Monthly Archives: July 2015

If “It’s the economy, stupid!”…

[updated on Oct. 17, 2015]

It is often argued that Hong Kong is an economic city, not a political city: “Let’s focus on making money and set aside democratic aspirations.” Well, the HK government now gets what it wished for!

It is certainly true that many HK people care about making money above all else. Indeed, it is not coincidental that many “winners,” who have benefited from HK’s growing integration with the mainland economy, tend to be pro-establishment. In contrast, young people who have nothing to lose tend to be pro-democracy. But what happens when the “winners” lose in a “made-in-China” stock market crash? Worse, what happens when those traditional regime supporters blame the visible hands of the state rather than the invisible hands of market forces for their losses (cf. the causal mechanism of “attribution” in theory of contentious politics)? In trying to stabilize the Shanghai and Shenzhen stock exchanges, mainland investors are moving money out of the HK stock exchange, thus further driving down HK stock prices and hurting its traditional supporters. Whether or not Beijing could stabilize the mainland stock markets, HK’s smaller investors are sure to suffer. Meanwhile, HK as an international financial center could regain its advantage over Shanghai and Shenzhen (after all the talk “that HK is becoming just like Shanghai and Shenzhen” or “that HK is to be surpassed by Shanghai and Shenzhen”).  If Beijing would learn from HK on how market forces work, there could be some silver linings in the long-term.

As if one made-in-China crisis is not enough, the HK government is suddenly confronted with another crisis that touches on a wide spectrum of HK people:  Tainted water saga reveals how China SOEs do business in HK. More on the water crisis below.

[July 31] China stocks post worst monthly fall in 6 years

[July 27] China stocks plunge, suffer biggest one-day loss since February 2007 Shanghai ends at 2-week low in biggest daily drop in 8 years, Shenzhen and Hong Kong tumble ; China’s support measures crumble as Shanghai stocks dive 8.5 per cent in biggest daily drop for 8 years

[August 24] From Asia to Wall Street: China’s stock market meltdown goes global in one of the worst trading days for eight years. “What we witnessed [on Monday] was an absolute meltdown on China stocks and the search for a safe haven continues,” said Stephen Innes, a senior foreign exchange trader at Oanda. (Frantic selling batters Shanghai and Hong Kong equity markets)

[August 28] The Economist’s cover story: The Great Fall of China

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The Chinese stock market: officially sanctioned prices? Illustration: David Simonds/The Observer

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The End of Fake Universal Franchise (For Now)

[Note: The veto may well represent the closing of the Umbrella chapter in HK’s 3-decade-old democracy movement. (See background.) Of course, the struggle for genuine universal suffrage will go on and we will continue to comment and blog on the latest developments. Thus, the revised title “HK’s Umbrella Movement and Beyond.” As usual, existing blog posts will continue to be updated.]

[Updated on Sep. 28, 2015]

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The veto — with unexpected drama and tears

The veto was expected, because the government proposal would need 2/3 of legislators to pass. Pan-democratic legislators had just over 1/3 of the votes to secure a veto. What was not expected was the walkout by pro-establishment legislators.

[June 18] Hong Kong parliament defies Beijing’s insistence and rejects ‘democracy’ plan : Proposal that would have allowed election of leaders, but only from candidates vetted by Communist party hierarchy, is defeated in key vote (香港立法會否決北京政改方案何去何從)

The “political reform package” was rejected on Thursday with 28 legislators in Hong Kong’s parliament voting against it. Eight lawmakers voted for the proposal. There are 70 members in all but more than two dozen pro-government politicians walked out of the session without voting in an apparent attempt to halt proceedings.

Pro-democracy lawmakers and activists celebrated the result, even though it means the current system – under which Hong Kong’s chief executive is chosen by a 1,200-member pro-establishment “election committee” – will remain in place.

[June 18] Hong Kong reform package rejected as pro-Beijing camp walk out in ‘miscommunication’ (with video)

All 27 pan-democratic lawmakers kept their vow to vote no, and pro-establishment medical sector representative Dr Leung Ka-lau added a 28th vote. That would have been enough to deny the proposal the two-thirds majority it needed. But the pro-establishment camp’s plan to blame pan-democrats for the failure of reform was severely undermined, as the walkout left just eight yes votes and a clear majority against the package.

Harry’s cartoons:

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How many voters do the “yes,” “no” and “abstain” votes represent, respectively? 政改真正場外點票

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The vote count is the best possible outcome for the pan-dem camp. The govt had championed the line that the pan-dems should bear the responsibility for denying HK voters the right to “one-person, one vote” in choosing future chief executives, calling on voters to punish them in future elections (“票債票償”). (See 北京欲借泛民手否決政改) As it turned out, it is the pro-establishment camp that has to bear the responsibility for not voting for the bill.

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This dilemma for the pan-dems before the vote: [June 18] The day Hong Kong’s Legco entered a parallel universe

Pan-democrats who had fought for years for democracy decried a government package that would allow Hong Kong people to choose their leader by one person, one vote. Their Beijing-loyalist rivals, hardly known as staunch pro-democrats, argued in favour of universal suffrage.

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Why did pro-establishment legislators walk out? 

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