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Chill wind from Beijing

February 8th 1999 03:57
I lived in Hong Kong for 16 years until 2007. In 1998 and 1999 I wrote a series of political and social commentaries for a quirky institutional newsletter - quirky in that it was intended to be as much contentious, offbeat and humorous as it was informative. I was working as an editor, and I wrote the articles under the pseudonym Red Inque. I post them here for anyone interested in a look at life in Asia at the time, and in Hong Kong just after its return to Chinese sovereignty.

They dream in courtship, but in wedlock wake. -- Alexander Pope


One country ...

A few years ago some wit claimed Hong Kong was preparing a reverse takeover for China. That got ‘em laughing where expatriates gathered. It remained a good joke all the way up to the handover. What with Hong Kong’s economy growing at 10% and China in a deep freeze battling inflation, it was so easy to imagine more than a grain of truth in it. Then they took Queen Elizabeth’s portrait off the wall in the General Post Office.

Red Inque had a Welsh flat-mate at the time, all mid-20s rugby-playing muscle and perfect-pitch Taffy baritone. I can recall the disbelief in his voice when he came home one evening about a week after the handover and told me the Queen’s portrait had gone. He looked like a little boy and almost choked on the words. Something at the core of him had finally realised that Hong Kong wasn’t his any more.

If there is one thing that has been consistent since, it is the perception that little has changed in Hong Kong in terms of the freedom of doing business. After initial alarm when popular favourite Anson Chan was passed over as the SAR’s first chief executive for Bejing buddy Tung Chee-hwa, days and weeks turned into months after the handover, and the hand of China, heavy or otherwise, was not to be seen. Even the Chinese garrison here seems invisible. We’ve had protests and marches and Martin Lee taunting the PRC, and the most violent law-enforcement response has been to turn up the volume on Beethoven’s Fifth Symphony. It has been business as usual (recession notwithstanding), which means non-intervention from points political.


Today, we may be seeing a change. Today, more than at any time since Hong Kong was returned to Chinese sovereignty, people are looking north and wondering. Today, as reported in The South China Morning Post’s Page 1 banner heading, we have a potential constitutional crisis on our hands.

The issue to which Beijing has apparently taken exception is a Hong Kong court ruling 10 days ago which widened the interpretation of who qualifies for right of abode in the SAR. The ruling, which caught authorities on both sides of the border by surprise, threatens an inundation from the mainland, which will create undoubted problems. But the ruling was a victory for the little guy, it was a statement of the integrity of the Hong Kong judicial system, and it was a thunderous endorsement of the rule of law and of China’s one country, two systems promise.

The ruling, it has emerged over the weekend, has met with disfavour in Beijing. Mainland ‘legal experts’ have described it as a violation of the Basic Law, as an attempt by the Court of Final Appeal to extend its jurisdiction to Beijing and turn Hong Kong into an independent political entity, and, ominously, as a challenge to the National People’s Congress, the supreme state power, according to China’s constitution.

The reaction in Hong Kong has been heated. ‘If the central government over-rules or becomes angered by it, it will lead to a constitutional crisis,’ said Democratic Party chairman Martin Lee. ‘It will be a disaster if the rule of law turns out to be the rule of man,’ said Hong Kong Bar Association chairman Ronny Tong. ‘Do we throw the Court of Final Appeal’s reputation in the litter bin simply because of one ruling they dislike? If so, the price we have to pay will be extremely high,’ said James To Kun-sun, also of the Democratic Party. ‘They are putting our judicial independence in question. How can people be convinced there will not be political intervention in our judicial system?’ said Society for Community Organisation director Ho Hei-wah.

The action of Beijing so far amounts to no more than an expression of dissatisfaction, and it remains to be seen whether it follows up with stronger words or, indeed, action. Meanwhile, imagine you are a New York or Frankfurt business owner looking to move into Asia in anticipation of economic recovery. Rents are down and you are prepared to wait for the economic barometer to go up. There’s just one decision left, where to base your operation, and last week you were still tossing up between Hong Kong and Singapore. Now?
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Bad press

December 7th 1998 03:16
I lived in Hong Kong for 16 years until 2007. In 1998 and 1999 I wrote a series of political, investment and social commentary articles for a quirky institutional newsletter - quirky in that it was intended to be as much contentious, offbeat and humorous as it was informative. I was working as an editor at the time, and I wrote the articles under the pseudonym Red Inque. I post them here for anyone interested in a look at life in Asia at the time, especially in Hong Kong just after its return to Chinese sovereignty.

Accuracy to a newspaper is what virtue is to a lady; but a newspaper can always print a retraction.-- Adlai Stevenson


Hung, drawn and syndicated

One must occasionally feel sorry for investment analysts. We are not referring here to the fact that they are likely to lose their jobs every cyclical downturn, nor that they feel unappreciated and misunderstood by sales people. No, we’re referring to that other predatory breed, the great opinionated, stentorian collection of human beings known as journalists.

There is in Hong Kong an economist of the senior and experienced variety who made a call a while back that the Hong Kong dollar peg would go. He was not alone in this call, but he was pretty much alone in nominating that the peg would go by a certain, not-too-distant date. This is sticking out one’s neck a very long way indeed.

There is in Hong Kong a newspaper columnist of the financial variety whose brief, one assumes, is to be witty and entertaining on a daily basis. A professional journalist can spot an extended neck three time zones away. So Mr Columnist rang Mr Economist and the ensuing conversation, according to the Hong Kong grapevine, could be described as less than gracious on one end and less than grateful on the other.

The result has been a series of references to the economist’s peg call in the newspaper column, each reference ever more gleefully crowing that the pressure on the peg was easing and counting down the days until it was proven that he was wrong, wrong, wrong. To the relief of many, that day was last Friday, and perhaps we’ll hear no more of it.

Red Inque has a friend who is an economist (not the same person) who a year ago made a major call that the renminbi would be devalued. In the end, he was wrong too, and if he has not been lampooned for it, it is probably because he very rarely talks to journalists, and then only to those he trusts. This is the result of bitter experience. Indeed, there are many investment banks which have a blanket ban on their analysts talking to the press.

In a perfect world, journalists would be fair and knowledgeable arbiters and what makes it into newspapers would be an objective reflection of the credibility of investment calls and research analysis. Sometimes it even works that way. But not in the incident which finished last Friday with a final blast of ridicule on one side and a frigid silence on the other. The reputation of the economist who was merely brave enough to make a big prediction has undoubtedly been tarnished, which is unfair. Also tarnished is the reputation of journalism, which has once more proved that people in ivory towers shouldn’t throw stones.
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Indonesia’s lonely battle

November 16th 1998 02:53
Expendable pawns and few mates

I lived in Hong Kong for 16 years until 2007. In 1998 and 1999 I wrote a series of political, investment and social commentaries for a quirky institutional newsletter - quirky in that it was intended to be as much contentious, offbeat and humorous as it was informative. I was working as an editor, and I wrote the articles under the pseudonym Red Inque. I post them here for anyone interested in a look at life in Asia at the time, especially in Hong Kong just after its return to Chinese sovereignty.

Red Inque has a chess software package on his home computer which is notable for being free, for not playing at a very high standard, and for thrashing him mercilessly. When it comes to chess, Inque stinks. For some unfathomable reason, the programme’s designers decided to call it Gnu, and I keep track of our games in an Excel file named Me ‘n’ Gnu.
While I was playing a few games on Friday night, 14 people died on the streets of Jakarta, shot dead by soldiers who didn’t like what they were doing, which was calling for democratic reform.

If the previous sentence was a bit of a mind flip, and shockingly callous along with it, it was meant to be. It is an allegory for the way the rest of the world, the rest of Asia, and even Indonesia’s ASEAN partners, will react with indifference. Leaving out the social and philosophical implications, which are matters for wiser heads than this one, it will be business as usual come Monday. There will be no plummeting stock prices, at least not because of things Indonesian, when Singapore, Hong Kong and Tokyo open today; even more apathetic will be the markets in Sydney, London and New York.

Indonesia is alone at the moment. The international community just does not care, certainly not in the way, say, that there was dismay and genuine concern when things started going badly awry in Russia. And while the IMF has not exactly turned its back, there are no white knights to broker a Mexico-style quick turnaround.

Some years ago, a free-thinking Western politician suggested that India and Indonesia, the world’s second and fifth most populated nations, should be invited to join the UN Security Council, at one stroke broadening that chamber’s scope of thinking and enfranchising the Third World. Suharto was in power, of course, but perhaps despotism was a little more acceptable in the years when it was a little more common. Suharto hardly ranks with Idi Amin and Nicolae Ceaucescu in the pure evil stakes, but the 32-year history of Suharto Family Inc is a history of the worst sort of rapacity, bleeding his country and leaving his countrymen to grovel.

It is the sons and daughters of Suharto’s victims, of course, who are now taking to the streets, dodging bullets and demanding change. It is grimly ironic that the riots have been sparked by a special meeting of parliament which is discussing change. According to the legislators, it is far-reaching democratic reform which will make a freer and better Indonesia. According to the students, it is far too little and, so long as it refuses to remove the military from holding parliamentary seats, it is bollocks.

Here’s a bit of fanciful thinking. What if Bill Clinton, having got Saddam organised for the moment, changed his mind and decided to come to the APEC meeting in Kuala Lumpur after all. Once there, he starts thinking along the lines that he could score some brownie points in the Muslim world by holding out a helping hand to Indonesia. Not everyone may be happy with the pace or the agenda, but President Habibie is undoubtedly heading in the direction of democracy. If we ignore Irian Jaya momentarily for a greater good, Indonesia has no major warts. A quick detour by Clinton from KL, where there is nothing interesting on the agenda anyway, to Jakarta, some words of en­courage­ment for the reform process, a quick billion or so aid package and a photo session with Habibie might calm things down wonderfully.
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