To no-one’s surprise, Hong Kong’s first ‘national security’ trial, with hand-picked judges and no jury, ends with a guilty verdict for Tong Ying-kit. Some discussion on the judgement, on what it means, and (in case you didn’t catch that) what it really means, bluntly. HK Watch’s reaction.
Essentially, if you were hoping that judges might protect freedom of speech, or the court show some independence, you were wrong. (But did anyone?) Tong is now liable for life in prison; whoever makes these decisions will probably order a sentence of 10 years or so, to balance ‘his first offense’ with ‘need to send serious message/gravity of crime’ blah blah. Judgement here if you can face it. When it comes to waving a flag, the defence lawyers might as well not show up.
Thomas Piketty and Li Yang’s paper analyzing the significant rise in inequality in Hong Kong since 1997 is pretty damning. The main paper is here. Not an especially easy read (non-native English-speakers and economists), but tons of comparative data showing Hong Kong as a real outlier in terms of inequality. Plus it coins a nice phrase – ‘pluto-communism’.
The research predates the 2019-onwards protests and NatSec regime, and focuses on effects rather than policy or other causes. It notes rising female participation, rising education levels, the fall of manufacturing/rise of services, and thus the rising role (and wages) of professionals and managers (all found in many economies since the 1980s). But it does not examine such specifics as the impact of a million low-skilled Mainland immigrants, the role of Hong Kong in storing/processing Mainland wealth, or the city’s perverse land/housing policies. Needless to say, housing prices have been a major contributor to wealth inequality…
Hong Kong’s 𝛽𝑡 ℎ𝑜𝑢𝑠𝑖𝑛𝑔 started in quite low level compared to other economies in 1980s. Driven by the soaring of the assets price, it then raised to 363% national income in 1997. During the Asia Financial Crisis, it fell badly to 122% of national income in 2002; ever since it has raised phenomenally, in 2018 𝛽𝑡 ℎ𝑜𝑢𝑠𝑖𝑛𝑔 reach to 450%, which is unparalleled by any other economies since 1980.
On the subject of Hong Kong’s financial-services sector’s focus on Mainland opportunities…
We are now witnessing the roll-up of the Chinese reform experiment. There is only one direction for this to go, and it’s not pleasant for foreign investors.