperatures rise dangerously in HK

Hong Kong’s extradition bill protests entered new territory over the weekend – literally and figuratively. Protests in the New Territories towns of Sheung Shui and Sha Tin erupted into violence marked by police incompetence and protester xenophobia. Videos running across social media and TV stations today show scenes of chaos as police seem to be often uncoordinated and undisciplined, while crazed mobs encircle and beat lone police officers separated from their colleagues inside a shopping mall. 

To say Hong Kong has not seen anything like this in 50 years, since the waning days of the Cultural Revolution in 1976-77, would not be hyperbolic. Commentators are trying valiantly to get their head around its causes, and suggest solutions. One of the more thoughtful is from veteran SCMP reporter Gary Cheung, who looks back at Hong Kong’s colonial history and asks political commentators and former government officials to pontificate about what the current government could learn from the old days. 

Unfortunately, the situation seems to be moving potentially beyond the government’s control. This is partly because of the relative lack of experience of its leadership  – Britain had a seasoned class of colonial administrators who were accustomed to putting down revolts throughout its colonies – but also undoubtedly because political discourse has moved into a realm where negotiating styles are fueled by deep-seated emotions rather than strategic considerations. The government seems increasingly in a no-win, no-way-out situation. 

Foreign observers might be forgiven for wondering what all the angst is about. “A regular night after a football game in a small English town,” is how one wag described the New Town Mall scenes to us. If only we could be so sanguine. China has a long – and recent – history of violent protests moving to scale quicker than can be imagined. It was why the late former Chairman Mao was fond of repeating the ancient saying to his cadres, “One spark can start a prairie fire.” 

In Hong Kong’s case, the spark was the bill, but rather than starting a prairie fire, it seems to have lit a fuse which is wending its way toward a powderkeg that Beijing could reasonably believe would start a much bigger prairie fire. The fuse has turned a corner that shows how little distance is left to reach the explosives. 

In our view, it is becoming increasingly clear that these protests are no longer about a proposed extradition bill. They have become anti-mainland and, worse, anti-mainlanders. If they continue this way, it is plausible that Beijing will intervene to prevent such sentiment from spreading. The consequences of that would go beyond anything currently envisaged by protesters and their sympathizers in the wider community. 

It is hard to say what could happen next. The task force in Shenzhen must be weighing some difficult choices. We would not be surprised if one of those is the imposition of a state of emergency in Hong Kong. This may not require putting the army on the streets. But it may result in perceptions of an “endgame” being formulated as central government intervention becomes more overt. Indeed, it is not unthinkable that if TV and smartphone screens continue to be filled with scenes like those over the weekend, Beijing will accelerate its plans for Hong Kong’s integration into the Greater Bay Area – in a way that no one could have envisaged days ago, let alone when the masterplan was being formulated a few years ago. 

To be clear, there is no other endgame. Full integration with the mainland is currently scheduled for 2047. It would be tragic if this had to be brought forward due to the current protests, because neither side is ready for it and much of the progress already made would be lost. But anyone who thinks that Hong Kong has an alternate future ahead of it is guilty of delusional thinking at best. How we get there requires debate. Whether we are going to get there does not.

There is still time and space for cool heads to prevail. The majority of the protests have been peaceful and orderly. If further restraint can be imposed – on both sides – it is still possible this crisis can be defused. But the fuse is not going to wait. It needs to be put out ASAP, before bruises and concussions and chopped fingertips become fatalities. Rumors today of protesters planning to surround the PLA barracks at Tamar remain that – rumors – yet they do not augur well for what could happen. 

Investors who think Hong Kong and the Greater Bay Area’s economic trajectory will not be affected by the realisation of such a worst-case scenario need to start reading more history books. The rise of the GBA to the world’s top 10 economies within the next decade will not likely be stopped, but it will surely splutter. Hong Kong does need to play its role as an international gateway, especially in finance and legal standards, for the GBA to realise its full potential. 

We do not currently agree with the worst-case scenarios bandied about by people such as hedge fund manager Kyle Bass. The Hong Kong dollar peg is in no danger while US$3 trillion of China’s forex reserves stand behind it. Hong Kong is a challenge the central government is capable of handling. But if the city has to manage, for example, the imposition of a state of emergency and any ensuing backlash from the international community, there will likely be serious short-term disruption of capital markets that are essential to the GBA’s growth.

In the long run, we remain confident in the GBA’s future, come what may in Hong Kong. China is not turning back the clock on its economic development strategy, which has lifted more than 400 million people out of poverty since 1979, no matter what London, Washington, Paris, Berlin and any other world capitals might have to say about the erosion of Hong Kong’s autonomy under Chinese sovereignty. Hong Kong’s role in the GBA is not irreplaceable, only difficult to imagine right now for Shenzhen and Guangzhou. We just hope and pray that in the meantime we won’t have to tell this remarkable story with a chapter on the blood that was spilled along the way.

Hong Kong and GBA: a two-way street

There are three interesting commentaries on Hong Kong’s outlook in SCMP worth sharing today. The first two are rather gloomy columns. One is by Albert Cheng, a legislator known for anti-establishment views who has been a columnist for the paper for decades. The other is by former Singaporean diplomat Bilahari Kausikan. They have divergent views of what is to blame for the current situation, yet they are equally pessimistic that the standoff between the elite and the masses can be resolved.

Cheng is more dramatic, as is his style. He reckons 2020 could be the “endgame” for Hong Kong, presumably without Tony Stark to save the city. His argument is that it won’t take much more for Hong Kong to be drained of its essential vitality as people and institutions continue to up stakes and leave. There is a precedent, he points out: 15 years before the handover, just as China’s Reform and Opening era was getting under way, confidence in Hong Kong’s future autonomy under Chinese rule was evaporating. At that time, the woe-betide-us floods were dammed by the Chinese and British governments signing the 1984 Joint Declaration. Li Ka-shing, Lee Shau-kee, Cheng Yu-tong and a few others had their fortunes cemented in that moment, as the city’s property market began its incredible turnaround, the currency stabilized, and a blueprint for the city’s historic bull run of the last three decades was laid out. 

Continue reading Hong Kong and GBA: a two-way street