Big Lychee, Various Sectors

The Standard, for anyone who needs reminding, is a free paper that largely comprises brief English translations of Sing Tao articles. It is tycoon-owned, virulently talks up the property market at every opportunity, and is resolutely pro-Beijing/Hong Kong government. But it used to have its own editorials, written by ‘Mary Ma’, which could on occasion be punchy and even funny. Then, some time ago, these were replaced by much duller pieces rehashing the government line. From today’s…

Yesterday, National Day celebrations in Hong Kong were more than just a display of flags and fireworks – they were a powerful symbol of the city’s resurgent vitality. The streets, thronged with both tourists and locals, pulsed with an energy not seen in recent years. This was not a fleeting moment of festivity, but a clear indicator of a resilient economy finding its footing amid global uncertainties. The scenes from Canton Road to bustling local cinemas tell a compelling story of recovery, reinvention and a future built on more than just financial prowess.

The visual cues of Hong Kong’s comeback are unmistakable. The re-emergence of mainland tourists shopping at luxury boutiques in Tsim Sha Tsui is a classic barometer of retail health. However, the recovery is broader and more deeply rooted. Local crowds flocking to restaurants and cinemas demonstrate a restoration of domestic confidence. This renewed sentiment has spurred the property market, with developers confidently launching new projects…

As Chief Executive John Lee Ka-chiu has emphasized, robust policies are designed to create prosperity that permeates the whole of society, not just the financial sector. The numbers validate this approach… 

The government [sic] proactive role in incubating new industries is particularly forward-thinking. Take, for instance, the ambitious decarbonization agenda. Initiatives like green marine bunkering and producing sustainable aviation fuel from used cooking oil are masterstrokes of modern policy. They are not merely environmental imperatives but represent enormous economic opportunities. Furthermore, these emerging green industries require a vast spectrum of manpower, from top-tier professionals to grassroots workers, ensuring that the benefits of growth are widely shared across the workforce.

What – no ‘yacht economy’?

On reading this, my immediate feeling is deep sympathy for whoever has to write this stuff every day. But then it occurs to me that it takes a certain literary technique to craft such a vacuous string of words – or be so wrong. Post-property bubble Mainlanders will never go back to buying luxury garbage like they once did. Aviation fuel from cooking oil is not a ‘masterstroke of modern policy’. 

It must, of course, be Chat GPT.

Which leads us rather elegantly to Ed Zitron on the case against generative AI. A long but worthwhile rant…

…if you generated a picture of a person that you wanted to, for example, use in a story book, every time you created a new page, using the same prompt to describe the protagonist, that person would look different — and that difference could be minor (something that a reader should shrug off), or it could make that character look like a completely different person.

Moreover, the probabilistic nature of generative AI meant that whenever you asked it a question, it would guess as to the answer, not because it knew the answer, but rather because it was guessing on the right word to add in a sentence based on previous training data. As a result, these models would frequently make mistakes — something which we later referred to as “hallucinations.” 

And that’s not even mentioning the cost of training these models, the cost of running them, the vast amounts of computational power they required, the fact that the legality of using material scraped from books and the web without the owner’s permission was (and remains) legally dubious, or the fact that nobody seemed to know how to use these models to actually create profitable businesses. 

…The problem is that most jobs are not output-driven at all, and what we’re buying from a human being is a person’s ability to think. 

Every CEO talking about AI replacing workers is an example of the real problem: that most companies are run by people who don’t understand or experience the problems they’re solving, don’t do any real work, don’t face any real problems, and thus can never be trusted to solve them … leaving us with companies run by people who don’t know how the companies make money, just that they must always make more.

When you’re a big, stupid asshole, every job that you see is condensed to its outputs, and not the stuff that leads up to the output, or the small nuances and conscious decisions that make an output good as opposed to simply acceptable, or even bad. 

…Large Language Models are also uniquely expensive. Many mistakenly try and claim this is like the dot com boom or Uber, but the basic unit economics of generative AI are insane. Providers must purchase tens or hundreds of thousands of GPUs each costing $50,000 a piece, and hundreds of millions or billions of dollars of infrastructure for large clusters. And that’s without mentioning things like staffing, construction, power, or water.  

Then you turn them on and start losing money. Despite hundreds of billions of GPUs sold, nobody seems to make any money, other than NVIDIA, the company that makes them, and resellers like Dell and Supermicro who buy the GPUs, put them in servers, and sell them to other people. 

…LLMs are an output-driven technology, but most jobs that AI is meant to replace require far more than just spitting out stuff. In reality, executive excitement over AI shows that they have little understanding of labor – they’re Business Idiots. 

…The stock market has an unhealthy relationship with NVIDIA (it makes up 7-8% of the S&P 500). 55% year-over-year growth isn’t enough – even if NVIDIA sells $72 billion of GPUs in a year, the markets would punish them for not keeping up an unrealistic pace. NVIDIA got desperate, and birthed “Neoclouds,” debt-ridden data center companies selling AI compute. NVIDIA invests in them, sells them GPUs, and pays them for compute – all so they can raise money using contracts/GPUs as collateral…to buy more GPUs from NVIDIA.

…We are in the midst of one of the darkest forms of software in history, described by many as an unwanted guest invading their products, their social media feeds, their bosses’ empty minds, and resting in the hands of monsters. Every story of its success feels bereft of any real triumph, with every literal description of its abilities involving multiple caveats about the mistakes it makes or the incredible costs of running it. 

(Warning: column uses ‘compute’ as a noun. It means computing power or resources.)

More here, if you like this sort of thing.

The SCMP reports on the latest obscure/offbeat attempt to rejuvenate Hong Kong’s economy…

Hong Kong is seeking to establish a cross-border individual travel scheme for yachts, with discussions under way with Guangzhou counterparts to ease maritime travel for private vessels as part of a wider effort to create a high-end “yacht economy”.

As opposed to a ‘low-end’ yacht economy. 

From the Standard…

Speaking at a Legislative Council briefing, Law stated the goal is to attract international yachts while also stepping up efforts to draw mainland Chinese tourists.

She pointed to the potential of developing a yacht rental sector. This would allow tourists, particularly those from inland regions unfamiliar with sailing, to experience trips with a captain and enjoy Hong Kong’s scenic harbour and island views.

I have a vision of a small group of civil servants in Admiralty within a Department that is part of a Bureau. It has a director (salary: HK$1,800,000 a year), three deputy assistant sub-directors (HK$1,000,000 a year), and a dozen more assistants and clerks (average HK$600,000 a year), plus a car and driver. It is the Yacht Economy Development Unit, and it is eagerly identifying more opportunities as we speak. 

(Obviously, it’s nothing like that in real life.)

A Bloomberg story expands on the New World Development horror and asks how the next generation of property tycoons will fare in the post-patriarchs era…

The younger generation in Hong Kong is navigating unfamiliar political terrain. Once a dominant force in the city’s business and policy circles, Hong Kong’s tycoons held considerable sway — especially during the early years of China’s reform and opening up, when Beijing’s political elite actively courted them for their investment capital and global connections.

But that influence has waned since the 2019 protests and social unrest. President Xi Jinping’s administration has grown increasingly wary of the city’s powerful family conglomerates, with state-owned media including the official People’s Daily blaming them for fueling public discontent through unaffordable property prices.

Beijing’s official explanation to the world for the 2019 protests is that evil foreign forces plotted and funded the movement. Closer to home, however, Chinese officials link anti-government sentiment to the housing mess. (Many dogmatic pan-dems reject such a link, insisting that the movement had nobler aims such as defending Hong Kong’s freedom and values. But if you could measure individual causes of raw discontent, housing would be number-one.)

One irony here is that the original property bubble (roughly 1985-1997) resulted from Beijing’s requirement that the colonial Hong Kong government tightly limit land supply. Another is that after the Asian Financial Crisis, post-1997 Hong Kong administrations continued that policy, systematically making apartments more and more expensive, yet smaller and smaller in size. Beijing could have ordered local leaders to cut that out (just as they could have limited the flow of Mainland immigrants into the city, which added to the housing problem). Even today, after encouraging serious over-supply of offices and malls, planners are nervous about allocating land for plain everyday housing.

In short, while the tycoons profited – obscenely, with relish – from the deliberate shortage of housing, they didn’t cause it. Not that we need to have much sympathy with them today…

Adrian [Cheng, former New World Development scion and boss], for his part, has turned his attention to other endeavors. He’s now leading the Hong Kong Academy for Wealth Legacy, a group that’s promoting the city as a hub for private investment offices that handle money for rich families — and providing financial guidance to their wealthy heirs. He also set up a firm to invest in digital assets.

In late September on Threads, he posted the words “I am my own light; nothing could diminish it.”

The US National Catholic Register has a piece on Cardinal Stephen Chow Sau-yan, Bishop of Hong Kong…

“Beijing wants to keep religious freedom intact in Hong Kong, because Hong Kong is important for China,” the cardinal contended, according to a report in the Sydney diocesan newspaper, The Catholic Weekly. He also said the secret provisional agreement between Beijing and the Holy See on the appointment of bishops is highly complex, and that observers should not force facts into a “dualistic paradigm.”

China has many voices, he continued, and its government takes the Catholic Church seriously, tries to understand it, and is very well informed. He appealed to those present to recognize that Communists are human, that they “yearn for love” and “yearn for respect,” even if he said he himself did “not quite agree” with their atheistic ideology.

The cardinal also played down the suffering that his outspoken predecessor, Cardinal Joseph Zen Ze-kiun, has experienced at the hands of the Hong Kong authorities…

…Steven Mosher, president of the Population Research Institute, said Cardinal Chow’s assertion that China wants to keep religious freedom intact in Hong Kong because the territory is important to it was “laughable.” 

…“The walls are closing in on the Church in Hong Kong more slowly than they are in China, but they are closing nonetheless,” he said.

Nina Shea, senior fellow and director of the Center for Religious Freedom at Hudson Institute, said that, like Cardinal Zen, Cardinal Chow is also not free to criticize the CCP, “so everything he says about the party’s policies and actions must be taken with a grain of salt.”

Pointing out that neither Cardinal Zen nor anyone else dares speak about the persecution against [Jimmy] Lai, Shea said they also cannot protest against the ongoing persecution of bishops and priests in mainland China. “Beijing’s media outlet in Hong Kong threatened to shut down Catholic schools in Hong Kong if Zen and the other Church leaders did not submit to CCP dictates,” Shea noted. “They are effectively hostage to these threats.”

The US State Department releases its 2025 Investment Climate Statements, including one on Hong Kong. It’s fairly mild…

Beijing’s imposition of the National Security Law (NSL) on June 30, 2020, introduced heightened uncertainties for companies operating in Hong Kong. On March 23, 2024, the Hong Kong government enacted the SNSO, a new national security legislation under Article 23 of the Basic Law. During public consultations on the proposed law, some legal and business groups raised concern that proposed legislative text was overly broad and could be arbitrarily enforced — especially related to provisions about “protecting state secrets,” “external interference,” and potential extraterritorial application – which could increase economic risk and general uncertainty about Hong Kong’s investment climate and potentially inhibit regular business activities and travel. The legal uncertainties and business risks have become a factor for corporations with operations in Hong Kong and those considering investments in the territory.

The Hong Kong government issues an angry press release…

…the Report continues to maliciously smear and make unfounded and false accusations against the Hong Kong National Security Law (HKNSL) and the Safeguarding National Security Ordinance (SNSO). For this, the HKSAR Government expresses strong discontent and firm opposition.

The number of registered voters falls again…

The 2025 registers of electors, released on Thursday, showed a total of 4,138,992 people registered as voters in the city’s geographical constituencies – the only category of lawmakers open for the public to vote.

…Thursday’s figure represented a drop for the fourth consecutive year and a decrease of about 330,000 compared with the peak level in 2021, when Hong Kong had a total of 4.47 million registered voters.

Not sure whether I’m registered or not. I had a reminder, which I think I ignored. Either way, the people many of us would want to vote for are either barred from running or are simply in jail. If you state an opinion that people shouldn’t bother voting, the ICAC – the anti-graft police – can arrest you. So obviously I wouldn’t do that. (If your opinion is that they should vote, that’s OK. If you express an opinion that this is absurd, maybe you could be arrested for sedition, namely inciting hatred of the government. So I wouldn’t do that either.) 

Some weekend reading…

Japan Times op-ed on the difficulties of invading Taiwan…

The island’s coastline is “remarkably unsuited for amphibious operations.” One study identified just 14 potential invasion beaches. Those landing sites would provide the terrain for one of the largest and most complex military operations in history, demanding a fleet comparable in size to that used by the Allies to land in Normandy on D-Day.

Once an invading force got on the beach — an accomplishment in itself — there would be little territory for staging forces as most of the land behind the landing zones is either rice fields that would swallow tanks and heavy transportation vehicles or cities, which create an urban fighting nightmare.

That unforgiving terrain assumes additional significance if the Taiwanese population is prepared to use it. And, the Stimson analysts note, “Chinese military planners believe Taiwan’s population will mount a formidable defense of their island.” According to a 2024 poll, two-thirds of the population would be ready to fight in their own defense.

History offers reasons to be cautious. The U.S. planned for an invasion of Taiwan during World War II, dubbed “Operation Causeway,” but decided not to proceed. As one military historian concluded, “the more they studied Formosa (Taiwan, pre-Nationalist takeover), the less they liked it.” U.S. President Franklin D. Roosevelt came to this conclusion, write the Stimson authors, even though the U.S. military “was approaching its absolute zenith of strength and experience,” a decision that “underscored the challenge.”

In contrast, the authors add, China’s People’s Liberation Army has “a mixed record” of amphibious operations.

Some in-depth pieces on China’s ‘involution’ problems. First a reminder from Michael Pettis…

…involution is just the most recent name for an old structural problem in China, that of excessively high GDP growth targets accommodated by increasingly soft budgets. The result is excess capacity throughout the economy.

That’s because as long as the GDP growth target is set above whatever growth the underlying economy can productively deliver, local governments are forced to deliver by overinvesting in whatever sectors are currently in favor, no matter how unproductive the investment.

Until China finds some way of raising consumption growth to at least 6-7 percent, it cannot rein in investment growth as long as it targets GDP growth rates of 4-5%. The only “solution” to excess capacity in one sector of the economy, in other words, is to shift it into another.

It’s worth remembering that the problem of involution was itself set off by the shifting of investment out of a massively overextended property sector. Much of this  went to favored manufacturing sectors, which is why these are exactly the sectors suffering from involution.

A (paywalled) NYT op-ed sets the scene…

Competition in China is often far more cutthroat than in the United States. America has a handful of carmakers; China has more than 100 electric vehicle makers struggling for market share. China has so many solar panel makers that they produce 50 percent more than global demand. About 100 Chinese lithium battery producers churn out 25 percent more batteries than anyone wants to buy.

This forces Chinese manufacturers to innovate, but it also leads to price wars, losses and bad debt — and that’s becoming a problem.

China is heading toward deflation, the often catastrophic downward spiral of prices that sank Japan in the 1990s. Its leaders are blaming a culprit they call “involution” (“neijuan” in Mandarin), a term that has come to mean reckless domestic competition. They want to rein it in by browbeating companies into keeping prices steady and instructing local governments to scale back subsidies.

It won’t work. At best, those are temporary fixes for China’s more fundamental problem. Its economy relies so heavily on investment for growth, rather than consumer spending, that it produces enormous surpluses that wreck profits at home and provoke trade wars abroad.

…Longstanding policies that encourage excess supply remain untouched. Local officials are still measured by how well the economy grows and how quiescent their citizenry remains. That, in turn, means keeping local companies afloat to ensure the steady availability of jobs and tax revenue.

…So far, there have been only modest additions to the safety net, and Beijing is wary of reducing the state’s control over the economy and handing it instead to consumers. There is little reason to think this will change. China is likely to try to muddle through its anti-involution campaign hoping that importers, even the tariff-heavy United States, will swallow its excess goods.

A CSIS blog adds…

A central feature of this conversation centers around a criticism of competition based on price. At the corporate level, there are price wars in sector after sector, with companies slashing prices to reduce their inventories and fight for market share against their opponents. In the auto sector, BYD has been criticized by some as the source of price wars, with the charge that it wants to push as many competitors out of the market as possible. The same dynamic is visible in mobile phones, solar panels, e-commerce, and many other industries. The result is deflation as a whole … and in many industries…

…adopting more fundamental reforms would constrain the party-state’s authority. And although officialdom may be unhappy with “excess competition,” it may be willing to accept it as the cost of keeping its hands firmly in control of China’s economy. 

The (paywalled) Overshoot Substack says …

So far, the impact of the domestic slowdown has been partly offset by soaring net exports. In 2024 the increase in China’s trade surplus contributed more to the reported growth rate than in any year since 1997¹. So far in 2025, the dollar value of China’s goods exports is rising about 6% a year, which is about the same as the full-year growth rate in 2024. But unlike last year, when spending on imports rose by 2.5% in January-August, or by 1.1% for the full year, so far in 2025, the dollar value of Chinese imports is down by 2.2%. China’s internal problems are therefore being dumped on the rest of the world. Businesses and workers elsewhere are earning less income because spending in China is too low.

That is a choice, and Chinese policymakers seem to be deliberately shifting at least some of the cost of that spending shortfall abroad through currency intervention. The Chinese banking system has increased its net foreign asset position by $360 billion since the end of 2023, leaning against pressure for the yuan to appreciate, and thereby reducing the international spending power of Chinese consumers while making Chinese exports look cheaper in foreign markets. In the short-term, that might be helpful in moderating inflationary pressures in manufactured goods, but the longer-term implication is deeply negative.

To see why, just consider what China’s top policymakers are saying about their domestic objectives. Besides increasing consumer spending—a longstanding official priority that has not yet translated into meaningful policy action—the focus is on getting companies to stop “excessive” competition for market share by slashing prices below cost. The official view is that this behavior, which has ostensibly been encouraged by local government production subsidies and an over-eager banking sector, deprives businesses of the ability to invest in research, technological upgrading, and quality control. The feared result is less innovation and lower incomes.

But if that is a problem for Chinese businesses competing with each other, it is also, presumably, a problem for non-Chinese businesses competing with Chinese ones—especially if they lack the subsidies and other supports needed to sustain production in the face of “irrational” price competition. From this perspective, the problem currently vexing China’s officials is simply the latest manifestation of the longstanding imbalances that for decades have plagued both China’s economy, and, by extension, the rest of the world.

…So far in 2025, total fixed asset investment (excluding rural areas) is just 0.5% higher than it was in January-August 2024. That is meaningfully slower than the full-year growth rate of fixed asset investment growth in 2024 (3.2%) or 2023 (3.0%), and much slower than the 5.4% growth recorded in 2019, the last full year before the pandemic. While it would be easy to pin this deceleration on the collapse in the housing market that began in mid-2021—growth swung from +10% in 2019 to negative 10% in 2022, 2023, and 2024—that is not the main explanation for what has happened in 2025, even if the pace of the real estate contraction has picked up to 13% so far this year.

For hardcore Pekingology/military geeks only – an in-depth essay on the Solo Wing Substack about purges in the PLA…

Through an examination of official announcements and other information, the outside world has learned that dozens of senior officers and cadres from various CMC departments, branches, theater commands, and military and aerospace enterprises have been purged or dismissed. 

…The obsession with purges reaches back to Stalin, who eliminated swaths of Soviet cadres and nearly all senior commanders in the Red Army, elevating the purge into ideology and codifying it in his Short Course. Mao drew on this model in Yan’an, launching the Rectification Movement that systematically purged and indoctrinated cadres, soldiers, and intellectuals. Through denunciations, remolding, imprisonment, and executions, Mao secured his supremacy.

Communists may argue that purges ultimately strengthened combat power: Stalin purged, and in 1945 the Red Army planted its flag on the Reichstag; Mao purged, and in 1949 the PLA routed the Nationalists. Causality is debatable, but the victors prevailed. As Stalin is said to have told Mao: “The victors are not judged, nor can they be condemned. This is a universal axiom.”

Among much else, includes analysis of the ‘weather balloon’ that drifted over the US in 2023…

The episode derailed efforts to stabilize U.S.–China relations and exposed the PLA as highly stovepiped and poorly supervised. Such isolation and poor coordination have caused similar incidents before. In January 2011, Defense Secretary Robert Gates met Hu Jintao in Beijing ahead of Hu’s state visit to Washington. Hours before, the PLA conducted its first test flight of the J-20 stealth fighter. Hu, as CMC chair, seemed unaware when asked. Xi, who had just met Gates the previous day, was likely equally surprised. The timing fueled speculation that PLA insiders sought to sabotage the summit. Hu’s weak grip allowed the military to carve out autonomy through its monopoly on expertise. Just three months earlier, Xi had been elevated to CMC vice chairman—his final step toward being anointed successor. The episode showed him firsthand the dangers of a daredevil PLA acting on its own.

Fancy a free book on how the Atlantic slave trade affected Glasgow? The Glasgow Sugar Aristocracy: Scotland and Caribbean Slavery, 1775–1838 by academic Stephen Mullen. You can read it or download a PDF (or buy a real copy) here. I’ve been perusing it. Interesting!

From HKFP, some pics from the typhoon, and some more (especially for fans of felled trees). And a clip via the Standard of people in Macau catching fish in flooded streets.

On other matters, the government gives up…

Hong Kong has confirmed that a long-delayed waste-charging scheme will remain on the shelf indefinitely, with the government saying the city continues to face economic challenges amid a global tariff war and rising geopolitical risks.

The Environment and Ecology Bureau announced the decision on Tuesday, two months after it was supposed to reveal the scheme’s future by the end of July.

The initiative had already been delayed twice and was originally shelved last May.

If you go to Japan, Taiwan and South Korea, you see ‘Pay As You Throw’ and recycling measures that have been in operation for some 10 or 20 years.

Who cares whether it’s Signal Number 1 or 3, or 8 or 10? HKFP explains them. The system dates from the era of sailing ships. As a mean editor who can trim 1,000 words to 300 with no problem, I would suggest that all you need is ‘nothing’ and ‘8’. The rest is pointless, unless you like ritualized crisis-building. If a typhoon is coming, just say so. 

In theory, the numbered Signals indicate specific conditions, like the distance of a cyclone. But in practice there seems to have been some storm-category inflation. Almost as if an ‘8’ today is what used to be a ‘3’. To make everything fuzzier, the authorities issued an unusual ‘pre-Signal 8 alert’ at noon yesterday. Then the actual Signal 8 at 2.20 (in Macau, they did it at 5.00). Schools had been shut the whole day, while businesses were closing by mid-afternoon. Seas were starting to get rough, so anyone who needed a ferry to get home would have to do so before services stopped. But for the other 99% of the population, the weather yesterday was pretty normal until well into the evening.

The obvious argument for bigger and earlier typhoon Signals is public safety. There was a time when the HK Observatory would hold off on the Number 8 until the last minute, when everyone had a couple of hours to get home (or to the pub). The brutes didn’t even give us enough time to panic-buy.

But some might wonder whether much of yesterday’s extensive announcements and Signal-raising were about making sure officials wouldn’t be accused of not doing enough. A few cynics might even think someone was amplifying a sense of impending potential danger in order to highlight how the government was boldly taking action to protect us. 

Which, in fairness, they have done, judging by the number of emergency vehicles zipping past my window this morning. But do we need the theatrics? Will they drag out the Number 8/9/10 hooplah into tonight?

The government announced a ‘Number 1 Standby’ (ie ‘nothing is happening’) signal just after noon yesterday, even though the typhoon was more than the usual 800 kilometres away. It then announced that it would put up the Number 3 by 9.40pm that evening and would ‘consider’ the Number 8 during the following (ie this) afternoon. It is now saying it will announce the number 8 at 2.20pm, and a ‘Pre-Number 8 Special Announcement’ two hours beforehand. Schools are shut today, as well as tomorrow. 

This is a big typhoon. Outlying islands will no doubt get a battering. Obviously, public safety is the priority, and emergency services need to be on heightened alert. But how does padding out the issuing of numbered storm categories and announcing early-warnings-of-warnings to the whole city really help? You have to wonder whether, in an effort to show everyone they are taking the incoming typhoon seriously, officials are inadvertently creating a greater sense of alarm. Now supermarket shelves have been stripped bare of bread, noodles and vegetables.

And will this continue after Ragassa has passed (which, believe it or not, it will)? Is the whole city going to stay shut down until Friday?

Non-panicky advice: get home in good time this evening and expect tomorrow to be a write-off.

There’s nothing Hong Kong loves more than an excuse to panic-buy…

Residents have begun to accumulate supplies in anticipation of the impending arrival of Super Typhoon Ragasa, while some retailers warned about potential price increases. 

In the flood-prone area of Heng Fa Chuen, residents were observed procuring additional provisions in preparation for Ragasa, which correlatively resulted in a modest increase in sales for local vendors. 

Businesses are projecting heightened foot traffic and revenue on the upcoming Monday and Tuesday, with some merchants indicating that prices may be adjusted based on the restocking situation.

There’s also a debate going on (somewhere) about whether taping windows up is a good idea.

HKFP op-ed on LegCo’s rejection of a government bill to establish a registration system for same-sex couples who married overseas. It describes some odd features of the process. The government did not hold a public consultation – but LegCo did. And that showed 80% opposition, despite a robust public opinion survey two years ago finding 60% support for same-sex marriage. And Beijing’s officials endorsed LegCo’s handling of the bill….

…The huge gap between public opinion (as shown in the scientific survey) and the LegCo vote reflects the unrepresentativeness of our “patriots-only” legislature. It also exposes officially identified “mainstream public opinion” for what it is – the opinion only of our officially selected patriotic political elite and their narrow band of supporters. 

The government’s lack of enthusiasm for its own proposal was palpable. Remember that only after the top court “kicked” the government did it do anything at all. For years, the government ignored the results of scores of lost lawsuits that exposed official mistreatment of same-sex couples. 

Indeed. The all-patriots LegCo would have voted for the bill if the authorities had wanted it, notwithstanding a few fundamentalist Christian members who show a curious obsession with gays. But the overall impression is that the government/Beijing’s officials were mainly concerned with asserting non-subservience to the court that ordered the change to the law.

As for the role of public opinion – the whole post-2019 ‘patriots-only’ move away from competitive elections tells you all you need to know. The system is designed not to be representative. 

An SCMP op-ed…

The decision by a majority of legislative councillors to vote down the same-sex partnerships bill has been presented by officials as some kind of triumph for the system of government. In fact, it sets us on the road to a slow-burning loss of credibility about our commitment to the rule of law.

A total of 71 members voted against the bill earlier this month, with just 14 in favour and one abstention. The outcome was widely reported in the overseas media, most directly highlighting that this was a direct rebuttal of a ruling by Hong Kong’s top court.

The narrative since put forward by some officials is that, despite the negative outcome, the process was a success because it showed all three branches of government carried out their duties faithfully according to the law. The judiciary interpreted the relevant law independently, the executive responded appropriately by putting forward legislation to remedy the adjudged illegality and the legislature exercised its free judgment.

This is pure sophistry. A significant minority of Hong Kong citizens have been denied certain rights that our Court of Final Appeal ruled they should have by law. The promise by the government to examine what might be done administratively to minimise the damage to those concerned is welcome but insufficient.

Another HKFP take on the subject here.

Also from HKFP – whatever happened to ‘Night Vibes’?

Launched in September 2023, the government’s Night Vibes Hong Kong campaign was once billed as the marquee push to revive tourism and domestic spending post-Covid. Performances, cultural events, markets and tours were promised, offering “festive and vibrant” experiences along the harbourfront and beyond.

By January 2024, it had expanded into Day x Night Vibes @ 18 Districts. As of the first quarter this year, more than 60 events had been held, officials said. But earlier this month, when a pro-establishment party urged Hong Kong to boost its “night-time economy,” reporters noticed that the campaign’s dedicated website had quietly vanished.

…into (presumably) the night.

Admit it – you hadn’t noticed, right?

Jessie Lau in Prospect on the 10th anniversary of the film Ten Years…

Now banned in Hong Kong and Mainland China, Ten Years captured Hongkongers’ anxieties in 2015 over what their home may become by 2025, in a series of haunting vignettes depicting the potential impact of Beijing’s increasing control over the semi-autonomous city. Filmed on a tiny budget of just HK$500,000 (£47,400), it was an instant hit upon release, selling out screenings across the city before it was pulled from commercial theatres following pressure from Chinese authorities. When it unexpectedly won Best Film at the Hong Kong Film Awards a year later, Beijing barred the broadcast of the ceremony on the mainland, calling it a “virus of the mind”.

I was a journalist covering the film awards for local media in 2016—an era of relative press freedom that now feels like a lifetime ago. I still recall the shock that reverberated across the auditorium that evening: the moment of utter silence, followed by rapturous applause. The flash of cameras from the press area, as we all flocked forwards, scrambling over one another, for our front-page shots. The look of disbelief on the executive producer’s face, as he stepped onto the stage and spoke about how the award represented hope in Hong Kong; how it belonged to us all.

For anyone who thinks an EV factory makes sense in Hong Kong – a good Reuters story on China’s car glut…

China has more domestic brands making more cars than the world’s biggest car market can absorb because the industry is striving to hit production targets influenced by government policy, instead of consumer demand, a Reuters examination has found. That makes turning a profit nearly impossible for almost all automakers here, industry executives say. Chinese electric vehicles start at less than $10,000; in the U.S., automakers offer just a few under $35,000.

Most Chinese dealers can’t make money, either, according to an industry survey published last month, because their lots are jammed with excess inventory. Dealers have responded by slashing prices. Some retailers register and insure unsold cars in bulk, a maneuver that allows automakers to record them as sold while helping dealers to qualify for factory rebates and bonuses from manufacturers.

Unwanted vehicles get dumped onto gray-market traders like Zcar. Some surface on TikTok-style social-media sites in fire sales. Others are rebranded as “used” – even though their odometers show no mileage – and shipped overseas. Some wind up abandoned in weedy car graveyards.

These unusual practices are symptoms of a vastly oversupplied market – and point to a potential shakeout mirroring turmoil in China’s property market and solar industry, according to many industry figures and analysts. They stem from government policies that prioritize boosting sales and market share – in service of larger goals for employment and economic growth – over profitability and sustainable competition. Local governments offer cheap land and subsidies to automakers in exchange for production and tax-revenue commitments, multiplying overcapacity across the country.

Another hub idea: rather than assembling EVs, how about disassembly of aircraft?

In the SCMP (where else could it be? – a Chinese academic thinks the country could use West Germany’s approach to absorbing Taiwan …

Beijing could incentivise Taiwan to reunite with the Chinese mainland by learning from German policies adopted after the fall of the Berlin Wall, a Chinese government adviser told a security forum on Wednesday.

Zheng Yongnian, a political-science professor from the Chinese University of Hong Kong, Shenzhen, said Beijing could consider steps such as financial support and unconditional citizenship for Taiwan residents.

He hinted that mainland China had the means to adopt measures similar to some of Germany’s post-reunification policies, such as a “solidarity tax” and exchange rate parity.

He told the Xiangshan forum in Beijing that when the East adopted the Deutschmark months before reunification, the East German mark was worth far less than the West’s currency “but they treated one East mark as equal to one West mark – that gave many ordinary [East German] people incentives to side with West Germany”.

He added: “The current exchange rate between the Chinese yuan and the New Taiwan dollar is roughly one to four, and I think that could work.”

He also cited the German government’s nationwide “solidarity tax” – initially 7.5 per cent, later 5.5 per cent – on income and corporate taxes to fund infrastructure and integration, hinting that mainland China could adopt a similar approach.

The levy raised the equivalent of hundreds of billions of euros and is still being paid by the top 10 per cent of earners today.

The Deutschmark thing is irrelevant, as a ‘One Country, Two Systems’ policy would leave Taiwan with its own currency. Anyway, West Germany made that pledge because the DDR’s currency was non- convertible, unlike Taiwan’s (though like China’s). Which brings us to the main problem with this academic’s proposal: German reunification involved a rich and democratic region absorbing a poor and unfree one. (Hence the solidarity tax – a wealth transfer to help the East catch up.) In the case of China and Taiwan, it’s the other way round: you’re trying to lure a free society with a developed economy into being taken over by a developing authoritarian one. 

The academic would be better off asking how things might have worked out if German reunification had involved West Germany being ‘incentivized’ to be ruled by the East German communist regime.

Chief Executive John Lee took just under three hours to deliver his policy address. He mentioned a few major initiatives – notably the ‘Northern Metropolis’ – that aren’t new. Some minor positive measures, including free high-tech prostheses for amputees, and less red tape for food outlets. Some banal obscurities, such as allowing dogs in restaurants. And a load of desperate (or optimistic) proposals to boost the economy, involving yachts, AI, gold, green (!) maritime fuel bunkering, Greater Bay Area intermodal something, streamlining license applications for Low Earth Orbit satellites, and encouraging tokenized assets, tokenized deposits, tokenized money market funds and tokenized bonds, with help from a supervisory sandbox. 

Hong Kong’s fundamental challenge is accepting and adapting to a world in which the Mainland’s post-Mao economic boom – the huge easy skim – is over. Which doesn’t bear thinking about. So frenetic micro-management it is. 

Joel Chan lists the hubs…

Wasn’t there also a reference to an ‘immersive, thematic travel hub’? Something to do with halal food? Or maybe I dreamt it.