Big Lychee, Various Sectors

Prosecution witness in Jimmy Lai trial…

Former media tycoon Jimmy Lai sought to paint China in a negative light in Apple Daily’s English edition so the United States would take hostile actions against Beijing, an ex-senior executive of the now-defunct outlet told Lai’s national security trial on Wednesday.

…“Lai felt that the Chinese Communist Party regime was suppressing human rights, covering up [issues] and lacking integrity, so he hoped to portray this image to foreign readers,” he said.

The defendant hoped that the English edition could “influence public opinion in the United States and thus create an impact on American politics,” in order for Washington to take hostile actions such as sanctions, to “protect Hong Kong and Apple Daily”, the court heard.

UN human rights experts…

“We are alarmed by the multiple and serious violations of Jimmy Lai’s freedom of expression, peaceful assembly, and association, and his right to a fair trial, including the denial of access to a lawyer of his own choosing and the handpicking of judges by the authorities,” the experts said.

More ‘smearing’ of Hong Kong from the Guardian, which visited M+ and the West Kowloon Cultural Hub-Zone…

Herzog & de Meuron decided to dig, taking an “archeological” approach, unearthing an unlikely gift in the form of the Airport Express train tunnel, cutting diagonally beneath the site. “It was like discovering the body of a huge animal,” says Herzog. “It gave us the impulse to create a kind of underworld, which is mysterious and strange – and so Hong Kong.”

…The architects describe it as “a space of unprecedented potential”, and it has so far staged some dangling installations. But it was empty on my visit, and curators confide that they struggle to find ways to use it. 

And it’s difficult to get to…

The nearest metro station is across a bridge, up and down several escalators, in the bowels of a shopping mall whose operators clearly prefer people to get lost in their retail labyrinth rather than find their way to the museum. Once you emerge, you are greeted with the blank concrete silo of M+’s conservation and storage building, a later addition to the brief whose lower floors are leased to the Phillips auction house, so it is their gigantic logo you see first, not the museum’s.

The nearest bus stop, meanwhile, drops you on the edge of an eight-lane highway from where you must tackle a 20-minute obstacle course of bridges and underpasses. Finally, coming by car (which, strangely for such a public transport-oriented city, was the recommended option) leaves you in an unprepossessing undercroft, as if you’re coming to service the boiler. Even arriving on foot presents challenges: the building is so big and “permeable”, with entrances on all sides, that the museum cannot staff all its doors, so many remain locked. A dedicated ferry service, opening later this year, should hopefully provide a more seamless arrival.

Coming by car is the ‘recommended option’ – in a city where 90% of households do not have one (and are not car-owning planner-bureaucrats who design everything for themselves). The writer concludes with the phrase ‘a motley hotchpotch of architectural misfits, marooned on the waterfront’. And he didn’t even get to the Cruise Terminal or the Zhuhai Bridge.

Beijing’s attempts to prop up China’s falling stock market fail to impress – from Bloomberg…

China’s history of botched market rescue efforts, the grim state of its economy, and uncertainties over Beijing’s long-term policy roadmap are keeping investors skeptical about the sustainability of these gains.

…“Xi Jinping’s people are almost certainly telling him that the rout in the equity market is a stability risk,” said George Magnus, a research associate at Oxford University’s China Centre. “Investors aren’t just abandoning Chinese stocks for normal reasons of valuation, but because the whole economic policy and political environment has atrophied. Getting confidence back probably requires major changes in both.”

…[Previous efforts suggest] that throwing money at the market as Beijing appears willing to do, while economic woes lie unresolved, will only embolden traders to sell into what may at best be a bear-market rally.

Howard French – always worth reading – in FP…

Xi is not just ideologically hostile to the creation of more generous health, retirement, and unemployment systems. The real problem is that China has waited this long to grapple with these issues in the first place. Beijing was slow to take aging and population decline seriously, putting them off until they could no longer remotely be denied and then all but panicking. The country is suddenly now awash in campaigns urging young people to create bigger families, and these are unlikely to work.

…[Beijing’s dilemma] looms as an increasingly excruciating choice between guns and butter … China saw the present period as a window of opportunity that was bound to close. Beijing hoped to use this window to make big geopolitical advances and lock them in through a combination of impressive economic growth and extraordinary military modernization before the costs unavoidably associated with aging forced it to switch direction and prioritize social needs at home.

Signs of this strategy can be found nearly everywhere one looks, from China’s muscling into the seas of the Western Pacific, where it has rebuffed its neighbors’ territorial claims while building artificial islands that host military outposts, to its enormous capital expenditures on the Belt and Road Initiative (BRI). Now in something of a retreat, the BRI is the program through which China has invested massively in infrastructure projects throughout Eurasia and other regions of the world.

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.

…the Hang Seng Index is below 15,000.

The Law Society finds that some of its members engaged in professional misconduct owing to links with the 612 Humanitarian Relief Fund. The Bar Association, on the other hand, clears its members accused of the same thing. What I don’t understand is why the police made the original complaints. If the lawyers were suspected of committing crimes, the cops would presumably arrest them. Since when have the police been a legal-profession watchdog?

A couple more HKFP items worth reading: an interview with journalist Bao Choy, and an interesting op-ed on how universities are (or should be) run.

That’s it – I’m switching the heater on.

The SCMP asks the seemingly age-old question: what is ‘soft resistance’? Scholars reply that…

…even though government officials might find it necessary to hit out at anti-China and anti-Hong Kong forces, they should use the term sparingly lest they stifle public debate and engagement and invite self-censorship.

Unless, maybe, that’s the whole point?

Mindful that the phrase is an import from the Mainland, pro-Beijing figures try hard to define the concept and justify sanctions for those who engage in it – with limited success…

Former director of public prosecutions Grenville Cross said hard resistance was generally more overt and might cover such acts as rioting, firebombing courts, or attacking public officials, while soft resistance could include more low-key activities like “polluting the minds of young people”, disrespecting national and regional symbols or praising those who violated the law.

…Executive Council member and senior counsel Ronny Tong Ka-wah said he believed “soft resistance” would be covered by the future law only in cases where someone translated their emotions into actions.

“If people think upholding national security will affect their freedom, it is also one kind of soft resistance. We are worried about people who make use of some freedom of creativity or speech as a guise to violate national security,” he warned.

“Of course, it is not illegal if you just think about it, but those who put their thoughts forward into actions like leaving commentaries, displaying slogans, that might be deemed problematic.”

‘Polluting the minds of young people’ – wasn’t that what Elvis did when he swung his hips on TV in the 50s? Eisenhower raging about soft resistance. Even more intriguing is Ronny’s idea that ‘thinking NatSec will affect your freedom is a form of soft resistance’. Is there some sort of Zen logic here? Submit, cease thinking, make your mind a motionless blank – and total enlightenment will enrapture you.

From the SCMP on Friday – M+ Museum has to rename (or un-name) the 1993 Zhang Yuan film Beijing Bastards, starring Cui Jian and other then-budding rock musicians. Google shows what was presumably the original url…

https://www.mplus.org.hk/en/cinema/once-upon-a-time-in-beijing/beijing-bastards/

But the page omits any mention of the title, simply headed ‘A film by Zhang Yuan’.

Another person arrested for online posts…

Police alleged that Tsang had repeatedly published posts with “seditious intention” on social media platforms, with their content promoting hatred towards Beijing and the Hong Kong government.

Runners in the Sunday’s HK Marathon report being warned about ‘political slogans’…

One woman told CitizenNews that she was escorted to a booth by police during a security check and told she was wearing a “political outfit” — her shorts had “Hong Kong, Add Oil!” on them.

And the Environmental bureaucrats ask police to investigate a ‘defamatory and slanderous’ online video apparently showing that it is easy to poke holes (not metaphorical but actual, leaking holes) in the government’s planned garbage bags. NatSec cops or the ordinary ones? 

At the Jimmy Lai trial, the court hears more about Apple Daily being biased. 

The Hong Kong Chief Executive tells the Hong Kong Federation of Journalists that their job is to ‘tell good Hong Kong stories’…

Lee accused Western politicians and media organisations of “fabricating lies, spreading illusions, and smearing Hong Kong for their political interests”.

He said the West had portrayed Hong Kong as “a place without freedom”.

(Out of curiosity, what ‘political interests’ do these Westerners have in smearing Hong Kong?)

And the city’s arts funding body – headed by the grandson of patriotic tycoon Henry Fok – cuts support for an annual drama awards ceremony after organizers last year invited a journalist who fought the government in court over press freedom and a political cartoonist. According to Fok, the HK Arts Development Council must ‘reduce the risk of potentially breaching the law, or even the national security law as far as possible’…

First held in 1992, the [HK Drama Awards] honour industry professionals across categories such as best producer, actor, stage design, composer and more.

Since 1996, the event has been held at a LCSD-operated venue every year, including at the City Hall’s concert hall 22 times. In 2022 and 2023, the ceremony was staged at Kwai Tsing Theatre.

In a response to HKFP, the [Leisure and Cultural Services Dept] confirmed it would not be sponsoring a venue this year after the last event sparked “different views in society.”

“Among them were views that some of the arrangements and content were inappropriate,” the LCSD wrote in a Chinese statement.

Some weekend links…

The Times asks Hongkongers how they are settling in to the UK (paywalled). 

At a time when young people are growing indifferent to democracy — a 2022 study by the Onward centre-right think tank found that 60 per cent of British people under the age of 45 agreed that “having a strong leader who does not have to bother with parliament or elections” is a good way to run the country — there is something refreshing about the passion for democracy among Britain’s Hongkongers. They have not had the luxury of growing complacent towards it.

Inside the Place, as orders of beef brisket noodle soup and Hong Kong-style French toast fly to and from the kitchen, the waitress Kelly Ho is a calm presence. The 40-year-old, who was a teacher in Hong Kong before moving to Britain in July, says she has no regrets, nor any plans to return to teaching: “Education is very high pressure. Here I’m much happier. I can see my two children when they finish school.”

Her biggest shock was not the weather (“everyone’s always moaning about it”) but the pay. Here she earns just over minimum wage, which can amount to £21,000 a year for a full-time worker; in Hong Kong a teacher can earn £60,000 or more. Even high earners there are taxed at no more than 17 per cent.

…Yet most of Britain’s Hongkongers remain confident that even if their own careers stutter, their children’s won’t. After selling his home in Hong Kong, Mak could have bought a bigger place in Manchester, but saved money for the future by buying a flat. “My wife didn’t want to have to take care of the garden,” he jokes. “Social mobility takes decades to observe. But if you’re asking whether we believe that it is better here, I would say yes. In Hong Kong, unless you have a good job or are very rich parents, it’s hard for your children to be rich too.”

Some background (guess the Times didn’t get the ‘good Hong Kong stories’ memo)…

Since 2021 members of Hong Kong’s Legislative Council have to be vetted by a screening committee, meaning nearly all are now pro-Beijing. The island’s pro-democracy newspaper, Apple Daily, has shut and its founder is on trial on national security charges. Schoolchildren are being taught that Hong Kong was never a colony of Britain. All Sim cards must be registered with real names. When Queen Elizabeth II died in September 2022, a man played God Save the Queen on a harmonica near the British consulate to rapturous crowds — until he was arrested on sedition charges.

Not a big fan of podcasts – I can read 1,000 words in the time it takes someone to go ‘um, ah’ and introduce themselves. But lots of people seems to like them, and now HKFP have taken the plunge. The latest is former domestic helper Xyza Cruz Bacani, who became a renowned photographer. 

An interesting comment from one ‘julia’ on Bill Bishop’s subscribers’ discussion thread, just before the Taiwan elections…

 None of the major candidates in this election are talking about Taiwan independence, that is a myth pushed by Beijing as justification for their refusal to deal with the democratically elected president of the past 8 years.

I don’t think there is any point to the US publicly reiterating support for the status quo in response to a possible DPP victory. Everybody in Taiwan already knows that there is nothing to be gained from challenging the status quo, the topic has been done to death.

The only belligerent in cross-Strait relations is the CCP, who made a rash diplomatic decision 8 years ago and now don’t want to accept the loss of face involved in admitting that the DPP aren’t a gang of extremists striking fear into the hearts of every honest person in Taiwan, they’re just a middle of the road political party that some people believe will do a better job than the other ones. Surely the CCP “at the core” understands this, so the only question is how they choose to respond to reality. I don’t think there is anything that US diplomats can do to give them an off-ramp if their plan to engineer a DPP loss fails. This is a problem of the CCP’s own making.

From the Diplomat – some Mainlanders don’t buy Beijing’s line on Taiwan’s elections…

Shortly after Lai Ching-te, the Democratic Progressive Party (DPP) candidate, won Taiwan’s widely watched presidential election on January 13, the spokesperson for Beijing’s Taiwan Affairs Office said in a statement, “The results of this election in the Taiwan region show that the DPP does not represent mainstream public opinion.”

Lai had captured 40 percent of the vote in a three-way race, finishing about seven points ahead of his nearest rival.

The official statement was posted by Toutiao, a popular news outlet on the Chinese social media platform Weibo, and quickly attracted mockery from numerous Chinese netizens.

“Oh my god… Can you stop lying to yourself?”

“So getting elected by one-person, one-vote doesn’t represent mainstream public opinion. Is what comes out of your mouth still human language?”

“Understood, as long as it is not 100 percent, it doesn’t represent the mainstream.”

…Most Taiwan-related online comments on the night of the election appeared to back the official goal of absorbing the island into the People’s Republic of China, but the amount of content that commended the free and fair election in Taiwan and criticized the lack thereof in China – and was noticed before being deleted – suggests that there could in fact be many in China who support democratic principles or even take a moderate view on Taiwanese autonomy.

Such democratic sentiments may have been strengthened by the grueling experience of Xi’s three-year-long “zero-COVID” policy. The policy’s extremely abusive enforcement measures awakened many Chinese citizens to the disastrous consequences of having no say in how and by whom they are governed.

The Guardian on China’s population decline…

On Tuesday, demographers proposed further reforms of fertility support policies, the Global Times reported. Some also drew hope from suggestions that there may be more babies born in 2024 in a post-pandemic baby boom, or because people wished to have children born in the Chinese zodiac year of the dragon, which starts in February.

Online, some Chinese Weibo users said they had anecdotally noticed many more pregnancies around them which they linked to the zodiac year.

Others were more sceptical, saying a single year baby boom would make life difficult for those children who would later sit for China’s highly competitive college entrance exam.

Not many of these guys left: YouTube interview with a 100-year-old WW2 US Air Force veteran.

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.

Had a phone call yesterday from the Registration and Electoral Office. They’re very concerned that the polling card they sent me before the District Council election was returned. Could it be that I had moved house? Yes, indeed it could. And yes, I was grief-stricken not to receive all those candidates’ leaflets. Nice girl – I didn’t have the heart to say there was no-one to vote for anymore.

A few mid-week links for the gentry…

Professor Wang Guiguo, an expert in something, will give evidence for the prosecution in the Jimmy Lai trial. He will…

…“identify the sanctions, blockade or hostile activities imposed or being considered by the [US]” on mainland China and Hong Kong, as well as explain the “impact” and “consequence” of such measures in his reports…

As the defence counsel ask: how is this relevant?

The Hang Seng Index closes at below 16,000. The last time it was this low was in late 2022. If you had bought then, you could have made a 35%+ profit in the following months. But that was when the remaining zero-Covid restrictions were driving everyone up the wall. You might think there can’t be that much downside left now. But then, the trend now shows four years of decline.

Also from HKFP – the strange case of ultra-low fixed-penalty parking tickets, which have been set at HK$320 since 1994, while the fine for littering is now HK$3,000.

If you’re wondering why anyone should care about diplomatic recognition by Nauru: an interesting article at a Carnegie-funded geopolitics site on China’s need for ‘strategic space’ in the South Pacific.

Remember Hong Kong DJ Rick O’Shea? Commercial Radio (I think)? Deep down there in the barrel of English-language broadcasting? Whatever happened to him? It’s sadder than you can imagine. Xinhua have resurrected him, to join one gorgeous pouting ‘Sylvia’ in extolling the virtues of socialism with Chinese characteristics. ‘I feel confident in  the Party’, he – or the scriptwriter – concludes. (Video is one year old, and has only 1,100 views. A tragic waste of talent.)

The FT on China’s ban on wording in stock-market listings prospectuses that ‘disparages the country’s laws and policies, business environment and judicial situation’…

Many bankers acknowledge that the language of offering documents has been toned down. They say they are simply acting in line with local regulations. Others, however, complain that this raises further questions about Hong Kong. A frustrated financier put it this way: If US firms in the city can no longer put prospectus filings together without asking what will be deemed to disparage China, can Hong Kong still be classed as an international financial centre? 

More whinging from the tourism industry, demanding looser rules in order to cram more Mainland visitors into Hong Kong.

What the Standard calls ‘financial experts’ – from a ‘Hong Kong Institute of Financial Analysts and Professional Commentators’ – call on officials to use the Exchange Fund to boost the market. The HSI ended at 16,216 yesterday. (Aren’t unprofessional commentators more fun?)

A Regina Ip SCMP op-ed supposedly pleads for a serious rethink of the whole economy, but is mainly handwringing over tourism and property prices, the need for a ‘population policy to attract and retain talent’, plus the same suggestion that the HKMA invest more reserves in the HK stock market. In other words, no re-think.

All these items come after various conferences and initiatives designed to boost the Hong Kong economy through ‘night vibes’, Greater Bay Area links, visas for talent, and assorted bio-engineering, AI and green tech fads. All remind us that the local bureaucrat/business establishment is having a hard time accepting that Hong Kong’s world has changed:

– Low interest rates are over; a housing-affordability ratio of 20 is no longer sustainable.

– Mainland tourists are no longer obsessed with buying vast quantities of luxury tat in Hong Kong. A crowded developed city does not need mass-tourism.

– The days when China’s economy was growing at 8% or 10% a year are history. We will never see the massive uplift of 1990-2015 again.

Maybe in her next op-ed, Regina could advise Hong Kong policy-makers to stop struggling and fighting so hard to make things the way they used to be. If you have no ideas where the economy should go next – and there’s no reason why bureaucrats should – just focus on reducing barriers to entrepreneurs in general and improving the quality of life for the population. And ditch the high-land-revenues/high-wasteful-spending fiscal model.

This assumes no-one can or will address the bigger political shifts in the background. Hong Kong’s role since the 1840s depended on being separate from the Mainland – people could do things here they couldn’t or wouldn’t do over the border. The central government does not seem to highly value that distinctiveness. And then there’s the international climate, with Beijing putting national security ahead of economics, and Western businesses reducing China exposure..

The old Hong Kong is over, but no-one’s noticed.

From Foreign Policy, Luke de Pulford on finding himself named as a co-conspirator in the Jimmy Lai trial. …

…[To Beijing, t]he national security law alone fails to address the underlying problem of Hong Kong’s burning desire for autonomy. So it was deemed necessary to resurrect a well-worn trope: that any dissent must be the result of a Western-orchestrated plot … this must mean that the 2019 protests were a Western conspiracy, and that the million-plus Hong Kongers who filled the streets were passive lemmings, manipulated by sleepers for foreign interests.

…Lai, we are told, was “colluding with foreign forces.” Septuagenarian Lai, we are expected to believe, was somehow behind the predominantly youth-run protests, ably assisted by interfering foreigners.

That’s why the charges of co-conspiracy laid against me, Magnitsky Act campaigner Bill Browder, and former Japanese Diet Member Shiori Kanno are useful tools. If Lai has supposedly colluded with foreign forces, then there need to be some foreign forces with which he has colluded.

…If I had the opportunity to testify in these kangaroo proceedings, I would tell the court that I know [Andy] Li pretty well. He was very active in his work, and many people knew him. But he simply didn’t know Lai. Li was entirely self-motivated. Nobody else was behind his work. Not me, and certainly not Lai. Of the hundreds of pages of text messages between Li and myself that are in the possession of the court, they won’t find a single mention of Jimmy Lai. Some mastermind.

This is the tragic reality of Lai’s case, which in microcosm tells the story of the degradation of a once-revered legal system and the demise of Hong Kong itself. Lai will be convicted, but not through guilt. His conviction will rely on coerced testimony from a reported torture victim who will potentially fabricate stories about certain actions that wouldn’t be criminal in any free country anyway—such as organizing roundtables on human rights or emailing a foreign politician—and all to satisfy a bizarre state obsession with a mastermind narrative.

I remember a time when Hong Kong people pitied Taiwan for being a police state. It’s impossible to miss today’s contrast.

Reg on the Taiwan elections…

Tsai [Ing-wen] exploited the turmoil in Hong Kong and whipped up support for her pro-independence stance by denigrating “One Country, Two Systems”. Many in Hong Kong thought it was Hong Kong’s chief Carrie Lam who handed her a surprising victory.

Good analysis from Frozen Garlic…

The KMT’s election results might be the most interesting. They have now failed to break 40% in three consecutive presidential elections. That’s not good. They will rationalize this defeat by talking about how Ko split the anti-DPP vote. However, they should be asking themselves why they were unable to defend that vote. A successful political party goes out and wins votes; it doesn’t just wait for the other party to mess up.

China gets miffed over ‘incorrect signals’ – international messages of congratulations – to the new leadership.

More from the Guardian…

Speaking after the result on Saturday, Chen Binhua, the spokesperson for China’s Taiwan Affairs Office (TAO) repeated its claim that “Taiwan is China’s Taiwan”, and reiterated its commitment to the “inevitable trend” of annexation.

“This election cannot change the basic pattern and direction of development of cross-strait relations … that the motherland will eventually be reunified.”

On Sunday Taiwan’s foreign ministry condemned the comments as “fallacious”, “absurd”, and “not worthy of rebuttal”.

It said claiming Taiwan was an “internal Chinese matter” was “totally inconsistent with the international perception and the cross-strait situation, and goes against the expectation of the global democratic community, and the will of the people of Taiwan in insisting on the value of democracy”.

And a quick word from Global Times…

Taiwan has never been a country, neither in the past nor in the future. “Taiwan independence” has never been and will never be possible. Anyone in Taiwan who attempts to promote “Taiwan independence” is attempting to divide the territory of China and will face severe punishment from history and the law, said [Foreign Minister] Wang, stressing that Taiwan secessionism will be a dead end, and China’s reunification is inevitable.

In case you overlooked them, catch up on the legislative election results.

Some reading if you have 10 minutes: a ruggedly non-CCP history of Taiwan from the Council on Geostrategy.

NatSec police take family members of two more exiled activists – Simon Cheng and Frances Hui – in for questioning. Jimmy Lai’s London-based legal team ask the UN to investigate the alleged torture of key witness Andy Li…

“Credible evidence is emerging that Andy Li was tortured when in prison in China before confessing to allegedly conspiring with Jimmy Lai to collude with foreign entities to endanger national security,” the lawyers alleged.

Li’s confession against Lai was suspected to have been “coerced and obtained after he endured torture, inhuman and degrading treatment in Chinese detention,” they alleged.

In case you haven’t kept up – Jimmy Lai’s trial continues with details about donations to pro-dem political parties.

The Standard reports that Hong Kong’s dazzlingly original regulators might follow the SEC’s decision to approve spot crypto ETFs. The issuers accept only real money, of course. David Gerard on the US move…

The SEC really didn’t want to approve a spot bitcoin ETF. SEC Chair Gary Gensler issued a statement explaining that the SEC was pretty much forced to approve by the court decision in Grayscale. He stresses that this stuff is still shaky trash.

Unlike in the last two elections, HKU will not be sending students on a study tour to Taiwan this year.

Some more Taiwan reading…

Nikkei Asia reports that financial analysts don’t want to talk about Taiwan…

Ning Zhang, senior China economist at UBS Investment Research, said at a news conference in Hong Kong on Thursday that the topic of the election was “political,” and that it was “inconvenient” to comment on it.

BlackRock shied away from answering a question from Nikkei Asia on the impact of the Taiwan election on the fixed income market at a Singapore briefing on Tuesday. The fund manager skipped the online written query, with the company’s public relations representative later saying they had received too many questions.

“I feel very humble in my ability to predict politics,” Ben Powell, chief Asia-Pacific investment strategist at BlackRock Investment Institute, told reporters last month. “Even if you told me the answer, it is not totally clear what the implications for the markets” are.

A public relations representative with French bank Societe Generale, during a Tuesday briefing in Hong Kong, declined to answer a reporter’s question on the election’s impact on the Taiwan equities market, one of the top picks for the bank: “We’re not commenting on it right now.”

Thread from correspondent William Yang…

…an important point to highlight is that there is a huge gap between the level of interest in this election in #Taiwan versus around the world.

…when the #HongKong protest triggered a surge in this doomsday feeling among #Taiwan voters, [and their] attention and interest in the election was very high. It also resulted in a very high voter turnout.

This time around, the international community is paying a lot of attention to this election, mainly from the perspective of how the outcome of the election will have an impact on regional security and geopolitics.

However domestically, a lot of voters have told me that they are quite disinterested in the election, citing different reasons. Some said they can’t imagine themselves supporting any of the candidates while others feel very desensitized by all the campaign dramas and rhetoric.

So as all of us in the international media tries to fulfill our assumption and needs, please try to take some time to really understand the Taiwanese voters’ perspective on this election. Instead of shoveling questions related to cross-strait relations, China and the possibility of war into their faces, maybe try to give them an opportunity to plainly explain what matters the most to them in this election. It’s likely that you will get a very different set of priorities from them.

From the BBC (‘But a Bit Cliched’) – the Taiwan that China wants is vanishing…

“We are all Taiwanese today regardless of where our grandparents came from. We inter-marry and mix Taiwanese and Mandarin when we speak to each other,” say a group of hikers on a trail near Taipei.

When they travel abroad, they say they are from Taiwan. “We do not want people to think we are from China.”

That is a problem for Beijing – because they are deciding what they want to be.

And that runs counter to the CCP’s message – a unified China under the rule of the Communist Party. It’s a message that has been delivered to Tibetans, Uyghurs, Mongols – and Hong Kong.

Guardian video about Taiwanese civilians, inspired by the Ukrainian experience, organizing their own military training to defend urban areas from invaders.

Chatham House on Taiwan’s ‘China challenge’…

The successful consolidation of Taiwan’s democracy in recent decades has intensified the growth of a distinct Taiwanese identity. The more Taiwanese democracy and identity bed in, the harder it will be for Beijing to secure a peaceful integration of Taiwan, something that very few Taiwanese want.

As this uncomfortable reality has started to dawn on Beijing, it has ratcheted up its grey-zone tactics, using military intimidation and information operations to try to break Taiwan’s resolve, and diplomatic initiatives to isolate Taiwan internationally.

Other reading for the weekend…

Taiwanese people don’t want to be a part of China – nor do Chinese people. CNN on the rise in Chinese illegals into the US…

…In the first 11 months of 2023, more than 31,000 Chinese citizens were picked up by law enforcement crossing illegally into the US from Mexico, government data shows – compared with an average of roughly 1,500 per year over the preceding decade.

Many who left point to a struggle to survive.

Three years of Covid-19 lockdowns and restrictions left people across China out of work – and disillusioned with the ruling Communist Party’s increasingly tight grip on all aspects of life under Xi. Now, hope that business would fully rebound once restrictions ended a year ago has vanished, with China’s once envious economic growth stuttering.

Following the recent arrest of a Catholic bishop, the Pillar on the Vatican’s ‘Two Chinas’ problem…

The effective suppression of a diocese without Roman approval is a major departure from the norms of the Vatican’s current agreement with the Chinese government, though it is not the first time the Communist authorities have done so.

With the Vatican-China deal up for renewal this year, the Holy See’s Secretariat of State will have to decide if Beijing’s unilateral redrawing of the ecclesiastical map is a calculated provocation, and how it can respond within its limited diplomatic room to maneuver.

As such moves become more common, however, the Vatican will have to reckon with the emerging divide between the Church in China recognized by Rome, which increasingly exists only on paper, and a different reality on the ground, run by the [Chinese Patriotic Catholic Association]. 

China Media Project looks at the CCP’s mixed feelings about the word ‘dictator’…

The Party wants to have its cake and eat it too: to be all-powerful but also to be seen as representative; to be feared and to be loved — avowedly — throughout the world.

…In 2021, as authorities in Hong Kong used the Beijing-imposed national security law to jail nearly every prominent member of the political opposition, a microblogging account amplified by official media said pro-democracy protestors were the territory’s “real dictators” due to their appeals for sanctions on the authorities imprisoning them.

And something relaxing from Public Domain Review – a circa 1902 book of kimono fabric designs…