Big Lychee, Various Sectors

The Hong Kong government replaces two senior officials. One of them – the tourism, pandas and mega-events minister Kevin Yeung – recently complained bitterly when an RTHK reporter asked him a pointed question, prompting the station to remind its reporters to adopt more positive angles in future. He is replaced by civil servant Rosanna Law. The other is transport minister Lam Sai-hung. (More on their failings here.) CE John Lee damns the outgoing pair with some faint praise…

“I really think that they have contributed their best [and have given] their best efforts for Hong Kong. So I thank them sincerely and I hope that they will have a good life, happy life after their departure,” Lee said.

“But I want to do more in these two and a half years. I want to get the people who will fit my criteria in building more results and ensuring the community understand and appreciate government policies. And I think I’ve got the best choices,” the CE added.

And to think Lee was lauding Kev for his noble work on monkey deaths just a few weeks ago.

Given the pay scale for these jobs (some HK$360,000 a month), you might expect Ms Law to show some initiative and argue against getting obsessed over panda bears and tourist numbers. But no…

…Law said top of her agenda would be to prepare for the introduction of the pandas to the public at Ocean Park, ensuring the smooth implementation of the multi-entry visa scheme for Shenzhen residents and preparing for next year’s National Games.

Joel Chan points out…

As of today, Hong Kong will need to average at least 189,000 daily visitors to reach the Tourism Board’s goal of 46 million visitors for 2024

Why do they set a target? (What do you call 200 tourists suspended in the air on the Wheel of Death? A start. Maybe not.)

Cathay Pacific removes an episode of cartoon Family Guy because of a visual reference to Tank Man… 

A complaint was raised against the flagship carrier on social media, in light of the city’s national security laws: “We emphasise that the content of the programme does not represent Cathay Pacific’s standpoint,” a spokesperson told HKFP on Thursday, “and have immediately arranged to have the programme removed as soon as possible.”

…“We have promptly informed the service provider of the seriousness of the incident, and have instructed them to thoroughly investigate the cause and strengthen oversight to ensure that similar incidents do not occur in the future.”

The absurdity is the point: any company that can’t afford to displease the powers that be must publicly humiliate itself as an act of contrition. (Republican congressmen kowtowing to Trump to survive the next primary election will know the feeling.) In Cathay’s case, there’s a lot riding on it. The company has a major brand name, aircraft, skilled staff, slots and route licences, which Mainland carriers would be happy to get their hands on.

Chart of the day, via David Webb: an all-time high of 40% of prisoners in Hong Kong are on remand – 3,790 people presumed guilty before trial.

Some weekend reading…

A review of The Troublemaker: How Jimmy Lai Became a Billionaire, Hong Kong’s Greatest Dissident, and China’s Most Feared Critic by Mark L. Clifford…

Lai is a man who thoroughly confounds the CCP with its reductionist and distorted view of a corruptible human nature. He sticks to transcendent principles and cannot be bought off or intimidated. For Beijing, nothing evokes more terror than the embodiment of its lies exposed by such men. Lai may remain imprisoned but his moral courage is forever a part of Hong Kong’s history.

ASPI Strategist on China’s replacement of Mongolian with ‘Northern frontier’ culture…

Chinese authorities have launched a campaign to change the term that people use to refer to Mongolian culture and to the cultural and historical heritage of the Inner Mongolia Autonomous Region (IMAR) in a move aimed at eroding Mongolian identity and sense of homeland.

The Chinese Communist Party’s new official term, bei jiang wenhua, meaning ‘northern frontier culture’, eliminates reference to Mongolians, one of China’s 56 officially recognised ethnic groups. Since July 2023, Inner Mongolia state media articles, official websites, party statements, party-organised children’s activities, and official social media posts have widely promoted the phrase. The party’s regional propaganda office has also founded an academic journal dedicated to ‘northern frontier culture’, and Inner Mongolia’s premier state-run academic institute has opened a ‘northern frontier’ research centre.

The adoption of the term appears to be part of the CCP’s growing campaign to weaken Mongolian ethnic identity and instead push a Han-centric national identity through the elimination of Mongolian language education and other measures.

…In October 2023, Zheng Chengyan, vice director of the Inner Mongolia Museum, wrote in an essay posted to the Inner Mongolia culture and tourism department website that ‘northern frontier culture as a regional culture has been jointly created by all ethnic groups in the northern frontier region since ancient times and is an important part of Chinese culture’.

One small problem: an actual independent Republic of Mongolia, with cultural identity intact, exists right next door

Chinese academic Wang Wen of the Chongyang Institute for Financial Studies at Renmin University recommends lowering barriers to foreign information and contacts as a way to boost China’s confidence…

However, after spending a few more days attending such forums or engaging in these exchanges abroad, a different feeling gradually emerges: a growing sense of comfort and enrichment. Cutting-edge information, hot topics, fierce discussions and brainstorming sessions abound, all without excessive formalities, empty phrases or rigid expressions. Reflecting on the relaxed pace of those “laid-back” foreign cities—like Paris, Berlin and Istanbul, which I recently visited—one notices a refreshing feeling of ease and naturalness all around: a cup of coffee, a daily newspaper, a group of friends, a broad smile and an unhurried afternoon. 

…Yet one can’t quite shake the feeling that Chinese scholars still tend to present their analyses as framed within official discourse, displaying not only a lack of basic adaptation of political ideas to academia, but also underscoring the intellectual poverty of Chinese academic theory in recent years. In contrast, international academia is continually introducing fresh concepts and insights. It’s hard to imagine how American scholars would maintain their dominant position in global discourse if they simply regurgitated White House policy or repeated their president’s remarks at international forums.

…Even more concerning is the increasingly severe blockage of information flows between China and the rest of the world. In the 2023 statistics on the global internet language share, Chinese ranked only 13th, below English, Spanish, German, Japanese, French, Russian, Portuguese, Italian, Dutch, Turkish, Polish and Persian. Moreover, historical data shows a decline in the global share of Chinese-language webpages in recent years, dropping from 4.3% in 2013 to just 1.2% currently. In fact, between 2021 and 2022, the Chinese language lagged behind even Vietnamese in this regard.

…After drinking deeply from the waters of foreign discourse, a majority of Chinese citizens has developed basic immunity against the infiltration of Western ideologies. They are now able to confront the storms of international public opinion with “cultural confidence” [文化自信]. They are now more and more capable of filtering out those absurd, tedious and occasionally malicious talking points, and are far more willing to retaliate of their own accord against propaganda attacks by foreign anti-China forces. 

This is an ad-free place, but I want to push an excellent service provider. If you want your knives sharpened: Blade N Beans, 1003 Harvest Building, 29-35 Wing Kut Street, Central… 

Now I have to get back to watching Olivia Squizzle. She will also name your children.

The SCMP reports experts’ suggestions for fixing the government’s budget deficit…

The Hong Kong government could reduce land sale prices, improve the efficiency of 167,000 civil servants and temporarily freeze their pay as possible solutions to ease the HK$100 billion (US$12.85 billion) deficit, experts have said, while admitting there are no simple fixes.

…city leader John Lee Ka-chiu said on Tuesday that “the government will start by cutting expenditure and increasing revenues”.

…[Economist] Simon Lee said Hong Kong has been too reliant on land sales and stamp duty for its income and needed to diversify its income sources in the long run by including levies such as sales tax.

Officials would be horrified at the idea of lowering land prices to stimulate sales and thus at least some revenues. Their assumption is: cling on to the land for long enough, and apartments must eventually come back to HK$20,000-plus per square foot, as God Himself ordained and carved in stone –  and the premiums will come flooding in.

Even more unacceptable would be the idea of cutting expenditure via a ‘temporary’ pay freeze for civil servants (assuming that ‘improved efficiency’ in practice means layoffs, which is a non-starter). If public-sector remuneration is 50% above that of the real world (and that’s a modest guess), it would take at least a decade for private-sector pay to catch up. Just admitting that such a gap exists would be unthinkable. Plus there’s the morale/loyalty angle.

Other potential spending cuts (assuming wasteful infrastructure projects are shelved, and big items like health, welfare and education remain intact) would only nibble at the deficit. 

That leaves a consumption tax – say 5% on all sales at shops, restaurants, utilities, etc. On the one hand, only the low-paid and poor, who have to spend most of their income on essentials, would really feel any pain. People on civil service salaries will barely notice a difference. The bad news is that sales taxes might in theory put off tourists, who as we all know are the most important and precious beings in existence.

Higher profits and salaries taxes would be more equitable, but now we’re getting blasphemous.

Ultimately, some sort of smaller government/higher taxes combination seems unavoidable – unless a miracle brings back the 1990s-2010s boom era.

In the background: gloomy prospects for the workshop of the world…

In a censored speech, economist Gao Shanwen says Beijing’s GDP and unemployment figures are (basically) false…

He said that if models from other country’s with burst property bubbles were applied to China, the country’s economy should have contracted by at least 2%, more likely by 3-4% in each of the last three years, though official figures have only reported a slowdown of 0.2 percentage points.

“The GDP growth rate has been overestimated by 3 percentage points each year, and by 10 percentage points cumulatively, which corresponds to the loss of 47 million employed people in urban areas,” Gao told the conference in the speech, a copy of which was posted by the U.S.-based China Digital Times website.

The WSJ looks at how developing countries – many supposedly friends of Beijing – are putting up barriers against Chinese manufactured goods…

A deluge of cheap Chinese goods washing over the developing world is jacking up tensions between China and the Global South, complicating Beijing’s plans to build alliances as it confronts escalating trade tensions with the U.S.  

With President-elect Donald Trump saying he plans to significantly increase tariffs on China, Beijing is hoping to unload more of its excess factory production to developing-world countries, from Indonesia to Pakistan to Brazil. 

But many of those countries are pushing back, as cut-price Chinese imports put pressure on their factories, killing jobs and blocking efforts to grow manufacturing at home. Many poorer countries have been counting on expanding manufacturing as the best way to propel their rise up the development ladder.

The article lists measures taken by Brazil, Indonesia, Bangladesh, South Africa and others to prevent Chinese imports from hollowing out their manufacturing sectors.

Michael Pettis comments….

This WSJ article lays out what is in effect an intractable problem of simple arithmetic. China represents 17% of global GDP and 30% of global manufacturing. Its current growth model requires that it increases its share further.

The US represents 23% of global GDP and only 17% of global manufacturing. 

if the two economies, who collectively comprise nearly half of global manufacturing, both try to increase their manufacturing shares, this requires that all other countries reduce their own manufacturing shares to accommodate them.

Not surprisingly, neither the EU nor most developing economies are interested in playing that role. So something must break – we cannot all raise or maintain our shares of global manufacturing. This is just arithmetic.

In an interesting test of how much has changed in the last five years, Hong Kong and Mainland authorities  are permitting unlimited cross-border visits by Shenzhen residents. Last time this happened, Sheung Shui and other New Territories towns were flooded with smugglers pushing carts laden with Yakult (a yogurt drink that supposedly makes ladies’ boobs bigger) and squatting on the sidewalk to consolidate packs of fresh meat, much to the delight of thousands of flies…

The resumption of multiple-entry Hong Kong visas … is unlikely to give rise to the smuggling practices that once brought overcrowding to northern districts, leader John Lee has said as he cited changes in consumer habits.

…Lee said on Tuesday that the revived scheme would cover a broader swathe of Shenzhen residents compared to before 2015. Non-permanent residents of Shenzhen holding residence permits, such as those who come from rural areas and work in Shenzhen, would also qualify.

If anyone would want to get into cross-border smuggling, it would be migrant workers with no Shenzhen hukou. But in theory the weakening of China’s currency might make smuggling less attractive.

Pros and cons from the authorities’ point of view… An influx of Mainland visitors might push up shop rents, which would please the Boom Days Re-enactment fans among the bureaucracy. On the other hand, it risks provoking resentment and renewed localist sentiment among the Hong Kong population, after all that hard work to nurture national pride. But if you get sufficient numbers of them coming in, no-one can see or hear the local people anyway.

The SCMP’s former editor pens an op-ed that is, by the paper’s standards these days, rather edgy…

On November 19, two major events unfolded simultaneously in Hong Kong which highlighted the paradox of this once-great but now-confused city as it tries to navigate between socialism and capitalism in an era of great uncertainty.

He then compares the gathering of international financiers and Mainland officials and the HK47 sentencing, which grabbed all the attention, adding.

It remains unclear whether the timing of these two major events was coincidental or deliberate. However, subsequent international media reports have shown that the convictions dominated the headlines, not only eclipsing the forum but also making some of the international financiers attending uncomfortable….

…Hong Kong officials and elites have failed in their efforts to counter [negative conceptions] about the city. In fact, some have inadvertently contributed to the perception that Hong Kong is fast becoming “one country, one system” as they are eager to adopt mainland-style language and tone in their public statements, as well as adopting some mainland-style bureaucratic practices….

At which point paywall-avoidance measures are exhausted, but the subhead gives a clue: ‘Efforts to reassure residents, investors and observers have been sidetracked by a lack of clearer parameters on what Hong Kong can or can’t do in the new environment’. 

His reference to Hong Kong being caught between ‘between socialism and capitalism’ is perhaps coy. By ‘socialism’, he means China’s communist system and its absolute need for control; by ‘capitalism’, he means the liberalism and pluralism that allow a free society and enable an international financial hub to thrive.

Let’s pretend it’s not structural, part 2.

According to the Basic Law, the Hong Kong government should balance its budget. Instead, for many years, it reported vast surpluses. And these days, it’s vast deficits. (I suppose you could try arguing it balances out over a 27-year time span. Then again, the Basic Law says lawmakers can reject a budget, while the NatSec court says they can’t – so who knows?) 

The SCMP reports the Hong Kong government’s latest shortfall…

At a meeting of the Legislative Council’s financial affairs panel on Monday, Paul Chan Mo-po revealed the deficit was substantially worse than what he estimated at the beginning of this year as the soft property market had taken a heavy toll on the government’s income generated by land sales, stamp duty and corporate taxes.

“The government’s income was far lower than expected,” the financial secretary said. “Before September, property transactions were very slow, which affected our stamp duty income.”

…The government has also recently downgraded its full-year gross domestic product to 2.5 per cent year-on-year growth based on weaker global demand and local consumption.

RTHK story…

The government has doubled its estimated deficit for the current financial year to around HK$100 billion, citing lower revenue mainly due to poor asset market performances.

When Financial Secretary Paul Chan announced his budget in February, he forecast a shortfall of a little more than HK$48 billion.

But he told lawmakers on Monday that as well as relatively poor asset market performances, revenue from profits tax is lower because firms aren’t doing too well at present.

…The secretary also reassured lawmakers that they need not worry too much about the government’s dwindling fiscal reserves, saying the key is “taking care of our own business”.

How will that help?

But wait! There’s more! David Webb expands on the FS’s numbers, which count HK$86 billion in proceeds from bonds as revenue rather than liabilities…

The situation is actually worse than the headline, because Mr Chan includes net cash from bond issues. Who will repay those, the tooth fairy? So the real deficit should be over HK$195bn, even worse than 2023-24 ($173bn)…

…Bond proceeds are not revenue or expenditure, they are a form of finance which must be repaid by future taxpayers. If we include them in the calculation, then any deficit could be neutralised just by borrowing the same amount of money!

The Standard op-ed notes the discrepancy and calls for cuts to the bureaucracy – citing Elon Musk – adding…

It is small wonder that some lawmakers have complained that the government is living on debt. Is this why the administration is desperately looking to the private sector for funding to bail out mega development projects, including the Northern Metropolis, to which the government is committed?

Beijing’s officials have urged property tycoons to bid for land, though the developers are clearly reluctant. No-one wants to consider the possibility/reality that the model is broken, and things will not somehow go back to the way they used to be.

The Economist (probably paywalled) suggests that the decline in Hong Kong real-estate prices is not a passing phase…

Home prices have fallen by over a quarter since late 2021. In September they reached their lowest level in eight years; the number of unsold homes had already hit a two-decade high. Commercial property is in trouble, too. Office vacancy rates are at a 25-year high. Rental prices have fallen by 40% from a peak in 2019, according to Savills, a property firm.

…there are signs that this crisis is structural, not cyclical. Hong Kong faces doubt over its future. Draconian national-security laws and a lack of clarity about the city’s role within, rather than alongside, China’s economy have harmed its image overseas. Some of Hong Kong’s pillar industries have been wobbly. Funds raised on its stockmarkets in the first nine months of this year were less than 30% of the amount raised in the same period of 2018. The workforce has shrunk by almost 200,000 in recent years, a big fall in a city of 7.5m. Hong Kong contends with one of the world’s lowest fertility rates, and by 2040 a third of its population will be aged 65 or older.

As with those of pre-2022 administrations, Hong Kong’s top local policymakers seem unable to conceive of radical budgetary or wider economic reforms. Nor do they seem any more inclined to upset property-related interests. The people who could bring fresh ideas are either in jail or otherwise sidelined. The Beijing officials behind the scenes seem more interested in national security and patriotism than in fixing the city’s ‘deep-rooted’ problems.

Hong Kong property became among the most expensive in the world when China was booming and the city offered a unique and highly attractive package of Mainland links, financial and other skills, rule of law and a free press. So much has changed that some serious adjustment to government fiscal policy and the economy’s overall cost structure is inevitable. It’s not about being pro- or anti-high prices, ‘low taxes’, specific interest groups or anything else. It’s simply about accepting reality. (The unsold homes mentioned in the article would sell out tomorrow if the sellers cut prices.)

Yet top officials – who think panda bears and luxury shoppers are bold policy – still seem to think that finding ways to push real-estate prices up will bring the old days back. (There may be personal interests at play here as well: people whose families own several apartments can easily convince themselves that the economy depends on property rather than vice-versa.)

The ‘way forward’, as civil servants used to say, would include a 180-degree shift in official views to recognize the benefits and opportunities arising from lower property prices, and serious action to cut government costs (public-sector pay) and broaden the revenue base. Fat chance, of course.

A HKFP op-ed spells out basic facts about the HK47 trial: there was no law against either holding primary elections or using the legislature’s constitutional powers to reject a budget, nor would such a scenario create ‘chaos’…

Having removed himself to a safe distance, Jonathan Sumption (a very senior retired judge) put it bluntly. The Basic Law, he said, explicitly authorised the Legislative Council (LegCo) to reject the budget and force the city’s leader to resign. It now appeared that “LegCo cannot exercise an express constitutional right for a purpose unwelcome to the government.”

…the notion that sacking the chief executive would precipitate a “constitutional crisis,” paralyse the government or overthrow the system … is an entirely fictitious prospect drummed up to justify longer sentences. Whatever the organisers of the referendum may have dreamed, the Basic Law provides for a continued orderly and effective government at all stages of a bid to fire the chief executive. If there is no budget the government is authorised to continue with the old one. If there is no chief executive, another official takes over pending the election of a replacement.

Ocean Park is losing money, even though it is attracting large numbers of visitors and now has six panda bears. 

I went to Water World a few times back when it existed. But my first (and only) ever visit to Ocean Park was a couple of years ago. Parts of it have a sort of shabby 1980s feel. It doesn’t help that the place is ultimately part of the government bureaucracy. The aquarium is great, like most aquariums, while the rides are pretty lame. It’s small, being in a crowded city that probably should leave this sort of thing to Shenzhen or somewhere. I went soon after Covid, when there were few crowds, but I’d hate to be there when it’s crowded…

…The park saw around 3,140,000 in total attendance from last July to the end of June this year, up from around 2,360,000 in the previous financial year.

The figure is a five-year high, driven by non-local visitors whose numbers more than tripled. The park said visitors from mainland China almost quadrupled, while those from India and the Philippines increased by more than three and five times, respectively.

To put it in perspective, Ocean Park can’t be as mind-numbing as I imagine DisneyLand to be. And Mainlanders, Indians and Filipinos are, according to leading experts, among the world’s most easily amused nationalities. But Ocean Park has nothing really distinctive. The panda bears are worth about 20 seconds of your time. Snails have more zip. 

The Standard has the ominous headline ‘Return of multi-entry visas looms’ warning that Shenzhen and other Mainland residents will be able to visit Hong Kong more frequently. If that fails, we can round them up at gunpoint and force them to come here.

A few links for the weekend…

From Merics…

…middle income and developing countries are also dealing with China’s surging exports, though their responses have received far less attention

…The wide range of measures taken by countries with their own unique mix of economic and political interests towards China shows the growing international concern caused by China’s economic model, subsidies, overcapacity, and surging exports. It also demonstrates key trends of how China does and doesn’t defend its economic interests with different countries – most notably, that Beijing seems willing to incur economic losses from trade defense measures when it believes it still has considerable potential for political wins, but will fight more intensely against economic losses when convinced a country is politically lost to them.

The Straits Times looks at Malay nationalists’ demands that Kuala Lumpur enforces local laws requiring Bahasa signage to be dominant on shopfronts…

Clashes over the use of Chinese on Kuala Lumpur shop signage are the latest racial flashpoint in Malaysia, with a Cabinet minister warning of economic harm if Prime Minister Anwar Ibrahim’s government continues to ban prominent Chinese characters on retail signboards.

Tourism, Arts and Culture Minister Tiong King Sing lashed out on Nov 24 at a decision by Kuala Lumpur City Hall (DBKL) to enforce a 1982 by-law dictating that any advertisement must have Malay displayed with larger characters than other languages.

“This overboard behaviour not only causes tourists to question the openness and inclusivity of Malaysia, but some international visitors have asked me point-blank whether Malaysia is racist or religiously extreme,” he said, lamenting in a statement that such issues of race and religion can stunt economic growth.

For fans of demographics (more or less) a couple of charts…

Via this thread, bar charts showing that 97% of all talent visa entrants in Hong Kong are from the Mainland. I would be surprised if it was much less. The authorities want to replace the young educated and perhaps somewhat older professional people who have been leaving. Who can they reasonably expect to apply? To the extent policymakers have a choice, what sort of people would they prefer?

And from a business intelligence company via this thread, changes in the number of billionaires in each country in 2023. The number of ultra-rich has grown in most places, but in China and Hong Kong, it has fallen…

(As it has – slightly – in Germany, and in Saudi. Don’t they have any billionaires at all in Japan?)

Interviewed on Sky News, Sebastian Lai says he doesn’t think his father has long to live.

The Wall Street Journal has an op-ed on the Jimmy Lai trial (article probably paywalled, but you should be able to see the video that goes with it)…

…Jimmy’s [absurd] trial … paints him as Hong Kong’s Osama bin Laden—“mastermind” of a national security threat to China. To drive this home, the Hong Kong government has pulled out props that rival Hollywood’s: the chains they put on a then-72-year-old Jimmy when he was arrested, the massive police presence at his trial as though he might bust out, not to mention the solitary confinement imposed for most of Jimmy’s four years in prison.

…he was trying to hold China to its promises to honor the values and freedoms that transformed Hong Kong from a barren rock into a global center for trade and finance. On the stand, he listed these Hong Kong values: “rule of law, freedom, pursuit of democracy, freedom of speech, freedom of religion, freedom of assembly.” Apple Daily, he said, “aligned” itself with them.

As for the U.S., the Hong Kong government can’t seem to make up its mind whether Jimmy was carrying out an American plot or directing America to carry out his. 

…On sanctions Mr. Pence was unequivocal: “Jimmy Lai did not ask for US sanctions or any action against Hong Kong or China.”

…Mark Clifford [former senior exec with Lai] … sums up the trial this way:

“Jimmy Lai’s testimony shows that he was guilty only of practicing good journalism. The idea that he was somehow driving U.S. policy on Hong Kong is laughable.”

The NY Times interviews Chan Po-ying, head of the League of Social Democrats and wife of Long Hair…

The first year and a half after the national security law was passed was a nerve-racking time. Something happened every week.

But I believe their tactics are now less heavy-handed, to avoid it turning into international news. Instead, they will try to dry up your money and come at you with laws and regulations you haven’t even considered. The charges are petty, but you will be fined.

It feels like we’re being repressed in a very underhanded way.

Last year, HSBC terminated our bank accounts. Since then, we have been unable to accept donations online. We have had to reduce our expenses to a minimum. We stopped renting an office, and let go of all paid staff.

At the street booths that we set up, we no longer ask people to sign petitions or write cards to political prisoners.

There is a lot of psychological pressure because the police arrive at the street booths before we do, and film the entire process. If we ask people for their signatures, they will be filmed, too. We don’t want to cause harm to anyone.

People used to think that signing a petition or coming out for a march could put pressure on the government. Now many know that there is no use.

Interesting Substack article about Chinese state media’s limited success in using overseas social media to influence foreign audiences, with special reference to Twitter…

As yet, not many state media influencers have migrated over [to BlueSky].

Will they? Almost certainly.

These are media professionals who are paid to post, work full-time, and have the pressure of an entire autocratic state behind them. They are fulfilling Xi’s call that: “China must amplify its voice so that the nation’s message is heard overseas.”

The great prize of Twitter was never its number of users: it was who they were. Journalists, academics, and politicians… the Chinese state saw it as the fount of western hegemony, and an ideological battle place. If BlueSky becomes Twitter’s spiritual successor, it too will be a key mount to conquer, drown out, or destroy.

If state media does arrive in earnest, it may take time. It’s noticeable how loose BlueSky’s algorithm currently is, how difficult it is to game. No promoted tweets, blueticks or convoluted algorithm to manipulate here. BlueSky’s simplicity may yet be its best protection for its purity.

With its currently predominantly western liberal leaning, the platform also will be an uphill challenge for those looking to push overtly nationalistic viewpoints.

Even after years of honing their communication on Twitter, many state media accounts and their offshoots remain too abrasive, too anthema to mainstream ideals, and (potentially most damaging of all).. too dull to entice new broad audiences.

Many only became large on Twitter via brute-forcing the system — latterly via Musk’s paid-for-blueticks. And yet, even with this algorithmic help, it’s interesting how KPI’s for many in recent months have plateaued, or gone backwards.

I recently semi-moved to Bluesky, though a lot of worthwhile accounts and material remain on Twitter. But one glaring difference is that it’s relatively easy to block and generally avoid annoying garbage on the newer platform – which clearly angers and frustrates conspiracy theorists, tankies and other bores/bots who want to shove various forms of idiocy into your face. And state media influencers.

The SCMP reports a push to use AI in China’s overseas propaganda efforts…

Communist Party mouthpiece People’s Daily called on the country to enlist AI in an information campaign to debunk US-led narratives about China, highlighting the perceived urgency in a series of front-page articles on Friday.

In the articles, researchers suggested strategies that included harnessing technology to counter Western media, which they said painted an unfair image of China, and hindered the nation’s ability to form a united view of itself.

…In another article, Cheng Manli, a professor at Peking University’s school of journalism and communication, pointed to the “urgency and necessity of advancing the restructuring of the international communication landscape”.

As geopolitical tensions have worsened, the US-led West has continued to escalate its suppression and containment of China, and the Western media’s incorporation of China-related issues into global narratives often distorts facts, according to Cheng.

She said such narratives “not only affect the international community’s accurate understanding of China, but also significantly disrupts the formation of consensus among the Chinese domestic audience”.

“Breaking the West’s monopoly on discourse and dismantling international stereotypes about China have become increasingly important to present a truthful, multidimensional, and comprehensive image of China to the world,” she wrote.

So Western media ‘hinders the nation’s ability to form a united view of itself’ and ‘significantly disrupts the formation of consensus among the Chinese domestic audience’. Does it really do that? Is it even that accessible to most people in China? Or are Beijing’s leaders simply suffering a haunting fear that someone, somewhere might be exposed to differing views? (To paraphrase HL Mencken.)

Desmond Shum describes AI’s ability to write (and explain how to write) official Chinese documents…

Apparently, over 50% of ChatGPT’s mainland Chinese users are CCP bureaucrats seeking help with their official documents. Yes, bureaucrats! ChatGPT has been so thoroughly fed with endless streams of Party prose that it now churns out CCP-style articles with the finesse of a seasoned propaganda officer.

He asked ChatGPT to summarize the characteristics of CCP official writing, and got the response….

“CCP official writing and “party Eight-Legged Essays” are often criticized for being formulaic, verbose, and lacking substance. Key characteristics include:

1.Formality and Routine: Heavy use of fixed slogans and a template structure, prioritizing political correctness over originality or practical solutions.

2.Lack of Substance: Abstract language avoids real issues, with vague terms like “further promote” replacing concrete measures.

3.Verbose and Repetitive: Redundant phrases and repeated points make texts long-winded and unfocused.

4.Authoritative Tone: Commanding language emphasizes infallibility but lacks approachability.

5.Ambiguity: Avoids specifics, leaving statements open to interpretation.

6.Rigid Style: Uniformity and repetition dominate, making content monotonous and unengaging.

While these features ensure ideological consistency, they often neglect logic, flexibility, and real-world relevance, reducing practical impact.”

I asked a free ChatGPT-style app to ‘Write a press release complaining about a critical newspaper article in the style of the Hong Kong government’. The result was a massive – stunningly bland and moderate – fail, with such phrases as…

The government respectfully urges [Insert Newspaper Name] to revisit its editorial practices and strive for a more responsible approach to reporting that prioritizes public interest and community solidarity.

There’s no substitute for authentic human mouth-frothing and ranting.

Some interesting stats about demographic changes in Hong Kong. 

On the relatively lighter side, Bloomberg notes that residential rents in mid-range middle-class areas have risen strongly in the first 10 months of this year (relatively cheap Tung Chung up 16.4%, North Point 14.1%, West Kowloon 12.3%, Olympic 12.3%), while rents in swish up-market neighbourhoods have fallen (Clear Water Bay down 6.8%, Deep Water Bay 5.1%, The Peak 10.6%, Shouson Hill 12.2%).

In short, highly paid executives – many presumably expats – have been leaving Hong Kong (plus maybe some are having their rent allowances cut), while lower-earning Mainlanders have been coming in. Landlords are perhaps putting a brave face on it… 

Vacancy on the Peak is rising partly because Chinese tenants have snubbed the area for its higher levels of humidity [real-estate agent Alan Li] said.

It is sweaty up there, but they can afford air-conditioning and servants to scrape the fungus off the walls. The price of housing might be a factor too. 

The underlying story is one of migratory mismatch. Senior international corporate types have been declining in number (as have certain other demographics – see below), while the Hong Kong government is replacing them, via visas-for-talent schemes, with less skilled Mainlanders (some of whom are reportedly finding work selling insurance). Hence closures of many fancy restaurants and other businesses serving high-end clientele. 

For really startling figures, see Joel Chan’s post with a chart showing the change in age groups in Hong Kong since mid-2017. The number of 70-79-year-olds is up 63% and 60-69s up 31%. The number of 30-39s is down 6.3%, 0-9s down 21.3% and 20-29s down an incredible 24.7%. 

The big rise in elderly cohorts is presumably due to so many people in their 50s and 60s moving into the 60s and 70s brackets. The drop in those in their 20s and 30s must be largely due to emigration (plus some of the 30s lot moving into the 40s segment, which is up 1.8%). This would be even greater without Mainland arrivals, many of whom must be in the 20s and 30s groups. The fall in 0-9s would be a combination of emigration and a big fall in the birth rate during the last few years. A 2.4% rise in the 10-19 segment would (I guess) reflect the higher birth rates earlier this century. Plus, in both cases, there must be some 0-19s coming in with Mainland adults.

The drop in 20-29s is amazing – comparable to the loss of men in that age group in Germany or France due to World War 1. How big is the decline if you zero in on the college-educated ones? How does Hong Kong pay for the health and welfare of so many elders with far fewer people of working age paying tax? (That’s another thing: more than a few young Mainlanders planning to stay in Hong Kong also hope to bring their aging parents over – to enjoy the free health care.)

RIP Bill Overholt. At Nomura just after the handover. he wrote a superb paper (which I still have somewhere) recommending in detail that Hong Kong begin an estimated 20-year process of ‘unwinding’ its land system – which was of course ignored. Also a really nice guy.

Not all Trump’s nominees for national security advisors are nuts like Seb Gorka. A sharper one is Alex Wong, a former State Dept official who outlines a no-nonsense analysis of why China inevitably sees the US as an adversary in a Hudson Institute article…

…the endgame has already been predestined by the strategic choices of the CCP … regardless of whether the United States pursues détente with China or democracy within it, the CCP will increasingly be presented with dilemmas for its legitimacy. 

…If, for instance, the United States establishes measures to insulate partners and itself from Chinese economic and political coercion, is that a deliberate challenge to the nationalist “Middle Kingdom” mythos the CCP leverages to justify its rule?

If the United States enforces international maritime law, defends norms of non-aggression, and seeks to maintain its access to the Indo-Pacific region and peace across the Taiwan Strait with an increased U.S. military presence in the region, is that an explicit challenge to the “territorial integrity” upon which the CCP bases much of its historical legitimacy and motivates its military buildup?

If the United States seeks to restore the reciprocal principles of the world trading system, halt China’s massive theft of intellectual property, and place controls on strategic technologies that could be turned against our own citizens and those of our allies, is that a deliberate attempt to close off the drivers of Chinese economic growth and techno-authoritarianism that maintain the CCP’s grip on power?

Certainly not. These are actions that fall well within a defense of U.S. security, freedom, and prosperity within a liberal order. But these questions and their answers point to the fact that the CCP’s parasitic abuse of both the liberal order and the U.S. economy has backed the United States into an endgame where—regardless of whether we seek to or not—our reasonable counters to Chinese strategy will create legitimacy dilemmas for the CCP. 

Obviously, lots of governments mess things up and quite possibly lose power as a result. The difference is that the Chinese system does not allow a different party to take over, and the leadership claims a track record of non-stop success to justify its monopoly position. So what happens when, through hubris or otherwise, you paint yourself into a corner and find that blaming external forces is no longer credible? Zero Covid was perhaps a minor example. The ‘sacred’ duty to take over Taiwan could become another. Gaming the international trade system – which was no doubt tempting and smart for a while – has clearly turned into the most pressing dilemma. How will China’s leaders deal with public disquiet over the impact of export-crippling tariffs, if and when they happen?

Does Hong Kong fit Wong’s pattern? Or was it more a case of perceived threats to the party’s power leading to choices that themselves created an even greater perceived threat? The return of the city to the motherland 27 years ago was an occasion of rejoicing throughout China and at least some high hopes in Hong Kong of a bright future as a special part of the country. If Beijing had allowed a more representative, responsive government in the city, we probably could have avoided the situation post-1997 where an aloof administration and frustrated populace were almost permanently at loggerheads over one issue or another. China could have had, in Hong Kong, Asia’s most vibrant commercial and cultural hub, but instead the leadership saw the city as a threat to its own power. Now, Hong Kong’s local officials feel a huge sense of achievement if they can pull in a few million more mainland tourists.

Which leads us to a Sixthtone article on the Xiaohongshu app’s impact on Chinese travel overseas…

In Laos, a solitary tree in the middle of a field has become an unexpected hit on Xiaohongshu, as Chinese tourists — and only Chinese tourists — flock to check in and snap photos for their social media page.

…In February, while on a trip to Malaysia, I met a local restaurant owner who refused to serve travelers who had only come because of Xiaohongshu. He explained that these customers didn’t truly appreciate good food, but were only interested in taking photos for social media.

…Ultimately, reducing travel to a collection of identical photos and poses can create a disconnect between tourists and the people and places they’ve come to see, one in which reproducing images for social media becomes a kind of end in and of itself.

In my neighbourhood, the must-photo spots include two rival bakeries just up from Hollywood Road. Tourists must pose outside the premises holding up a branded paper bag and cake. They must also have their picture taken standing in front of a lame mural on a nearby narrow street. And – strangest of all – there’s the much-photographed vista of exotic Caine Road from the pedestrian walkway. This is the view at its best, when parked school buses brighten it up…

Maybe the scene appears in a movie? The hordes lining up for photogenic pastries yesterday…