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The thoughts of an American expat in Hong Kong living on an "underlying island"

With the expected defeat of the Electoral Reform Package, many are claiming the HK Govt and CCP are in uncharted territory/uncharted waters. Not really, beyond the FUBAR antics of the pro-CCP loyalist legislators after the division bell rang, CY has already tipped that the post-2005 Electoral Reform Package plan has been put in place. The CCP doesn't have a very broad playbook, so it's not unexpected that CY will sound a bit now like Bowtie did then. "Blame the pan-dems for everything, and I mean everything that's ever gone wrong in HK including the FUBAR loyalist walkout. Call them obstructionist. Say you'll be focussing on livelihood issues and economic development. Call the pan-dems obstructionist some more and unpatriotic. Rinse. Repeat."

The appearance of waves of radical centrist commentators bemoaning the inability to reach a compromise is also expected. "Why weren't the 'moderates' allowed to have their way? The CCP was so moderate for engaging in dialogue and negotiations. Thank goodness, HK still has the ICAC to keep us free of electoral corruption." Any compromise, even if one side surrenders nothing and the other is asked to surrender everything is quite rational and reasonable and oh so very moderate. It's all BS, but some political/marketing guru told the CCP loyalists to try to win the public opinion of HK's middle ground.

Given the CCP's absolute intransigence on compromise and rejection of every pan-dem modification, no matter how meagre, it's expected that Hong Kong would split into 3 camps. The first are the loyalists. They'll follow Ip Kwok-him out of the LegCo chamber without question and vote for his stupidity in the ballot box in 2016. The second are the opponents of the reform legislation. I believe the Liaison Office has been working hard to divide and conquer this segment with the rise of some 'localist' groups that are quite well kitted out and who spend most of their time attacking the pan-dems instead of the policymakers that have created the situations these 'localists' claim to be interested in. The third group are 'the middle'. This can be divided into two groups. Surrender monkeys, who were willing to accept the Electoral Reform Package because the CCP said it was the best they could get and surrender monkeys accept being powerless and take what's put on their plate and are grateful like good children. The second group are the parasitic optimists. They believe they'll get rich if they stick close to The Party.

The road forward will see The Party try to keep the surrender monkeys servile yet content with the crumbs placed on their plates and launch enough white elephant projects and investment schemes/scams to keep the parasitic optimists fixated on the belief that one more pull on the slot machine will make them wealthy. The important thing to note is that real wealth and societal security must be withheld, as the lack of financial and societal security for the masses is one of the keystones of Maoism to keep the masses agitated and uncertain. So Team CronY will push the Innovation & Technology Bureau for the CronY iProA through the LegCo FinComm while withdrawing actual social welfare bills to blackmail the pan-dems while the loyalist press corpse will bash the pan-dems for being obstructionist and the zombie press corpse will wonder why the pan-dem FinComm isn't taking up the social welfare bills instead of wasting time on the ITB.

So even if the White Elephant and CronY projects have changed, the basic plot remains the same. 2015 is Back to the Future 2005.

ADDENDUM 19 June 2015 3:42pm
Shortly after the original publishing of this, CY Leung spoke for a 2nd time in 2 days to the public and announced that he'd change the agenda for the FinComm and set the ITB to the side in favour of more grassroots livelihood issues. Stay tuned to see what really ends up on the agenda when the FinComm meets.

UPDATE 19 June 2015 6:20pm
Didn't take long for zombie press corpse to prove me right.

Chief Executive CY Leung said he would bring a series of economic initiatives to lawmakers next week, and called for their support.

Democratic lawmakers had been filibustering all budget items during the city's pro-democracy protests, holding up funding for a variety of slated projects. Leung said that a continuation of such actions would hurt the community.

"It's time for all of us to move on," Leung told reporters. "We should try to forge consensus on various economic and livelihood issues."

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If I personalise the Individual Visit Scam as being CY's responsibility, it's only because CY claimed that title long ago in a speech on 23 January 2013 to the Joint Business Community Luncheon.

Ten years ago, I was sent by the then Chief Executive, Mr C H Tung, to Beijing. We wanted to explore with the Central Authorities the possibility of allowing residents in the more affluent cities in the Mainland to come to Hong Kong as tourists without having to join tour groups. Some commentators were again sceptical. They somehow believed that these tourists would not have the spending power, that they would pose a risk to law and order, and might even become illegal immigrants. But again we ploughed on.

The rest is history. Today, the Mainland is the biggest market for our professionals and the biggest source of tourism income. The sceptics were wrong on all counts. These two sectors of our economy have seized on the opportunities and confronted the many challenges by working with the Government. Both sectors have benefited from CEPA.

Please note the effort CY expends on entangling CEPA and the IVS. This is part of the mythos of the CCP being HK's economic saviour in the post-SARS world. For the average HKer, CEPA is a joke only highlighted by the VAT-avoiding smugglers that have become the target of localist protests in HK. At worst CEPA represents the transfer of wealth and talent from HK's developed industries to the mainland, like the film industry, which leaves the film industry actually in HK on life support. The IVS, on the other hand, is the crown jewel for two groups of shibboleth babblers: the 'CCP is infallible' shibboleth babblers and 'growth in stats on the Bloomberg News scroll bar is the only goal' shibboleth babblers. Both of these babbling groups are willfully blind to the actual impacts in reality of their beliefs, which is why they're conjoined twins in HK to block out any sort of reality creeping in to governance via votes of people living in the real world.

In the real world people can clearly see there is an alternative to their economic dead-end policies which produce community-killing economic distortions. In the real world the grand story arc from the political marketing team faces the reality of shops being forced to close to make room for the conjoined twins to suck even more money out of the economy to line their own pockets. And no return of the smugglers or sudden appearance of southbound-cash being dumped in to the HK-listed stocks of mainland corporations will change that reality on the street.

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So Team CronY is at it again. From trying to push Rule By Law with draconian punishments for exercising HK's Freedom of Speech and Commerce to CY trying to smear localists as being bad for HK.

The Chief Executive, CY Leung, said on Wednesday that a fall in visitor numbers over Easter due to anti-mainlander protests is a warning sign that's seriously tarnished Hong Kong's image as a tourist hub.

HK retail sales for February 2015 show that there really isn't any damage to HK's economy from a visitor slowdown. We'll have to wait until early May it seems for March's retail data to appear (4 weeks to collect retail sales data? Really?), but the only folks that might be suffering from the slowdown in mainland visitors are the Team CronY players involved in skimming a percentage of the mainland M2/M3 cash growth scam at the retail cash till and commercial rents.

It’s official: Hong Kong’s retail sales in the first two months of 2015 were flat. There was no slump as previously, widely reported.

Hong Kong’s Census and Statistics Department (C&SD) figures on retail sales released Tuesday show February sales soared 14.9 per cent, reversing the 14.5 per cent fall widely reported in January.

...

“The subdued performance was mainly due to the notable fall in the sales of jewellery, watches and clocks and valuable gifts, conceivably reflecting the weak tourist spending on big-ticket items. Yet, the performance of many items that are more closely related to local consumption showed some relative improvement from December 2014.”

So what's CY's reaction to this potential rebalancing of HK's economy towards reliance on more stable local consumption?

Mr Leung said the government will launch a campaign to beef up tourist numbers later this month, but did not elaborate.

CY banging a shoe on the lectern and shouting that "This Aggression against my Individaul Visit Scan as HK's Saviour Must Not Stand" What a sorry sad little man is this CY!

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I haven't written in a long time, so I decided to rewrite this Wall Street Journal article Look Elsewhere for Chinese Shoppers, Political Tensions Are Bad News for Hong Kong Retailers because it's clear from the actual body of the article that if there are political tensions causing problems for HK retailers, it's tension on the other side of the border with Xi Jin-ping's purges.

So here goes my rewrite:

Many of the Chambers of Commerce in HK as well as members of the Chinese Communist Party's United Front in HK and Western media have said that HK's 'chauvinist fringe' have or will have a negative impact on HK's economy. The statistics on actual visitors from the mainland to Hong Kong paint a different picture. Actual arrival numbers from the mainland continue to rise. (Please remember arrival numbers include tourists, personal tax arbitrage shoppers, and possible multiple daily entries by parallel goods traders tolerated by the CCP due to low-quality low-confidence goods on the mainland.) There are some negative numbers involved though. Sales of high-ticket ostentatious items fell by 24.5%: gold, luxury watches and other items associated with bribes/laundering corrupt cash.

This drop in sales has been associated by many observers with the arrest of party members on charges of corruption. (Be aware Xi Jin-ping has also convicted many anti-corruption citizens for demonstrating that the current 'anti-corruption program' is another big wind from the center to allow factional purges.) Another possible explanation is cash tightening on the other side of the border due to a pause in the property bubble causing a ripple effect in 'shadow banking' products. On the other hand no one beyond the looniest of United Front spokespersons has suggested the drop is due to HK's 'chauvinist fringe' calling anyone a locust.

Of course no one has suggested that the drop in mainland purchases due to anti-corruption purges on the mainland might actually support some of the contentions by HK's 'chauvinist fringe', for example that cash pouring into HK's retail and residential property markets wasn't legitimate and that the economic dislocations on commercial property rents and occupancy were harmful and unsustainable. As they say in San Francisco, eviction is death, push out mom & pop shops for big chains selling products unwanted by locals and you're exchanging family livelihoods for some minimum wage retail jobs and diverting the profits to the tycoons owning the chains. This is further supported by the drop in the stock prices of retailers that sell a huge proportion of their goods to mainlanders, when it was floated to curb mainland visits by 20%.

As for buying HK stocks, my advice is simple. HK's government has designed the economy around 2 pillar industries: labour exploitation and skim. If CCP continues their recent push of ongoing near-permanent stimulus cash injections and Team CronY continues to walk back limitations on corrupt money flooding HK's residential property markets, then HK's stocks will almost surely be stable at worst. If the US economy rebounds and provides a market for HK businesses to skim a percentage on goods trans-shipped via HK, it's a short-term buy and don't ask about the long-term, because you don't want to worry about missing out on those stock profits NOW NOW NOW!

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In the book Edge of Empires, John M Carroll, makes clear that Hong Kong's politics have always been neatly linked with the socio-economic myth-making of the ruling class. From the time British tycoons were taking credit for the economic activity of Chinese merchants to the time of Chinese elites becoming incorporated into the elite social structure. It's even continued in post-handover Hong Kong as the economic elite state HK success is as an entrepot in order to forget the role of manufacturing in Hong Kong's economic success as Hong Kong's manufacturing was shipped north by the economic elite.

So it shouldn't be surprising to informed observers of Hong Kong's politics to see pro-Team CronY elite wrapping their anti-democratic propaganda in socio-economic myth-making. SCMP featured an op-ed from Andrew Leung on Saturday April 11 and an op-ed from Regina Ip on Sunday April 12 that both wrap Hong Kong's economic success in the mantle of Hong Kong's elite. Andrew Leung stated Hong Kong's economic success was because of the current unrepresentative CE Election Committee and argued that the future Nomination Committee needed to be just as unrepresentative in order to maintain Hong Kong's wealth. Regina Ip on the other hand stated that Hong Kong's economic success was dependent upon the combination of the anti-democratic colonial rule and Hong Kong's elite and suggests that Hong Kong's future wealth depends on leaving Hong Kong's political power with them for the future. Given that Hong Kong's current elite's wealth and power stems from inclusion in Team CronY, it's cannot be surprising that they see their continued power and wealth as being dependent upon Team CronY retaining its stranglehold on Hong Kong's political and economic system.

The problem with myth-making is that it doesn't stand up to scrutiny of facts. Much like Team CronY's team studying Hong Kong's financial future made up all sorts of crappy assumptions about growth in government infrastructure spending in order to justify Hong Kong going broke in the future (is this disclosure the cause of Tom Holland's disappearance from SCMP?), the more you look at the foundational premises of Team CronY's myths and you see they are built on crap. For example Li Ka-shing's success depended upon the pre-DAB creating a violent disturbance large enough to allow him entrance to Hong Kong's property market. Sun Hung Kai's foundation is linked to the squatter clearances, New Town development plans and reservoir formation with their attendant resettlement property and vouchers of the late 50s and early 60s. Both of these firms survived the economic downturns in the post-bubble and SARS-era due to government policy interventions by Tung Chee-hwa in the property market in order to ensure property did not drop far enough that Li Ka-shing's late 60s success could be repeated by a new challenger.

Would Hong Kong have been more successful if the property market had been allowed to collapse further? Such a collapse would have made commercial rents more amenable for new start-ups (and not just tech start-ups at the beginning of the tech bubble) that would have broadened Hong Kong's tax and employment base, but threatened the economic and political stranglehold the current elite still enjoy, so Hong Kong as a whole and the mass of Hong Kongers have ended up much worse off, as demonstrated by one of the worst Gini co-efficients in the world, due to the continued stranglehold.

In addition to the crap foundations of the elite's economic myth-making, their anti-democratic drumbeat relies on lies of omission and misdefinition of the most basic terms in Hong Kong's Basic Law. For example Regina Ip failed to explain what were the polarising forces the colonial government feared. I guess she doesn't like pointing out that Hong Kong doesn't have and will never have universal suffrage under democratic principles due to 70+ years of meddling by the Communist Party of China in Hong Kong's affairs and that the polarising forces were the CPC and KMT. At least Ms Ip has learned not to bite the hand that feeds her. On the other hand Andrew Leung starts swapping 'representation' with 'representative'. As anyone who studied basic statistics or polling theory, which the DAB has great interest in given their harrassment of HKUPOP, one group is representative of another if their respective proportions are 'similar', a maths concept taught in Hong Kong in the lower secondary forms. Since Hong Kong's Basic Law mentions democratic forms, we know the similarity should be along the lines of population democgraphics. The current Election Committee has lots of groups represented, but their proportions are not similar to Hong Kong's demographics unless you re-weight the greater population by making Party loyalty and wealth outweigh concepts of one man, one vote. Why would you do that? In order to ensure that your place as one of Hong Kong's elite at the pinnacle of the Gini co-efficient is never threatened by the groundlings that want to change the system they know is designed to exploit their labour (HK's 1st pillar industry) and skim their salaries directly into the pockets of HK's tycoons (HK's 2nd pillar industry).

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Upon assuming office Xi Jinping told his cadres to cut the bullshit and speak plainly. Unfortunately that command has not trickled across the border to The Party's cadres in Hong Kong. But let me talk plainly about Article 45 of HK's Basic Law and provide a modest proposal that is the only way forward.

The Chief Executive of the Hong Kong Special Administrative Region shall be selected by election or through consultations held locally and be appointed by the Central People's Government.

"The method for selecting the Chief Executive shall be specified in the light of the actual situation in the Hong Kong Special Administrative Region and in accordance with the principle of gradual and orderly progress. The ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures.

Beyond Article 45 of the Basic Law, we must also accept the Communist Party of China's definition of 3 words: representative, democratic and balanced. No, you won't find balanced in the Basic Law, but it's been a key word uttered by the faithful to guide HK's ongoing 'consultation' on the 2017 CE Election. You also won't find the method the nominating committee should use stated in the Basic Law, but you can be sure the DAB/Communist Party meant that nominating committee isn't supposed to be a rubber stamp for civic nomination but only rubber stamp the DAB/Communist Party/tycoon choices for CE.

The CPC and friends have clearly stated that the existing Election Committee is 'representative', perhaps in the way that a committee of 10 whites, 9 blacks, 4 Arabs, 5 South Asians, 2 Parsees and a Chinese would be representative of the population of Hong Kong, since many groups are 'represented' without concern if their proportions are actually 'reprentative'.

'Democratic' here is like the Democratic People's Republic of Korea or perhaps the elections held by the late Saddam Hussein. There was voting. The people made their choice and that provides the chosen with legitimacy. End of discussion.

'Balanced' means that the will of the people shall always be countered by the will of The Party. The people's will cannot provide the choices of the nominating committee.

The level of protests from the Democratic Party/Civic Party/the Front for Hong Kong People's Liberation Power/the People's Liberation of HK Power Front/etc. reminds us that the base problem is that the Communist Party will not allow a Chief Executive for Hong Kong that stands up for Hong Kong. Stop imports of diseased chickens? Maybe if the chickens are Vietnamese or American, but never good Chinese Communist chickens.

Given that the CE must be acceptable to the CPC, let's identify what the CPC wants from HK: money. The CPC comes to HK to raise money, goes to Beijing to decide where the money will be spent, and Shanghai to spend it on projects. What's given to HK? Lots of poor Chinese, whose welfare will be left to HK taxpayers, and petty cross-border arbitrage experts with suitcases unburdened by 20% tariffs unlike the legitimate foreign imports with which they compete.

So given this basis, it's clear that only a candidate chosen by the Liaison Office or HK's tycoons will be allowed on the ballot. So the only practical solution to this situation is obviously a nominating committe with 2 people that broadly represents 'the only opinions of any value'. First, the head of the Liaison Office as Xi said to cut out the bullshit, which means dropping the pretense that local shoeshiners on the current nominating committee are independent thinkers and don't rubber stamp the choice provided them by the Liaison Office. Also since everyone knows The Party represents the will of the people, the protests from the pan-dems about unrepresented are clearly untrue. The second member will be a champion appointed by the tycoon godfathers.

And with these two candidates on the ballot, the loyal HK press can salivate and push their horse race coverage of this 'election campaign' to new heights. And The Party can rest easy in their delusions that given an opportunity to rubber stamp their choice via an election, their HK CE choice will never be as unpopular and loathed as Tung/The Donald/Team CronY and will be internationally acclaimed for their progressive implementation of democratic reforms from all corners of the globe.

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During CY Leung's "election campaign", he boosted his popularity by saying he would take on HK's vested tycoon interests. Since then he's foot-dragged on competition laws that might crimp the tycoons' style and handed them big profit gains on re-raising plot densities, eliminating triggering minimum prices for land sales and introducing negotiated land use fees. The feud between Team CronY and the tycoons resembles a professional wrestling feud. Lots of hot air to drive positive press for folks wanting to see that sort of feud.

With Team CronY's ratings scraping the bottom of the bucket, I'm sure the PR spin team are looking for ways to boost his popularity. A public feud with an unpopular ally might be just the thing and the boys from the Heung Yee Kuk step up for Team CronY. And in some of the same circles that cheered Team CronY's hot air about taking on the tycoons, you'll hear cheering that someone's about to get tough with the folks holding HK's future development hostage.

Once again it's best to watch the actions and not the hot air the press reports. For example check out Team CronY's appointees to the 10 Best Ways to Pave Over Paradise advisory panel. Beyond the usual One Country, Two Systems communist-party mouthpiece shoe-shiners and Team CronY surveying colleagues, there's the NT/Islands members. Zero members from Islands/NT independent NGOs. Independent in the sense that they don't provide a pro-government echo chamber like the NT Association of Societies, whose Chairman is also a local NPC delegate. There's also the Chair and Vice-chair of the Islands District Coucil (the chair is an Election Commitee member for the HYK and the other is a lady, so ineligible for the HYK, but is chair of the OIWA. In addition to the Islands District Chair, there is another HYK Election Committee rep on the panel: Randy Yu Hon-kwan. As David Webb points out, he's a senior manager for Sino Land and an appointed member of the Islands District Council (though his listed address isn't actually in the Islands). One thing Webb doesn't mention is that Yu is Lau Wong-fat's son-in-law. Ya know? Lau Wong-fat? Heung Yee Kuk chair and part of Team CronY's ExCo? Sound like the two sides are feuding to you? Me neither.

And if you don't believe it should be Team CronY, notice the name Franklin Lam on the panel. He was last seen resigning from ExCo due to profiting on property deals prior to ExCo information on said property becoming public knowledge. So of course the CronY thing to do is put him on a panel handling private information on future government property development deals.

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I'm sure there were those that thought I was crazy and extreme using the term Bushevik on this blog so many years ago to describe the authoritarian/hegemonic tendencies of the Presidency of GW Bush. In the latest sign I wasn't barking up the wrong tree comes news of the Chinese Communist Party's latest hire: Erik Prince.

It may be a HK-listed company, but it's still an CCP SoE and Erik Prince's "most respected partners" are folks seeking 21st-century banana republics in Africa that can be looted of natural resources in exchange for some infrastructure like white elephant soccer stadiums and Chinese-controlled ports on the Indian Ocean.

In an amazingly blunt and honest statement, the U.S. conservative glibertarian think-tank Heritage Foundation has come out as being opposed to the ideals laid out by Abraham Lincoln at Gettysburg. It's hardly surprising to anyone that the current GOP is closer in spirit to the Confederates than they are the Party of Lincoln, but it's amazing that one of them would come out and admit it.

In the Heritage Foundation's latest throwaway publication on global 'economic freedom', they say that:

the introduction of democracy to Hong Kong could result in more populist measures that in turn could raise government spending and affect the territory's economic freedom.

...

the Foundation's Director of the Centre for International Trade and Economics, Terry Miller, says the Chief Executive Election of 2017 could see the government spending more to curry favour with the electorate.

Is there a clearer statement that the Heritage Foundation opposes government of the people, by the people and most especially for the people?

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The blog may be dead but some stories still bring on a rant when I have time to type. This story by Tim Sullivan of AP entitled A MISTREATED MAID? OR A PROFOUND INSULT? is today's joy and double rainbow.

Tim Sullivan pulls out all sorts of clever sleights-of-hand to normalize the US as a security state.

As for the arrest itself: Only the powerless and poor would face arrest for lying on a government form. For someone in the educated elite, a strip search would be unthinkable.

...

Americans are raised to view elitism with distaste, or at least to pay lip service to the everyman ideal.

...

In explaining the arrest, U.S. Attorney Preet Bharara — who was born in India but raised in the United States — highlighted that difference.

The "sole motivation in this case, as in all cases, is to uphold the rule of law, protect victims, and hold accountable anyone who breaks the law - no matter what their societal status and no matter how powerful, rich or connected they are," he said in a statement.

The fact that a U.S. attorney and a U.S. reporter show an expectation that all folks arrested in the U.S. should be subject to strip searches as a matter of routine and a sense of egalitarianism is a sign of the times. It's a sign of a security state that has become desensitized to procedures which are designed to humiliate and subjugate the accused and not designed as a matter of actual public safety.

Stories like this and the NSA's routine collection of metadata remind of State's where the primary objective of the Security apparatus is not public safety, but the maintenance of the status quo's hold on authority via absolute control of the citizenry. That's not the American dream, but Xi Jinping's China dream.

Finally a news story pimping the notion that somehow U.S. legal enforcement is egalitarian in the same week that a rich boy in Texas got probation after killing 4 because he was rich is pathetic. Pathetic, like selling "duck and cover" is an effective public safety response to a nuclear attack.