Pyrotechnics-vibes

In the days leading up to Hong Kong’s annual budget, the government usually leaks details about a few planned measures the public will like – typically rebates, vouchers or other handouts. This year, with another huge deficit looming and mega-reserves semi-dwindling, we hear mostly silence. (The Budget announcement is today, by the way. Didn’t you feel the excitement?) Officials need to find ways to raise more revenue, rather than spend it. Apart from, perhaps, cuts to stamp duties in order to try to push up housing prices. And maybe extra funding for national security education, or some such. What we do know is that the Financial Secretary will come up with yet another way to attract yet more tourists into a city already experiencing a shortage of both space and labour…

The proposed monthly fireworks display will be different to those on major festivals such as the Lunar New Year and National Day, according to government sources.

The administration is considering holding monthly fireworks and drone shows above Victoria Harbour, as part of the measures said to be announced in Wednesday’s budget delivery to spur local tourism.

Government sources have indicated that the proposed monthly displays are different in scale and concept from traditional ones.

‘Different in concept’. Instead of going ‘boom!’, the monthly fireworks will go ‘bam!’ (except for a few that will make a squealing sound, thanks to the hamsters attached), and instead of shooting up vertically, they will go sideways, to signify Greater Bay Area integration opportunities. 

The tourism industry is not impressed, pointing out that people might get bored of the new attraction. (I once went to an international fireworks competition in Macau that went on for over three hours. It got very tedious.)

From an esteemed commenter

Fireworks cause extensive air pollution in a short amount of time, leaving metal particles, dangerous toxins, harmful chemicals, and smoke in the air for days.

Stephen Roach responds to criticism of his FT article saying Hong Kong is over…

I cited three reasons for saying Hong Kong’s glory days may now be over: a distinct loss of its high degree of political autonomy in the aftermath of the massive demonstrations of 2019-20; a weakening of Hong Kong’s economic underpinnings as a result of a protracted malaise in the mainland Chinese economy; and a squeeze from US-centric friendshoring that has forced Hong Kong’s East Asian trading partners to choose sides in coping with the crossfire of the Sino-American conflict.

While the pushback has been fast and furious, few have taken serious issue with the three points raised above. Instead, many have rested their case on Hong Kong’s long-standing resilience, a seemingly innate capacity for the city to reinvent itself in the face of near existential threats.

…Resilience this time will require a new-found political and economic policy autonomy that seems highly unlikely.

Xinhua joins in

…saying some Western news outlets and “so-called experts” had spread false claims to “achieve their sinister plot of using Hong Kong to contain China”.

“Their true objective is to shake people’s confidence, disrupt the economic development and social stability of Hong Kong, as well as hinder the implementation of Article 23 and Hong Kong’s progress from stability to prosperity,” Xinhua said, referring to home-grown security legislation the city must pass under the Basic Law, its mini-constitution.

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Your tax dollars at work – in the courts

The Glory to Hong Kong injunction appeal continues, with government lawyers arguing that 32 YouTube links should be declared ‘illegal’…

Representing the secretary for justice, [Benjamin] Yu argued that the videos were seditious and secessionist in nature and carried the intent to distort China’s national anthem. If these videos continued to be disseminated, it would endanger national security, he said.

…The song … amounted to a “weapon” for people to threaten the authorities, [government lawyers] said.

As a practical matter – anyone can copy these videos and load them back onto YouTube (or any site) in five minutes, thus creating new links faster than NatSec sleuths can track them down. Fortunately for national security, the PRC’s weapons include nuclear missiles, aircraft carriers and a large army and air force, which should be enough to counter a three-minute piece of music.

And do the vids ‘carry the intent to distort’ China’s national anthem? They don’t feature March of the Volunteers, let alone attempt to distort it.

(Also in the courts – the government just can’t let go in fighting rulings that support basic rights for gay couples.)

Some patriots are having problems with potential constraints on freedom of expression arising from Article 23, or with each other. There was Paul Tse. Then newish FTU legislator Joephy Chan criticized DAB veteran Tsang Yok-sing for voicing reservations about the proposed new NatSec law’s sedition measures. And now…

A pro-Beijing activist has petitioned a visiting top Chinese official, urging for clarification on “soft resistance” and the “bottom line” of the national security law, and saying that a lack of certainty around what was allowed had left Hongkongers afraid to speak up.

“…we dare not speak up. We do not feel safe.”

Chan Ching-sum gained attention around 2014-19 as a firebrand pro-Beijing housewife and scourge of pan-dems. She was, of course, free to voice her opinions then. 

There have always been figures in the pro-Beijing camp who were more outspoken than others, but with the pan-dems jailed or otherwise silenced, their comments are more noticeable. And there’s a new breed of ultra-loyalists waiting to blast them.

From RFA, Ching Cheong on the background to Article 23…

Why has the Article 23 legislation been described as the “sword of Damocles” over Hong Kongers’ heads? 

Because essentially this law is the culmination of a long-running attempt to graft the ideology, political ideas, and behavioral patterns of the Chinese Communist Party’s totalitarian system onto a pro-Western capitalist society that respects ​​universal values.

…this [subversion] provision reveals the central government’s extreme distrust of the Hong Kong government and its people, not to mention its own lack of self-confidence.

There’s some nostalgia for the old folks…

Hong Kong’s own Secretary for Security Regina Ip sneered at calls for universal suffrage, with the comment: “Hitler was elected under one person, one vote.”

Asked about whether Hong Kongers would get a chance to comment on the draft law, she sneered: “So I have to listen to what the aunty who washes the dishes in McDonalds has to say?”

Ip’s domineering attitude was one of the key reasons for the failure of the 2003 legislation.

The full China Media Project interview with CUHK journalism professor Francis Lee.

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More injunction woes

Hong Kong Court of Appeal ‘voices concerns over a lack of clarity and certainty’ about the government’s second attempt to get an injunction to ban and curb distribution – especially on YouTube – of protest anthem Glory to Hong Kong

Last year’s application at the Court of First Instance failed after Mr Justice Anthony Chan Kin-keung found the intended ban would run counter to established criminal justice procedures and would not achieve what the government wanted – to compel internet giant Google to censor the song.

In its appeal, the justice department has argued that the lower court failed to offer “the greatest weight and deference” to Chief Executive John Lee Ka-chiu, who pronounced the song’s circulation a threat to national security in a move that was binding on the judiciary.

…[Government counsel Benjamin Yu] urged the court to fulfil its “positive duty” under the Beijing-imposed national security law to prevent and suppress acts endangering national security by doing as the executive branch said.

But the bench remained unconvinced, as judges highlighted various parts of the draft order which they found to be ambiguous and had failed to meet the required legal standards.

High Court Chief Judge Jeremy Poon Shiu-chor pointed to the exemption clause and stressed the public could not be left to speculate what acts might be safe.

“Is it sufficient or adequate enough for the purpose of certainty and informing a reader as to what he should or should not do? Lawful activity or lawful act does not add anything further, because without an injunction you can do whatever you want,” he said.

The senior counsel conceded that his team had failed to come up with other reasonable excuses…

Some questions. Are courts supposed to show ‘greatest weight and deference’ toward the Chief Executive? Yu’s remark about the court’s ‘positive duty’ suggests that he thinks they should. The judges are not questioning whether a short piece of music can ‘endanger national security’ – but they are objecting to the vague and weak phrasing about exemptions. 

Also, will the new Article 23 NatSec Law – or other measures – enable the government in future to get its way more readily in the higher courts (following the recent CFA case on the supposed organizers of the August 18, 2019 demonstration)? Will ramped-up anti-sedition laws in the forthcoming bill make an injunction like this redundant?

And, assuming the government eventually succeeds in getting an injunction, what action does it expect Google to take, and what will the authorities do if Google does not comply? 

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A joke to end the week…

Bloomberg story (quoting a Bloomberg Intelligence report) declares that Singapore has won the race to be Asia’s international business hub…

The city state hosted regional headquarters for 4,200 multinational firms in 2023, extending its lead and dwarfing the 1,336 found in Hong Kong…

“Hong Kong has lost the race to be international business’ preferred choice for Asia headquarters, as more global and even Chinese companies choose Singapore because of its better relations with the West, broader talent pool, diversified economy, and tax incentives,” according to the 50-page report. “Companies may rank Singapore higher in terms of political stability and freedom amid elevated geopolitical risks in the region.”

Hong Kong codified its position as China’s finance center by containing political protests and adhering to the country’s Covid-Zero policy during the pandemic, while Singapore highlighted its independence and emerged as the preferred site for international business offices, the report said.

The Standard adds

A list of companies with regional headquarters in Singapore reads like a Who’s Who of multinationals – FedEx, Microsoft, Alphabet’s Google, Mead Johnson, Rolls-Royce and General Motors. Companies that operate in more sensitive environments – such as TikTok and the online fashion giant Shein – have business hubs in the Southeast Asian city.

Chinese companies like electric-vehicle maker Nio are also established in the city-state, while tech companies Alibaba and Huawei are expanding operations there.

The corporate critical mass and more diversified economy could help Singapore attract even more global business than Hong Kong for the next five years, the report said.

HK Security Secretary Chris Tang thinks two years in prison for publishing sheep cartoons is too lenient, so the Article 23 NatSec Law should introduce tougher penalties when it addresses sedition. Presumably the same applies to wearing the wrong T-shirt. 

See also an extract from a forthcoming China Media Project interview with CUHK’s Francis Lee of the CUHK School of Journalism…

It’s not easy for journalists to run afoul of the NSL as long as you stay away from Hong Kong independence and foreign funding, and follow a few other simple rules. That requires a bit of self-censorship, but at least there are ways for you to stay away from that. But sedition is different because anything that arouses hatred against the government can potentially be seditious. And basically, that means that whenever the news media tries to perform its watchdog role, it’s potentially in the gray area already. Of course, the sentence for sedition is at most two years in prison, which is nothing compared to NSL. But at the same time, it’s much easier for the news media to run afoul of.

…I think the legislation more journalists will be worrying about — or have been worrying about — deals with “fake news laws,” which the government has said they are studying but which we still know very little about. [State secrets] might require you to, again, to self-censor on a number of topics, but you can still avoid it. But disinformation, depending on how it’s defined, could be much harder to avoid.

From HKFP, Not One Less Coffee closing down after repeated inspections by inspectors from (take a deep breath) the Food and Environmental Hygiene Dept, the Fire Services Dept, the Agriculture, Fisheries and Conservation Dept, the Inland Revenue Dept, the Police force, the Labour Dept and the Buildings Dept.

Some other reading and viewing for the weekend…

CMP on how the Hugo Awards for science fiction seem to have been co-opted by China.

The winner of 2023’s Best Novella category was the hitherto unknown Chinese author Hai Ya (海漄), whose quick read, The Space-Time Painter (時空畫師), revolves around a tough-as-nails cop who investigates spooky reports of a ghost in Beijing’s Palace Museum, known worldwide as the Forbidden City. The cop traces the spectral source to a real-life treasure of the museum — an ancient scroll painting by Song dynasty artist Wang Ximeng (王希孟), whose ghost is trying to make contact with contemporary China.

…Readers point to clunky writing and clichéd plot points, expressing disbelief that the work is a prize-winner. “Could it be that the award was forcibly given because the home turf is in China,” one user posted. “With so many better works than this one, how did they pick something so unappealing?”

In a commentary on the video site Bilibili, one online influencer said Hai Ya’s novella had the quality of a decent topical essay by a high school student. The work was not meant to satisfy Chinese readers, he said, but “to swipe an award from the English-speaking world.”

From the Guardian – how China is the second most expensive place in the world to raise children.

A good YouTube interview with David Rennie of The Economist about Chinese people’s loss of faith in their government following the end of Covid and the decline of the property market, and Beijing’s efforts to increase national resilience in a hostile world.

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Some of our 20-somethings are missing

The latest population figures include a rebound in Mainlanders coming over on one-way permits – presumably there’s a backlog from Covid. These are family-reunion cases and are probably mostly middle-aged and not especially well educated. There would be other Mainland migrants coming in on the various talent-attracting visa schemes. 

The breakdown for particular, younger age groups reflect something more drastic. The trends for the numbers for younger people could in theory be skewed by changing patterns in, say, parents sending kids overseas (or not) for school. The drop in 0-9-year-olds could partly be caused by couples putting off having babies during the protests and Covid. But what – apart from emigration – could possibly cause a fall in the population of 20-29-year-olds by well over 20% since mid-2017?   

Not often that I go back and read an angry government press release, but I just checked to see if anyone has noticed – or corrected – the one in awful English from yesterday. And it’s still there

…the joint statement by Hong Kong Watch and other organisations smacked of deliberate smears and was no further from the truth … it is fully justified for the Hong Kong SAR to put forward measures that could be considered … such practice interfered through intimidation in the affairs of Hong Kong that are purely China’s internal affairs, which not only violated the international law and basic norms that govern international relations, but also allegedly constituted the offence of “collusion with a foreign country or with external elements to endanger national security”…

Maybe native speakers, as non-citizens, are barred from working on NatSec-type press statements?

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Official press releases not what they used to be

HK Watch issues a joint statement with dozens of other NGOs asking the Hong Kong government to ensure that the Article 23 NatSec law complies with human rights, and – among other things – urging other governments to sanction Hong Kong officials. (Site blocked in Hong Kong.)

The English version of the government’s response portrays the statement itself as justification for a new NatSec law. Perhaps what’s most striking is not just that it’s overwrought, but that it’s so poorly written/translated – giving it a weirdly semi-sinister feel (allegedly).…

The Hong Kong SAR Government said the joint statement by Hong Kong Watch and other organisations smacked of deliberate smears and was no further from the truth, adding that it must refute them and set the record straight.

…It is fully justified for the Hong Kong SAR to put forward measures that could be considered, having regard to the relevant laws of foreign countries as well as the shortcomings as revealed from experiences gained from handling cases concerning offence endangering national security.

…Regarding the joint statement’s appeal to foreign chambers of commerce and international companies based in Hong Kong to re-evaluate risks, as well as its request for them to impose so-called “sanctions” on officials handling the Basic Law Article 23 legislation, the Hong Kong SAR Government said it totally disrespected the constitutional duty of the Hong Kong SAR and blatantly trampled on the city’s legislative process.

The Hong Kong SAR Government pointed out that such practice interfered through intimidation in the affairs of Hong Kong that are purely China’s internal affairs, which not only violated the international law and basic norms that govern international relations, but also allegedly constituted the offence of “collusion with a foreign country or with external elements to endanger national security” under Article 29 of the National Security Law.

What the joint statement advocated squarely reflected the ongoing national security threats which anti-China and destabilising forces pose, the Hong Kong SAR Government added. 

Presumably, the English-language audience is an afterthought. As perhaps is that of the traditional-characters Chinese version.

CE John Lee says the consultation exercise…

“…gives me the impression that [respondents] are in support of the overall goal of enacting Article 23 to ensure that we protect ourselves when people want to cause damage to us,” he said.

“A lot of the opinions subscribe to the idea that this is a piece of legislation that will ensure when other people want to break into our house, cause harm or damage to us, the Article 23 enactment should be able to protect them from all these threats, attacks, break-ins and harm.”

The ‘door and lock’ analogy also appears in the official response to the Nikkei Asia piece about the shortage of judges. ‘Lines to take’ were never a strong point.

On other matters…

Twitter thread by Holmes Chan on going to see a movie with no title – Beijing Bastards at M+…

The film’s title was blacked out on brochures by hand. Outside House 1, there was no indication what movie I was going to see … Opening credits list screenwriters, producers, director… but no title.

Also on Twitter, a graphic showing the top consumers of various types of meat (including seafood). Hong Kong is top in pork – with each inhabitant apparently getting through over 2lb of the stuff per week. This puts the city in top place for overall meat consumption, at 8lb a week – a third more than the US. Further down, Macau comes top in seafood consumption. After feeling slightly ill for a moment, it occurs to me that tourism is probably pushing up the per-capita figures. Though that wouldn’t be the case with the sheep/goat stats for Mongolia. Maybe it’s just waste.

From China File – six experts’ expectations for the Chinese economy. Most foresee problems in boosting household consumption and ramping up tech/industrial capacity without provoking protectionism overseas. The essential one is Anne Stevenson-Yang…

After the 2008 Global Financial Crisis, fearing a bank contagion and declining exports, leaders put the investment model on steroids. Under instruction from Beijing, banks threw caution to the winds. In five short years, Chinese banks added loans worth the entire value of the U.S. banking system—which had taken 150 years to create, in a country with a much larger economy. Those loans went to industrial schemes and much more infrastructure than the country actually could justify, but very largely, to real estate.

…The illusion of property values that would rise forever was burst in 2021, and since then, China’s economy has weakened. What to do? The whole Chinese economy has kited atop property speculation, and no official dared allow it to stop. Now, banks say that 70 percent of assets are invested in the property sector. Bloomberg Economics calculates that a 5 percent fall in housing prices would equate a loss of 19 trillion renminbi (U.S.$2.7 trillion) in wealth.

…To revive the old model and save the defaulting assets, the government would need to hose trillions on the economy. But all that cash would break the renminbi’s peg to the U.S. dollar, and that is a consequence the Chinese Communist Party cannot accept: It would mean massive capital flight, an angry populace, and the end of the dream of great wealth.

So, China’s leaders pace like caged tigers, lunging at half measures like new bond issues and a “stock market stabilization fund,” as if these efforts might bring back the glory days. But half measures will not work.

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Dragon slayers’ plan: ransack shops, push officers in closer proximity to bombs

AFP reports that the first trial under new anti-terrorism laws is to take place in Hong Kong. The majority of the 14 defendants face up to life imprisonment…

Members of the radical protest group known as “Dragon Slayers” were rounded up after a long investigation into an alleged bomb plot that was to be put into action during an International Human Rights Day rally on December 10, 2019.

…The “Dragon Slayers” would ransack shops to attract authorities while then-18-year-old member David Su would push officers in closer proximity to the bombs, the prosecution said.

“The group planned to take the police guns for their own use after the officers were killed,” [prosecutor Edward] Lau said.

…Other than the woman admitted late in the trial, all of the accused have been kept behind bars for more than 1,000 days.

Will they be getting the Jimmy Lai treatment? Vid of the road closures and police escort for his trip back from court to jail.

In case you missed it: the PRC – a nuclear power with the world’s largest navy – narrowly escapes the threat posed by a 78-year-old with terminal cancer, who gets nine months in prison for ‘carrying the purpose of overthrowing Beijing’ via a plan to protest with a home-made cardboard coffin.

And the trial of HK Alliance members accused of planning to ‘subvert state power’ (hold a Tiananmen vigil) will not start until November at the earliest.

Which brings us to a Nikkei report on Hong Kong’s shortage of judges…

Three out of six potential High Court judges put forward by the Judicial Officers Recommendation Commission (JORC) in its last round of suggestions in 2021 were never appointed by the city’s leader. One candidate pulled out of the process due to concerns over sweeping changes in the legal landscape made by the national security law that Beijing imposed in mid-2020, while another failed to pass a background check…

…Amid the shortfall of appointments, national security cases like Lai’s have been pushed back repeatedly and a record number of defendants are behind bars awaiting trial.

Only 161 of 211 positions within the judiciary are filled, with the highest ratio — 36% — of vacancies at the High Court judge level…

…Withdrawing an application by a nominee is unheard of, according to legal professionals, due to the rigorous and lengthy interview process. However, senior lawyers who spoke to Nikkei Asia on condition of anonymity said the ripple effects of the security law have made the position of a judge less appealing.

Since the enactment of the law, judges must pledge to uphold national security and to protect the “overall interests” of Hong Kong. The oath also spells out that “any acts that undermine the order of the political structure led by the chief executive” are a violation.

…Melissa Pang, the former president of the law society, told a closed-door panel in November that the U.S. [sanctions] bill would make it even more difficult for the judiciary to attract talent, according to lawyers who attended. Judges in Hong Kong are unable to return to private practice once they resign.

Experts say the prestige that once came with being a judge has been overshadowed by the security law. “Who would want to put themselves out there and risk their reputation?” another senior lawyer said.

This has left cases piling up and defendants stuck in jail. The chief justice said in 2022 that a ruling must be handed down up to nine months after the conclusion of a hearing. Hong Kong had 3,304 people in remand as of September 2023, according to the Correctional Services Department. Put another way, over one-third of people in prison were defendants.

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A quick public inquiry fantasy

HKFP op-ed says that the Article 23 consultation document uses a slanted version of the 2019 protests to help justify the additional NatSec law…

The official view is generally disseminated via editorials, press releases, official documents, press conferences, trial prosecutions, and public speeches. Authorities have refused to hold an independent inquiry into the events of 2019. Such an inquiry would include the government’s role in triggering the protests.

…Endlessly repeated, the government characterises the events as “black-clad violence,” “colour revolution,” and “insurrection.”

Even “soft resistance” makes an appearance, still undefined. These characterisations appear to be a mix of police and pro-establishment political elite perceptions, led by a Chinese Communist Party verdict, delivered without a publicly available investigation. 

…Pro-Beijing scholar Lau Siu-kai has argued that the 2019 anti-government protests amounted to an unsuccessful colour revolution…

The article calls for a public enquiry into the causes of the discontent, as under the colonial government after the 1968 unrest. Such soul-searching is obviously not on the agenda. If it was – in a parallel universe – there would probably be broad acceptance among Mainland officials and the local population that the Beijing-picked post-1997 administrations massively failed to meet public expectations (housing, influxes of Mainland immigrants/tourists/white-elephant projects, extradition bill, refusal to listen). Protests in 2014-2019, culminating in the 2019 District Council elections, reflect the fact that the majority of Hongkongers thought the best solution was a more representative system of government. 

Beijing, on the other hand, believed the answer was a more authoritarian one. Implementation of Article 23 is the next step in that process.

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A few things…

More angst about tourism. The SCMP reports that some 470,000 Mainlanders (the only tourists who matter) visited Hong Kong in the first three days of the lunar new year holiday. They were clogging up the few parts of Central and Wanchai I ventured out to. But that’s still not good enough for the ‘tourism industry’, who complain that, rather than spend big bucks on overpriced garbage, the beastly ingrates… 

…arrive in the city early in the morning and head back to the mainland that same night.

“They would come and walk around the city instead of really spending money here,” [industry person Dicky Yip] said.

On mainland social media platforms Xiaohongshu, terms such as “Hong Kong in a Day” and “Tourist Special Forces ” have gone viral, with posts containing the former amassing more than 54 million views.

Popular posts contain detailed maps and itineraries, with users swapping suggestions on how to see the city’s key attractions in under 24 hours while spending as little as 300 yuan (US$42). Suggestions include saving on transport by taking the tram or eating at local cha chaan teng.

…[Alice] Zhang, a recent graduate who works in marketing, was visiting the city for the first time and had decided to simply walk around to see “scenery that was different from the mainland”, she said.

But even though she had only arrived at around 10am, she would be returning to Shenzhen just 12 hours later, she added.

“One reason is because the hotels are so expensive here,” she said. “And I don’t think there is much else to see to stay longer.”

And of course she’s right. Hong Kong is trying desperately to boost the sheer number of visitors, assuming they will all be the old sort buying/smuggling imported luxury products. Instead, much of the influx comprises young people with limited funds who must have their photo taken posing at a few dozen Weibo-popularized spots. Maybe they will become more adventurous one day? The point is that, as someone who hitched across Europe, North Africa and the US in his teens, I have no problem with kids who don’t do anything for the local economy when they travel. The Hong Kong tourism lobby and bureaucrats, on the other hand, only want visitors who will prop up high rents.

Is Hong Kong Still Worth Visiting? A recent video on Hong Kong from travel guide producer Attache. The producers seem nervous. Not political enough for analysis fans – 2019 isn’t really even mentioned (they had a hard time getting people to talk). And probably too superficial for the hardcore foodies (shots of dai pai dongs). But a genuine tribute to the city from a former resident. “Even though there is something truly heartbreaking going on here, this place is by no means dead.” Pretty good editing, too. 

The Hong Kong police are installing 2,000 CCTV cameras on the streets in the coming year. They already say that’s not enough, and they ‘haven’t ruled out’ facial detection tech. 

By way of reassurance – maybe – Minxin Pei in Foreign Affairs argues that China’s internal security surveillance system relies on informants as much as technology, and therefore cannot be exported elsewhere. Lots of interesting detail on the system…

Beijing’s surveillance state is not only a technological feat. It also relies on a highly labor-intensive organization. Over the past eight decades, the CCP has constructed a vast network of millions of informers and spies whose often unpaid work has been critical to the regime’s survival.

…To avoid creating a rival to its own power, the CCP distributes surveillance tasks to different units in the security forces and other state-affiliated actors. This organizational arrangement has two distinct advantages. It prevents the formation of a powerful secret police that can control the upward flow of information and become a threat to the party. And it enables the party to benefit from the involvement of state-owned enterprises, universities, and other entities that channel information to the government, without increasing the size of the secret police.

…citizens can spy on their colleagues or neighbors, and because their participation is secured by coercion or enticement, it does not cost much to maintain them. Data disclosed by 30 local governments show that between 0.73 percent and 1.1 percent of China’s population—perhaps as many as 15 million people—serve as informants. 

… economic problems will make it harder for Beijing to handle the spiraling costs of maintaining and upgrading its high-tech surveillance equipment. This may be a particular problem for the Skynet and Sharp Eyes projects, which are funded by debt-ridden local governments and are therefore likely to experience mounting challenges in the lean years ahead.

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Leisurely return after long weekend 

Evil foreign forces take advantage of China’s holiday to engineer another outbreak of ‘smearing’…

In The Atlantic, Timothy McLaughlin laments the local administration’s prioritization of NatSec…

… [CE John] Lee and other city leaders ultimately answer to Beijing, and they are apparently unwilling to make the best of the few remaining elements of the city’s exceptional status. Instead, they are feverishly obsessed with security and with integrating Hong Kong into the mainland. For them, governing appears mainly to consist of mimicking Beijing or trying to predict what it wants from them.

“The biggest obstacle to Hong Kong’s future development is its current political elite,” Wang Xiangwei, an associate professor of practice at Hong Kong Baptist University and a former editor in chief of the South China Morning Post, said on an online talk show last month. Lawmakers should proactively pitch Beijing on their ideas for administering the city, Wang said, and demonstrate that they are capable of taking charge. Instead, he said, “they are trying to guess Beijing’s intentions.”

…Neither lawmakers nor the government is keen to take ownership of Hong Kong’s many problems. In the past, pro-Beijing lawmakers and members of the government blamed the prodemocracy camp for whatever ills befell the city, no matter how scant or nonexistent the evidence. Now the government and lawmakers find themselves with a dilemma of their own making: The old scapegoats are in jail, exiled, or otherwise barred from meaningful political participation, so officials need new culprits to pin their underperformance on.

More often than not, they point to the United States, the West more broadly, or some amalgamation of shadowy outside forces working to destabilize Hong Kong. And they do so by issuing screeds and condemnations whose tone and vocabulary are jarringly incongruous with the government’s past reputation for efficient civil service and lingering British formality. When the U.S. credit-rating agency Moody’s issued a negative outlook for Hong Kong and Macau in December, the city’s No. 2 official went on the radio to claim that the decision was part of a Western-led plot to smear the city as well as the mainland. “Its sole purpose is to use Hong Kong as a means of suppressing the country’s development,” he said. “This is very obvious.”

We don’t know how much the local government’s obsession with NatSec pre-empts rather than follows instructions from Beijing’s officials. In the Mainland, there is a long tradition of overzealous enforcement of orders from Beijing by lower-level bureaucrats afraid of being punished for not going far enough. Perhaps both Mainland officials posted in the city and Hong Kong’s own ministers – some with a background in the disciplined services – feel similar pressure.

In the FT, Stephen Roach of Morgan Stanley fame – a longstanding China bull – reluctantly concludes as a stock investor that Hong Kong is finished….

Hong Kong’s demise reflects the confluence of three factors. First, domestic politics. For the first 20 years after the handover, its political scene was relatively stable. China was a passive Big Brother. The wheels came off in 2019-20 when, under Carrie Lam, the Hong Kong leadership made the mistake of proposing an extradition arrangement with China that sparked massive pro-democracy demonstrations. China’s response, clamping down through the imposition of a new Beijing-centric national security law, shredded any remaining semblance of local political autonomy. The 50-year transition period to full takeover by the People’s Republic of China had been effectively cut in half.

…It all worked out brilliantly, for longer than anyone expected. And now it’s over.

See also an Atlantic Council report on China’s stock market decline…

It is worth recalling that the first shot in the campaign to rein in online companies was fired at the stock market in 2020, when regulators sank Alibaba Group’s plans to launch an IPO for its Ant Financial subsidiary after Alibaba founder Jack Ma publicly criticized regulators. What followed was a campaign under the banner of Xi’s 2021 call for “common prosperity”—a slogan associated with wealth redistribution that ultimately was directed at various unwelcome capitalist practices. The campaign was muted after it was seen to be undermining business confidence, but the latest broadsides from Beijing may prove unsettling to the markets.

Foreign investors tend to avoid commenting on Chinese political developments. But Lazard Asset Management offered a glimpse of their thinking last year when it wrote, “Factoring political risk into investment decisions will likely also be critical in the months and years ahead, given the scale of uncertainties—including the potential consequences of Common Prosperity.”

And a major US law firm is isolating its Hong Kong operations from its international database – reportedly to prevent local authorities from accessing client information…

…Latham & Watkins is cutting off automatic access to its international databases for its Hong Kong-based lawyers, in a sign of how Beijing’s closer control of the territory is forcing global firms to rethink the way they operate.

…Latham & Watkins is now “treating Hong Kong as the same as mainland China”, one of the people said, as US firms grow wary over Beijing’s closer control of the territory. The law firm declined to comment.

…Latham & Watkins is also separating its Hong Kong office database from the rest of Asia — its offices in Seoul, Singapore and Tokyo — to create a new “Greater China” database shared with the Beijing office, the people said.

…“What it means is if you have . . . raids in Hong Kong, law enforcement [can only] access Hong Kong and China databases,” the second person said.

Officially, of course, rule of law and a free flow of information remain 100% intact. In private, however, some establishment figures might concede that things aren’t exactly what they were – but will be adamant that jury-less NatSec courts, the closure of Apple Daily, the jailing of people for books and T-shirts and so on is all about pan-dems and won’t affect bankers, lawyers, accountants and business folk. The problem is that once the pre-2020 line is crossed, there is no longer an absolute guarantee about who it might happen to. International consulting companies in the Mainland have been raided for doing due-diligence research/suspected ’espionage’; why not here? (Constant talk by Hong Kong officials of evil foreign forces and ‘black hands’ is hardly encouraging.)

Even ordinary people might feel some reduced certainty. For example, pre-2020, you could be 100% confident of accessing your MPF retirement funds provided you met certain well-known conditions to do with age, or work or residency status  Then, out of thin air, the authorities barred emigrants using BNO passports from getting their funds. That’s a precedent. Pre-2020, you could be positive that you wouldn’t be arrested for your T-shirt.

On a less gloomy topic, HKFP looks at Hongkongers in Tamsui. I was in the Taipei suburb just a couple of months ago and can confirm that it’s a pleasant area, complete with some excellent Vietnamese food. (Minor quibble: it’s ‘remote’ in the same way Shatin is, being a half-hour metro ride from town – though it does have a volcano/magma dome underneath it.)

And a video: Visit Hong Kong – you probably won’t be arrested.

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