Big Lychee, Various Sectors

The Development (sic) Bureau announces plans to cover coastal areas in the New Territories and outlying islands with oh-so original tourism/luxury housing eco-concrete, starting with southern Lamma… 

The site – a disused quarry on Lamma Island covering an area of around 25 hectares, including a five-hectare artificial lake – would be “suitable for development as a high-end lakefront and hillside resort,” the bureau said.

It would be accompanied by a marina, as well as low-density luxury housing, it added.

Obvious question: why? 

The government press release says…

Its tranquil seaside location in a rural island setting, wealth of tourism and recreation resources particularly a large man-made lake, and proximity to the urban area have rendered this site suitable for development as a high-end lakefront and hillside resort, to be complemented by a world-class marina and low-rise luxury housing. The initiative aims to help promote yacht tourism on the one hand, and also help support the development of island hopping in Hong Kong. For this EOI, we will consult the market on ways to optimise the use of the site by suitably incorporating the above-mentioned elements in its overall development and synergising with other attractions in the area. On implementation, it is proposed to adopt a single-developer approach for this project.

You might have thought the various attributes would have ‘rendered’ the site suitable for leaving alone. But no.

Being charitable – I put Saint Francis of Assisi to shame sometimes – if you were a Hong Kong bureaucrat ordered to fix the economy by next week, could you come up with anything better? Remember: no radical reforms are welcome, and you’re hitting retirement age in six months.

On the subject of tranquility, the Standard reports the silence of some all-patriot District Council members…

District councillors were silent during meetings to avoid redundant remarks and save time to serve their communities, Secretary for Home and Youth Affairs Alice Mak Mei-kuen said.

This came after media reported that after more than a year into their four-year tenure, 33 district councillors did not speak in 80 percent of their district council meetings, and among them, six remained silent in all of the meetings they attended last year.

Mak told reporters yesterday that district councillors or lawmakers do not wish to repeat what others have said as it is not an efficient use of limited meeting time.

“For a council with over 30 members, if everyone repeats the same points, it does not make efficient use of the meeting time…

Why would they all be repeating the same points?

And where have we heard the phrase ‘island hopping’ before? Well, yes, it was during World War II, when the US Marines clawed back Japanese-occupied dots in the Pacific. (Read Norman Mailer’s The Naked and the Dead.)

Which sort of brings us to the latest bout of panic – because there’s not enough mayhem in the world right now. Anyone spending too much time on the wrong websites will have noticed some vaguely thoughtful people confidently predicting a Chinese invasion of Taiwan within a few months, supposedly to take advantage of all the other international tariff-related chaos going on. (They are prompted by this.)

This would mean Xi Jinping choosing to outbid Donald Trump in the stupidity stakes. It would entail a massive and crippling economic embargo on China leaving markets even more wiped out than they are already. Among various possible sideshows: the Internet cut off; a coup in China if it failed; executions of hundreds of Taiwanese splittists if it didn’t; martial law in Hong Kong just to be safe, etc, etc, etc. You don’t want to think about the worst-case scenario.

We don’t need any more excitement right now.

On the off-chance anyone wants it – think-tank type Matt Turpin bravely sort of explains what the US administration is perhaps attempting to do tariffs-wise, assuming there is some underlying logic. My hunch is we are in ‘make it up as you go along’ territory.

None of them about Speed or Coldplay… 

SCMP op-ed by a couple of academic/think-tank types suggests that the government sell public housing units at (pluck random number out of thin air) 25% below their market value in order to tackle the budget deficit…

A potential answer [to the budget problem] lies in one of Hong Kong’s underutilised assets: its 850,000 public rental units, which house about a third of its population. Selling these units to tenants could generate transformative revenue. Even at a 25 per cent discount off the market price – which is roughly HK$2 million per unit – a decade-long sell-off could yield up to HK$1.3 trillion, which is enough to cover more than 14 years of the current deficit of HK$87.2 billion.

This assumes there would be takers. If you are sitting pretty in a small but HK$2,000-a-month unit, why would you want to spend HK$2 million to carry on living in it while also assuming responsibility for maintenance costs? If you’re retired, perhaps you could rent it out and move to the Mainland. But with bigger private-sector homes costing at least double or treble the resale value of the housing estate unit, it doesn’t offer most tenants much of an upside.

The authors point out the standard socio-economic advantages of encouraging home-ownership – ‘empowerment’, building equity and enabling greater mobility. The last point is especially valid, as being stuck in a distant housing estate almost certainly reduces job options. They don’t mention the possible drawbacks. For example, with less subsidized rental housing stock, where do the poor live? But these pros and cons have nothing to do with the article’s supposed concern of solving the fiscal problem.

And would it actually do that? If successful, it would provide the government with a helpful windfall. But it would not generate longer-term recurrent revenues, which – along with lower expenditure – is the only sustainable way to solve the budget deficit. It’s like the West Kowloon Cultural Hub-Zone selling luxury flats to make ends meet: once you’ve burnt through the cash, you’re still losing money.

Speaking of the SCMP, Zichen Wang of Pekingnology has some points to make about the paper. As a former Xinhua staffer, he likes to think of Jack Ma’s organ as occupying a unique and noble position connecting China and the West. But he can’t help tearing into some of its Mainland science reporting …

Regrettably, alongside its wealth of credible reporting, SCMP has also developed a distinct genre of science stories based entirely on a single paper published in a Chinese (sometimes quasi-) academic journal. A recent prime example is a recent article, China unveils a powerful deep-sea cable cutter that could reset the world order, which has since spread widely, misleading Bloomberg, CNN, MERICS, and Lowy Institute, as well as top China experts on Twitter.

Among the faults he finds…

These reports exaggerate early-stage findings, concepts, and designs, presenting them as finished deployments without sufficient scrutiny despite the well-documented low conversion rate of academic research to actual industrial application … [They] sensationalize and politicize the research by taking it out of context and linking it to current events … A key tactic is attributing everything to the actions of the Chinese government … the SCMP fails to adhere to best practices followed by reputable English-language outlets, which often consult external experts in relevant fields to provide readers with a more comprehensive and impartial view of scientific developments … Another issue is the overwhelming focus on research with potential military implications … The descriptions and narration in these reports are so hyperbolic that they sometimes sound like science fiction.

He surveys eight examples. In the case of the ‘undersea-cable cutting’ thing…

…the Chinese [academic] paper was published on Feb 24 in a pay-to-play journal churning out admission decisions within a week and only available in a subscription-based database, until being drummed up by the SCMP a full month later on March 25. It’s mindblowing that “China unveils” and “officially disclosed” it, as the SCMP story fictionalized, quickly translates to the “very public unveiling” received [overseas] where some “strategic communication” is now speculated.

Other examples include the stories ‘Was doomed US submarine caught by a monster whirlpool in the South China Sea?’ and ‘How China is solving F-22’s stealth coating cracks with 3,000-year-old silk weaving tech’. (Competition idea: write an absurdly far-fetched China tech headline, SCMP-style.)

Why is SCMP management pushing this sort of coverage? Is it to get clicks, or out of over-eager patriotism?

China Digital Times summarizes online debate about Li Ka-shing’s patriotism, or lack of it…

…many online articles and comments supportive of Li have been deleted by platform censors. CDT Chinese editors have archived ten recent essays and articles on the subject, at least three of which have since been censored. A now-deleted satirical essay from WeChat public account 捉刀漫谈max (Zhuōdāo màntán max, “Ghostwriter Chat max”) posed the facetious question “How About If Li Ka-Shing Just Sells the Ports to Russia?” and mocked the blind nationalism of those urging Li to ignore business fundamentals and bend the knee to Beijing. An article by WeChat blogger Xu Peng noted the irony of those who would criticize Li for not being “patriotic” enough—despite his decades of generous donations to charitable causes in China—while conveniently overlooking nationalist pundit Sima Nan’s rather unpatriotic record of tax evasion. A now-censored article by science and current-affairs blogger Xiang Dongliang pointed out that CK Hutchison’s proposal only involves the sale of usage rights to the ports—because the ports themselves are under the sovereignty of the nations in which they are located—and that the company does not plan to sell the usage rights to any ports located in China or Hong Kong. Xiang argued that the proposed sale is motivated by CK Hutchison’s need to hedge economic and geopolitical risk, and that absent other Chinese buyers (who would be subject to the same challenges), it is only rational for the company to offload usage rights to the ports to American consortium BlackRock. If the Chinese government and online nationalists are genuinely concerned about port control falling into American hands, Xiang wrote, they should encourage so-called “patriotic” Chinese companies such as Huawei or Hongxing Erke to bid for the ports instead.

Brian Kern lists imprisoned pro-democracy Hong Kong figures by former political position, length of sentences and number of arrests…

225 pro-democracy leaders have been arrested 380 times. Some have been arrested as many as seven times each.

128 pro-democracy leaders have been convicted 184 times. Some have been convicted as many as six times each.

75 pro-democracy leaders have been imprisoned, receiving a total of 125 sentences, with five sentenced to a total of more than 100 months (eight years and four months) each.

A report from a Brookings Institute guy following a recent visit to China…

There appears to be a widely held view among China’s policy community that Trump’s [tariffs] announcement is designed to undermine China’s economic competitiveness, rather than as a source of leverage for negotiations to resolve specific trade irritants. This colored PRC response.

Asia Times looks at the repercussions of the recent earthquake-related construction mishap in Bangkok…

China’s Belt and Road Initiative projects are being scrutinized in Thailand after Myanmar’s 7.7 earthquake pancaked a 30-floor building 966 kilometers (600 miles) away that Chinese engineers were constructing in Bangkok.

The incomplete skyscraper was the only building to collapse in the lightly damaged Thai capital. But the disaster exposed allegedly substandard steel reinforcing rods that had snapped, reducing the building to a huge rubble pile that crushed about 87 construction workers, including 15 confirmed dead and 72 who disappeared.

…The investigation began with a bizarre, troubling sight. Two days after the March 28 quake, four Chinese men were filmed grabbing in their arms as many construction-related documents as they could carry and running away from the rubble site.

A must-see interview with historian Frank Dikotter, of HKU and elsewhere. Some of what he says you might already know, but there is a ton of fascinating stuff here. 

A man is imprisoned for 10 months for writing graffiti on and around pedestrian walkways…

[Ernest Lee] stood accused of “destroying” lift doors and banners in multiple locations, including pedestrian bridges in Wan Chai and Causeway Bay, between May and December last year.

He wrote slogans in Chinese like “Taiwan independence,” a reference to Chinese President Xi Jinping as Winnie the Pooh, and claims that the Chinese Communist Party had brought “disaster” upon Hong Kong, the prosecution said.

Lee, a logistics worker, was charged with one count of committing acts with seditious intention and eight counts of criminal damage. He pleaded guilty to the sedition charge and four of the criminal damage counts, with the other four dropped by the prosecution.

…Judge Victor So, a designated national security judge, said the court could not ignore the defendant’s aim of expressing dissatisfaction with the government and venting his inner hatred.

The slogans he wrote also involved cursing the central government and using insulting names to refer to the “motherland,” So said.

Is the crime defacing public property or expressing dissatisfaction with the government (which accounts for the sedition charge, a NatSec offense)? Ten months is relatively light for a NatSec sentence. 

Lee’s opinions are hardly out of the ordinary. Most Taiwanese would say that the controversy isn’t about whether they are independent rather than should cease to be. Non-Taiwanese are free to visit and judge for themselves. ‘Xi as Winnie’ memes are all over the place. And the idea that the CCP has brought ‘disaster’ to Hong Kong is no doubt provocative but ultimately a matter of opinion, even taste. (Is Trump ‘bringing disaster’ to the US?)

Vandalizing public infrastructure is potentially a greater national security risk than expressing hatred for the government. Discuss.

Badiucao celebrates Hong Kong’s art week with appearances on LED billboards in Mongkok.

On the subject of disatsres, China Media File looks at the response to the recent collapse of a half-built tower in Bangkok…

Shortly after the collapse, the China Railway No. 10 Engineering Group removed a post from its WeChat account that had celebrated the recent capping of the building, praising the project as the company’s first “super high-rise building overseas,” and “a calling card for CR No. 10’s development in Thailand.”

Yesterday I wondered whether or how rents have reflected population changes in different Hong Kong districts over the last five years. Joel Chan comes up with the data.

Anything expensive (that’s all apartments in Hong Kong island, plus big ones in the New Territories) have fallen by around 5-8%; relatively cheap ones (small ones in NT and especially Kowloon) have risen by at least 4% (10% for the smallest Kowloon flats); the 500-1,000 sq ft units in Kowloon and NT are unchanged. Which seems to say, in short, that wealthier tenants have been leaving the city or trading down, while penny-pinching ones are coming in. Bear in mind that the number of small units city-wide is much larger than the number of really big ones.

More on statistics – the number of paper cups used at the Rugby 7s last weekend. Click here to find out. It’s about 10 times what I would have guessed.

The US imposes sanctions on six NatSec-related officials in Hong Kong, including Justice Secretary Paul Lam (doesn’t care) and several top police. 

Beijing’s Hong Kong Office for Safeguarding National Security, whose boss is among the sanctioned, dismisses the measure as ‘a piece of waste paper’.

The Hong Kong government issues a more splenetic statement…

The Government of the Hong Kong Special Administrative Region (HKSAR) today (April 1) strongly condemns the United States (US) for including six Central Authorities and HKSAR officials in a so-called “sanctions” list in an attempt to intimidate the relevant officials safeguarding national security. It, once again, clearly exposed the US’ barbarity under its hegemony, which is exactly the same as its recent tactics in bullying and coercing various countries and regions. The HKSAR despises such so-called “sanctions” and is not intimidated by such despicable behaviour.

If you like this sort of press release, there’s a giant one on the US’s latest HK Policy Act Report…

The Government of the Hong Kong Special Administrative Region (HKSAR) today (April 1) strongly disapproved of and rejected the untruthful remarks, slanders and smears against various aspects of the HKSAR in the United States (US)’s so-called 2025 Hong Kong Policy Act Report. It was apparent that the so-called report was compiled to serve the political purpose of maintaining US hegemony. It, once again, clearly exposed the US’s barbarity under its hegemony. By piling up false stories and narratives, they were clearly crafted to serve the political interest of the US in order to suppress the development rights and security interests of others.

…The US once again told fallacies about Hong Kong by replacing the rule of law with political manipulation and confounding right and wrong, and blatantly interfering in Hong Kong affairs which are entirely China’s internal affairs. The US’s attempt to undermine the stability and prosperity of Hong Kong will only expose its slyness and will never succeed.

The spokesman said, “The so-called ‘sanctions’ arbitrarily imposed against the officials of the HKSAR and the Central Authorities who perform their duties in accordance with the law by the US at the same time when publishing the so-called report smacks of despicable political manipulation to intimidate the relevant officials safeguarding national security. These grossly interfere in China’s internal affairs and Hong Kong affairs, and seriously violate the international law and the basic norms governing international relations. It, once again, clearly exposed the US’s barbarity under its hegemony, which is exactly the same as its recent tactics in bullying and coercing various countries and regions. The HKSAR despises such so-called ‘sanctions’ by the US and is not intimidated by such despicable behavior. The HKSAR will resolutely continue to discharge the duty of safeguarding national security. The HKSAR Government will make every effort to protect the legitimate rights and interests of all personnel.

…”The US Government had vilified the HKSAR’s legislative work, as well as law enforcement agencies, prosecutorial and judicial authorities, in claiming that fulfilment of their duties constituted an ‘erosion of rights and freedoms’. However, the fact is that the US has been ignoring the non-interference principle under international law, interfering with other countries’ internal affairs, grooming agents, instigating ‘colour revolutions’, and even creating social unrest and multiple humanitarian disasters through economic and military coercion, causing suffering to people in many countries. In the HKSAR, the ‘black-clad violence’ and the Hong Kong version of ‘colour revolution’ back in 2019 have severely damaged the social stability of Hong Kong. 

Etc.

If you thought we had heard the last of ‘soft resistance’, you were wrong. Security Secretary Chris Tang warns against the phenomenon ahead of the 10th National Security Education Day on April 15…

“Citizens must think critically and not be misled by the lies spread through soft resistance,” Tang said, calling on residents to cherish Hong Kong’s “hard-won” stability post-2019 unrest.

Tang said a series of events has been organized to mark the National Security Education Day, including a thematic exhibition at the National Security Exhibition Gallery at the Hong Kong Museum of History, featuring robot-guided tours.

A territory-wide interschool national security knowledge challenge is ongoing to enhance recognition of national security among primary and secondary students.

Educational comics and animations featuring characters “Andy” and “Security Bear” produced by the bureau were also launched to illustrate national security concepts, he said.

…Tang criticized Hans Yeung Wing-yu, a former Hong Kong Examinations and Assessment Authority history manager, for allegedly exploiting a student’s suicide during a mainland exchange to incite anti-government sentiment.

Yeung, who had fled to the United Kingdom, previously sparked outrage with an exam question framing Japan’s 1900-45 invasion of China as having “more benefits than harms.”

“He is anti-China, humiliates the nation, and panders to Japan – his actions endanger national security,” Tang said.

He also accused Chung Kim-wah, ex-deputy head of the Hong Kong Public Opinion Research Institute, and commentator Stephen Shiu Yeuk-yuen of similar tactics.

I am guessing that’s Security Bear up there on the right (the one in blue), though it could be Andy, or one of the robot exhibition-guides. Seen here, anyway. 

From the census officials via stats guru Joel Chan – changes in population in Hong Kong by district, at year-end 2024 compared with end-2023 and end-2019. In part…

Parts of the New Territories have gone the opposite way…

For the city as a whole, the changes are very small…

Hong Kong 7,432,500 ↓0.2% / ↑0.1%

Not sure how the government manages to track the number of residents in each district to the nearest 100 year by year. But if they say Wanchai District has lost nearly one in ten of its population, who are we to doubt it? Though not exact, there is noticeable correlation between population changes and median household income by district (2023 figures here). Wanchai (which includes Happy Valley, Tai Hang and Causeway Bay) and Central and Western are the wealthiest areas, while Tuen Mun and Yuen Long among the least well-off.

Simple predictable explanation: expat and local middle class leaving, Mainlanders arriving.

It would be interesting to see data for residential property prices. Have they fallen more on northern Hong Kong island than in NT? What about rents? 

The Diplomat has a Hong Kong-centric take on the CK Hutchison ports saga. There are some debatable points (for example, whether the company sought Beijing’s approval). But it poses some interesting questions…

This backlash reflects Beijing’s increasingly uneasy relationship with Hong Kong’s business elites. Despite the waves of [Natsec] securitization in recent years, the Chinese party-state still lacks formal channels of influence vis-a-vis Hong Kong businesses, and the port sale has only deepened the Chinese Communist Party (CCP)’s suspicion toward Hong Kong’s capitalist class. While Beijing has long co-opted local businesses to govern Hong Kong – a strategy pioneered by the British colonial government – it has become increasingly distrustful of their autonomy, profit-driven motives, and lack of patriotism. Beijing’s public pressure campaign against CK Hutchison portends a growing effort by the CCP to direct Hong Kong’s independent business interests.

As the article notes, Hong Kong companies do not (yet) have CCP committees attached to them.

Transcript (audio available) of an interview with Mark Simon on the Jimmy Lai trial… 

“What really shocked me was here is an English laws educated judge wearing a funny wig, basically stealing another culture you could say, you know, the British culture. And she’s up there telling a guy you’re Chinese. She’s parroting a line of the CCP, which they tell Chinese all over the world: You’re Chinese. We own you.”

…”I’ve always believed that they know they have nothing on Jimmy. Jimmy Lai has basically been tried on two things: tweets and what he said in terms of on-air comments or something like that, the whole collusion thing is pretty much collapsed. Because the fact of the matter is, Jimmy really in an overall sense did not meet with many people in eight years. He went to Washington DC twice largely because he wanted people to understand about press freedom. Press freedom was really the driving force early on with Jimmy. He’s always been a democracy activist. He’s always been pro-democracy.”

But Lai’s lifelong advocacy for democracy clearly irked the authority in Beijing, and they were determined to silence him – so much that they locked the 77-year-old diabetic in solitary confinement inside Stanley Prison, a pre-World War II maximum-security facility known for housing Hong Kong’s most dangerous criminals.

Throughout his imprisonment, Lai has steadfastly maintained his innocence, insisting that the charges against him are politically motivated attempts to suppress press freedom and democracy. But even he may not have anticipated that his skin color –  “yellow” – would be invoked in a court of law, as Judge Esther Toh Lye-ping suggested it as a condition of his alleged offense.

Beijing issues new measures against foreign sanctions…

Article 7 of the Regulations specifically allows for the seizure of intellectual property of those that “directly or indirectly participate in the drafting, decision-making, or implementation of the discriminatory restrictive measures in Article 3 of Anti-Foreign Sanctions Law.”  Paragraph 2, Article 3 of the Law reads, “Where foreign nations violate international law and basic norms of international relations to contain or suppress our nation under any kind of pretext or based on the laws of those nations to employ discriminatory restrictive measures against our nation’s citizens or interfere with our nation’s internal affairs, our nation has the right to employ corresponding countermeasures.” 

A BBC China story – even a non-soccer fan can’t help but read on…

With a minute left on the clock and trailing Japan 6-0, Chinese defenders were likely wishing for the sweet relief of the final whistle.

But Japan’s Takefusa Kubo was not feeling charitable. After watching his team-mates toy with their opponents for a while, he received a pass on the edge of the Chinese box and rammed home Japan’s seventh goal.

The ball rocketed into the roof of the net, and the man known as “Japanese Messi” condemned China to their worst-ever defeat in a World Cup qualifier.

The 7-0 spanking in September – described as “rock-bottom” by a Shanghai-based newspaper – followed a year-long line of humiliating defeats which included losses to Oman, Uzbekistan and Hong Kong.

But worse was to come.

Corruption and authoritarian rule, no less.

Back to the Diplomat – a Beijing-funded trip to China for Taiwanese…

While participants signed up to visit Hainan, expecting beaches and tropical landscapes, the actual itinerary was shrouded in secrecy. Each evening,we received details for the following day’s schedule, which differed drastically from expectations. Instead of leisure time on Sanya’s beaches, the group was subjected to propagandistic programming.

…Through subtle manipulations, the CCP turns unsuspecting participants in these supposed tourist trips into ambassadors for its narrative. These travel groups, though varied in size and theme, all serve one purpose: to propagate China’s vision of cross-strait unity. By having the tour guides or CCP officials showcasing urbanization and military power, they promote an image of a modern and unified China.

Without realizing the risks, these Taiwanese tourists become pawns in a larger geopolitical game. The CCP’s infiltration into the Taiwanese understanding operates incrementally, one tour group at a time, eroding the boundaries that separate Taiwan from China.

Want ‘the latest society scoop, royal news, and style inspiration’? Of course you don’t. But anyway, here’s Town and Country magazine’s Snob’s Guide to Hong Kong…

When it comes to shopping, Hong Kong has no small number of great options. We always get a charge from visiting the K11 Art Mall in Tsim Sha Tsui, which is home to fashion and jewelry boutiques, restaurants, and live events. Other high-end destinations around town include shopping centers like Pacific Place (don’t forget to stop at Shanghai Tang), Landmark, The Peak Galleria, and Russell Street in Causeway Bay, which was once home to the world’s most expensive retail real estate and still draws crowds thanks to shops like the locally legendary Lane Crawford.

But not all your shopping needs to be done this way. 

Well, that’s true.

Secretary for Security Chris Tang issues a response to Ming Pao‘s response to his earlier response after a reporter asked him a question he didn’t like. Details at HKFP, which adds…

Over the past two years, the Hong Kong government has lashed out at Ming Pao over news reports, opinion pieces, and satirical cartoons.

On March 5, Tang warned the paper not to be “exploited by people with ulterior motives” as he condemned legal scholar Johannes Chan for “undermining the rule of law” in a Ming Pao opinion piece criticising a court ruling.

In January, the newspaper defended its journalism after the government described one of its reports on a cybersecurity bill as “biased and misleading.”

In August, Ming Pao urged its columnists to be “prudent” and “law-abiding” when penning for the newspaper, saying “crisis may come” if they were not compliant.

He is not the only government minister having problems with the media asking questions. Starting around five minutes into this Bloomberg vid, Financial Services Secretary Christopher Hui gets a reasonable question about the possible impact of the CK Hutchison ports deal drama on the financial sector. He reels off a list of barely relevant reasons why Hong Kong is an anchor of stability and top financial hub. The interviewer asks the question again, only to get pretty much the same non-answer. A second interviewer comes in and asks specifically whether he thinks the deal will go through. For a third time, he recites press-release jargon.

The word is that he stormed out of the studios without getting his make-up removed.

If he was really unprepared, it would have been better to just say it’s a sensitive issue and I can’t discuss details.

Why were the reporters’ questions about the repercussions of the port deal perfectly valid? Look no further than two more stories.

A report (by Bloomberg) says that Beijing is telling state-owned companies not to start any new business with firms linked to Li Ka-shing…

China has told state-owned firms to hold off on any new collaboration with businesses linked to Li Ka-shing and his family, according to people familiar with the matter, after the Hong Kong billionaire irked Beijing with his plan to sell two Panama ports to a global consortium.

The directive was issued to state-owned enterprises last week at the behest of senior officials, the people said, asking not to be identified discussing private matters. Existing tie-ups are not affected, they added.

Under the directive, state enterprises wouldn’t immediately get approval for business activities linked to the tycoon. The regulators are also reviewing what investments the family has in China and abroad in a bid to better understand the breadth of their business dealings, the people said.

…The order to pause new dealings doesn’t necessarily mean Beijing will bar state firms from working with businesses linked to Li. But it does ratchet up pressure on the 96-year-old billionaire after CK Hutchison’s deal with a BlackRock Inc.-led consortium to sell ports in Panama and elsewhere put his conglomerate’s flagship entity in the crosshairs of US-China tensions.

(HKFP/AP story here.)

How much does this ‘ratchet up the pressure’? Is that a veiled threat in the last sentence of the second para? What sort of message does it send the foreign investors Beijing wants to attract? Is Li Ka-shing, looking at a US$19 billion deal, going to pay any attention?

A local spin from the SCMP, which in which the Hong Kong government feels a need to get involved…

Tycoon Li Ka-shing’s CK Hutchison Holdings and the Hong Kong government are discussing “a reasonable way out” with a week to go until the deadline for sealing a controversial deal to sell its two Panama ports to a consortium led by US investment firm BlackRock, the Post has learned.

Sources said on Wednesday that the government had approached Hutchison immediately after learning from its surprise announcement on March 4 that it was selling all its overseas port operations to a group led by the US firm.

…“Both sides have since been in contact, trying to look for a reasonable way out,” a government source said.

Other sources said the options were limited as pulling out of the sale was likely to be costly and carried serious political implications while pressing ahead with it would exact a toll on both the company and the country.

RTHK reports yet another Ta Kung Pao piece on the issue…

The article by the Ta Kung Pao newspaper quoted business experts who questioned whether the Li Ka-shing-owned conglomerate had gotten the best deal it could have, stressing that businesses should “stand with the nation in the face of hegemonic bullying.”

The article noted that public opinions that the sale did not appear to conform to the business logic of maximising profits.

“Not only is the valuation of the assets low, but the decision was made very quickly, without adopting the ‘highest-bidder wins principle,” the article said.

“Western media reports have also pointed out that the US consortium had gotten a bargain.”

The apparently gravely concerned, warm-and-fuzzy but never quite convincing argument that your foe is picking up a stone only to drop it on his foot. Nice of the writer to care so much for CK Hutchison’s welfare, but if anyone wanted to bid more for the ports, they are (or were) free to do so. Many people would say that, with the world turning protectionist, US$19 billion was pretty rich for a bunch of cranes and wharfs.

Some weekend reading – the Hong Kong government’s anguished statement on the UK’s latest six-monthly survey of the city…

 The Government of the Hong Kong Special Administrative Region (HKSAR) strongly disapproved of and must resolutely refute the untruthful remarks, slanders and smears against various aspects of the HKSAR in the so-called six-monthly report on Hong Kong: July to December 2024 of the United Kingdom (UK) today (March 27).

(Continued for 18 paras.)

The Standard reports that Hong Kong Talent Engage (it’s a thing) is posting a video on China’s Little Red Book social media platform warning would-be skilled Mainland migrants of the dangers of scams when they get a visa to work in the city…

The initiative offers mainlanders the latest updates on Hong Kong’s talent policies, employment and lifestyle, while also addressing anti-fraud measures, warning against black market traps and policy rumors, and assisting with residency issues to help them kickstart their careers in the city.

To mark the occasion, HKTE invited [Labour and Welfare Secretary Chris] Sun to star in a short video, where he led a talent team to introduce “T Sir” and “E sister” to hundreds of millions of Xiaohongshu users in the mainland.

In the video, Sun takes on the role of a talent team convener, skillfully using electronic devices to summon the two characters while outlining their important missions.

“This mission has two main objectives: first, to raise awareness about fraud among talent and to avoid believing in false information. Second, to promote our talent services,” he emphasizes.

An HKTE spokesperson said “T” stands for “Talent” and “E” represents “Engage.” And “T Sir” will focus on sharing official information and debunking rumors, while “E sister” will offer practical and valuable insights into living in Hong Kong.

The spokesperson said the goal is to effectively attract and support talent in settling down in Hong Kong, ensuring a seamless transition as they begin a new chapter in their lives.

Conveniently, the paper reports just such a scam over the page.The conmen call the victim and claim to be Mainland police investigating money-laundering. They prey on ignorance and gullibility, but also fear: the trick works best if the victims have (or think they have) indeed infringed Chinese capital controls when moving cash across the border. Either way, what does it say about the quality of the ‘talent’?

And what will skilled Mainlanders make of ‘T Sir’ and ‘E Sister’?

HKTE’s English page on scams. An entire Anti-Deception Coordination Centre is out there, producing videos on every ripoff imaginable, including the Romance cum Investment Scam.

New Bloom describes how China’s ‘soft power’ has failed to work in Taiwan. Essentially: Chinese popular culture has become politicized and alienating to Taiwanese; punishment of Taiwan companies that fail to endorse Beijing’s line has similarly alienated public opinion; and Taiwan’s sense of identity has strengthened…

The 2019 crackdown on Hong Kong was a turning point. Many in Taiwan had once considered China’s “One Country, Two Systems” model. But after seeing Hong Kong’s freedoms stripped away, support for that idea collapsed. China’s promise of peaceful coexistence lost credibility. Unification with China now looks like a direct threat to Taiwan’s democracy…

…China’s failure in Taiwan exposes a deeper flaw in its approach. Soft power is about attraction, not coercion. Unless China dramatically rethinks its approach, reunification will remain as distant as ever.

China File looks at Taiwanese people’s view of themselves as non-Chinese as the KMT increasingly sees the CCP as an ally…

In a recent interview with Japanese media, senior KMT legislator Weng Hsiao-ling was frank about her party’s objectives. She told Nikkei Asia that “the peaceful unification of this country is of course our ultimate goal.” Even though there “may be no way to achieve this immediately,” she continued, “cross-strait communication and interaction” can help achieve this objective.

In her interview, Weng asserted that all Taiwanese people are Chinese. Yet poll after poll by National Chengchi University (NCCU) in Taiwan, originally founded in China a century ago as the KMT’s party school, show that Taiwanese respondents see things differently. In the university’s most recent survey, 94.4 percent of respondents said they identified as either Taiwanese or Taiwanese and Chinese. Of that supermajority, nearly two-thirds said they viewed themselves as Taiwanese exclusively. Only 2.4 percent of respondents said they felt they were Chinese only, with 3.2 percent declining to answer.

NCCU polling has also found that Taiwanese overwhelmingly reject unification with the PRC. Only 1.1 percent of respondents to a similar poll from late last year sought unification as soon as possible, with 5.8 percent favoring maintaining the status quo and moving towards eventual unification. On the other side of the lopsided spectrum, 34.1 percent favored maintaining the status quo—effective independence—indefinitely. Another 26.4 preferred keeping the status quo and deciding later, while 22.5 percent said they wanted to keep things as they are for now, with the eventual goal of doing away with the ROC and establishing a Taiwanese state.

Recall that the bulk of Taiwanese are descended from Fujianese who started settling on the island around the same time the English began colonizing Massachusetts and Virginia. It’s not as if there was even much of a window of opportunity in the 1980s-90s, when it seemed 1C2S could work in Hong Kong and even encourage liberalization in China. Prior to democratization in the 80s, the KMT denounced China’s government as ‘communist bandits’. Following democratization, Taiwan people became free to openly reject the KMT line that they are Chinese. 

As these articles suggest, there is no way Taiwan will accept Chinese rule peacefully. That leaves Beijing with two choices: use violence – which would prompt global sanctions and crash China’s economy – or just forget it.

The SCMP reports on the office glut…

How do you solve a 15-million-sq-ft empty office space problem in Hong Kong, a size larger than all the space in existing prime office buildings in the city’s main business district in Central?

This is the dilemma facing Hong Kong office landlords and asset managers, given the current vacancy rates and future supply of new buildings.

Given the long-term trend, it is likely to take at least seven years for the demand to catch up with the supply, according to property consultancy CBRE. Office landlords would thus struggle to fill the void, it added.

“By the end of this decade, the vacancy pressure is likely going to be very similar to what we are seeing in the market today,” said Marcos Chan, executive director and head of research at CBRE Hong Kong. “That is on an assumption that the market demand will be quite similar to what we used to have, before the market experienced a downturn a couple of years ago.”

The seven-year estimate appears to be on the optimistic side. If the current net annual demand for prime office space stagnates at 1 million sq ft, it could take 15 years to fill these vacant offices with tenants, according to data cited by Edward Chan, director of S&P Global Ratings.

Hong Kong developers added 8.5 million sq ft of office space since mid-2019, failing to adjust for economic calamities. As anti-government protests and Covid-19 outbreaks sent the economy into a recession, the city’s grade A office market shrank by 1.3 million sq ft and rents slumped 40 per cent, according to data tracked by CBRE.

What level of incompetence does it take for planners and policymakers to bring about a massive glut of offices and a simultaneous shortage of affordable housing? Why did bureaucrats decree over a decade ago that Kowloon Bay would become an office hub like Central when they could have earmarked the space for homes?

The article adds…

…[CBRE] estimates that 186 premium office buildings with 8 million sq ft of vacant space could be suitable for conversion into accommodation.

The paper is drawing on a CBRE report, which cleverly uses the word ‘hub’ a lot in proposing government flexibility on repurposing older and smaller office blocks…

CBRE’s research identifies emerging sectors such as education, innovation and technology (I&T), healthcare and wellness, and creative and cultural industries as key drivers of growth in Hong Kong’s economy due to demographic changes and supportive government policies. These sectors require a different type of office space, one that combines living, working, and social elements to foster collaboration and innovation. 

The government anticipates a shortage of 180,000 workers across various sectors in the next five years, highlighting the need to recruit labor and tertiary students from overseas. Coupled with policy measures to attract high-calibre students and skilled professionals to Hong Kong, the demand for accommodation is expected to surge. 

Ada Fung, Executive Director, Head of Advisory & Transaction Services, CBRE Hong Kong said: “With demand for buildings that combine living, working, and social elements continuing to grow, the trend of living and working under the same roof will likely become more common in the coming years. We recommend landlords to adopt a hub-based commercial buildings with accommodation provided within a specific industry ecosystem. This can create synergy among occupants, enhance management and collaboration, and ultimately increase occupancy rates “

…landlords may need to fully or partially convert buildings to include accommodation or other non-domestic uses within traditional commercial space to achieve a round-the-clock ecosystem in commercial buildings.

Another real-estate consultant is pushing for offices to be converted into student housing, in particular.

Main problems: bureaucrats who have a longstanding aversion to changes in land/building use (unless a hefty lease conversion premium makes it unviable), and to the idea of more housing.

Also in the SCMP, Mike Rowse recommends a broad-based consumption tax to fix Hong Kong’s budget deficit…

[I suggest] we make a start on preparations for some form of a goods and services tax. I realise it will not be popular and will require very careful presentation and explanation. But we are kidding ourselves if we think the debate can be deferred indefinitely. It is inevitable and we should begin the conversation immediately.

My suggestion is to start small and gradually increase the range of goods and services covered. How about starting with something simple like utility bills such as gas, water, electricity and telecommunications? Eventually, we could also tax restaurant bills and luxury goods. As much as possible, we should keep collection at the wholesale level to simplify administration.

There will undoubtedly be pleas for exemptions. There is bound to be opposition to imposing the tax on kindergarten and school fees or medical expenses for example. It will take a strong financial secretary with the support of a disciplined legislature to resist. But the general aim should be to include everything eventually.

We can also set the tax at a low percentage initially – 3 or 5 per cent – and increase it later as necessary. Singapore followed this route, increasing its sales tax to 9 per cent last year without a noticeable loss of competitiveness.

We must borrow very large sums to finance essential capital expenditure. We can do so – and we must. Yet to maintain our reputation for fiscal prudence, and keep borrowing costs low, we must show capital markets that we have a credible plan to achieve fiscal surpluses and repay whatever we borrow. That means a goods and services tax.

Of course, such a tax is regressive. A 5% tax on electricity hurts the poor far more than the wealthy. It’s as unfair as charging below-average earners a higher salaries tax rate than millionaires. At the very least you would have to raise welfare payments and the minimum wage to compensate. 

It might be better to start with higher taxes on luxuries such as designer label shoes and handbags, ugly watches, tacky diamond necklaces – the entire inventory of high-end malls. Plus bigger/flashier models of cars. Why not additional stamp duty/capital gains tax on apartments over (say) HK$25 million? But here we run into vested interests: vendors of overpriced crap (and their landlords) will whine that it could deter tourist expenditure. Civil servants and their buddies buy big cars and apartments.

And then there’s the option of cutting bloated civil service salaries. Which would have to include retired bureaucrats’ pensions, on which subject former Administrative Officer Rowse is curiously silent. But in order to get the wider public to accept a GST, you would have to tackle that as well.

From HKFP – Security Secretary Chris Tang waxes wrathful about the Guardian’s piece on Jimmy Lai being denied his right to choose his own legal representation.