Category Archives: GBA View

Wither Hong Kong’s economy?

It’s hard to know what to make of the near-surreal news flowing through Hong Kong at the moment in relation to its economy. It’s as if there are people here, living in ivory towers, who cannot see what is happening on the streets and in the shopping malls while they issue policies and commentaries that have no bearing on reality.

The Hong Kong government has announced details of another round of relief measures, which include instalment plans for tax bills and direct subsidies for utilities, aimed at supporting those smaller companies whose businesses have been hit hardest by the protests. The message seems to be: don’t worry, we know times are hard, so take a bit longer to pay us what you owe, but we know you will get on your feet again, eventually, and in the meantime, don’t worry, we won’t shut off the lights and water.

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Hong Kong’s DOJ tries to pull a fast one

It might have been expected for the National People’s Congress Standing Committee to proclaim that Hong Kong’s system of governance is based on an “executive-led” model. But to hear this argument coming from the Department of Justice is alarming.

The DOJ, which oversees prosecutions, has submitted an application to the Court of Appeal seeking to overturn the High Court’s decision that ruled the government’s face-mask ban unconstitutional. Apparently, it is on the grounds that the court doesn’t understand who is really the boss of this place. 

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Day 4 post-election, and Hong Kong is still here

Hong Kong has nearly reached the end of its first week on a new political playing field and, so far, both social stability and the rule of law remain intact. Protests have not erupted into violence again. No intervention in Hong Kong’s security or political regime has come from Beijing, despite US President Donald Trump signing the Hong Kong Freedom and Democracy Act into law. And, perhaps most importantly, the National People’s Congress Standing Committee has not followed up on its threat to issue an interpretation of the Basic Law that would set aside the High Court’s ruling on the government’s face-mask ban.

That doesn’t mean it couldn’t still happen. As SCMP reports, an ominous column was penned by someone who is widely believed to be “in sync” with the senior leadership’s thinking, saying that Hong Kong is risking its autonomy by voting so brazenly against pro-Beijing election candidates. Ren Yi is his name, or “Chairman Rabbit”, and he is the grandson of a former powerful Guangdong party boss. He has a million followers of his online musings.

The central government, meanwhile, is clearly enraged by Trump’s decision to sign the Act, and could yet counter it by taking retaliatory action against American interests in Hong Kong and, possibly, Macau. Or it could somehow pressure lawmakers into pushing through Article 23 legislation that would likely curb freedoms, including freedom of speech. This seems almost inevitable if the Act’s passage is followed by a review of Hong Kong’s special trading status by the US government.  

And the High Court’s decision to extend the suspension of its ruling on the face-mask ban could be seen as a way to keep the door open for the NPCSC to issue a ruling, within the next month, which would likely erode the foundations of the rule of law in Hong Kong. 

But none of these worst-case scenarios has happened. Yet.

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Hong Kong keeps pondering, wondering, what next?

Three days after Sunday’s District Council elections, the high has not yet worn off. Although street protests have started to pick up again, they remain relatively mild. 

However, Hong Kong is no closer to understanding how the central government feels about the way its supposedly loyal candidates were routed. Analysts have weighed in on both sides of the border, and their conclusions mostly state the obvious: a major rethink is needed in how to manage Beijing’s relationship with Hong Kong.

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In Hong Kong, it’s steady as she goes

Although Hong Kong’s freshly reinvigorated political opposition camp appears to be headed toward the same hole it has stepped in before, belligerently calling for the Chief Executive, Carrie Lam, to resign while repeating demands for universal suffrage ASAP, rather than knuckling down to find pragmatic ways to address the city’s governance challenges, and the government has responded in a typically wooden style, too, the outlook for this embattled city appears to be improving. 

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Magnanimity needed in Hong Kong

After nearly half a year of angst, most of Hong Kong is smiling today. The violence has abated. The sun is shining, and the air is cool. Votes have been cast, in record numbers, and 80% of the seats in the District Councils will now be filled by people who are not deemed to be part of the pro-government camp. 

It might sound like a cliché, but the people have spoken.

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Beijing speaks, not yet rules, on face-mask ban

Nervous observers worried about the rule of law in Hong Kong didn’t have to wait long to gauge Beijing’s stance on the subject. Within 24 hours of the High Court’s ruling that the Hong Kong government’s face-mask ban was unconstitutional, the National People’s Congress Standing Committee issued a statement blasting the decision as being unconstitutional itself. Saying only it (the NPCSC) had the right to rule on constitutional matters, it said the decision had “weakened” the administrative power of the Chief Executive.

This is not yet a breach of the rule of law in Hong Kong. The statement was an opinion, not a ruling. It is, however, evidence of a surprising lack of political nous by members of the NPCSC. By speaking out on an issue that was not vital to the government’s ability to handle the ongoing crisis – a glance at TV footage shows how futile the ban has been – rather than waiting, the NPCSC has pre-empted the Hong Kong government’s efforts to find another way to legally enforce the ban. The High Court’s decision had, in fact, left the door ajar to the government to do this by not ruling on whether the ban was necessary under an emergency situation. 

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Try harder, Xi tells Hong Kong govt

It is becoming clearer that something has shifted in Beijing’s approach to governing Hong Kong. We pointed out the beginnings of this shift last week, after CE Carrie Lam’s visit to Shanghai and Beijing, where she met President Xi Jinping and her direct report, Vice Premier Han Zheng. She came back more confident, less inclined to give middle-ground statements on the protests. We speculated that it was because the central government had reached a new consensus on Hong Kong, and a change of direction was needed: restrained passive-aggressive interventionism was out; active, overt policy guidance was in.

However, until late yesterday, it hadn’t seemed like the new approach was being timed on a stopwatch. The central government was upping the pressure to introduce national-security legislation, but no deadline had been hinted at.

Then President Xi Jinping interrupted a busy schedule on his overseas trip to comment on the situation in Hong Kong. He reiterated that he wants to see the Hong Kong government and police do whatever is necessary to put an end to the protests. It was no longer just the Hong Kong government’s most important task; it was now its most “urgent,” too.

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Hong Kong as regional HQ: time to move?

For those who care to look, the Hong Kong protests are exposing flaws in many assumptions about Hong Kong’s competitiveness. This is not only a short-term concern, either. As revenues come under pressure, partly due to the protests, partly due to a slowing Chinese economy, operating costs are inevitably being looked at more carefully by companies based in “Asia’s World City”. It would be surprising if only a few were considering moving or scaling back their operations here.

The question is: Can other cities in the Greater Bay Area offer compelling alternatives?

The short answer would be: Yes. But do some homework first.

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New direction set for Hong Kong

It is fitting that Fintech Week took place at the same time as Carrie Lam’s duty visit to Beijing last week. The three-day event, held at the AsiaWorld Expo Center, provided a reminder of Hong Kong’s enduring value for the Greater Bay Area. As the city’s tourism industry withers after 15-plus years of rich yields, Hong Kong needs a new Chinese export to sell. Financial technology is one of the most promising, and Fintech Week was done well. Its success supported the Chief Executive’s declaration, at the end of her Beijing trip, that Hong Kong’s role within the GBA was “completely unchanged”.

She is right. Selling Chinese goods and services to the world has always been Hong Kong’s strength. From textiles, to toys, to computers, and, yes, to the spending power of mainland tourists, Hong Kong has, to date, been the best place to get a deal done. Until China completely liberalizes the Renminbi, it will remain so. This is a major reason why the Greater Bay Area masterplan was drawn up in 2017 and launched in February of this year: the region needs Hong Kong to put its companies on the world stage. International marketing is Hong Kong’s forté.

Until Lam’s trip to Beijing this week, it had appeared that Hong Kong was playing another, unspoken role within the Greater Bay Area (and the country): as a salon for debating ideas about the future, and as a laboratory for testing their applications. This premise was established by the late Deng Xiaoping in his prescient 1984 agreement with the late Margaret Thatcher, which laid the foundation for the “One Country, Two Systems” principle that underpins the Basic Law. He clearly wanted to see what China could learn from a melting pot of East and West on its doorstep.

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