Big Lychee, Various Sectors

An SCMP op-ed laments the ‘patriots only’ District Council elections for their poor turnout, low level of diversity and the system’s overall lack of popular participation…

The dismal turnout for the latest election is a stark reminder of waning community engagement in Hong Kong, a reflection of a growing disconnect between people and their communities.

…While it is important to establish limits, excessively rigid restrictions risk dampening people’s enthusiasm and stifling their sense of belonging. Genuine community integration calls for more than superficial connections; it demands the public’s deep-rooted engagement and a profound connection to the community they call home.

…The crux of people’s sense of belonging lies in their active participation in community affairs. Hongkongers must be given a say in social matters and be able to actively contribute to community development. To achieve this, the government must prioritise the fortifying of public consultation processes, within and beyond the district council.

…One effective approach is to incorporate people from diverse backgrounds into district consultation committees, casting a wider net of perspectives to shape community decisions. By fostering collaboration and actively involving residents, we have the opportunity to weave together a tightly knit and prosperous community.

The piece is written by legislative councillor Tik Chi Yuen of the ‘Third Side’ mini-party, who is the nearest thing the chamber has to a token non-establishment member. 

The lack of public engagement isn’t an accidental by-product of the ‘all patriots’ system – it’s the whole purpose. In a top-down Leninist structure, the ruling party cannot share power or allow any rival political forces or independent institutions, or even civil society. The genuine political process takes place behind closed doors, not with ‘public participation’. Consultative bodies are in practice appointed by the ruling party, and their activities are stage-managed as shows of support for the government. Hence the near-unanimous votes of approval in China’s National People’s Congress (or in today’s LegCo).

If you want the public to be connected with the political process, you have to let them take part – running in elections and voting for the candidates they want. If you don’t let them do that, it’s because you don’t want them to have any input. The public obey the government, not the other way round. (I assume Tik knows all this.)

Of course, followers of Marxist-Leninist theory claim that their model represents the masses through ‘dictatorship of the proletariat’. But such systems are famously intolerant of criticism and protest.

On which note, three more items…

Hong Kong drops 17 places in the Fraser Institute’s latest Human Freedom Index, which reflects the state of things as of 2021. In 2010, it held third place; it is now 46th.

Not everyone might agree with the Index’s exact methodology, but Switzerland and New Zealand come at the top and places like Saudi, Venezuela, Myanmar and Syria at the bottom. The report says…

Given ongoing attacks on freedom in Hong Kong, we will be surprised if future reports do not show a continuing and pronounced degradation in the territory’s ratings, including a noticeable decline in economic freedom.

An HKFP op-ed on the Hong Kong authorities’ apparent fear of the gay rights movement…

…the size of the gay community in Hong Kong may be precisely the reason to suppress it. The Chinese party-state, and presumably its minions in Hong Kong, seems to see every minority of any size as a potential threat. The larger the minority, the larger the perceived threat, and thus the greater the perceived need to control or subdue it.  

The government comes up with interesting arguments against a previous court ruling against an injunction to ban dissemination of the song Glory to Hong Kong…

The song boosted people’s morale and encouraged them to “do things they were not prepared to do,” [senior counsel Benjamin] Yu argued.

“When you try to upset the government, you don’t necessary need to use conventional weapons… the song is regarded by the composer himself as a weapon,” Yu told the court.

Despite the implementation of the national security law, Glory to Hong Kong remained prevalent and continued to “arouse emotions.” It was mistaken as Hong Kong’s national anthem more than 800 times, Yu said citing an estimation by the police.

So will they be coming for YouTube? I mean – boosting people’s morale like that?

Good news for writers of the Hong Kong government’s wrathful press statements: the overseas media have other things to look at than the Jimmy Lai trial. The bad news: the other things include Hong Kong’s dwindling stature as a financial hub.

Bloomberg looks back at a pretty bad 2023…

It was supposed to be the year Hong Kong rebounded onto the world stage, leaving behind an era marred by street clashes, political crackdowns and Covid curbs.

Instead, 2023 turned out to be one of the worst for the financial hub in recent memory, at least as far as its markets are concerned.

The Hang Seng Index has fallen 16%, losing ground [in terms of market cap] to rivals in Tokyo and Mumbai, and putting it among the biggest decliners globally. Funds raised by initial public offerings are the smallest since the dotcom bubble burst. Home sales are on track to be the lowest for any year since records began in in 2002. Office rents have fallen to levels last seen 13 years ago.

Underscoring the malaise, the city has been dubbed the “ruins of an international financial center” on Chinese social media, a viral label rejected by financial services chief Christopher Hui.

…In a sign that Beijing is growing concerned, officials from China’s Ministry of Finance traveled to the city last week to meet with bankers from firms including HSBC Holdings Plc and Standard Chartered Plc to discuss ways to bolster the city’s hub status.

…Further deterioration next year would likely increase doubt over the Lee administration’s ability to meet the demands of an international city, and undercut Xi’s efforts to increase foreign direct investment needed to shore up China’s struggling economy.

One main reason is that the HS Index is dominated by Mainland companies, and China’s demographics, debt problems and ideology are all dragging on the country’s economy. Another is that Hong Kong’s own ideological rectification – including political trials – is bound to worry investors. The FT says…

[Hong Kong] now finds itself hitched to a slowing mainland economy. Additionally, competition from Chinese capital markets and a political crackdown by Beijing have left Hong Kong facing “an existential crisis as a major international financial centre,” according to [economics academic] Eswar Prasad

…Journalists, businessmen and lawyers have been arrested under security charges. The judges that preside over such cases are handpicked by Hong Kong’s top officials and there is a 100 per cent conviction rate. Local authorities have increasingly adopted tactics similar to those of mainland China against dissidents and others, including televised “confessions” and forced “repentance” letters.

…Faced with what a range of lawyers, bankers, professors and economists who spoke to the Financial Times describe as a “new reality”, foreign businesses and expats have continued to leave the city, their places taken by mainland firms and citizens.

It now seems to be ‘NatSec first’ rather than ‘business first’. In the Mainland, the SCMP reports that China’s state security ministry – not the economics one – warns about pessimistic comment on the economy as a national security threat…

“Talk concerning China’s decline is in essence an intention to create a ‘narrative trap’ or a ‘cognitive distortion’,” it said.

“It aims to doubt or deny China’s socialist system and attempts to strategically contain China’s development.

…“We still wonder if normal discussions about the problems of the economy will inadvertently cross the vague red line, now that Beijing clearly wants us to focus on the bright prospects.”

SCMP’s former editor notes in an op-ed that Beijing’s leadership wants ‘stronger economic propaganda and public opinion guidance to promote a positive narrative about the Chinese economy’…

The new directive seems to target online commentators and analysts who write research reports for clients at brokerages, consultancies and think tanks. Many online pundits have already seen their social media accounts suspended because of their frank and honest comments, and analysts have been warned they must be careful in their choice of words when writing about the Chinese economy.

One Hong-Kong-based fund manager told me that when sales people from Chinese brokers come to meet him, they first flash PowerPoint presentations on the bright prospects of the Chinese economy. After the presentation, they go on to share what they really think.

How is it possible to restore confidence if one has to be economical with the truth? No wonder the stock markets in Hong Kong and on the mainland fell on Wednesday, the first trading day after the work conference statement was released.

For a quarter-century or so, Hong Kong was a great place for stock investors because it was volatile – which can be fun – yet riding a major long-term uplift from China’s reform-driven post-Mao recovery. Reuters offers reasons why the great ‘maximum bullish’ days are finally over…

China likely grew 5%-or-so in 2023, outrunning the global economy. However, beneath that headline is the fact China invests more than 40% of its output – twice as much as the United States – suggesting a significant portion of that is unproductive.

That means many Chinese don’t feel that growth. Youth unemployment topped 21% in June, the last set of figures before China controversially stopped reporting.

University graduates who studied for advanced-economy jobs are now taking up low-skilled positions to make ends meet while others have seen their wages cut.

In an economy where 70% of household wealth is parked in property, home owners are feeling poorer. Even in one of the few bright spots of the economy, the electric vehicle sector, a price war is causing pain downstream for suppliers and workers.

The national pessimism could present President Xi Jinping with social stability risks, analysts say. If China does slip into a Japan-style decline, it would do so before ever achieving the kind of development Japan did.

The next 80 days look likely to put Hong Kong’s image through the shredder.

A succinct description of Jimmy Lai’s trial …

A hand-picked judge, no jury, denied his first choice of lawyer, & Beijing already suggested he’s guilty. Faces life in jail.

Also, ultra-high-level security around the courthouse…

Remember that the theatrics — the marathon trial, the 1000 police, the bomb truck, CSP Steve Li attending court etc — are themselves a political message: They inflate Lai’s culpability.

More on the scene outside the court here.

The first day starts with his lawyers arguing that the sedition charge (not the more serious NatSec one) should be discarded on statute-of-limitations grounds.

The Hong Kong government feels the need to stress that…

…all cases, including that of Lai Chee-ying, concerning the National Security Law are handled strictly on the basis of evidence and in accordance with the law.

In a statement, the Hong Kong SAR Government pointed out that as the legal proceedings involving Lai Chee-ying are still ongoing, it is inappropriate for any person to comment on the details of the case.

Global Times  (which is not just ‘any person’) weighs in on the trial…

…[against] which some Western media and political figures have launched a public opinion campaign by badmouthing the city’s rule of law and the National Security Law (NSL) for Hong Kong. Legal experts said begging external forces to support Lai and undermining the rule of law in Hong Kong are destined to be futile. 

These instigations of the Western media, politicians and organizations openly calling for the release of Lai and criticizing the rule of law in Hong Kong are extremely dangerous and irresponsible, some experts said. While some Western politicians and media hail Lai as “an anti-government hero” and “a pro-democracy fighter,” such campaign of smearing Hong Kong will also allow local residents to see clearly the true nature of Lai as a proxy for Western interests, they noted. 

The Washington Post reports on the conditions in which the ‘HK 12’ were held in Shenzhen. The 12 include Andy Li described by HKDC as…

…defendant-turned-prosecution-witness in JimmyLai’s trial … mistreated while in Chinese prison after he was caught trying to escape HongKong … remanded in an HK psychiatric facility, & has no independent legal representation.

As the WaPo reporter puts it…

Andy Li is one of the listed prosecution witnesses in Lai’s case — but our investigation questions whether his testimony and evidence can be seen as reliable, given the circumstances in which it was derived

From the paywalled WaPo piece…

Li, a 33-year-old gifted programmer who during the protests became a significant player in international lobbying and fundraising efforts, has already pleaded guilty under the national security law for his own role in the democracy movement, and he is expected to tie Lai to an alleged foreign conspiracy against Hong Kong and China.

But Li was mistreated while in Chinese custody, a year-long Washington Post examination of the case found, raising questions about whether his testimony will be voluntary and reliable. The Post’s reporting reveals previously undisclosed details about the coercive treatment of the 12 escapees, especially Li, by Chinese authorities, and Li’s reemergence and continued detention in Hong Kong after seven months of isolation in China.

…For the first three months, according to several people familiar with the conditions, they were confined to these solitary cells, where two guards on shift took turns to watch them around-the-clock, even as they went to the bathroom. The lights were always on. During the day, they were forced to sit cross-legged on a concrete stool until their joints grew sore, except during mealtimes or interrogations. Walking around the cell was generally not permitted. At night, they were awakened at random hours, for no apparent reason. They were never allowed outside.

…Most of the 12 were not physically abused, but seven people familiar with conditions at the center said screaming could “consistently” be heard coming from one cell: Li’s.

“It is likely that what [Li] faced inside was 10 times worse” than the rest, one person said.

Kevin Carrico’s advice…

Please, be a decent human being and remember that this is a show trial meant to imprison a critic of the regime, possibly for life.

Don’t take the charges and arguments seriously, don’t try to make sense of things –  it’s a show trial

Jimmy Lai’s NatSec trial starts today. This is the highest-profile NatSec prosecution so far, and – let’s say – has the potential to leave Hong Kong’s reputation for rule of law in worse shape than before. Supporters lining up in the cold overnight. UK Foreign Secretary’s statement.

Samuel Bicket on the role of judges in the lead-up to the trial, which starts today (site blocked in Hong Kong, at least from my ISP, so VPN or other workaround needed)…

For 80 days, a pre-ordained theater will unfold in which the Department of Justice will present evidence of Lai’s political connections abroad, and the three complicit judges will ensure the process is smooth for the prosecution and difficult for the defense. When it’s over, Lai will be convicted and sentenced to an obscene prison term—probably for the rest of his life.

…The trial will be long—it is slated to last for months—and it will be a media circus. Conviction is inevitable. Success for Lai’s sympathizers will be measured by the length of the sentence: anything less than life without parole might be seen as a victory, even if the 70-year-old Lai would be unlikely to see freedom again either way.

Yet, for the CCP’s Enemy Number 1, it was never going to be sufficient for Lai to remain free over the years it took for the Hong Kong DOJ and courts to reach this point. Nor would it even be enough for Lai to be detained on remand, where he would still be imprisoned but would be allowed daily visitors, outside food, and a more relaxed environment.

Instead, over the past several years the DOJ and judiciary worked hand-in-hand to charge, convict, and sentence Lai on a series of increasingly absurd public order and fraud charges. As a result, Lai has been serving time as a convicted prisoner for years.

…judges have bent over backwards to reach convictions on the most tenuous of evidence, then sentenced Lai to prison terms well beyond any semblance of rationality.

In the Guardian…

The trial, which is being held in open court, will be an opportunity to attract public attention to his case, even if the verdict is considered to be a foregone conclusion.

In November the security minister, Chris Tang, said the trial would allow the public to see how “bad” Lai’s alleged offences are. Tang has previously praised the 100% conviction rate in national security cases.

Fiona O’Brien, the UK bureau director of Reporters Without Borders, said: “This is no time for equivocation: if the UK government really believes in press freedom – as it says it does – it cannot stand silently by while a British citizen is condemned to die in jail because of what he published.”

More from Reuters …

Foreign envoys, business people and legal scholars will be watching the trial closely, saying it looms as a fresh diplomatic flashpoint and a key test for the city’s judicial independence and freedoms under the sweeping national security law imposed by China in 2020.

…”Any talk of justice would be a farce,” Sebastien Lai, one of his sons, told Reuters from London, where he recently met the British Foreign Secretary David Cameron. “Everyone knows it’s going to be a show trial.”

….Lai’s plight has also highlighted some of the contradictions faced by Hong Kong as it seeks to rejuvenate its reputation as a global financial centre with national security now a policy prerogative under China’s leader, Xi Jinping.

Lai’s listed company Next Digital had its assets frozen after a mass police raid on its headquarters, and bankers were threatened, essentially crippling operations and forcing its shutdown.

Those contradictions aren’t going away… Hong Kong’s pre-2020 establishment – bureaucrats, tycoons, international business – do not seem to be at ease with a more authoritarian atmosphere and are clearly distressed by the damage done to Hong Kong’s reputation by the NatSec measures, the Covid regulations and the city’s new exposure to Beijing’s increasingly hardline ideology. Old-style figures like Anthony Cheung, Abraham Shek and even Regina Ip have voiced at least some implicit criticism of the less pluralistic, less tolerant new order. Business types with family and shareholders’ fortunes in the game recite the new official lines, but not exactly with enthusiasm. They try to convince themselves that the worst is over, and Hong Kong is ‘back to normal’ and ‘open for business’.

And then along comes the new ascendant NatSec establishment: ex-cops now heading up the government, once-marginalized United Front groups, opportunists in the professions, and Mainland officials in the background. And the ‘back to normal’ message is drowned out by shrill CCP-style press statements, million-dollar bounties on overseas dissidents, arrests of ever-more obscure individuals on sedition charges, patriotism in schools and museums, denunciations of gay rights, and on and on – now Jimmy Lai. At the end of last week, the NatSec Law was suddenly amended to allow the authorities to seize suspects’ assets for beyond two years.

Hong Kong authorities offer HK$1 million bounties on another five overseas activists, including Joey Siu – who, as a US citizen, seems to be wanted for colluding with her own government – and former UK consulate staffer Simon Cheng. Standard report.

Apparently anticipating criticism, both the Hong Kong government and its Security Bureau issue statements saying they ‘strongly’ and ‘continuously and fully’ support their own police force’s NatSec department. From the SB’s…

The Police have the responsibility to pursue those who have allegedly committed offences under the National Security Law outside Hong Kong. As with the eight persons who have been put on the wanted list earlier, the five persons concerned have fled overseas and allegedly continued to commit offences under the National Security Law. Their malicious acts to endanger national security have been seen through by all, and there is no doubt that they have clearly and seriously endangered national security. As the law enforcement department of the Hong Kong Special Administrative Region safeguarding national security, the Police are duty bound to put the five persons on the wanted list in accordance with the law and the action is fully justified,” a spokesman for the SB said.

“No matter how countries and politicians harbouring these absconders unreasonably smear the action, the Police will continue to take all necessary measures steadfastly and fearlessly to prevent, suppress and impose punishment for acts and activities endangering national security in accordance with the law, upholding the principle that ‘laws are observed so as to bring offenders to account’, with a view to safeguarding national security,” the spokesman continued.

From AP…

In Washington, State Department spokesman Matthew Miller condemned the “egregious actions taken by Hong Kong authorities in announcing national security law changes and a new bounty list targeting democracy advocates overseas.”

“That shows blatant disregard for international norms for democracy and human rights,” he said. “Hong Kong authorities have no jurisdiction within United States borders where the advocates for democracy and freedom will continue to enjoy their constitutionally guaranteed freedom and rights.”

NatSec police also arrest four people locally for donating to Nathan Law and Ted Hui through online crowdfunding platforms. (How do the authorities know they donated? What about the thousands of people who contributed to the legal aid fund?) Ronny Tong opines that watching wanted exiles’ YouTube channels might count as giving financial aid.

The Standard says Chief NatSec Superintendent Steve Li adds an appeal to Agnes Chow…

“I hope she can seize the opportunity to return to Hong Kong so she will not become a fugitive,” he said. “Otherwise, if she does not return to Hong Kong and report to us on time we will put her on the wanted list.”

Chow had claimed she was required by police to visit Shenzhen in exchange for the return of her passport.

The condition of bail “is not absolutely rigid and we are open to discussion,” Li responded to that claim.

While she considers, TVB broadcasts another video recantation by jailed protester Tong Ying-kit. And the Jimmy Lai NatSec trial starts Monday.

Some reading for the weekend…

As HK Chinese U fires its vice-president for signing a petition opposing reform of the institution’s council, the BBC reports on declining academic freedom in Hong Kong…

[A 30-something humanities academic] says his nightmare is being named and attacked by Beijing-backed media, which could cost him his job, or worse, his freedom. That fear has swept through Hong Kong’s universities and academic circles, which once attracted top talent. The city was close to the mainland, yet far enough to host progressive classrooms, world-class libraries and archives that allowed academic freedom, even in Chinese studies.

But that is no longer the case, academics and students tell the BBC, many choosing to stay anonymous out of fear. In the academic year 2021/22, more than 360 scholars left Hong Kong’s eight public universities. The turnover rate – 7.4% – is the highest since 1997, when Hong Kong returned to Chinese rule, according to official data. Foreign student enrolments have dropped by 13% since 2019.

“The free atmosphere that existed is gone and people are worried,” says Stephan Ortmann, a political scientist at the Hong Kong Metropolitan University. He says many of his colleagues have left and those that remain are wary – he has heard of teachers who have removed all Hong Kong and China-related material from their courses.

Winners of this week’s Yes We’re Desperate Award goes to the Hong Kong Tourism Board for offering free restaurant meals to Hong Kong people to induce them to… visit Hong Kong.  (The HKTB is funded by a levy on hotels, right? So you could say this is a subsidy to residents from tourists.)

A Standard editorial wonders whether the Lantau islands reclamation mega-project is really going to happen…

The rail and road network masterplan revealed by Transport Secretary Lam Sai-hung has offered the strongest evidence that former chief executive Carrie Lam Cheng Yuet-ngor’s Lantau Tomorrow Vision has ceased to be a priority – if not quietly left on the shelf to gather dust.

After Beijing’s officials increased de-facto control over Hong Kong in 2019-20, the bureaucrats’ longstanding insistence that all that underutilized land in the New Territories couldn’t be used for housing was dropped and the Northern Metropolis unveiled. That left the Lantau reclamation redundant – unless you were eying multi-billion dollar contracts. But with reserves dwindling, even the biggest white-elephant fans must be having second thoughts. ‘Stupid’ is one thing; ‘no money’ is another.

Several Western commenters offer views on China’s collapsing birth rate. Carl Minzner…

Totaling 17.86 million in 2016, [births] slid to 9.56 million in 2022, a roughly 50 percent decline in six years. 

…Wang [Pei’an], one of the top leaders of the enforcement bureau previously charged with enforcing China’s harsh one-child limit, is now channeling new central party directives and pivoting in the direction of pronatalism. His is not the language of individual choice, nor of helping China’s youth recognize their own personal ambitions. Instead, it is an as-yet nascent framework for—yet again—telling Chinese youth what the state expects them to do with respect to marriage and childbirth. 

And that is a serious problem. It points to a steady re-politicization of some of the most private choices facing Chinese citizens. 

Inside Asian Gambling publishes an open letter from Alvin Chow, boss of Suncity casino junket operator ‘sentenced to 18 years in prison on charges of fraud, triad offences and illegal gambling’. He claims the charges and punishment were excessive. 

National Interest casts doubt on Western governments’ never-ending eagerness to get on with China …

It is illogical to assume that a dystopian communist surveillance state with vast imperial ambitions and an entrenched plan to subvert the U.S.-oriented world order will significantly change course because of economic or diplomatic “engagement.”

Bloomberg on Beijing’s attempts to write the Mongol Empire out of history…

…in the regional capital of Hohhot, the history museum has gotten rid of its “Genghis Khan and His Empire” exhibit, along with any souvenirs featuring him in the gift shop. China last year even passed a law mandating that the Chinese language must be used over Mongolian in order to “safeguard national sovereignty.”

A look back at Taipei’s old ‘combat zone’ – declining into seediness since the end of the Vietnam War at Linsen North Street, Lane 132, of which I have some vague recollections in the late 1980s.

On YouTube: a DW documentary about Kim Yo Jong, Kim Jong Un’s sister, and Alex Jones’ ranting as an indie folk song.

After officials pretty much declare that Hong Kong’s Heritage Museum will be ejected to make way for the Science Museum, itself being moved to accommodate a new ‘patriotic’ facility, the Leisure and Cultural Services Department issues an irate press release…

There are recent online accusations by suspected overseas organisations and individuals that the Hong Kong Special Administrative Region Government has decided to abandon the Hong Kong Heritage Museum (HKHM), which will erase a large quantity of invaluable archives and artworks and threaten the preservation of the cultural heritage of Hong Kong. The [LCSD] today (December 13) severely condemned the ill-intentioned parties for spreading false information online and sternly made the following statement to set the record straight.

For anyone on tenterhooks, the rest (one more para) is here.

Expect another angry press statement after jailed activist Chow Hang-tung is awarded a human rights prize…

The 12 winners of the Franco-German Prize for Human Rights and the Rule of Law were announced by the French and German foreign ministries on Tuesday. The award honours “civil society’s commitment to human dignity and the inalienable human rights of all people,” according to press releases issued by the ministries.

…The 38-year-old has been charged and sentenced in relation to Tiananmen vigils in 2020 and 2021. She is awaiting for allegedly inciting subversion under the national security law, and is separately appealing her conviction and sentencing in a security law case over refusing a data request by national security police.

And here it comes…

The Government of the Hong Kong Special Administrative Region (HKSAR) today (December 13) expressed its strong disapproval of and firm opposition to the ministries of foreign affairs of France and Germany for issuing the so-called “Prize for Human Rights and the Rule of Law” to Chow Hang-tung, who was charged for suspicion of committing offences under the Hong Kong National Security Law (NSL).

A spokesman for the HKSAR Government said, “Chow Hang-tung is facing a criminal prosecution of ‘incitement to subversion’ and the case has been committed to the Court of First Instance of the High Court awaiting trial. The judicial proceedings of the case are still ongoing, but the ministries of foreign affairs of France and Germany have issued the so-called prize to Chow Hang-tung in the name of ‘human rights’ and the ‘rule of law’, which is obviously contrary to the spirit of respecting the rule of law. The HKSAR Government strongly urges these foreign countries to respect the spirit of the rule of law, abide by the international law and basic norms that govern international relations, and immediately stop interfering in the affairs of Hong Kong.

Etc, etc. This is a relatively mild rebuke by the (so-called) standards of these things, perhaps reflecting Beijing’s eagerness to maintain good relations with the Europeans. (Do the editors at the Information Services Dept deliberately not polish away the clunky Mainland phrasing as a form of ‘soft resistance’? Or are they under threat of disciplinary inspection if they dare make the copy less alienating?)

Now awaiting an indignant official press release aimed at the Asian Corporate Governance Association, for knocking Hong Kong from joint second to joint sixth in its rankings… 

Dual class listings, “homecoming” secondary issuers and pre-revenue biotech firms now account for 20% of market cap, and they play by a set of very different – and much weaker – rules. Five out of the top ten companies by market cap are either secondary, or weighted voting right, listings. Nearly 10% of Hang Seng Index constituents now fall into this category. Capital market development has focussed on attracting more of the same, and with the continuing lowering of entry requirements and rules applicable to these issuers, the rights, and safeguards available to investors have diminished…

…The long-stated separation of powers at the heart of Hong Kong’s governance have been declared void and judges are palpably under pressure to respect the boundaries of an executive-led system. A reconfigured legislative council which prioritises patriotism may be more prone to give the government an easier time with its lawmaking programme. Indeed, ACGA was disappointed that changes to company law allowing virtual AGMs (after the pandemic) passed with no detailed debate, and at breakneck speed. 

Hong Kong’s score in Civil Society & Media also fell significantly. The shuttering of media outlets and wariness of reporters to cross red lines has stifled a once-vibrant fourth estate. Notably absent from the media landscape today are the cohort of scandal-chasing tabloids who helped to keep the tycoons and company directors on their toes, as well as the deep-dive data investigators among the foreign press who delved into the uncomfortable business interests of the elite. Not helping matters has been the curtailed access to director and company information: the ability to shine a light on corporate digressions is much compromised. Nor do academics in Hong Kong seem to pontificate on the governance issues of the day: a reported exodus of university scholars is evident when searching for research on Hong Kong CG issues. Today it is more likely that a research piece on stock market reform or weighted voting rights will be penned by an academic in Singapore or the PRC, than in Hong Kong. 

Meanwhile China’s Ministry of Finance is hosting a gathering of bankers in Hong Kong to ‘bolster the city’s status as a hub’. Bloomberg reports…

The discussions will center on how to enhance Hong Kong’s position as an international finance center, its risks and challenges, and how strengthening ties with mainland China can help consolidate its status as a hub, the people said. The ministry didn’t respond to a fax seeking a comment.

Hong Kong is facing big challenges… The city has seen tens of thousands of residents emigrate after years of strict Covid curbs and as China tightened its political grip. Dealmaking has all but dried up as China’s economy struggles to rebound to past levels, with major banks cutting staff and shifting out of the city. Scores of smaller brokerages have shut down.

…City leaders have been adamant that Hong Kong is open for business and not losing its luster…

But leaders have also maintained a heavy focus on national security, even years after protests were quashed, hundreds of people were arrested and newspapers were shuttered.

The city’s leader, former policeman John Lee, last week defended his focus on national security, saying most of his policies are on other matters, according to city broadcaster RTHK. At the same time, he warned that criticizing government policies on housing and the economy could be a form of “soft resistance.”

More angry official responses: Beijing attacks the UK Foreign Secretary for meeting a UK citizen about another UK citizen jailed overseas.

The government announces 179 appointed members of District Councils, chosen for their patriotism…

A government spokesman said the appointed councillors were of “high calibre who love the country and Hong Kong” and they received their seats under the “principle of meritocracy”.

Quite a few of them were among the losers in the 2019 polls – so I guess that means they rank somewhere in a meritocracy.

My prediction that there would be fewer brown people in all Hong Kong District Councils combined than in the UK cabinet was right: there is one Pakistani and one Nepali among the 179. 

After all the overseas coverage of the elections – a few items on the Agnes Chow case… 

An HKFP op-ed…

The idea that Hong Kong people will be moved to horror and revulsion if somebody stays abroad to avoid a national security trial is a bit of a stretch.

…Consider Judge Andrew Chan, who recently told 16 defendants, many of whom have been in custody for approaching three years, that to deliver a verdict at the end of their trial he and his colleagues would need “three to four months”, with “no guarantees” that it would not be longer. This is carrying judicial contempt for the value of other people’s time too far. 

A commentary by academic Eric Lai in the Diplomat – …

“The request for a letter of repentance as part of the deal for releasing her travel documents is, obviously, not part of the criminal procedure under either local law or the NSL.”…

For many foreign investors, the underlying reason for trusting Hong Kong’s “one country, two systems” formula is that their investment could be safeguarded by the standards of the common law in Hong Kong, including the independent court, legal certainty, and the absence of arbitrariness in law enforcement. These elements fundamentally differ from the city’s sovereign state, where laws and courts are subject to the Chinese Communist Party. 

…the Hong Kong government has repeatedly claimed to business groups that the city’s common law and justice system remain robust and impartial, supporting a fair and friendly business environment. 

That said, Chow’s statement inevitably sends a message to global investors that Hong Kong’s enforcement of laws and political powers are more arbitrary than before, as the authorities now consider acts of patriotism as a top cause for gaining freedom of movement and property. Foreign investors would not be eager to receive similar treatment from both Chinese and Hong Kong law enforcement when doing business in the territory…

…given the scant accountability the local police face under the NSL, this whole charade – arrest, seizure of travel documents for indeterminate periods, imposition of arbitrary conditions – could befall anyone in Hong Kong now. 

Transparency is paramount to saving Hong Kong’s image of upholding the rule of law, unless it is merely a façade or slogan. The government should explain publicly whether Chow’s claims are accurate and, if so, what was the legal basis of making such requests on Chow. 

The Economist (paywalled) has more…

…the police and officials in Hong Kong are adopting tools often used on the mainland to control residents. These range from forced confessions and so-called “patriotic tours” to re-education campaigns in prisons. Young people are a particular target. Even as the city tries to woo back tourists and businesses under the banner of “Happy Hong Kong”, its leaders are planning to expand the use of such tactics.

…In order to control people like Ms Chow the government has also developed what it calls a “deradicalisation” programme. This usually takes place in prison. According to officials, hundreds of detainees have taken part. Most were protesters. A young participant called Tsang Chi-kin was recently interviewed for a television series sponsored by Hong Kong’s police. Shot during a pro-democracy protest in 2019 and later arrested, Mr Tsang said the programme taught him to manage his emotions. “We must think clearly before acting to avoid being incited and instigated by others.”

The programme involves meeting a psychologist, studying Chinese history and culture, and attending career-planning sessions. One government video shows detainees playing the drums. They perform a song called “Chinese People”. “I am proud to be Chinese,” says a detainee. “Chinese drums were invented by us Chinese people. I feel very accomplished to be a part of the People’s Republic of China.”

And Asia Nikkei on the Mainland Judgements in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance, which allows Mainland court rulings to be enforced in Hong Kong…

“It’s a double-edged sword,” said Ambrose Lam, a Hong Kong legislator representing the legal constituency. “Even the chambers of commerce said they were worried, because they don’t trust the mainland judicial system.”

…The new rules on reciprocal enforcement add to the ambiguity about the rule of law in Hong Kong, said one private banker who has wealthy Chinese clients. “The authorities like to create this ambiguity, giving them room to maneuver. The ambiguity is enough to scare one to death.”

Another wealth manager said the move would encourage more Chinese to shift their wealth from Hong Kong to places like Singapore or Switzerland.

The Hong Kong General Chamber of Commerce did not respond to a request for comment. Several other chambers of commerce in Hong Kong declined to comment.

From the SCMP…

Hong Kong’s first “patriots-only” district council election has been lauded by Beijing and local authorities as “a success in improving governance structure”, calling it “real, functioning democracy” despite the poll yielding a record low turnout.

…Veteran politician Tam Yiu-chung, who formerly served as the city’s sole delegate to the nation’s top legislative body, insisted the voter turnout was “reasonable”.

The 27% turnout is the lowest since 1997 and grabs many of the headlines. But HKFP reports perhaps the most interesting election-related figures…

A total of 163, or 92.6 per cent, of the 176 seats in the small-circle committee elections were themselves members of the three committees, according to a HKFP tally.

In the race voted for by the general public, 84, or 95.4 per cent, of the 88 seats also sat on one of the three committees.

In total, 247, or 93.6 per cent, of the 264 elected seats were members of the three committees.

No-one in government wants to acknowledge the possibility that what happened was a large-scale boycott. Comment in (probably paywalled) international press is less squeamish…

The FT says…

…Hong Kong’s voters largely steered clear of a Beijing-imposed “patriots only” election yesterday, in a blow to official efforts to legitimise China’s vision for governance of the territory.

…The final turnout in the last district election in 2019, when opposition candidates won by a landslide, was 71.2 per cent. The previous record low turnout was 30.3 per cent in 1988.

Local officials had made exhaustive efforts to persuade citizens to vote under an electoral regime that in effect barred opposition candidates from standing. Turnout was seen as an important test of the government’s ability to demonstrate public support for the political order imposed by China’s President Xi Jinping.

Many pro-democracy supporters snubbed the polls after the number of directly elected district councillors was cut to less than 20 per cent of 470 seats, down from 94 per cent in 2019. 

From Bloomberg…

Hong Kong’s local council elections drew their lowest turnout in nearly three decades, as residents snubbed a system lacking political diversity after a revamp to cement China’s control.

…“The election no longer serves as a channel for citizens to speak to authority,” John Burns, emeritus professor at the Department of Politics and Public Administration at the University of Hong Kong, said before the polls. “Had authorities permitted some pan-democrats or middle-of-the-road candidates, turnout would likely increase.”

…Low turnout despite [the government’s] all-out push would indicate a vast majority of the public are now “outside the stadium,” Kenneth Chan, associate professor of the Department of Government and International Studies at Hong Kong Baptist University, said before the elections.

“It’s not political apathy,” added the former lawmaker, “but a widespread political disengagement by design.”

By which I assume he means the authorities designed a political system that – even by previous standards – cuts the public out of the process, so many people see no point in participating in the new arrangements. 

(The ‘all-patriots’ model is designed to eliminate any critics. Although they have never been allowed to elect their government, Honkongers could previously elect an opposition. Now all they are allowed to do is elect people who follow the government line. That means there is no longer a formal mechanism for upward feedback to register popular discontent. Even such informal methods as small peaceful demonstrations or criticism of the government can now attract sedition charges or menacing threats of action against ‘soft resistance’. Will this really improve governance?)

The WSJ…

The low voter turnout reflects the level of public support for the new system and people’s political disengagement, said Kenneth Chan, associate professor in political science at the Hong Kong Baptist University and a former lawmaker.

“People in Hong Kong felt disinvited from the elections, now heavily vetted,” he said, adding that many believe the government should directly appoint these representatives rather than waste resources on a highly controlled election.

“The bigger embarrassment is that the government had mobilized from top to bottom, using both carrot and stick tactics to push for a higher voter turn out, but it ended in failure,” Chan said. 

Simply appointing members of these bodies would certainly save election-related costs. But why not just scrap the District Councils and LegCo and be done with it? Mainland academics and ideological theoreticians like to stress that ‘separation of powers’ and ‘checks and balances’ are unacceptable in China’s system. 

Not done with the bitchiness, the Journal adds…

The government extended polling hours by 90 minutes after saying a computer glitch had delayed people voting and in the evening canceled hourly updates of voter turnout.

A quick tour of Twitter, starting with defrog…

…the election yesterday was for 88 seats out of 470 (with 27 for rural committee chairs, and the rest either appointed by govt or elected by small pro-Beijing committees), so the pro Beijing camp already controlled 382 seats before the voting even started.

Ryan Ho Kilpatrick…

In this election, every vote cast is one for the gov’t. The pro-Beijing camp is guaranteed to take 100% of seats, after taking ~18% in 2019. But with just 1/4 of eligible voters (<1.1m) turning up today, they’ll likely do so with even fewer votes than in 2019, when they got 1.2m.

pyBYpy…

What election?  When you jailed all the electable, it is not a election, it is filtration

tyrranywillend…

According to HK01 Beijing demanded a 30% turnout. After wasting taxpayers’ money on fireworks, ad campaigns, outdoor events, free transport to polling stations from elderly homes, a sham election shows itself. No extravaganza will make an illegitimate government legitimate

A list of people arrested (or wanted) for inciting others to boycott the election, disrupt it, or similar things.

Cartoon showing similarity between voter turnout and Hang Seng Index.

News reports have been highlighting the participation of South Asian candidates and voters, particularly in Kowloon. I predicted a week or so ago that there would be fewer brown people in all District Councils combined than in the current UK Conservative administration’s cabinet. Judge for yourself here and here. (In theory, some ethnic minorities could use Chinese-sounding names. Probably not Pinyin ones. Hmmm.)

An AP quote…

“The newly elected district councilors come from diverse backgrounds,” Hong Kong leader John Lee said. “They will make the work in the districts more multidimensional … better aligning with the interests of the citizens.”

…for the District Council election’s ‘District Committees constituency’. It seems they comprise less than 2,500 voters, all government-appointed, and get to choose 176 council members. Winning candidates (apparently most of them) all received surprisingly similar votes – around 80-150 each. Maybe this is what happens when no-one has ever heard of any of them.

Although RTHK sees the 96% figure as worth reporting, officials say the turnout for the 88 popularly elected seats doesn’t matter, or is influenced by nice weather, or by overall public satisfaction. As of 7.30pm, it had reached 24.5% (compared with the 71% total when the polls closed in 2019). In one place, less than one voter a minute for much of the day. Then a technological ‘glitch’ forced poll workers to switch to manual paper records – so as of 7.30 this morning we don’t know either the final results (though we can predict that no opposition figures won) or turnout. (Shatin East had declared results.)

Conspiracy theorists might suspect an excuse to lengthen polling hours or otherwise ramp up the turnout number. Cynics will say the embarrassment of a computer breakdown after such lavish promotional efforts suggests plain incompetence (a task force will investigate). Others may simply see a metaphor.

There were arrests. Seventy-seven-year-old Koo Sze-yiu, for planning to protest against the election system. ‘Sedition’, apparently. Several people for allegedly encouraging others to spoil ballots. And LSD members, who also planned a protest.

While the long lines of voters seen in 2019 were absent, the candidates took the whole thing almost absurdly seriously. Found on the sidewalk in the afternoon, Angel Pang’s last-minute plea for votes…

Even more, just from the last couple of days…

Lee Cheuk-yan’s sister-in-law faces prison for taking items from her sister’s apartment, thus ‘perverting the course of justice’…

Judge Patrick Tsang … said the length of time she spent in her sister’s house and the fact that she entered twice could reflect careful planning on her part. Jail time for Tang was unavoidable, Tsang said.

Hong Kong’s Tiananmen vigil group appeal over their conviction, alleging that the prosecution withheld evidence that they were foreign agents..

The barrister added that it was the responsibility of police and prosecutors to prove that the Alliance was a foreign agent. At present, the activists did not even know which foreign body they were accused of colluding with, meaning they had no way to defend themselves on the basis of facts, [Senior Counsel Philip] Dykes said.

Transit Jam reports that Hong Kong police in Kowloon East want to enlist vehicle owners to pool 24-hour dashcam footage to ‘link into a community recording network’…

The project, dubbed “Project CARCAMS” has nothing to do with traditional dashcam road safety but will use parked vehicle cameras as district surveillance tools to “strengthen community security,” according to a police blurb.

…there are no laws, other the laws of physics, preventing vehicle owners capturing, in full HD, the face of everyone who walks past their car, 24-7, without any warning or permission.

While there may be some genuinely useful police work going on, the issue is how a potentially million-camera high-definition 5G surveillance network is being built right under our noses.

Prison authorities bar jailed activist Owen Chow from receiving a copy of a book on European history and culture because of ‘obscene’ content – a disgusting picture of a nude woman on a beach by Italian porn merchant Boticelli. He is asking for a judicial review.

After a relatively measured government press release, Chief Secretary Eric Chan says Moody’s downgrade of Hong Kong’s credit outlook is ‘part of a United States-led smear campaign to curb China’s national development’. (He does know Moody’s threatened to downgrade the US government’s credit rating last month, right?)

An SCMP editorial takes a slightly gutsy view of Agnes Chow skipping bail, somewhere under all that passive voice…

It is not clear whether the trip [to Shenzhen], and another letter expressing regret for her past actions, were part of her bail conditions. This should be clarified.

Such requirements would be unusual, if not unprecedented.

Bail conditions should be confined to ensuring suspects behave and are present for any legal action taken against them. Further details of what happened should be provided.

Chow has already served a prison sentence for an offence committed during the 2019 civil unrest. She has had the national security investigation hanging over her head for more than three years, a very long time.

Efforts should be made to either charge or release suspects expeditiously, or at least explain why it takes so long to make a decision.

Efforts should be made to enjoy some or all weekend reading…

A HKFP op-ed on Hong Kong’s Audit Commission, which is (allegedly) wasting taxpayer’s money not looking into genuine wastes of taxpayers’ money.

Agnes Chow talks to France 24.  And one from Reuters.

Bloomberg review of Among the Braves looks at the authorities’ attempts to convince everyone the 2019 protests were foreign-organized black violence… 

Four years on, the winners are still struggling to make their story stick.

Hong Kong’s official line is that the democracy protests were an attempted color revolution instigated by hostile foreign actors and “black-clad rioters,” and that everything has returned to normal since the city’s post-pandemic reopening. Reality keeps on refusing to cooperate.

…The former police and security personnel who now dominate the upper ranks of the Beijing-appointed Hong Kong government hold all the megaphones, but have won no hearts and minds. The lying-flat apathy of society suggests to me a population that knows it’s being fed transparent falsehoods…

Ends with a quote from Hannah Arendt…

‘…whatever those in power may contrive, they are unable to discover or invent a viable substitute for [truth]’.

FT (probably paywalled) on Moody’s advice to staff in China…

Moody’s Investors Service advised staff in China to work from home ahead of its cut to the outlook for the country’s sovereign credit rating, a suggestion staff believed was prompted by concern over Beijing’s possible reaction, according to two employees familiar with the situation.

The move by the US rating agency highlights the unease of many foreign companies doing business in the world’s second-largest economy, where some have suffered police raids, exit bans for staff and arrests amid tensions between China and the US and its allies.

…In a statement on Wednesday, the National Development and Reform Commission, an economic planning body, accused the rating agency of “bias and misunderstanding of China’s economic outlook”.

Also from the FT – over 8.5 million people, most of working age, have been blacklisted in China for defaulting on mortgages and business and other loans. That’s up from 5.7 million in early 2020 and around 1% of the working population…

Under Chinese law, blacklisted defaulters are blocked from a range of economic activities, including purchasing aeroplane tickets and making payments through mobile apps such as Alipay and WeChat Pay, representing a further drag on an economy plagued by a property sector slowdown and lagging consumer confidence. The blacklisting process is triggered after a borrower is sued by creditors, such as banks, and then misses a subsequent payment deadline.

…Life for blacklisted borrowers can be difficult as they navigate dozens of state-imposed restrictions. Defaulters and their families are barred from government jobs, and they can even be prohibited from using toll roads.

Be careful whom you report. From China Digital Media…

The drama began on November 24, with a video released by the People’s Court of Wenchuan county, in Sichuan province, sternly warning Chinese internet users: “If you use software to circumvent the firewall in China, no matter what your purpose is, it is considered an illegal act.” The spokeswoman in the video further cautioned that “by scaling the wall, you’re actually putting yourself right in the middle of the enemy’s hunting ground, blithely walking into the enemy’s carefully laid illegal, collusive, and political traps.” More worrisome still, the video interprets the vaguely defined crime of “firewall circumvention” as a “hacking attack,” or a criminal intrusion into a computer system.

In response to the video, current affairs commentator and blogger Xiang Dongliang … reposted a quote from the Wenchuan court and duly reported Hu Xijin to the authorities for using a VPN to “scale the wall” and access overseas websites:

Xiang’s account was then banned.

Speaking of ‘scaling the wall’ – Chef Wang is one of the more engaging YouTube cooks going (sample here, for eggplant and pork) and surely a contributor to Chinese ‘soft power’. But he has recently managed to ‘hurt the feelings’ with his recipe for egg fried rice… 

The Chinese Academy of History has said the claim about Mao Anying is a “most vicious rumour”, but the story remains popular. The rumour – and references to egg fried rice – are now a taboo topic in China’s highly sensitive and controlled political environment. References to the dish are not censored but are fraught around this time of year.

China clamps down on students of Marxism who take Karl too literally about workers’ rights…

Though President Xi Jinping has called for a refocusing on Communist roots — including a May speech which called for Marxism to be promoted in campuses and classrooms — Beijing is increasingly wary of student-run Marxist societies, especially those that try to apply theory to practice.

Over the summer, when university students joined efforts to organise a labour union for factory workers in southern Guangdong province, Chinese authorities flew into action.

In August, a police raid swept up the student activists, beating several of them and confiscating their phones, according to the Jasic Workers Solidarity group, a labour rights organisation that the students joined.

China Media Project explains ‘hyping’ – Beijing’s preferred allegation in response to criticism…

Furious at a wave of reports in September 2023 about the weakness of China’s economy, the official Xinhua News Agency alleged that Western journalists for media such as The Economist had “fundamentally lost their capacity to view China objectively” as a result of “longstanding ideological prejudice” and the “desire to gain readers through hyping and mudslinging.”…

This use of the term “hype” (炒作) to characterize fact-based coverage by Western media of the Chinese economy, which according to a broad consensus by economists and professional analysts faced numerous challenges, is a good example of how the term “hype” — and related phrases such as “media hyping” (媒体炒作) and “news hyping” (新闻炒作) — is routinely used by Chinese state media to attack factual coverage on key issues that the Chinese Communist Party (CCP) regards as damaging to its interests.

…“hyping” may be paired with the hardline term “hostile forces” (敌对势力), a phrase that for decades has been used by the CCP to broad brush perceived enemies both internal and external — often with the suggestion, apart from any justification, that the two are in collusion.

Asian Review of Books looks at A Young Englishman in Victorian Hong Kong: The Diaries of Chaloner Alabaster, 1855-1856. A precocious 16-year-old sent out as an interpreter. Uses the word ‘beastly’ a lot. 

This might strike a chord with Hongkongers: Japanese complain that there are too many tourists…

…Kyoto has terminated its popular one-day bus pass to discourage tourists from using the city’s busses.

Extended queueing times and jammed public transport have inconvenienced locals. In 2022, roughly 80% of residents complained about public transport and the streets being overly filled with tourists. 

…the sector triggered a dynamic of “tourism gentrification” with locals being pushed out from the housing market since short-term holiday rentals are more lucrative to landlords. Shops and restaurants started catering to travelers rather than locals.