Cause for pessimism vs cause for optimism
Like so many people these days, we wonder whether Hong Kong (HK) has any kind of future given recent events in the SAR, given the problems posed by Chinese Communist Party (CCP) and Carrie Lam. God knows the world is also a very different place thanks to the impact of Covid-19. Some people are drawing up a kind of checklist - a tally of the pros and cons for staying in the city or leaving it. Of course the SAR has a future, but it will most likely be very different from the HK we have now, and most likely quite different to the place Hongkongers grew up in.
Here are a couple of pointers we gathered....and we are sorry if the news seems like it's all doom and gloom! It's all in your mindset - as they say, "Beauty is in the eye of the beholder!" Are your plans aligned with those of the CCP and Xi Jingping?
NOTE: Editor's comments are in [square brackets]. We wonder whether we have enough money (here or offshore), the appropriate real estate or business holdings and the right connections.
Xi Jinping Sets Out Economic Plan to Replace Hong Kong With Shenzhen
Ruling Chinese Communist Party general secretary Xi Jinping on Wednesday laid out plans to have the mainland Chinese city of Shenzhen at the heart of an integrated economic zone that will include the former colonial cities of Hong Kong and Macau. [They are still colonial cities-just under a new master CCP who demands more control and more commissions for a larger gang!]
Shenzhen will provide the "engine" for the development of the Greater Bay Area, Xi said in a speech marking the 40th anniversary of the city's founding as a special economic zone (SEZ). [Wishful thinking! SEZ is a 'new' city and with most people coming from other places across China this SEZ has no community or identity other than a place just for making money! The SEZ is a place in which to make money anyway you can and then go back to your village, settle down, buy a big piece of land, marry and have children. Nobody is interested in development aside from CCP who only want to take a commission % on everything! Who do you think makes all the money on the 'developments' - of course it is Emperor Xi and is his merry gang of thugs - the CCP.]
Regulations and institutions in Hong Kong would be "aligned" with those in neighboring Chinese cities, Xi said. [China has great constitution, laws, regulations, rules, rule of law, etc, but nobody abides by any of them - there is no enforcement! The only practice that CCP does best with is criminal - like stealing, corruption, rape, abuse, torture, coercion, etc. - is this what HK is supposed to do? For years SEZ and Shanghai have tried to overtake HK as a financial centre and they have failed - because what CCP lacks is HK's rule OF law! Kill the rule OF law in HK and CCP is the big loser! The Emperor has no clothes - he is too stupid!]
"With Shenzhen being an important engine in its development, we should seize the major historical opportunities in the development of the Greater Bay Area, promote the alignment of economic rules, and institutions of Guangdong, Hong Kong and Macau," he said.
"We should also continue to encourage and guide [read 'impose and demand'] our compatriots in Hong Kong, Macau, and Taiwan as well as overseas Chinese [think spies], to play their important roles in investment, entrepreneurship and two-way openness [think traditional Han-type corruption] ," Xi said.
He said there would be a political leadership role for Shenzhen in promoting Xi's personal brand of political ideology. [more of fake democracy with 'Chinese characteristics']
"Shenzhen will also take the lead to realize socialist modernization, this is the historical mission of Shenzhen given by the party in a new era," the president said [using Orwellian Double speak of course], referring to Xi Jinping Thought on Socialism with Chinese characteristics for a New Era.
The announcement suggests that Hong Kong will be sidelined as Beijing's focus turns to Shenzhen, which has already provided a base for Chinese leaders to supervise developments in the former British colony, which was rocked by months of anti-extradition protests and pro-democracy demonstrations in 2019 [and continuing dissent in 2020, and the Wuhan virus throughout!].
Shenzhen would be given a role in relation to Hong Kong, Xi said during a visit to the city, but gave no further details. [nothing now, nothing later? i.e. SEZ will rule over HK]
Hong Kong chief executive Carrie Lam on Monday gave late notice that her annual policy address would be postponed so she could attend the anniversary event in Shenzhen, and learn about new policy developments coming from Beijing. [There were no policies! Her Highness sat at the end of the table ignored by all like an infected, unwanted guest to a royal banquet!]
SOCIALIST COMMAND ECONOMY
Chinese economics commentator Jin Shan said Hong Kong and the former Portuguese colony of Macau would likely be included in Xi's plans to move to a socialist command economy. [Macau has always been a pirates hideout - now sunk since the casino business has been closed. HK is already a socialist state practicing a socialist economy - see our blog Hong Kong government is illegally practicing socialism!]
Xi's ideas "are of a piece with traditional notions of a planned economy," Jin said. "This actually goes in the opposite direction to the reforms and opening up [of late supreme leader Deng Xiaoping] and market economics." [and the wrong political direction!]
"The premise of openness is that a society, government, and the markets are under the rule of law, as a guarantee to achieve a prosperous market economy," he said. [But CCP only knows RULE BY LAW!]
Hong Kong current affairs commentator Liu Ruishao agreed, saying China's economic policy will be mostly focused on the domestic economy under Xi's plan. [They know international trade is now doomed thanks to many nation's efforts to decouple from CCP!]
"They want to divert power away from Hong Kong and center mainland China," Liu said. "When they are done ridding Hong Kong of its value, Hong Kong will die a natural death." [Liu is the wrong person to comment - he seems to be promoting CCP narratives! Will there be a funeral? Will anyone notice? Or is this just more CCP wishful thinking because nobody has ever been able to conquer the 'Yeu' people who lived south of the Nanling mountains and as far south as Vietnam; these are the Hakka, Tanka and other indigenous people who remain in HK; the Yeu people are not Han Chinese who migrated into HK later.]
Law Ka-chung, a former Bank of Communications analyst and economics professor at Hong Kong's City University, said Beijing will achieve that with a massive injection of funds into Shenzhen's high-tech industry. [Law is another clear CCP supporter. Will they just print the extra cash needed? Where's that money coming from exactly? CCP has blown its money and banking system on the 'Belt and Road' and bribing foreign countries to support China at the UN and other institutions!]
"Shenzhen is all about developing high-tech, but Hong Kong can't afford to do that because it has had a financial reversal of fortunes," Law said. [Without access to US market and US technologies SEZ and China will go nowhere as an economy, especially one that has yet to lift up 600 milion people from poverty. It is lost as an economy ranked only 72nd on GDP/ capita being unable to add value because there is only top down directives and no bottom up creativity!]
Law said the Sino-U.S. trade war had led to a drain on Hong Kong's U.S. dollar liquidity, once a key selling point of the city as a financial center.
"The Hong Kong Monetary Authority’s U.S. dollar foreign exchange reserves have fallen from 46 or 47 percent to 41 or 42 percent," Law said. "There has been a sharp fall recently, as a proportion of funds are being drained."
Law said Xi seems to have decided to develop China's own currency, the renminbi, as an international reserve currency instead. [Dream on...]
"If they want to build their own financial center, then it's going to be Shenzhen," he said.
[I thought it was going to be Shanghai?]
THE NEXT 'WORLD CITY'
Terence Chong, associate professor of economics at the Chinese University of Hong Kong (CUHK), agreed, saying that Xi looks set to replace Hong Kong with Shenzhen as China's next "world city." [Another CCP supporter! Today there are only 2 world cities - London, UK and New York, USA. Both native English speaking places, the international language of business. Both have a history and development of a high rule OF law. Both are leading democracies deeply embedded in institutional development, etc. No city in China under CCP comes anywhere near any of this! CCP thinks its about money - which it is not - but China and its banks now have no money! The nearest Asian equivalents to a 'world city' are more likely to be Seoul or Tokyo but they lag far behind London and NYC; Singapore, an ex-British colony, can not compete because it like HK is still a feudal Chinese plutocracy!]
"Shenzhen's GDP has already outstripped that of Hong Kong, which isn't the kingpin of the Greater Bay Area economic development plan, because you can't have areas of slower growth leading areas of faster growth," Chong said. [HK is a finance centre with financial services; SEZ is a factory and market of products; apples and oranges are fruit - but apples are not oranges no matter how much the Emperor screams at the apples!]
"Hong Kong was never going to be the lead city in the plan."
Chong said Shenzhen could struggle with the free movement of capital in and out of renminbi, however, in comparison with Hong Kong, with its freely convertible, U.S.-dollar-linked currency.
It could also struggle attracting international talent, he said.
"How many foreigners are going to want to relocate to Shenzhen?" Chong said. "Can they cut banking and communications costs? These are all things they could do as a city." [Better question to ask is: how many foreigners will now be willing to live and work in HK? CCP messed up big this time!]
He said dispute resolution was unlikely to be better in Shenzhen than in Hong Kong, where an independent judiciary was once cited as a key attraction for investors in the city. [But clearly Hong Kong's judiciary is not as independent as it once was - they are more like lap-dogs these days! Which means no foreign party will agree to any arbitration in HK between a China / CCP firm and a foreign firm! No problem for USA - if China wants the business you have to agree to financial services and arbitration in USA - or the deal is off!!]
"Perhaps they could use Hong Kong procedures," he said. [or else just pretend to and work like crazy to keep up the facade...you can always fool some of the people some of the time!]
Reported by Tseng Yat-yiu, Chan Jeon-nam and Lau Siu-fung for RFA's Cantonese Service, and by Gao Feng for the Mandarin Service. Translated and edited by Luisetta Mudie.
Editor's comments by [Jeremiah B.]
Luxury Homes Tie Chinese Communist Elite to Hong Kong’s Fate
Three top leaders of China’s Communist Party have relatives who own assets in Hong Kong, including more than $51 million in luxury real estate, a New York Times investigation shows.
[Note : More of those pesky WTPOHK editor's comments in square brackets! Obviously all CCP money has been laundered and is clean from any criminal activities!! Remember there are also a number of different CCP factions openly fighting against each other for power and money in China!! Ms. Li named below is with which faction? Unless Xi's faction has significant investment in HK Xi would think nothing of tanking HK just to pull down an opposing faction! It was rumoured that Xi wanted to pull down his opposing faction using HK's proposed extradition law - now he seems to be able to do that through HK's national security law.]
HONG KONG — Li Qianxin, the elder daughter of the Chinese Communist Party’s No. 3 leader, has quietly crafted a life in Hong Kong that traverses the city’s financial elite and the secretive world of Chinese politics. [So this is why the Hong Kong borders cannot be sealed to keep Covid out!]
For years, she has mingled with senior executives of state companies through Hong Kong and mainland professional clubs known for grooming the sons and daughters of officials. [No, not Girl Guides!] She has represented Hong Kong in Chinese provincial political advisory groups. She is the chairwoman of a state-owned investment bank based in Hong Kong that has long done business with the relatives of top Chinese officials.
Ms. Li, 38, also has deep financial roots in the city, having bought a $15 million, four-story townhouse perched high above a beach. Her partner owns a now-retired racehorse and spent hundreds of millions on a stake in the storied Peninsula Hotel that he later sold. Ms. Li and other members of the Communist nobility are embedded in the fabric of Hong Kong’s society and financial system, binding the former British colony closer to the mainland. By building alliances and putting their money into Hong Kong’s real estate, China’s top leaders have inextricably linked themselves to the fate of the city. [No one likes to see their assets shrink away!]
As the party now takes a stronger hand in running Hong Kong, the top leadership in Beijing has a vested interest, politically and personally. Ms. Li’s father, Li Zhanshu, oversaw the swift passage of the new national security law for Hong Kong that handed the party a powerful new weapon to quash dissent. [And who was it in HK that fully cooperated with this move?] The law could protect the families of the party’s leaders by stopping the protests that wreaked havoc on the economy, or leave them vulnerable by driving down business confidence in the territory. It could also expose them to sanctions. [Here's hoping!]
Li Qianxin, a daughter of the Chinese Communist Party’s No. 3 leader, during a rare public appearance last year.
Credit...Hong Kong Policy Research Institute
Already the [draconian National Security] law has prompted rebukes from foreign countries that could threaten Hong Kong’s access to the global financial system. The Trump administration imposed sanctions on Friday on Hong Kong’s chief executive, Carrie Lam, and 10 other senior officials in the city and the mainland they accuse of curtailing freedoms in Hong Kong.
“Members of the Red aristocracy in China, including the princelings, have made huge investments in Hong Kong,” said Willy Lam, an adjunct professor of China studies at the Chinese University of Hong Kong. “If Hong Kong suddenly loses its financial status, they cannot park their money here.”
One of the leadership’s biggest exposures to Hong Kong is in real estate. Including Ms. Li, relatives of three of the top four members of China’s Communist Party have in recent years bought luxury homes in Hong Kong worth more than $51 million combined, a New York Times investigation shows.
Qi Qiaoqiao, the older sister of Xi Jinping, China’s president, started buying properties in Hong Kong as early as 1991, Hong Kong property records show. Her daughter, Zhang Yannan, owns a villa in Repulse Bay, which she bought in 2009 for $19.3 million, and at least five other apartments, the city’s property and company records indicate.
Wang Xisha, a former Deutsche Bank executive who is the daughter of Wang Yang, the No. 4 party leader, bought a $2 million home in Hong Kong in 2010, according to city property records.
The Communist Party has long been secretive about the riches of many of its leaders’ relatives, aware that such an accumulation of wealth could be seen as the elite abusing their privilege for personal gain. [My, my!] In Hong Kong, the party is also mindful that the presence of princelings could further fan resentment of Beijing. [Why would HK people ever become resentful of Beijing? Well, for annexing the SAR for a start!]
Ms. Li, like many relatives of top Chinese officials, keeps a low profile.
In the mainland, there are few mentions of Mr. Li’s family in the party-controlled news media, and searches for his daughter’s name on social media sites yield minimal results. A trip to Nangoucun, his ancestral village in northern Hebei Province, offered little insight about his children.
But internal documents from Deutsche Bank obtained by the German newspaper Süddeutsche Zeitung and reviewed by The New York Times late last year referred to a woman with the same name in English and Chinese as the elder daughter of Li Zhanshu, now the No. 3 leader in China. Those documents were part of an internal inquiry stemming from an investigation by the Securities and Exchange Commission into the bank’s politically connected hires.
The Hong Kong identity [card] number that is used by Ms. Li in a Hong Kong corporate record listing the directors of China Construction Bank International is the same one used in the records linked to the beachfront property and a company she owns with her partner.
The villa in Hong Kong owned by a niece of President Xi Jinping, Zhang Yannan.
Credit...Eric Rechsteiner for The New York Times
A well-connected businessman and an associate have confirmed that the Ms. Li who is an executive at China Construction Bank International is the daughter of Li Zhanshu, as does a biography of the official written by Cheng Li, an expert on elite Chinese politics at the Brookings Institution.
The rest of her résumé can be pieced together through news snippets and archived web pages. [Thank you New York Times!] They showed how Ms. Li has strengthened her ties to the city in ways that position her well for a political career in the mainland.
She joined networks like the Hua Jing Society in Hong Kong that provide a forum for princelings to meet the children of Hong Kong’s tycoons and political class. [It's not about WHAT you know, but WHO you know, you know!]
In 2013, she and other Hong Kong representatives of the Chinese People’s Political Consultative Conference, or C.P.P.C.C., a party-run political advisory group, helped organize relief funds for a village. Two years later, she visited farmers and carried toddlers in the same province to promote the United Front Work Department, a party unit that develops overseas political networks. [More CCP spies and infiltrators!]
Ms. Li is now the chairwoman of China Construction Bank International, the investment arm of a major state lender, according to corporate records in Beijing. Ms. Li, her partner and the bank have not responded to multiple requests for comment from The Times.
“There is often an assumption that simply being well connected is enough to get ahead in Chinese politics,” said Rana Mitter, a professor of Chinese history and politics at Oxford University, who did not comment specifically about Ms. Li. “Actually, there is still a great deal of interest in candidates proving themselves for higher office in institutions such as the Communist Youth League and the C.P.P.C.C.” [You might also need a foreign degree, the wherewithal to commit blackmail or fraud, the right address, plus funds to pay bribes]
Like many other members of China’s Communist elite, she has amassed significant wealth, according to a review of company and property documents filed in Hong Kong. Ms. Li also took advantage of a tax haven popular with the world’s elite.
She bought the waterfront townhouse overlooking Stanley Beach through Century Joy Holdings Ltd., a company registered in Hong Kong and incorporated in the British Virgin Islands, for $15 million in 2013, according to a document filed with the city’s land registry. Ms. Li, then 30, was the Hong Kong entity’s sole director. That entity was dissolved in October, hours after The Times contacted Ms. Li for comment ahead of the publication of the article about Deutsche Bank’s hires in China. [Sneaky!]
Her partner, a 35-year-old Chinese-born Singaporean businessman, Chua Hwa Por, has used a similar strategy.
Stanley Beach, where Ms. Li bought a townhouse for $15 million in 2013.
Credit...Marcel Lam for The New York Times
He was named as the sole beneficiary of a firm registered in the British Virgin Islands, according to the Panama Papers, a 2016 leak of confidential documents that exposed how prominent business leaders and politicians might have used shell companies and offshore bank accounts to evade taxes. ['might' is such a weak word!] Mr. Chua uses a variety of addresses and several identification numbers, but he can be tied to Ms. Li, the properties and the companies through his Singaporean identity number.
The nature of Ms. Li’s relationship with Mr. Chua is unclear, but they own a company together and have used the same home addresses in documents they have filed with Hong Kong’s property and company registries. Hong Kong news reports have speculated that the couple were married. [Living in sin, maybe?]
In status-conscious Hong Kong, Mr. Chua was not modest about his wealth. At 31, he owned a racehorse named Limitless and posed for photos with a bottle of wine at the Hong Kong Jockey Club after it won a race in 2017. [Maybe owning a horse is the way to improve your future in Hong Kong?]
That year, he also started to make a number of major purchases, according to filings with the Hong Kong Stock Exchange. He took over Tai United, a little-known investment company listed in Hong Kong, using it to buy trophy assets including a large stake in the Peninsula Hotel and the 79th floor of an iconic skyscraper. [Who's the social climber then?]
In July 2017, barely five months after he was appointed chairman of Tai United, Mr. Chua resigned from the company. He stepped down shortly after Next Magazine, a Hong Kong news outlet owned by the pro-democracy tycoon Jimmy Lai, reported on the purchases and his possible ties to Mr. Li, the senior Chinese official. (The publisher, Mr. Lai, was arrested this week, accused of national security and other offenses.) [Was this about tit-for-tat, or cutting off the fuse that was about to ignite something really explosive?]
Chua Hwa Por, holding a wine bottle, is the partner of Ms. Li and owner of Limitless, a racehorse whose victory he was celebrating in 2017 in Hong Kong.
Credit...Kenneth Chan/South China Morning Post, via Getty Images
Mr. Li, the official, was at the time poised for a promotion to the Politburo Standing Committee, the apex of party power, and even the whiff of corruption in his family would have been potentially damaging. In January the next year, Mr. Chua sold the bulk of his stake in Tai United.
Without public disclosure of the wealth of officials and their relatives, it is impossible to know how Mr. Chua and Ms. Li obtained their income. There are legitimate reasons for people to own companies offshore, and it is also not illegal for Chinese citizens to do so. Shirley Yam, a prominent financial writer in Hong Kong, also raised questions about the couple’s financial dealings in a 2017 column in The South China Morning Post, a local newspaper owned by Jack Ma, one of China’s richest tech tycoons. [But lately he's been in trouble with CCP!]
The newspaper later pulled the column from its website, citing “multiple unverifiable insinuations.” Ms. Yam resigned, and defended her column in a statement. But if there was fallout from the disclosure, Mr. Li most likely emerged unscathed; in October 2017, he was elevated to the party’s powerful standing committee. [Bully for him!]
Since then, Mr. Chua has largely shied away from the public eye. But he and Ms. Li remain joint owners of a company called Chua & Li Membership. In annual filings with the government, both had listed the $15 million beach house as their residence until earlier this year, when Ms. Li changed her address to an apartment owned by Mr. Chua on the 60th floor of an exclusive property.
Ms. Li made a rare public appearance in April 2019, attending an event that now seems to have foreshadowed Hong Kong’s current fate.
She applauded alongside the Hong Kong leader, Mrs. Lam, at the opening of a government-backed exhibition promoting national security for Hong Kong, a promotional video for the event showed. Other special guests included the deputy commander of the People’s Liberation Army in Hong Kong and the directors of the highest offices representing mainland authorities in Hong Kong.
Shields and bulletproof vests hung on walls as members of the Hong Kong Army Cadets Association — a youth group supported by the government and the People’s Liberation Army — were taken on a tour of the exhibition.
Fourteen months later, Beijing imposed the national security law on Hong Kong.
A big video screen in Beijing displaying Ms. Li’s father, Li Zhanshu, the No. 3 official in the Communist Party. He oversaw the passage of the new national security law imposed on Hong Kong.
Credit...Pool photo by Wu Hong
[Hong Kong truly has its own 'Lifestyles of the rich and famous' even if they are not so famous or fabulous!]
By Alexandra Stevenson and Michael Forsythe for the New York Times
Sui-Lee Wee contributed reporting from Nangoucun, China.
'Leaving Hong Kong' as China cracks down, a family makes a wrenching decision; Reuters