Hong Kong's economy gets shot to hell by CCP; GDP is down 24%!
Updated: May 28, 2020
The Chinese Communist Party (CCP) must NOT have any input into the economy of Hong Kong (HK). China has a socialist system, and under the Joint Declaration which is HK's Constitution, its economic model can not be applied in HK. Under the Joint Declaration HK must have a high degree of autonomy.
CCP's only goal is to remain in power in China no matter what. CCPvirus is creating and maintaining the world's worst ever authoritarian state! CCP does NOT care at all about people, human rights, humanity, culture, economy, religion, obligations, Treaties, etc.
The most significant and frequent "foreign influence" on HK is from the CCP itself.
CCP has an enormous destabilizing effect on HK - something which it can NOT do under the terms of the Joint Declaration's first paragraph (bold format added): "The Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People's Republic of China have reviewed with satisfaction the friendly relations existing between the two Governments and peoples in recent years and agreed that a proper negotiated settlement of the question of Hong Kong, which is left over from the past, is conducive to the maintenance of the prosperity and stability of Hong Kong and to the further strengthening and development of the relations between the two countries on a new basis."
It goes far beyond the scope of this commentary to detail all the ways in which the CCP destabilise HK. Just read a few more of our blogs and it will soon be apparent that the CCOP do not have the interests of HK and its people at heart.
WTPOHK urges the world's leading democracies, especially the G7 who supported HK protesters in August 2019, to collectively push back hard against the Chinese Communist Party (CCP). This supports everyone worldwide, including the people of China and COVID-19, to eradicate from Earth the rule BY law used by the authoritarian CCP.
We urge the UK with the support of the G7 and others to finally take the CCP to the International Criminal Court of Justice for its breaches of the 1984 Sino-British Joint Declaration on the Question of Hong Kong. This is about the broader question of the rule OF law versus the rule BY law which needs to be settled for global prosperity and stability. There is the question of what will happen in HK from now until July 2047 under the Joint Declaration; and also what will happen after the end of the Joint Declaration - all of which affects the prosperity and stability of HK and China.
We urge the UK and other leading democracies to offer humanitarian aid to the people of HK including political asylum, international observers, etc.
By and large HK people are law abiding - CCP is not! Today CCP is HK's problem, as we can see from COVID-19, and tomorrow CCP will be everyone's problem! Read or listen to CCP's commentary and you will note they mention "China’s ascent to its rightful place on the global stage".
For decades Hong Kong (HK) has been flooded with CCP's corruption, ineptitude and instability - which has negatively affected the prosperity of HK. In Hong Kong absolute power absolutely corrupts! No HK Chief Executive has completed a second term.
The current HK government, lead by the Chief Executive Carrie Lam, does NOT represent the will of HK people and is therefore illegitimate. UN Universal Declaration of Human Rights Article 21.3 (bold format added) "The will of the people shall be the basis of the authority of government; this will shall be expressed in periodic and genuine elections which shall be by universal and equal suffrage and shall be held by secret vote or by equivalent free voting procedures."
In HK November 2019 District Council elections the pro-democratic camp won control of 17 of 18 districts. This is the only universal and equal suffrage election currently held in the SAR; the Legislative Council and Chief Executive elections are NOT run according to UN Treaties.
In the upcoming Legislative Council (LegCo) elections in September 2020 the pro-democratic camp are likely to win the majority - this is why CCP and HK government are spooked and running scared. They are trying desperately to illegally enact in HK a draconian National Security law (also called Article 23). This view is also supported by the last British Governor of HK Chris Patten (see below).
Pepe & Jeremiah B.
All Eyes Should Be on Hong Kong
Newsweek 20 May 2020. Opinion: Kyle Bass, Founder and Chief Investment Officer, Hayman Capital Management, L.P.
"[Hong Kong's] GDP is down 24 percent quarter-over-quarter annualized!"
In international politics, few things are certain during these uncertain times. But I can predict one: the relationship between America and Hong Kong is in the throes of major change.
On May 22, China's leaders will convene for their annual People's Congress, during which they will discuss the status of Hong Kong and whether to push forward with their rebuffed attempts to impose upon that special jurisdiction the laws and circumscribed rights of mainland China. If they do so, America and Britain will push back—with lasting consequence.
Hong Kong has become ground zero for the ideological clash between democracy and heavy-handed Chinese communism. This tug-of-war was on global display last summer, when over two million Hong Kongers—26 percent of the entire population—peacefully took to the streets of Hong Kong, in sweltering 100-degree heat, to protest Beijing's overreach with a proposed extradition bill that would impose China's laws on Hong Kong. The people of Hong Kong have completely lost faith in their embattled leader, Carrie Lam, and their police force. Peaceful protestors have been brutalized, pro-democracy figures have been illegally arrested and the Hong Kong Legislative Council's day-to-day operations have been tampered with by the Chinese government. During the most recent attempt to conduct a Legislative Council meeting in Hong Kong, in a scene that is reminiscent of an event that might take place in a failed state, fist fights broke out between the pro-China members and the pro-democracy members.
Unfortunately, the rapt global attention and support that greeted Hong Kongers last year at the start of their protests has been sidetracked by other news. But this week, the world should again pay attention to Hong Kong.
At the People's Congress, the Chinese Communist Party is likely to push forward with having Hong Kong implement a full set of laws with "Chinese characteristics" that give Beijing the right to essentially do whatever it pleases. This will shatter the Sino-British Joint Declaration of 1984, in which China agreed to allow Hong Kong to continue to operate "autonomously" until 2047. After 156 years of Hong Kongers experiencing British rule and all the freedoms and rights that accompanied it, expect larger and more dynamic protests and (hopefully) more global action from politicians. Recently, Secretary of State Mike Pompeo has said that he would not renew Hong Kong's special trade status until he had seen the outcome of the People's Congress.
But absent a complete about-face on that, it is unclear how Pompeo could possibly validate Hong Kong's continued "autonomy" after the blood-letting the world has witnessed firsthand. In late 2019, Amnesty International titled a piece, "Hong Kong: Arbitrary arrests, brutal beatings and torture in police detention revealed." Suffice it to say this is not something any responsible autonomous nation would do to peaceful protestors.
Unfortunately for citizens, at the same time that Hong Kong is experiencing the worst political destabilization since the Opium Wars, the special jurisdiction is already in the throes of the worst economic depression it has ever faced: GDP is down 24 percent quarter-over-quarter annualized. I have been studying the Chinese banking system and Hong Kong closely for the last decade, and I think that Hong Kong is living on borrowed time. (In full disclosure, I run global investment funds investing in this macroeconomic outcome.)
What happens in Hong Kong will not stay in Hong Kong. The battle between an expansionist, increasingly repressive Chinese communist government, on the one hand, and a Western rule of law-based democracy, on the other, will spill over into Taiwan. Already, the battle in Hong Kong has affected Taiwanese politics: watching China's Communist Party try to assert control in Hong Kong is the primary reason that a historic number of Taiwanese voters took to the polls to rebuke the pro-Beijing candidate and elect a president, Tsai Ing-wen, who campaigned with the promise of protecting Taiwan's democracy and sovereignty.
Taiwanese voters will continue to be enthralled by every development in Hong Kong, because they know that an aggressive and emboldened Chinese Communist Party is bad news for them, too.
The world should focus on Hong Kong. This is not just about the fate of millions of peaceful protesters, but about democracy, reneged promises and a global order that is shifting as the Chinese Communist Party continues to change its terms of engagement.
Kyle Bass is the founder and chief investment officer of Hayman Capital Management, L.P., a Dallas-based investment firm.
References (In case you're in any economic doubt):
CNN, 4 May 2020, "Hong Kong's economy just suffered its worst three months on record"
ING Think, 4 May 2020, "Hong Kong: Deep Recession"
AA, 4 May, 2020, "Hong Kong in ‘deep recession’, GDP contracts nearly 9%"
Further reading: "China security versus Hong Kong security" [Blog]