HK government panics at sight of Roach

Former Morgan Stanley boss Stephen Roach came back to Hong Kong a few weeks ago after a previous spat…

“There ain’t gonna be any resilience here if China continues to underperform, period,” he said, pointing to the parallel slowdown in growth rates for the city and country at large. “It’s not something that I think you can necessarily count on to persist and project into the future.”

Rather than ignore him, the government issues a lengthy statement that can best be summarized as ‘ growing steadily blah blah international financial centre blah blah NatSec blah Greater Bay Area blah green finance blah Belt and Road blah blah’.

Back home in Connecticut (we’re not worth a long stay), Roach says the Hong Kong government is in denial…

…Roach told the Post on Thursday morning he was delighted the government had heard his message, but was discouraged to see it had dismissed his “data, and analytical-based arguments”.

He said the authorities’ rejection of his message over the troubles ahead for the economy lacked an “analytical” angle, and he was worried by their decision to resolve “tough problems” with a “descriptive spin”.

…During his speech, Roach noted the premise of his argument was based on the close connections between the economies of Hong Kong and the mainland economies following greater cross-border integration through flows of trade and finance, as well as tourism.

“The Hong Kong economy has effectively been swallowed up by the mainland economy – hook, line and sinker. With the Chinese economy likely to underperform over the foreseeable future,” he said.

He concluded that Hong Kong was unlikely to “spring back to life on its own”.

…“I would welcome the government’s response to my core arguments rather than counter their seemingly desperate attempts to throw up a smokescreen and deflect attention elsewhere.”

He also said in his speech that it was important for the financial hub to continue to allow for constructive criticism.

…“Solutions come from solving tough problems, not from PR statements.”

Hypersensitive reactions suggest that the critic concerned has hit a sensitive nerve – or in plain words, is right. The huge uplift in Hong Kong’s economy over the last 40 years mirrored, and resulted from, that of the Mainland. The city was in a unique position to leverage China’s abandonment of Stalinist economics, and it was an amazing coattails-ride. That phase of history is over. Officials would show real confidence in Hong Kong’s future if they acknowledged that and let go of the old high-property-prices zillions-of-tourists model.

Timothy McClaughlin adds

Hong Kong has some of the highest rents in the world but Stephen Roach lives in the government’s head for free.

After fretting about the exodus of shoppers to Shenzhen, officials claim it is a success story for the Greater Bay Area. Insofar as it’s a success story for market forces and lower prices for consumers, they’re right. 

Two British judges resign from the Hong Kong Court of Final Appeal, one citing the political situation in the city.- unless you read RTHK, in which case he doesn’t.

In case you haven’t seen it – CE John Lee congratulates Ronny Tong on his puberty, twice, in video and text. (I mean it’s nothing – my brother’s 21st birthday was 40 years ago, and I still haven’t sent him a card.)

Some weekend reading…

Atlantic on Beijing’s bid to out-tech the US

Xi gambled that he could partner with Russia and Iran, undermine the U.S.-led global order, and build a military designed to challenge American power—do all that and still benefit from the U.S. technology the Chinese economy needs to advance his ambitions. Perhaps he believed that capitalist greed would override national-security concerns, or thought he could rely on inaction from a divided and preoccupied Washington. Perhaps, too, he underestimated the complexities of the semiconductor industry and what it would take to develop the chips China needs.

Whatever Xi’s assumptions, he picked a chip war with a superior power before he had the armory to wage it.

And Lowy Interpreter looks at China’s claims to own much of the Philippines’ exclusive economic zone waters.

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12 Responses to HK government panics at sight of Roach

  1. Joe Blow says:

    Perhaps Pikachiu was referring to Brother 11’s well-publicized “promiscuity”.

  2. Stanley Lieber says:

    Thank you for the illuminating article from the ‘Lowy Interpreter’ on the China-Philippines maritime tussle. It’s concluding paragraph makes an excellent point.

    “Above all, the emphasis should be on supporting the Philippines’ own approaches and strategies. Counter-China messaging from the United States or other external countries would only backfire, fuelling narratives of “major power competition” rather than focusing attention on China’s transgressions.”

  3. Chinese Netizen says:

    Speaking of out tech-ing the U.S., this story immediately came to mind…

  4. Steve Bannon says:

    @Chinese Netizen

    Thanks for the paywalled article.

  5. Chinese Netizen says:

    Oops, sorry Stevo-O. Maybe your Chinese billionaire buddy can unlock it for ya?

    I’m sure there are other outlets that’ll give it for free. Just Google “Chen Jin Jiaotong University”. Story’s from 2006.

  6. True Patriot Economist says:

    “Roach noted the premise of his argument was based on the close connections between the economies of Hong Kong and the mainland economies …”

    No siht!

    I thought every taxi driver, every real estate agent, every pharmacy owner, my mother in law knows:

    China Good = Hong Kong Good – China Bad = Hong Kong Bad!

    Since 1978

  7. Flowery Twats says:

    @Joe Blow
    Pikachu to his staff: “Whatever you do, don’t mention the war statutory rape. I mentioned it once, but I think I got away with it all right.”

  8. reductio says:

    “We thank Stephen Roach for his contribution. The Hong Kong government has always encouraged, and will continue to encourage, a diversity of expert opinions on its performance, as it believes that critical reflection can only enhance its competitiveness. However, economic analysis is as much art as science and Stephen has placed more emphasis on certain aspects than the Hong Kong government believes is warranted by the evidence. Again we thank Stephen for his input and hope he, and other experts, continue to offer their insights in the future.”

    Jesus, it’s not that difficult to put a bit of spin on things that doesn’t make you sound like a big cry-baby.

  9. Knownot says:

    “I congratulate Ronny … on the puberty he always has”

    But seriously, what word was he or his speechwriter thinking of? I have thought of ‘probity’, ‘purity ‘, ‘profundity’, but none seems right.

  10. Steve Bannon says:

    @Chinese Netizen

    Leave it to a member of the leftist elite to assume the whole world subscribes to the NYT, let alone reads or believes anything in the propagandist rag.

  11. Puberty, Equality, Fraternity! says:


    To be fair to the HKSARG, they have just admitted they’re still going through puberty, so perhaps the cry baby outburst might be down to all those extra hormones.

  12. Peaky Plan says:

    @Knownot, the official explanation was that Ronny himself used the word puberty in his speech and the CE was just riffing off that.
    It still doesn’t make sense. I would speculate that the CE’s speechwriter, working off Ronny’s pre-supplied vetted speech, used a thesaurus for “adolescence” (in a “youthful adolescence” context) and, seeing that the word “puberty” had been used already in Ronny’s speech, decided it was safe and went with it without really knowing English well enough to catch the error.
    More worrying was the usual shit from Ronny claiming that those mocking the CE did so with “ill intent” and that there was, according to him, no problem with what the CE said. When it was clearly a blunder, even when viewed with the context of Ronny’s speech (which was not supplied to the media so, how were we to know?)
    “Ill intent” seems to be the new “soft resistance”.

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