CHINAMacroReporter

'After the protests - China is not just shackling Hong Kong, it is remaking it'

‘The old Hong Kong is gone. Judge Mr Xi’s China by what it builds in its place.’
by

|

The Economist

March 20, 2021
'After the protests - China is not just shackling Hong Kong, it is remaking it'
BIG IDEA | ‘The old Hong Kong is gone. Judge Mr Xi’s China by what it builds in its place.’

The tyrannical moves by a nation's most implacable foe are seldom credited with any good intentions.

  • Yet for a foe to reach the level of implacability it has to have some vision that includes public goods that is coupled with its efforts to extend its dominance.
  • Without that that foe would be rightly labeled a 'tinpot dictator' and sooner rather than later consigned to a footnote.

And so it might be with Beijing and Hong Kong.

  • Beneath the wholesale repression may also be a desire to make Hong Kong 'better' according to Xi Jinping's own vision.

The problem for those us who abhor Xi's vision is crediting him with anything other than a desire to control the city.

  • That's what makes parts of ‘China is not just shackling Hong Kong, it is remaking it’ in The Economist so interesting.

Those parts convey the notion that beyond the obvious goal of bringing Hong Kong to heel, Mr. Xi wants to solve problems for benefit of the city.

  • Beijing’s electoral reforms aim to break the tycoons' influence in the legislature and in turn reduce income inequality and poor housing,
  • They also aim is to improve the quality of officials administering Hong Kong’s economy.

According to the article: ‘Talk to Chinese officials and state-backed scholars, as well as to pro-government politicians in Hong Kong, and they will insist that neutralising the opposition is a necessary step towards a greater goal:’

  • ‘Repairing flaws that render Hong Kong’s political and economic systems structurally unsound through a wholesale remodelling of its institutions and society.’

Beijing, it says, has ‘real concern about Hong Kong’s income inequality, which is among the most extreme in the developed world, and the cruelly high costs of housing in the territory.’

  • ‘Officials in Beijing deny all blame for an unhappy Hong Kong and are impatient with Westerners who cast Hong Kong’s discontent as a clash between a freedom-loving public and despotic rulers: Marx has taught them that all politics is rooted in economic forces.’
  • ‘Their favoured scapegoats are foreign saboteurs and a small number of Hong Kong-Chinese oligarchs who have dominated the city’s property and retail sectors for generations.’

‘Western critics focus on the blow that the new election law lands on pro-democracy parties.’

  • ‘Chinese observers are equally interested in its changes to the Election Committee, which will give Beijing-appointed members the power to dilute the influence of the property tycoons.’

‘Beyond that assault on Hong Kong’s old-school business bosses, a wider campaign is brewing to craft a new “capitalism with Hong Kong characteristics”.’

  • ‘The ultimate target is the city’s whole laissez-faire, low-tax economic model, which some officials in Beijing grumble has been elevated to an almost religious creed by local oligarchs, foreign business leaders and civil servants.’
  • So much for ‘guaranteeing that Hong Kong’s capitalist way of life would continue for at least 50 years after the Union Flag was lowered.’

Also, ‘National leaders do not hide their exasperation with the low calibre of many who enter Hong Kong politics today.’

  • ‘Maria Tam Wai-Chu, a senior member of the National People’s Congress from Hong Kong, points to the global technology giants which have transformed Shenzhen, the gleaming megapolis that lies just across the border from Hong Kong, and laments that: “We are so backwards here in Hong Kong.” '
  • 'She would like to see technology experts or business executives appointed or elected to Legco, to help the city confront the 21st century.’

‘The old Hong Kong is gone.’

  • ‘Judge Mr Xi’s China by what it builds in its place.’

Much the same could have been said for the Nazi reforms in Germany in the 1930s.

  • For my part, it seems that Autobahns and Volkswagens were a bad trade for Germans’ freedom.
  • And it seems that most Hong Kongers feel the same about Mr. Xi’s plans to remake their city, good intentions or not.
December 30, 2021
Q&A 4 | Is China Exporting Inflation?
'‘China has its own issues. If you look at the CPI inflation, it looks more moderate. ‘If you look at the producer price inflation, it looks more severe.’
keep reading
December 30, 2021
Q&A 2 | Will the Gender Imbalance Keep Housing Prices Firm in the Medium Term?
‘The part of housing prices caused by gender-ratio imbalance is not going to go away in the medium term. But the government has ways to create volatility in the housing market.’
keep reading
December 30, 2021
Q&A 3 | Property 2022: Stabilization or Growth?
‘The goal is to stabilize housing prices while having housing sector grow.’
keep reading
December 30, 2021
Shang-jin Wei Presentation-3 | Analyzing the Gender Imbalance Data
‘Compare these with graph showing the impact of the same factors on rental prices...'
keep reading
December 30, 2021
Shang-jin Wei Presentation-2 | Gender Imbalance as a Driver of Housing Prices
‘Why does gender imbalance have such an outsize impact on China’s housing prices?'
keep reading
December 30, 2021
Q&A 5 | Will Xi Continue to Favor the State Over the Private Sector?
‘He wants to see a bigger role for the state in the economy. But in the last two years, he has done some course correction. For example, after talking up the role of state-owned firms and building stronger, bigger state-owned firms, he is talking about the equal importance for the private sector.’
keep reading
December 30, 2021
Q&A 7 | Why Did Beijing Ban Online Tutoring?
‘Each policy in isolation – whether its banning online tutoring or protecting data or enforcing anti-monopoly regulations or any other - has its rationale.’
keep reading
December 30, 2021
What Are Your Top of Mind Concerns?
I asked the participants what are their top of mind concerns about China.
keep reading
December 7, 2021
Getting (Xi Jingping's) Priorities Straight
How do you make investment or business decisions in the face of the uncertainties created by Xi Jinping's reshaping China's economy? In this issue, I'll give you a few different ideas on how you might deal with that uncertainty.
keep reading
December 7, 2021
Look Through the Rights Lenses
Getting down more to the nitty-gritty, if you’re evaluating a sector or a company, get your lenses right to get the details right.. Stonehorn’s Sam Le Cornu gives a good example of this in a Bloomberg interview.
keep reading
December 7, 2021
Sometimes You Just Have to Roll the Dice
Telling someone to align him or herself with Beijing's priorities still is generally good advice.And, when I tell you what those priorities are, I know I am right - until I'm not.
keep reading
December 7, 2021
Watch What Beijing Says - and Does
Besides listening to Xi Jinping, you can discern Beijing’s priorities and its likely actions through its big policies - and this is my point here.
keep reading
November 23, 2021
'Biden Has a Summit With Xi, but No Strategy for China'
‘Neither Taiwan nor strategic arms are a hot campaign topic, and China is not yet at the forefront of public consciousness. To ensure America’s eventual strategy is workable, political leaders need to debate the challenges so citizens can appreciate the implications of the choices they will have to make.’
keep reading
November 23, 2021
Xi Jinping's Leadership: 'The Inevitable Outcome of History'
Mr. Xi is the hero of a Resolution on the history of the Chinese Communist Party that painted his leadership as the inevitable outcome of history and all but gave him his third term. Tony Saich of the Harvard Kennedy School did a terrific analysis on this - you'll find it below, after my take.
keep reading
November 23, 2021
'Xi Jinping has made sure history is now officially on his side'
‘While there are murmurs of opposition, the historic plenary session would suggest that the future is in Xi’s hands. However, when politics is so deeply personalised and centralised, there is only one person to blame if things go wrong. Unless, of course, we get a new resolution on history that tells us who led the party astray, despite Xi’s earnest attempts to keep policy on the straight and narrow.’
keep reading
November 9, 2021
'America's China Plan: A Proposal' by Clyde Prestowitz
Outcompeting China and avoiding global extension of its authoritarian and coercive policies and practices is not really about China. It’s about America.
keep reading
October 27, 2021
Why China Won't Invade Taiwan - Yet
Forget Evergrande and the energy crunch. After the recent flurry of alarming headlines, here’s the question I get most often these days from CEO’s and institutional investors: Will China invade Taiwan in the next few years?
keep reading
October 17, 2021
An Energy Crunch. China's Latest Crisis. They Just Keep Piling Up.
‍‘Over the next six months or more, the energy crunch in China will be an even bigger challenge than Evergrande. Will make the Evergrande problem look tiny and has huge global implications. The lights go out in China!’ one experienced and very well-respected reader of long residence in China wrote to me in response the last issue on Evergrande.
keep reading
October 7, 2021
Just How Contagious is Evergrande?
Just as a personal crisis can lead you to dig deeper into yourself, so the rapid-fire events in China - with trillions of dollars of business and investment on the line - have led us to (finally) go deeper into how China works – and to come to grips with uncertainties caused by Xi Jinping’s recent moves to reshape the Chinese economy and the Party’s social contract with the Chinese people.
keep reading
September 27, 2021
'This Time Feels Different'
Just when we thought we were getting used to Xi Jinping’s tech reforms and social-engineering regulations, the Evergrande crisis heats up.
keep reading
September 19, 2021
AUKUS: A New World Order?
‍In case you passed over the news of AUKUS, the new strategic alliance among the U.S, the U.K., and Australia, here a few headlines to encourage a deeper look.
keep reading
September 7, 2021
Xi Jinping: Today, video games. Tomorrow, well ... just be good.
Today's issue is a heads up on what may be Xi Jinping's efforts to reshape Chinese society.
keep reading
August 28, 2021
The Taliban: 'China's Perfect Partner'?
Breaking through the blow-by-blow reporting that started when the Taliban began its sweep to victory are the geopolitical analyses of who gains and who loses in Afghanistan.
keep reading
August 15, 2021
'Xi’s Dictatorship Threatens the Chinese State'
‘Mr. Xi is determined to bring the creators of wealth under the control of the one-party state.’
keep reading
August 15, 2021
'Are you tired of losing yet, America?'
As I write this, Taliban forces have entered Kabul and are reportedly occupying the Presidential Palace.
keep reading
August 15, 2021
China Economy: Industrial Production Down, Demand Resilient
China’s industrial production down 10%. Demand resilient.
keep reading
August 15, 2021
'China Signals More Regulation for Businesses in Coming Years'
‘The State Council’s statement provides a guiding context to interpret current regulatory thrusts. The blueprint as an attempt by Chinese authorities to help investors understand the motives behind the regulatory push.’
keep reading
August 5, 2021
‘Global investors shocked to have discovered that China is run by Communists.’
‘Global investors are shocked to have discovered that China is run by Communists.’
keep reading
August 5, 2021
'Shocked Investors Scour Xi’s Old Speeches to Find Next Target'
‘While China’s policy moves can feel ad hoc particularly to foreign investors, the changes are quite targeted on certain sectors.’
keep reading
August 5, 2021
Don't Say Xi Jinping Didn't Warn You
‘Global investors are shocked to have discovered that China is run by Communists.’
keep reading
August 5, 2021
'China Wants Manufacturing—Not the Internet—to Lead the Economy'
‘Social media, e-commerce and other consumer internet companies are nice to have. But in his view national greatness doesn’t depend on having the world’s finest group chats or ride-sharing.’
keep reading
August 1, 2021
'Stock Market: China Doesn’t Care How Much Money Investors Lose'
‘Does Beijing not care how much money foreign investors have lost? Does the government really want to close China Inc.’s access to the deep pool of global capital? The short answer is, no, the government doesn’t care.
keep reading
August 1, 2021
'Xi's Four Pillars of Regulation'
‘Broadly, Beijing is concerned about four pillars of stability: banking, anti-trust regulation, data security and social equality. All of Beijing’s major interventions reflect these concerns.’
keep reading
August 1, 2021
China's Tech Crackdown: 'Nobody Saw It Coming.' — Huh?
‘Carnage in China's financial markets signals the beginning of a new era as the government puts socialism before shareholders, and regulatory changes rip apart the old playbook,’ writes Reuters’ Tom Westbrook.
keep reading

More

CHINAMacroReporter

May 2, 2021
'Fanning the Flames of War'
I recently received an email from a former U.S. ambassador and influential senior foreign policy expert taking me to task for publishing so many hawkish posts about U.S. policy toward China in the ‘China Macro Reporter.’ These are, he said, ‘in some ways fanning the flames of a potential war. Please back down, at least a bit.’ ‘This is not the Malcolm I remember or know,’ he ended.
keep reading
May 2, 2021
‘A trend for hostility toward China, inflamed under Trump, is a recipe for American failure’
‘A trend for hostility toward China, inflamed under Trump, is a recipe for American failure.’ ‘Hostility toward China, much of it misinformed historically and strategically, has deepened in the United States in recent years, with a consensus hardening among both Republicans and Democrats that China is at root an adversary that must be thwarted.’ ‘Four years under President Donald Trump have enlarged and inflamed that trend, but it is a recipe for American failure.’ ‘The Joe Biden administration needs to seriously rethink Washington’s approach to Beijing.’
keep reading
April 30, 2021
'World Economic Outlook, April 2021: Managing Divergent Recoveries'
‘The upgrades in global growth for 2021 and 2022 are mainly due to upgrades for advanced economies, particularly to a sizeable upgrade for the United States (1.3 percentage points) that is expected to grow at 6.4 percent this year.
keep reading