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Thread: What's wrong with Hong Kong (and how to fix it)

  1. #136
    Senior Contributor DOR's Avatar
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    tbm3fan,

    So where do you land on the scale of freedoms vs. totalitarian semi-capitalistic regime.
    Now you've moved outside the scope of this discussion.
    It doesn't matter what I think; that's not something for this thread.
    Stick to the subject, please.

    I think Xi is stuck back in ancient times when China was ruled by numerous warlords fracturing China for their personal fiefdoms.
    I don't recall China moving away from warlords (of one kind or another), factions or personal fiefdoms for more than a dozen years or so.
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  2. #137
    Defense ProfessionalSenior Contributor tbm3fan's Avatar
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    Quote Originally Posted by DOR View Post
    tbm3fan,
    Now you've moved outside the scope of this discussion.
    It doesn't matter what I think; that's not something for this thread.
    Stick to the subject, please.
    My mistake and here I thought the subject revolved a lot around the protests which have called everything into question re: integration, economy, and the political. I gather freedoms, which much of the protests are about don't figure into the mix. Seems to me if they are not considered then nothing can be solved in any manner except by force. Force, of course, renders the whole discussion moot as there will simply be a decree. I see freedom, as in my question, to be the most integral part since many protests and revolutions involved freedoms. Redistribute is a pipe dream here.

    Twenty years after the Handover, the experimental “one country, two system” political arrangement is facing its greatest challenges. Street protests, legislative log jams, political disappearances, and open interference in Hong Kong’s internal affairs by Mainland officials are threatening to make the SAR ungovernable. Before a full-blown crisis dictates unpalatable responses, steps must be taken to redistribute power, revitalize the roles of the Chief Executive and Legislative Council, and rein in Beijing’s role in Hong Kong’s strictly domestic affairs.
    As far as your opinion I am funny about that. I tend not to get into discussions where someone is detached from consequences. Not my style as every discussion has humans ultimately affected in the end. I want to know where the person stands emotionally inside before getting deep into things.

    A good current example. US withdrawing troops from Northern Syria based on not getting involved in some typical mideast squabble. Sounds reasonable on the face of it and we can discuss it all day from a geopolitical viewpoint. However, in the end, human lives are involved and many could die due to our detachment. I'm not detached I want to know the human costs involved before I get into the discussion. Hong Kong is similar.

  3. #138
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    There are much newer precedents of unpopular bills being withdrawn. 2012 education bill protest is an example. That protest made Joshua Wong popular.

  4. #139
    Senior Contributor DOR's Avatar
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    tbm3fan,

    The core issue is that the Basic Law offers rights and freedoms that the HK SAR Government cannot guarantee. Until (and unless) the CCP decides to back off and let the SAR Government enforce its own laws without any interference from outside, that will remain the problem.

    Hong Kong got rich off of China; without China, there was never any need for Hong Kong to exist. During the 30 years when China was closed to the outside world (1950-79), Hong Kong had to come up with new ways to make a living (low-end manufacturing), but it quickly abandon those when China opened up. Too much competition. As the only place on the continent to offer a western style rule of law, bureaucracy, education system, medical care, and a host of other things westerners like, Hong Kong attracted the business and finance that sought to do business in China.

    As with New York or London, that drives up the cost of living beyond reach for those who are not competing at the world class end of the spectrum. Unlike New York and London, Hong Kong people generally don’t move just outside the commuter belt and carry on doing what they did before the city became too expensive. The simple reason is that the nature of their society – laws, courts, schools, hospitals, etc. – stops less than five miles from the last subway station. In essence, the people of Hong Kong are trapped in an expensive city.

    You suggest that only force can solve the problem because there is no consideration of freedom. I would put it differently: force will be used to temporarily suppress dissent because China is ruled by the CCP, which knows of no other way to deal with dissent. By its very nature, the CCP cannot compromise.

    You also suggest that once force is used, the city will be ruled by decree, and here I think we part company. I can envisage an outcome where Hong Kong continues to largely be governed by the same norms as before, but with no tolerance for massive street protests. (If you chose to define ‘freedom’ as the ability to shut down the city with large-scale protests, then we have to better define our terms.)

    I am a political and economic analyst. If I inject my personal opinion into discussions where there is far more useful information to be found in a narrative of the facts, I do my clients a disservice. When I give my opinion, I try to define it as such. Sorry if I wasn’t clear about that.
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  5. #140
    Turbanator Senior Contributor Double Edge's Avatar
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    I'll reply when i get time. Just this for now

    Internet restrictions would only exacerbate Hong Kong's problems | Al Jazeera | Oct 16 2019

    "digital platforms are not critical to collective action ... removing them can turn a predictable situation into one that is highly volatile, violent and chaotic".

    He told me in an interview that "disrupting people's access to the networks they use to communicate and coordinate is liable to only spark further anger and protest in the streets." He added that "in other countries, massive blackouts have been linked to escalations of violence spurred by information chaos and have proven futile against peaceful demonstrations."

    Despite being ineffectual and carrying the risk of increasing the levels of violence, restrictions to internet services are already under way in Hong Kong. Some international companies already complied with demands to remove and block services that the authorities in the self-governing territory deem a cause for concern.
    If they wanted to cut the internet in HK there is a high economic price to pay. So they did not do it.

    From a reducing protests ie collective action it would have been better to do it as protests got larger back in June. Too late to do it now.
    Last edited by Double Edge; 19 Oct 19, at 20:44.

  6. #141
    Senior Contributor DOR's Avatar
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    The economic cost of unrest

    To put it in perspective, …


    Preliminary reports – there are no hard numbers to back up the commentary – put third quarter real GDP at -2.9%.

    Just to remind us about the structure of the Hong Kong economy, private consumption fell by HK$16 billion, and capital investment by HK$24.5 billion.
    Exports fell by HK$110.8 billion, and imports by HK$140.3 billion.

    Trade is 3.6 times as large as the domestic economy.


    On the tiny domestic side,

    In the second quarter of 2003, when deflation and SARS were wrecking havoc on tourism and domestic retail demand, sales fell 10.8% year-on-year, and by 7.8% in volume terms.

    In the second quarter of 2009, when North Atlantic financial institutions threatened to crash the entire world economy, retail sales in Hong Kong fell by 5%, and by 5.4% in volume.

    In the second half of 2015 and the first three quarters of 2016, when the crackdown on corruption in China decimated Hong Kong tourism, sales fell by an average of less than 9% in value, and just over 7% in volume.

    In the third quarter of 2019, sales fell by 17.5% in value and 19.5% in volume.
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  7. #142
    Senior Contributor DOR's Avatar
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    November 2019 District Council elections

    Following four months of unrest and while a siege continues at Polytechnic University, nearly 3 million people cast ballots in District Council elections. A high, 71.2% turnout sends opposition candidates to 388 of 452 seats (85.8%).

    The vote was widely seen as honest, although there were complaints about people being video recorded as they entered and left voting places.

    In the last election, a 47% turnout saw two-thirds of the seats won by pro-establishment candidates. Now, the opposition will determine who will sit in the District Council functional constituency Legislative Council seat. The irony of a pro-democracy politician taking an FC seat will be widely ignored.
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  8. #143
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    it was a landslide victory for the pro-democratic camp, although of course it's 117 seats out of 1200 member committee when it comes to actually selecting the leader. the fix is in.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  9. #144
    Turbanator Senior Contributor Double Edge's Avatar
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    Name:  HK democracy vote.jpg
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  10. #145
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    The 2020/21 Hong Kong Budget

    True to form, when the foundations of Hong Kong shake, financial secretaries offer one-off token gestures to appease the public, rather than serious structural reforms. In keeping with the long tradition laid down by his predecessors in previous years, Paul Chan Mo-po has once again deftly side-stepped the opportunity to do something meaningful.

    This year’s gifts include HK$20.8 billion worth of tax breaks and refunds (including $10,000 per person). As usual, this will further pare down one of the world’s narrowest tax bases. And, true to form, the actual cash-in-pocket effects will be postponed well into the recovery period, ensuring yet another excessive boom to follow the unnecessarily deep bust.

    Operating revenues in 2019/20 (ends March 31, 2020) are expected to be HK$16.8 billion below the target set a year ago, and capital income off by $2 billion, or -3.9% and -1.3%, respectively. Capital revenues, on the other hand, might rise 5.3% (an additional $26.8 billion over expectations) while spending will fall 21.7%, or $23.1 billion.

    The longer-term strategy (if it can be called that) is to take $280 billion less out of the economy by 2024/25 than originally planned. This is intended to bring the fiscal reserves down to below the trillion dollar mark passed in 2017/18. By the end of the five-year forecast period, the current 22 months worth of spending that is locked away from useful employment is to be reduced to 15 months, or $937.1 billion. In other words, just 26.5% of GDP, down from nearly 40%. Whoopee?

    The economy this year is 4% smaller (-$119.4 billion), in nominal terms, than previously expected. Five years out, it is expected to be 7.2% smaller than predicted twelve months ago. As a result, revenues fail to emerge. Over 82% of the decline in revenue recorded in the current fiscal year is due to the 21.1% drop in takings from companies, including the personal assessment favoured by small businesses. Salaries tax receipts fell 9.6% and the take on stamp duties by 21.2%.

    Over the past decade, Hong Kong has spent an average of 16.4% of government revenues on education. The second largest pocket was 13.1%, which was the amount dumped into the fiscal reserves each year. Not the total, just the increase. It exceeds the share spent on housing, social welfare, or healthcare. That, in a nutshell, defines the priorities of this and previous financial secretaries.

    During the worst economic and financial crisis in 75 years, and on into the period of deep politicization of Hong Kong society, the government increased the $500 billion already sitting in the bank by a further $669 billion. There was no need to do so, but there was a profound lack of the imagination, and leadership, necessary to rethink the relationship between the policy book and the pocketbook.

    Fortunately (but, only if one believes the Mr Chan’s numbers), that will all change now. But, not by much. After taking $28.5 billion from the reserves in the past year, the new plan is to draw down another $195.6 billion over the next five years. That’s nearly 5.5% of revenues. If past predictions are anything to go by, this will not happen. Financial secretaries tend to under-estimate revenues and over-estimate spending, and as a result end up with piles of useless cash sitting in the bank doing no one any good at all.

    If you have no use for the money, why take it out of the economy?

    The Duty-free City
    For the curious, the on-line tax calculator allows the public to find out how much tax is owed. It also allows analysis of how much income under various scenarios is totally tax free.

    A single person, no dependents pays no tax on the first HK$132,000 (US$16,923)
    A married couple pays no tax on the first HK$262,000 (US$33,590)
    A married couple with two kids pays no tax on the first HK$500,000 (US$64,103)
    https://www.ird.gov.hk/eng/ese/st_co...get/stcfrm.htm
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  11. #146
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    Hong Kong’s 2019 economy

    The Hong Kong economy grew to the equivalent of US$366.1 billion in 2019, or $48,761 per person. Because so much of the city’s economy is foreign trade, the more useful measure of incomes is private consumption per capita, which reached US$33,421. Singapore, by way of contrast, was $23,483 in 2019.

    The SAR experienced its second full quarter of decline in October-December as real GDP fell 2.9% (year-on-year) after dropping 2.8% in the third 2019 quarter. Trade, that three-quarters of the economy external to the city, fell 9.2% in Q-3 and 6.6% in Q-4. Domestic demand fell 11.5% in July-September and 5.8% in the final three months of the year.

    For the full year, GDP fell 1.2%, the first drop since the 2.5% fall in 2009, and only the third on record (the other was a 6.4% contraction in 1998). Two-way trade fell 6.2% and the domestic economy by 6%. Private consumption was off 1.1%, and capital investment by 12.3%.
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  12. #147
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    And... This won't be the last global pandemic, rather more seems likely given modern increases in travel for business and pleasure.
    .
    .
    .

  13. #148
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    DOR; What "serious structural reforms" do you believe are possible/permittable by the Chinese authorities on the mainland that would not involve political changes along the lines the recent protestors want?

  14. #149
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    the only structural reform the CCP talks about is integrating HK into the so-called "Greater Bay Area" megalopolis, thereby subsuming HK into the mainland.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  15. #150
    Senior Contributor DOR's Avatar
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    Quote Originally Posted by snapper View Post
    DOR; What "serious structural reforms" do you believe are possible/permittable by the Chinese authorities on the mainland that would not involve political changes along the lines the recent protestors want?
    Start with the assumption that anything the protesters want will be denied by Beijing, and you get exactly zero.
    It is a non-starter, and both the HKSAR Government and the Liaison Office understand that. Therefore, they do not reject any and all demands.
    Indeed, they have already agreed to the first and most important one: the extradition bill was withdrawn.

    On fiscal matters, offering a tax break on income generated during a recession is pretty lame.
    Given the massive structural budget surpluses (average 3% of GDP in the last 15 years), cutting tax rates makes sense.
    Given that 80% of the population, and probably 70% of the companies don't make enough to pay taxes, eliminating a whole slew of fees makes sense.
    And, since most people make important decisions based on long-term expectations, making these changes permanent -- and not one-off, year after year -- makes sense.

    Belt and Road demands lip service, and Hong Kong provides that, in spades.
    How about a suggestion we came up with in 2003, which was to establish a world-class infectious disease detection, treatment, and prevention center?
    Nah, once the panic subsides, they'll lose interest, again.
    *sigh*
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