A ‘good HK story’ story

HKFP turns pitches that got nowhere into a news item with maybe a dash of ‘soft resistance’ –  the challenges involved in telling good Hong Kong stories. Even the sewage works rejected a request for a photo feature. Interesting to compare and contrast the wording of different government departments’ rejections of requests to do a story. Some use similarly abrupt, almost frosty, phrasing, while others come across as semi-friendly. Sesame Street today was brought to you by the word ‘accede’.

(I once had the pleasure of visiting a sewage treatment facility, though not in Hong Kong. On a patch of windswept wasteland next to the conveyer belt carrying dried solid waste was an impressive patch of tomato plants.) 

Some mid-week reading…

Courtesy of a commenter yesterday – a fund manager who picked the wrong time to short the Nikkei and stay long on Hong Kong/China…

Chua Soon Hock’s Asia Genesis Macro Fund had a drawdown of 18.8 per cent in the first weeks of January, according to a letter sent to investors seen by Bloomberg News. The fund is returning money to investors after losses on long Hong Kong and China equities positions as well as short Nikkei bets, according to the letter.

“I have reached the stage whereby my confidence as a trader is lost,” chief investment officer Chua wrote in the letter. Tough trading since October and a “disastrous” January “have proven that my past experience is no longer valid and instead, is working against me”.

…Chua said that the fund made a “big mistake” in trying to pick the bottom of benchmark Hong Kong indexes. He was also “astounded” with the Nikkei-Hang Seng spread that priced Chinese and Japanese stocks at the same value as in 1991.

…“I have lost my knowledge, trading and psychological edge,” Chua added, “The principle of risk-reward for both the short term and long term has turned its head.”

You gambled. 

More from Asia Times…

“I still do not understand the inconsistency of China policymakers’ not fighting against deflation, leading to continued loss of market confidence and prolonged bear market,” [Chua] wrote in the letter.

…Hu Xijin, a “patriotic” political commentator and the former editor-in-chief of the Global Times, tried to boost people’s confidence in the stock markets by buying A-shares with his own money.

Initially, the newbie injected 100,000 yuan in his investment account last June, and gradually invested the amount to 480,000 yuan.

On Monday, when the Shanghai Composite Index fell 2.7% to 2,754, the lowest since April 2020, Hu said he felt sad that he lost 10,444 yuan in a single day. He said he has so far suffered a loss of 71,024 yuan, or 17.4% of his money. 

…Lau Kwan-ming, a Hong Kong financial writer, said in an article on January 16 that once US and European stock markets had started to correct from current high levels, the Hang Seng Index likely would drop farther, perhaps to as low as 12,000. 

SCMP op-ed…

…many of the cracks Beijing pledged to fix eight-plus years ago remain below the surface. And they spook investors in ways that will keep shares under downward pressure in the months ahead.

These cracks include: extreme opacity, the continued dominance of state-owned enterprises, weak corporate governance, regulatory uncertainty, a feeble credit rating system and a Communist Party more focused on the symptoms of China’s troubles than the underlying ailments.

…Think of the plunge in Chinese stocks as a giant ticking clock. It’s expressing how investors wonder less about what Beijing will do and how, but when officials will prioritise economic reforms. Time isn’t on Beijing’s side in 2024.

China Media Project on why Chinese state media said so little to its domestic audience about ‘internal affair’ Taiwan’s elections…

How do we account for this dichotomy? The stiff poker face in Chinese, and the snarling wolf warrior in English? In fact, these varying reactions, which have played out in the past for international stories China’s leadership regards as highly sensitive, offer a glimpse at how state media handle sharply differing priorities for domestic and international audiences. 

While China insists Taiwan is an internal affair, and that the rest of the world should simply keep its nose out, the bulk of the coverage of the elections in state media was directed externally, at foreign readers. Internally, silence reigned.

Nikkei op-ed on the Philippine government’s ties with Taiwan…

With Taiwan the leading player in semiconductor production, the Philippines is angling for a large place in Taiwan-centered supply-chains. Specifically, Manila has the potential to play a bigger role in chip packaging and testing, and then perhaps to move on to higher-value-added segments.

Overall, the Marcos administration senses a historic opportunity to maximize relations with its highly industrialized northern neighbor while also building closer security ties with the U.S., which could help deter Chinese aggression.

This strategy is already annoying Beijing, but Marcos has put a higher priority on defending Philippine territory against Chinese expansionism and has concluded that China will not provide that much economic support anyway. Polls show a majority of Filipinos are on board for this new course.

And RFE on Beijing’s headache as two key partners – Iran and Pakistan – come to blows.