HK Election Epilogue

September 5, 2016

It’s exciting times here in Hong Kong as the results from yesterday’s election trickled in over the course of the day.  When all was said in done, over 2.2 million people or 60% of the 3.7 million eligible voters turned out to cast ballots, which was a record high and surpassed the turnout in 2004 that came on the heels of the 2003 street protests where over 500,000 Hong Kongers marched to protest to possible passage a new security law that at the time could have severely curtailed freedoms here.  I was not able to vote because I am not a permanent resident, which only happens after you’ve lived here for over seven years.  But back to the main issue at hand, the results.  Of the 70 seats, six went to candidates from new parties advocating for either greater self-determination or outright independence from China after 2047, the year “one country, two systems” is set to expire under the Basic Law, Hong Kong’s mini-constitution.  The success of these new parties is a big deal for Hong Kong’s future because the six pro-democracy candidates are all under 40 and represent a break from the traditional pan-democrats who stood in opposition to the pro-Beijing lawmakers because rather than work under the premise that Hong Kong is a part of China and gently nudge Beijing to introduce more democracy in the city, this new guard wants Hong Kong to take matters into its own hands and push from the ground up for a greater right to self-determination.  The New York Times does an good job of summarizing the results and hints at what it possibly means going forward. Suffice it to say that the pan-democrats plus the localist / radical contingent took 30 seats in the 70-seat body with enough seats to veto those measures that require a super-majority to pass.  On a grander scale and as someone who considers Hong Kong to be a second home with the city being the first place I had ever been to outside of the U.S. save for Canada and where I lived for two years after college, the election results represent a break with the way things had been done in this city in the nearly 20 years since the handover.  It had been a tug-of-war between the pro-Beijing and pan-democrat lawmakers with what has been a pretty consistent string of Chief Executives.  Now with the introduction of this new element, which I prefer to call the self-determination or localist group instead of radicals, is seeking to create a space for Hong Kong to figure out its own destiny and prepare for life after 2047.  The big variable is how Beijing handles this outcome and what happens going forward.  The central government is completely focused on the G-20 meetings in Hangzhou, so the response has been muted and I would not blame the government for ignoring it with so many heads of state from liberal democracies in town.  The electoral outcome is an embarrassment and worse, an indictment of Beijing’s approach towards Hong Kong since the handover, especially in recent years with the half-assed approach to granting universal suffrage for the election of the Chief Executive and the alleged abduction of the five booksellers, which was a clear violation of “one country, two systems” since they were taken into custody outside of China.  The people of Hong Kong seem to be waking up and realize that China is not the benevolent overlord they wanted Hong Kongers to believe they were, though they have done little of late to reassure the city given the slow and steady erosion of freedoms here. I leave with this final thought, which I will unpack in another post.  Much has been made about how Hong Kong could not go it alone and I don’t know the ins and outs of whether independence is completely doable, but one thing to consider with independence or even greater self-determination would be the ability to revamp the Hong Kong government and create a prime minster or president-type position that would legitimately be tied to the legislature to ensure that both branches of government are working together versus the current system with legislative and executive branches that are completely disassociated from each other.  Such a revamped government with proper accountability to the people of Hong Kong and not Beijing might actually be able to do something to prepare Hong Kong for its next act and effectively tackle the challenges this city faces.  It’s just a thought.

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Now that I got my little rant about the state of affairs in U.S. presidential politics, I can turn back to what’s really important – the fact that Pokemon Go has finally come to Hong Kong.  No, I’m kidding about the importance of that event, but it’s fascinating how quickly the Pokemon Go phenomenon has swept the world.  What I find alarming and once again is something that you wouldn’t pay much attention to as an expat in Hong Kong or occasional visitor to mainland China is any and all press freedoms remain under constant assault.  First it was yesterday’s article in The Guardian questioning how Hong Kong’s main English daily, The South China Morning Post (SCMP) conducted an interview with a Chinese activist released from a year in secret detention before she had even seen either her husband or lawyer.  In the interview, she expressed contrition for her activism and the SCMP is only saying that it was aided by an intermediary that it refuses to name, leading many to believe that this confession was orchestrated by the government in the same vein of the on-air confessions pulled from those who have run afoul of the Chinese government.  Then today I was reading about how the Chinese government is cracking down on original news reporting on online web portals like Sina, Sohu, and Netease, which have built up significant investigative reporting arms over the years as more traditional print media like the Southern Weekend have been sidelined by the government.  The Cyberspace Administration of China is relying on a 2005 internet regulation to crack down on these news sites and is now saying they can only publish social and political news that has been sourced from government -controlled news agencies.  In recent years, these websites have covered stories that tend to resonate deeply with the general public including corruption, natural disasters, chemical contaminations, and other social-related issues.  Sina, Sohu, and Netease are like Facebook, Twitter, and Google both aggregating stories from other sources and printing original stories.  Not only will Chinese netizens lose a valuable source of candid and practical news about things like contaminated running tracks at Chinese schools, tainted food, and government officials abusing their positions of power, but it’s another attempt the central government to stamp out alternate narratives and further control the flow of information its citizens receive.  Perhaps it’s because of next year’s 19th Party Congress and the party’s fear that such news will sow discontent ahead of that event, so better to start now to control the official narrative.  Yet this most recent move combined with what has been a slow, but steady erosion in the quality and independence of the SCMP’s reporting since the paper was taken over by Alibaba at the end of last year is a real one-two punch in the face of independent journalism.  Now no one on the mainland expects the press to be free, but these online news sites actually served a public good bringing stories and issues to light that affected large swaths of the population and might not have seen the light of say in the government-controlled media for fear of inciting dissent.  But when press freedoms in Hong Kong come under attack even though they are supposed to be preserved until at least 20147 under the Basic Law, it’s hard not to take such actions here as a harbinger of worse crackdowns on press freedom to come both here and in China.

 

Divorced from Reality

January 17, 2016

I spent a large chunk of the last week sitting in meetings with our Chinese partner talking about expansion throughout China over the next several years and one thing I was struck by was how all of the conversations were completely divorced from the macroeconomic reality in China.  There was no mention of China’s economic troubles, whether it be the falling stock market, an oversupply of housing, falling economic growth, overcapacity in the manufacturing sector, or any number of statistics that point to a rapid deceleration of the the Chinese economy.  The only thing that came up was the devaluing the the Chinese renminbi and its mention was prompted by the Americans in the room.  Equally absent was any discussion of the current political situation in China, though that is slightly less surprising.  However, on the whole if we were sitting in a roomful of American or European business executives, the economic climate would have certainly been a part of the discussion and even maybe one or two political quips, including some comment about how unfathomable Donald Trump’s candidacy is and the sad state of American politics.  But there was none of that in these meetings.

It’s often something I wonder about when I see people wandering the mall or around me at a restaurant – what do they think about what’s happening in their country?  Do they even know what is happening in their country?  It’s very likely they may not be fully aware of what is going on since they would need a VPN to read foreign news sources and the Chinese media is largely silent as to the country’s economic doldrums.  Plus most people are too busy watching tv shows and movies on their phones to pay attention to the news, whether it’s CCTV or one of the many government publications sitting untouched in the newsstands around the city.  My meetings last week confirmed for me that there is a disconnect between what the reality of what is happening in China and how people are engaging with that reality.

Much has been written about the housing glut in China and no matter what city I travel to, I’m usually greeted with too many cranes to count as I drive into town from the airport. So many cities seem to be all about building new central business districts replete with malls, office buildings, and more apartments.  And yet the question is the same – who is going to move here?  If the government is seeking to continue its drive to urbanize and move the rural population into the cities, I cannot imagine that they are going to be re-settled in these luxury housing developments that continue to rise all over the country.  The malls are a whole other phenomenon.  How many luxury malls does a country need? Apparently there is no limit, but when I was in Chengdu I walked through a few of these new malls and some were eerily empty, both of people and stores.  Apparently the SCMP and I went to some of the same malls.  In Shenzhen the malls seem to be more for strolling than shopping with most people just wandering the mall, taking pictures, eating and drinking, but not really holding shopping bags.

I think at this point there is no disagreement that the Chinese economy is slowing down. The problem is that nobody quite knows how much.  The official statistics are less telling. It’s more about reading between the lines or anecdotal evidence of such a slowdown. It will be interesting to see what number the government announces on Tuesday for 2015 GDP growth.  There is so much gray when it comes to this country and not only on the economic front.

Over two weeks ago, Lee Bo, a publisher of books critical of the Party disappeared in Hong Kong. He was the fifth person to disappear in connection with this particular publisher.  He was last seen at his warehouse in Hong Kong before New Year’s and since then there have been a series of odd occurrences including phone calls to his wife from a Shenzhen number where he is speaking Mandarin rather than the Cantonese he uses at home and a letter to his wife that he is going to be away for awhile taking care something on the mainland.  The Hong Kong government has asked Beijing where he is and over two weeks later they still have not received an answer.  The issue at stake is that because of the whole “one country, two systems” between HK and China, Chinese law enforcement officials are not supposed to be coming into HK and taking away HK residents.  They are supposed to go through proper legal channels if they have reason to want to interrogate someone.  Coming in and secretly ferreting a HK resident across the border is a serious violation of the principle behind “one country, two systems”. It’s more than problematic that Beijing has not given the HK government an answer as to  Lee Bo’s whereabouts and shows a serious lack of regard for HK and its autonomy.

So I digress.  The point of all of this writing was that I still wonder if Chinese people actually know what’s going on with their own country or simply do not care.  I don’t know if I will ever be able to get a straight answer.

Power to the People

July 3, 2012

Just a quick word before heading to bed.  After a wandering around Central in a suit for meetings with law firms and quick jaunt to Jordan across the harbour to see my tailor, Louis, I met up with friends to go to a 川菜 (Sichuan) private kitchen in Wanchai and then a Taiwanese dessert place in Causeway Bay for some shaved ice.  The good food aside, my first meeting this morning was in the building (and quite possibly the same floor) where Salomon Smith Barney’s offices used to be when I was an investment banking analyst.  Walking down the escalator and across the overpasses this morning towards the harbour was kind of trippy because I used to do the same walk over ten years ago.  The feeling wasn’t quite deja vu because I was fully present in the moment and could easily link it back to the past event, but it was one of those moments when you realize in some ways how far you’ve come and in others you are still very much the same person you were all that time ago. with just a touch more awareness.

As you all know, there were protests this weekend in Hong Kong against many things including the swearing in of the new Chief Executive, the environment, housing prices, human rights on the mainland, education, jobs, and practically any other social, political, or economic cause that you can think of.  When I asked Hong Kongers I know how they feel about things here, they express a lack of trust in C.Y. Leung, the new Chief Executive, but there is also a resignation that nothing is going to change anytime soon.  I don’t know if that resignation comes from the wisdom (or jadedness) of older age or from a very practical view that as long as China calls the shots from Beijing, change in this city is not going to come anytime soon.

I read an interesting op-ed piece in Monday’s South China Morning Post by Lau Nai-keung, who is a member of the Basic Law Committee of the NPC Standing Committee.  What this means is that Lau is on the committee that makes sure that the Basic Law is being follows. The Basic Law Hong Kong’s mini-constitution that enshrines its freedoms and way of life until 2047.  One could argue that Lau is a Beijing sympathiser and his op-ed piece is not the most clearly written, but it tries to lay out an argument that pro-democracy forces in Hong Kong are looking to use people power to both weaken the government’s hand and force Beijing to allow universal suffrage for the Chief Executive in 2017.  The piece also seems to argue that the pro-democracy forces are just waiting for China to collapse so that Hong Kong can go its own way as a truly autonomous city-state more akin to Singapore with real elections.  While it’s an interesting notion to think about Hong Kong as an independent city-state, I am not quite sure what Lau is arguing for except that if the pro-democracy forces keep pushing people power, then the chances that a national security law will be implemented as required under Article 23 of the Basic Law will be nil.  It sounds to me like Lau wants this law passed as one who has been ordained to uphold the Basic Law, warts and all.  It also sounds like he remembers quite well what happened when the Hong Kong government tried to pass a national security law in 2002 and sparked the largest protests to date on Handover Day in 2003 with upwards of 350,000 marching in protest of the law.  The man is afraid of what the people might demand and what Beijing may decide when pushed to the brink, but yet he does not offer any real solution to the problem except to almost blame pro-democracy forces of “peacefully subverting the system” as provided for in the Basic Law. 

I need to give this some more thought, but I have been thinking about it since it’s so timely and sometimes half a thought is better than none.