My money’s still on ‘not going to happen’

Bloomberg op-ed on Hong Kong’s fiscal challenges…

Stacked against these two ambitious endeavors [Lantau Tomorrow and the Northern Metropolis], all fiscal savings from the past will evaporate. In fact, one might as well pretend that Hong Kong has no fiscal reserves at all if Chief Executive John Lee refuses to tweak his predecessor Carrie Lam’s outlandish urban rejuvenation plans. Artificial islands are vanity projects. It’s time Lee turns the page before the city’s fiscal health worsens to the point of no return.

I’ve always thought Lantau Tomorrow had ‘not going to happen’ written all over it. I love hate to quote myself, but from back in October 2018…

The government is proposing to spend half a trillion dollars on something – land – that we already have (for example, the unmentionable barely used firing range zone around Castle Peak is far bigger than the proposed reclamation). The official rationale is that assembling and consolidating under-utilized sites in the New Territories is too much hassle. But seriously, how much hassle is worth half a trillion? This is like buying a far pricier apartment to avoid having to clear out a spare room full of junk.

…That’s assuming [officials] really are trying to push it. The whole idea almost looks too preposterous to be real…

Six months later…

The government claims that the extra space will accommodate lots of affordable housing – yet at the same time the reclamation will pay for itself through the traditional overpriced land-sale scam.

This is sort of contradictory, though the numbers probably look better when you see the reclamation as an area into which riffraff can be ‘decanted’ (the official term), leaving the old urban neighbourhoods of Kowloon to be flattened and sold off to developers to build luxury apartments.

But this all assumes that 20 years down the road, Hong Kong will still be a relatively desirable place to live in, or launder wealth through. That assumes that: a) the CCP regime will still be in power with comparable economic and political systems to today’s; and b) this regime will not have largely merged Hong Kong by then, so local land values will still be much higher here than across the border.

While Chinese officials no doubt like the idea of spending Hong Kong’s reserves on contracts for state-owned construction giants, the most vocal supporters of Lantau Tomorrow have always been the old-style bureaucrats and their buddies the local tycoons and engineering companies, plus consultants, insurers, architects and other potential beneficiaries. All personified by the Better HK Foundation. Under Hong Kong’s new order, they no longer get everything they want.

Major shock in the Jimmy Lai trial: the court hears from publisher Cheung Kim-hung that Lai was… Apple Daily’s boss, and pro-democracy. Former Next Digital director Mark Clifford…

“Hong Kong is on trial, not Jimmy Lai. Every day of this kangaroo court provides new evidence that the Chinese Communist Party and its Hong Kong helpers are guilty – guilty of undercutting the freedom enshrined in the principle of ‘One Country, Two Systems’ and the vow that Hong Kong’s way of life would continue for 50 years after China’s 1997 takeover. Rights promised in the Basic Law and the Sino-British Declaration, an international treaty, are being trashed by Beijing and its Hong Kong enablers.      

“The sad spectacle of Cheung Kim-hung’s testimony simply reinforces what we have long asserted: Jimmy Lai’s trial is a sham.

China’s economy grew 5.2% in 2023, just surpassing the official target of 5%. Rhodium Group predicted that result – but reckons it was more like 1.5%. From its end-year review and outlook…

Yet through this steady parade of slowdown indications, GDP forecasts barely moved. Official quarterly GDP statistics and monthly retail sales statistics were enhanced early in the year by tweaks to prior period data that fluffed up current figures. And that, in turn, was good enough for the international organizations tasked with providing independent validation and for most of the sell-side research economists advising investors.

According to China’s own numbers, its economy is on track to reach 5% growth in 2023. To be sure, there are bright-spot industries such as electric vehicles (EVs) that are outpacing the rest of the economy. But when Beijing publishes a 5%+ 2023 GDP growth number next month, it will be irreconcilable with evidence of general malaise and reactive policymaking that has piled up all year long.

The former Chairman of China Everbright Group is arrested for suspected corruption. Tang Shuangning is also accused of ‘privately reading publications with serious political problems‘. Will we ever find out which publications? Paine’s Rights of Man?  Zhao Ziyang’s memoirs? Fat Freddy’s Cat?

Unmitigated Audacity of the Week Award goes to China’s ambassador to Australia, who says it was a Japanese naval ship that blasted RAN divers with sonar. Serious Chinese sonar would have really hurt.

The Philippines Defense Secretary issues an endearingly cheeky blunt statement in response to Beijing’s complaints about Manila congratulating Taiwan President-elect Lai Ching-te.