Big Lychee, Various Sectors

From HKFP, pix and stories from Causeway Bay yesterday…

In Victoria Park, a man holding an electric candle while sitting on a bench was surrounded by police officers at around 4.30pm. The man, wearing a face mask, a white cap, and dressed in black attire, was later brought to a police van. Police did not say whether he was apprehended.

Among others stopped by police: a dog wearing a collar with yellow ribbons, and a woman eating a banana.

Customs take action against a candle shop…

Hong Kong customs officers inspected ex-district councillor Katrina Chan’s incense shop for hours on the eve of the Tiananmen crackdown anniversary, accusing her of failing to comply with product safety regulations.

…They told her she was suspected of violating the Consumer Goods Safety Regulation because she had failed to include bilingual safety labels on products.

Inspections of the products lasted more than four hours, from 7.30pm to around 11.40pm, after the mall had already closed.

Oiwan Lam writes on the Hong Kong tax authorities’ recent interest in independent media…

These organisations and individuals were requested to pay a provisional tax demand before IRD’s investigation into any alleged underpayment was complete. The total provisional tax demanded from the eight media organisations was about HKD 700,000 (USD 89,300), while from individuals it was about HKD 1 million (USD 127,590). 

What’s worse is that the tax authority has made errors and unreasonable claims when auditing profit tax for independent media outlets and their reporters’ income, according to [HKJA chair] Selina Cheng. Although they could apply for a review and a deferred payment, they had to prepare financial records to invalidate the authority’s estimations.

Cheng herself is also a victim of such arbitrary tax audits. She was asked to pay backdated tax for the 2018/2019 financial year. Her annual income at that time was only HKD 230,000 (USD 29,340), but the authority claimed her income was up to HKD 630,000 (USD 80,380) and demanded that she pay the backdated tax.

HKFP reports that a different sort of business run by a pan-dem figure is getting similar attention…

Derek Chu, an ex-district councillor and the owner of e-commerce company As One, said on Tuesday that the Inland Revenue Department (IRD) demanded in April that his business pay HK$120,075 in profit tax for the financial year 2023-24.

The tax assessment would mean As One made a profit of about HK$1.5 million in 2023-24, but in reality, his shop only recorded a profit of less than HK$100,000, Chu told HKFP in a phone interview.

Most of As One’s HK$4 million income last year was spent on salaries, rent, and restocking products, he added.

“The numbers should have been obvious to the IRD,” Chu said. “I don’t know how they could see that much profit.”

The shop owner, who also founded the prisoners’ rights advocacy group Waiting Bird, accused the IRD of “targeting” his business and said he decided to speak up about the tax demand to “set the record straight.”

“It’s about telling people that what the IRD did was completely unwarranted,” he said.

The nearest thing to a June 4 vigil allowed these days is people walking around Causeway Bay eating ice cream cones. The largest-scale activity to mark the events of 1989 is the police presence. SCMP on the authorities’ June 4 preparations…

Hong Kong authorities will take action against anyone who threatens national security, the chief executive has warned, as the 36th anniversary of the Tiananmen Square crackdown approaches.

Asked about the legality of commemorating June 4 by lighting candles or wearing clothing with related slogans in Causeway Bay, where annual vigils had been held for decades, city leader John Lee Ka-chiu said all activities must comply with the law.

“Any activity on any day must comply with legal requirements. No one should violate the law,” Lee said on Tuesday, a day ahead of the anniversary, without mentioning the historical incident.

And HKFP reports…

Police officers patrolled Victoria Park – the former site of the city’s annual vigils for the Tiananmen crackdown – and its vicinity on Tuesday, one day before the 36th anniversary of the crackdown.

Outside the Sogo department store, plainclothes officers stopped and searched performance artist Chan Mei-tung as she was chewing bubble gum.

The officers set up a cordon and told reporters to stay on the other side of the road as they warned Chan and filmed the scene.

They then escorted Chan to the Causeway Bay MTR station and waved goodbye to her as she walked through the station’s gates, photos from local media outlets showed.

Chan was arrested for disorderly conduct on the eve of the anniversary in 2022, after standing outside Sogo and peeling potatoes.

Meanwhile, a patriotic food carnival called the Hometown Market in Victoria Park attracted 100 to 200 visitors on Tuesday afternoon.

That’s for 300 booths. Admittedly, some sell grilled lamb.

The BBC’s John Simpson looks back.

Bloomberg summarizes the sheer wretchedness of debt-ridden New World Development’s plight: its HK$$20 billion 11 Skies mega-mall project at the airport has so far leased only 40% of its space…

The 3.8 million square foot complex, equivalent to about a quarter of the combined square footage of New World’s major investment properties in Hong Kong, stood mostly empty on a recent weekday afternoon visit. Only two eateries out of more than 800 shop fronts were open, and those were to service nearby office workers. White hoardings covered up most retail storefronts, escalators stood motionless and there wasn’t any signage naming future tenants.

…New World is struggling to service around HK$210.9 billion ($26.9 billion) in liabilities. The property group faces worsening pressure to repay loans if it can’t strike a deal with banks to refinance HK$87.5 billion of its borrowings by June. So far, it’s secured commitments for about 60% of that amount after pledging some of its most prized assets…

…Revenue from 11 Skies may also run into a ceiling because New World is required to pay the Airport Authority either guaranteed rent, or up to 30% of the mall’s gross annual revenue, whichever is higher, until 2066

Sound like they’re screwed. Maybe turn it into housing?

Not really, but sort of, perhaps. Financial Secretary Paul Chan…

…noted that the Development Bureau had already initiated various studies on the Lantau Tomorrow Vision and that technical research would proceed to prepare for potential challenges, including hydrological considerations, should the project move forward.

The focus is now on the Northern Metropolis. This isn’t because spending a half-trillion-plus on a fairly small amount of land requiring massive connecting infrastructure didn’t make sense even when Hong Kong had huge budget surpluses and reserves. More because the extra space doesn’t even seem to be necessary, especially if you prioritize land valuations.

On a related subject, New World Development’s share price, from HK$52 in 2019 to HK$4.45 yesterday…

The latest fall followed an announcement that it would defer payments on perpetual bonds (which, not being quite as perpetual as markets would like, are now trading at around 60 cents on the dollar). (Update: more like 23 cents.)

Hong Kong retail sales decline for the 14th month in a row. A breakdown shows that consumer durable sales are down 23% year-on-year, though interestingly, alcohol sales have zoomed up by nearly 30%. Officials are renewing efforts to reverse the trend, notably by attracting more tourists.

Falling consumption might be a symptom, not the cause, of a problem. Discuss. 

RFA on the replacement of Zheng Yanxiong with Zhou Ji as head of the Liaison Office…

No reason was given Friday for removing Zheng and if he was being appointed to another position.

Zheng was dispatched by Beijing to Hong Kong in 2019 to oversee the crackdown on the protests, before his appointment in 2020 as the first head of the Office for Safeguarding National Security in Hong Kong. In 2023, he was promoted to director of the Liaison Office – the position he’s now vacating.

Throughout his tenure, he aggressively promoted the enforcement of Hong Kong’s National Security Law as Beijing looked to curtail the freedoms that had set the city apart from the mainland since the 1997 handover from British control. His tenure saw tighter controls over the press, academia, and civil society — drawing widespread international criticism.

Courtesy of a tip in the comments: the Ombudsman’s archives, with reports dating back to the mid-1990s, are on Github. (Have Github’s computers slowed down as a result?)

HKFP op-ed asks why lawmakers have been advised to keep quiet on the Office of the Ombudsman’s deletion of online archives…

…local media reported that authorities silenced LegCo on this issue. Authorities sent out “warm reminders” that LegCo members should not “follow up” or “comment” on the Ombudsman saga.

This gives the impression that LegCo is simply an extension of the government, speaking for the government only. What of its checking role? 

…The Ombudsman’s deleted reports saga tells us that Legco has lost some capacity to hold authorities to account. It tells us that officials expect Legco to speak for the government and not for the people of Hong Kong.

Yet, LegCo members should be able to speak out on issues such as this. Authorities should understand that speaking out is not “attacking” the government but trying to improve local governance. LegCo members’ constitutional role includes checking the government.

Authorities should relax the gag order on LegCo members so that they can better serve the people. This will build trust in our institutions, which is in everyone’s interest.

Of course the new-look legislature is expected to ‘speak for the government’. If the authorities wanted an assembly that represented the people and checked the executive, they wouldn’t have abolished the freely elected seats and created an ‘all-patriots’ LegCo. There are dozens of issues today’s lawmakers don’t talk about – from construction site safety, to over-tourism, to futile checks on Japanese seafood, to tax audits of independent media, to never-ending NatSec arrests and trials. 

Perhaps a more pertinent question is why the Ombudsman’s Office decided to remove these online records. Did a highly paid bureaucrat order the deletion because he thought all the files were slowing computers down? In which case the only reason lawmakers are being told to keep quiet about it is because the government finds it embarrassing. Or is this part of a new style of government? Are old election results, LegCo votes, Auditor’s reports, budgets, demographic data and other records going to become harder to find? If you wanted to bring about a system of increasingly tight control, making such information harder to access would help the authorities create new official narratives about the past. 

Today’s competition: Spot the plain-clothes cop. This Tweet claims there are 10 undercover police in the 12-second video clip panning out across from Sogo in Causeway Bay as June 4 approaches. If the number is correct, I think I got them all – on the third viewing. One is 98% obscured by another at the beginning and a couple of probables pass by with their backs to you. It’s the hair and the trying-too-hard-to-look anonymous (and the overt and bored hanging around). Fun for all the family.

Exiled activist and ‘absconder’ Joe Tay’s cousin and her husband are brought in for questioning by NatSec police…

Tay’s other cousin and his wife were brought in by the police for questioning earlier this month.

Tay, 62, currently based in Canada, is one of six overseas activists for whom police issued arrest warrants in December. He left Hong Kong in June 2020. Each wanted person has a HK$1 million bounty on their head for alleged national security violations.

Tay is accused of incitement to secession and collusion with foreign forces.

Police wanted poster.

As with other NatSec enforcement, investigations of fugitives’ relatives tends to lead to negative news reports overseas. To counteract ‘US-backed Western media smear campaigns’, the Hong Kong government is encouraging online ‘influencers’. Hundreds of them…

…to attract global attention through “market-savvy and humorous” approaches, Chief Executive John Lee Ka-chiu said.

Speaking at a Legislative Council Q&A session, Lee revealed that authorities invited 650 influencers in the first quarter of this year, including from the UK, Australia, South Korea, Thailand, Indonesia, mainland China and Taiwan. 

Among them, an Australian influencer’s content alone garnered 50 million views, he said. 

Last year, 2,600 influencers promoted Hong Kong, generating 380 million views.

China condemns the US plan to refuse or revoke student visas to some or all Chinese students. As usual with Trump, details are vague and subject to caving at any time. But whatever emerges, it seems students with CCP connections are being specifically targeted. Numerous experts on China rush to remind us all that young people in China join the Party out of cynicism rather than ideology. Kevin Carrico – former front-page star of Wen Wei Po – considers the proposed measure from a different angle…

The near universal shock at the possibility that any country in the world may not be eager to roll out the welcome mat for members of the Chinese Communist Party highlights to me the stunning degree to which membership in the Party has been normalized on a global scale.

…it is well past time to also push back against what I call here CCP privilege: the assumption that one can be a member of an organization opposed to basic human dignity and engaged in genocide without any potential repercussions, even on a global scale.

One argument defending CCP privilege claims that the Chinese Communist Party today is less a Leninist authoritarian party than just a social club or honor society.

…I am thankful to say that no social club that I ever joined has engaged in genocide or other crimes against humanity. And if by chance I had ever mistakenly joined such a social club, I would personally be eager to depart such a club once I understood what was happening, as being part of such a club would be a form of complicity in these crimes.

…The day that news of the policy proposal broke, Google searches for “quitting the Party” rose dramatically. 

The self-interested nature of Party membership, based in the search for privilege, has always been the Party’s greatest strength. Yet if there is ever a price to be paid for membership, it may become the Party’s greatest vulnerability.

Transit Jam goes to the Ombudsman’s Office HQ to view a document that would until recently have been available online. Everything is as difficult as you would expect – from booking ahead to negotiating the Shun Tak Centre to reading documents while staff linger outside the room. Almost as if they don’t want anyone to see their archives.

Asia Times on Apple’s boss and China…

…Cook sold Apple’s soul to China.

He deepened the company’s dependency on a regime that censors dissent, surveils its citizens, and threatens global security—all because the margins looked good.

He didn’t just outsource production. He outsourced principle. While Musk battled regulators and Zuckerberg sparred with Congress, Cook was quietly bending the knee to Beijing, deleting apps, filtering maps and making sure nothing upset the Politburo.

His legacy isn’t one of innovation or bravery—it’s of appeasement in pursuit of profit…

From Chinadiction, reviews of two books on Taiwan. One tries to clear up Formosa’s often-misunderstood past…

…the tribal histories that preceded and coexisted with the Dutch, the Spanish, the Ming refugees, the ascendant Qing Dynasty Manchus who semi-managed western coastal Taiwan until the arrival of the Japanese in 1895 – and after them the en-masse arrival of the defeated Chinese Nationalists (Kuomintang, or KMT) in 1949.

The other looks at the possibility of a war…

…despite all the rehearsals and incessant training, taking Taiwan is a toweringly tall order for an untested military such as China’s especially as modern warfare changes before our eyes. Hopefully, the best deterrence of all – as Xi continues to purge PLA generals, reportedly for corruption and “violating political discipline” – is China itself.

In Japan today, manufacturers sell more adult than baby diapers. As the population ages, some market segments will grow while others shrink; at best, the overall economic effect will likely be neutral. But, under orders to Do Something, desperate Hong Kong bureaucrats latch on to the possibility that an aging population could serve to boost the local economy. They were given a buzzword, and they are going to make sure their bosses hear it back…

The Working Group has proposed 30 measures in five areas, namely: boosting “silver consumption”, developing “silver industry”, promoting “quality assurance of silver products”, enhancing “silver financial and security arrangements”, and unleashing “silver productivity”. 

Among the detailed list of measures: ‘The exhibition industry will enhance silver economy elements in exhibitions’, plus a range of initiatives involving public-sector bodies facilitating things. Meanwhile, private-sector providers will – as in Japan – adapt to change and grab opportunities wherever they can without any government guidance. 

In fairness, the Deputy Chief Secretary more or less admits that there’s no point in the government expecting these ideas to generate additional GDP growth. The main hope is in getting more people in their 60s to continue working in a tightening labour market.

Joel Chan notes that the labour participation rate in Hong Kong was around 61% until 2019, since when it has declined to 56.8% – ‘the lowest since records began in 1985’.

HKFP reports that Hong Kong Chief Executive John Lee, answering questions from the press, implies that journalists ‘break the law and evade taxes’ and refers to the HK Journalists Association as some sort of enemy…

“Journalists or any other profession have no privilege to evade taxes,” Lee [said].

He also said a “real professional group” should improve the profession it belongs to instead of pressuring the government.

“Tolerating members who break the law and evade taxes while pressuring the government will only expose the group’s own maliciousness,” the chief executive said.

The tax authorities haven’t even concluded their audit process yet. And what sort of pressure is the HKJA applying?

Hong Kong’s tax department insists it ‘definitely does not’ audit for tax returns based on specific industry or background, even as it launches simultaneous investigations of independent news media outlets and their staff and their family members. HKFP points out that at least six such organizations  – ie most of them – have been audited, though…

In 2023–24, 1,802 audits were “processed” by the Inland Revenue Department whilst, as of 2024, there were over 1.46 million registered companies.

Some 3.2 million people are expected to pass through Hong Kong borders over the Tuen Ng May 31-June 2 period. (RTHK style? The line with Shenzhen is a ‘boundary’, but if you include air and sea movements, you can call them ‘borders’.) The majority of these will presumably be people making two crossings over the weekend. Even so, it seems around a tenth of the Hong Kong population will get out of town while a similar number will flood in. 

As a witty commenter put it recently, Hongkongers will leave town to spend their money elsewhere in order to avoid all the Mainlanders who come here and don’t spend any money.

From the Standard…

A private housing estate in North Point has sparked controversy after issuing a notice prohibiting residents from walking bare-chested in common corridors, warning that such behavior could violate Hong Kong’s criminal laws.

The estate management posted the notice following complaints about shirtless residents in shared spaces while taking out trash or handling personal items. While acknowledging the hot weather, the notice reminded residents that corridors are public areas and urged them to “wear shirts when passing through.”

It cited Section 148 of the Crimes Ordinance (Cap. 200), which criminalizes “indecent exposure” in public places without lawful authority, punishable by up to HK$2,000 in fines or six months’ imprisonment.

Well at least they didn’t mention national security.

The FT reports on Singaporeans falling for ‘job scams, romance scams, government official impersonation scams’ and other fraud. Known victims (many do not go to the police) lost over $1 billion last year… 

This is a small part of a global criminal enterprise worth an estimated $1tn, but Singaporeans, affluent, digitally advanced and compliant, are particularly vulnerable to these scams. As one person involved in the recovery of assets put it: “They are rich and naive”.

All of which sounds familiar to those of us in Hong Kong, where cross-border movements of cash leave many people in possible violation of Mainland laws, and thus susceptible to being conned by fraudsters posing as law enforcement. But there is a unique twist in the Lion City…

…Scams have become so widespread that Singapore’s government has even discussed corporal punishment for offenders. “We believe in caning as a strong deterrent,” said Loretta Yuen, chair of the fraud committee at the Association of Banks in Singapore. “It’s a deterrent, but there is also a sense of revenge to it.”

Hordes of visitors swamp an area to take photos, causing serious inconvenience to local residents. Do the authorities take action, or do they welcome the influx as good for the economy?

If you are a family of brown barn owls at Kadoorie Farm, the answer is the former. The management of the wildlife facility announce…

Our role is to protect the bird and manage the visitors, and check for visitors that might be using laser pointers or playing owl sounds, all to take a great picture, but at the same time causing great disturbance to the birds. 

To protect the birds, unfortunately, we have decided to temporarily close the road and prevent this disturbance to the young Brown Wood Owl and his parents. While we understand that this may cause dissatisfaction to some photographers, we hope that everyone understands that the well-being of the birds comes first, and we appreciate your cooperation.

If you are a human trying to negotiate the streets through your overcrowded Hong Kong tourism hotspot neighbourhood – tough luck. Your well-being is not a consideration.

The Hong Kong tax authorities’ mass audits of independent media organizations and journalists get attention in the international press – as you would expect. From the Guardian…

Hong Kong authorities have targeted journalists and media outlets with what are supposed to be “random” tax audits, in a move the industry union says adds pressure to waning press freedoms.

The head of the Hong Kong Journalists Association, Selina Cheng, detailed what she said were “strange” and “unreasonable” accusations by Hong Kong’s inland revenue department. Requests or audits were made against the association, at least eight independent media outlets, and at least 20 journalists and their family members, including Cheng and her parents, she said at a press conference on Wednesday.

Cheng said the tax department had told one journalist that they had to pay a profit tax for a company they did not run, and had cited a registration number that did not exist. Another company was told it was being audited for profits made during the year before it was even founded. One journalist had their income “assessed” as double the amount they had actually earned, and was issued a demand for prepayment of tax on the “under-reported” income.

…Citing IRD figures, [HKFP founder Tom] Grundy said the chance of being “randomly” selected for an IRD audit was about 0.123%. “The probability drops much further when considering almost all independent media outlets were coincidentally, simultaneously selected.”

From RFA…

The association expressed concern that this could further reduce the operating space for small-scale and independent news outlets in a city once known for its freewheeling media. It called for the revenue department to stop audits without clear justification and to publicly explain the rationale for what it sees as a potentially coordinated crackdown on independent journalism.

“For small outlets like ours, this is a serious reputational attack. Being accused of tax evasion is defamation. The authorities’ frequent scrutiny of journalists and media organizations creates anxiety and casts a shadow over press freedom in Hong Kong,” Selina Cheng, the association’s chair, told a news conference.

And NYT…

Thomas Kellogg, the executive director of the Georgetown Center for Asian Law, said that administrative harassment can be an effective way to control the remaining outlets that have managed not to cross red lines that could put them at risk for prosecution under national security or sedition laws. Such reviews “serve as a reminder to media outlets that they have to watch what they say, and that the government has ways to hit back at them over reporting it doesn’t like,” he said

….Last year, the authorities investigated what [HKFP] described as “false complaints,” including claims that a hot sauce it sold as a fund-raiser had come from an unlicensed food factory and that Mr. Grundy’s pet dog lacked a license and rabies shot. Both cases were closed after he submitted evidence to the contrary, Mr. Grundy said.

If you think journalists’ salaries are hardly high enough to warrant tax audits, wait until you find out how much artists make. The Standard reports…

Patriotism must be at the core of artistic practice in the new era to solidify Hongkongers’ national identity and promote the preservation of Chinese culture, Zheng Yanxiong, director of the central government’s liaison office in Hong Kong, said.

Speaking at the opening of the Guangdong Art Centennial Exhibition Hong Kong at the Hong Kong Convention and Exhibition Centre on Thursday, Zheng emphasized that art should serve as a vehicle for fostering patriotism and a sense of belonging to both the nation and Hong Kong. 

He called for greater innovation in artistic creation and cultural production to advance Chinese culture while maintaining its traditional essence.