HK ‘back to normal’ but with ‘hostile foreign forces’

From the SCMP…

Beijing’s top envoy in Hong Kong on Saturday called on local police to strictly enforce the national security law, warning that “hostile foreign forces” were still attempting to undermine the city’s stability while anti-China elements were plotting a comeback.

Being too lazy to get around the paywall, I didn’t read the part where the paper asked the obvious questions: Who are these ‘forces and elements’? Where are they from? Which countries or organizations are involved? And please don’t repeat the old mutterings about the long-departed, DAB-training and apparently omnipotent National Endowment for Democracy. 

Perhaps part of the reason is that Beijing officials do not distinguish between tangible and intangible ‘forces and elements’. They might be talking about actual people, but they might also be referring to foreign ideas. Or is it that the system simply needs threats?

At least in the UK they tell you who or what the threats are. The Spectator’s China affairs columnist distances herself from the UK parliamentary assistant arrested a few months ago…

‘Everybody can be recruited in the right circumstances,’ [a former UK intelligence] officer tells me. ‘It’s about asking the right questions to the right people at the right time.’ A recruit could be charmed with a compelling narrative of Chinese culture or persuaded China was wronged by western imperialism. Money or sex could be a factor. If there is some deep-seated anti-Americanism, this could be developed into pro-communist sentiment. ‘The recruitment of every intelligence agent is individual to the person involved,’ says the officer.

…It should be made very clear to anyone in Westminster where the line lies between above-board information-sharing and covert dalliances. Could the parliamentary researcher have been a useful idiot, not quite realising the seriousness of what he was doing?

The wrong reaction, though, would be to assume that people with experience of China are already compromised, or that those who advocate a more sophisticated approach to the country … I would say this, though, wouldn’t I?…

Good unrolled thread on the comparisons between the Japanese and Chinese development models, starting with…

You start as a discredited elite. You brought absolute ruin to your country. You need to justify your rule, fast. You start with a rural reform (Japan 1946-50, China 1978). Small farmers get a plot of land. Agricultural productivity goes up. There is a food surplus…

…onto…

– Use state-controlled banks to drive loans to fund productive capacity and infrastructure – Focus on politically connected companies without thinking too much about future profits.

– Direct it all by a powerful, but competing bureaucratic fiefdoms: ministries in Japan, provinces in China – Get everyone into an interlocking web of relationships of patronage and debt to assure that you control things: keiretsus, SOEs, state banks, developers, exporters…

…and finally…

The system you have built is not a proper market economy. It is a giant web of personal relations optimized for wage suppression; production, infrastructure and housing investment; and carefree liquidity

You realize everyone that matters is involved. You have no idea how you will distribute the losses without getting a lot of important groups furious Worst of all you do not even have the institutional capacity to implement the theoretical interventions the economists suggest…

In another thread, Michael Pettis responds to the notion that Beijing won’t fix things simply because ‘Xi opposes consumerism’…

For well over a decade, China’s growing imbalances should have been fairly obvious, even if many analysts didn’t recognize them. The implications of transforming this model and reversing these imbalances should also be fairly obvious.

It requires a transformation of deeply embedded business, financial, and political institutions along with, inevitably, changes in the structure and composition of business, financial and political elites. It is that, not ideology, that is the hard part.

And for those interested – Patrick Boyle interviews Bloomberg scribe Zeke Faux on his (reportedly hilarious) book Number Go Up about the rise and more recent ugly and inevitable collapse of the crypto mania-fetish-scam-bubble, featuring the bizarre ape-cartoon NFTs, Sam Bankman-Fried and all the rest.