If HK Burns - China Burns



Posted by Ed 44 days ago
HONG KONG (Reuters) - Concerns over Hong Kong’s political and economic future are growing as pro-democracy protests drag on and turn increasingly violent, and China makes clear that forceful intervention is possible.
An intervention by Chinese troops could seriously damage Hong Kong’s standing as a stable international financial center and a gateway for global capital flowing into the world’s second-largest economy. No other Chinese city, not even Shanghai, could step into that role in the foreseeable future.


While China still has extensive capital controls and often intervenes in its financial markets and banking system, Hong Kong is one of the most open economies in the world and one of the biggest markets for equity and debt financing.

The size of Hong Kong’s economy may only be equivalent to 2.7% of mainland China’s now, down from 18.4% in 1997 when it reverted to Chinese rule, but the territory punches above its weight due to its world-class financial and legal systems.

All that is possible due to its unique system of governance.

Chinese banks hold more assets in Hong Kong — $1.1 trillion in 2018 — than lenders from any other region, according to Hong Kong Monetary Authority’s data compiled by Natixis. That figure equates to roughly 9% of China’s GDP.  


Ed 5 days ago
HONG KONG - There is No Alternative  
The formula for stealing Hong Kong’s mantle is no great mystery. Would-be rivals need to have vibrant, innovative capital markets plus the sort of quality of life that could tempt financial professionals to migrate.
That means a decent level of English proficiency, (though Hong Kong is by no means in the first rank on that criterion); good transport and public services, particularly international schooling; and, ideally, something of the low taxes and cheap domestic help that many residents privately see as essential to feeling affluent in one of the world’s most expensive cities.

A common-law legal system like the one that underpins legal contracts in most English-speaking countries would help, too — but that will only be replicated in places that already have it, like Singapore.

The most important trump card for Hong Kong is something no other city can quite match.

China still needs it — both as its gateway to the world, and as a bolthole for wealthy mainlanders to stash their wealth.
Almost two-thirds of China’s inward and outward foreign investment passes through the territory in some fashion or other.
If anything, that role could grow as China seeks to attract more foreign funds to plug what’s becoming a persistent capital account deficit.
Blocking that conduit could pose risks to the Chinese economy that would dwarf the problems of Hong Kong.

“There is this fundamental view that you can only do business with China if you tiptoe around human rights, fundamental freedoms and civil liberties,” said Anson Chan, the territory’s most senior civil servant for four years either side of the 1997 handover.

“It’s just not true.”

Ed 3 days ago
Hong Kong’s Retail Sales Won’t Recover This Year or Next Year: ING’s Pang

Ed 2 days ago
Compounding the problem, residential home prices are plunging down nearly 27%.   
Adding to the problem:
Hong Kong protests are pushing the city’s commercial property market off a cliff, and sellers are in denial Read More
And:   Hong Kong’s Retail Sales Suffer Worst Drop on Record  Read More 
It would appear that the protesters strategy of 'We Burn - You Burn' by attacking the economy of Hong Kong is closing in on a 'Mission Accomplished' moment.    
Trying to shut down a rebellion that has deep support --- in a key financial centre like Hong Kong --- is not possible  through the barrel of a gun.   That would only serve to accelerate the trajectory towards total implosion.
There must be a negotiated settlement.   And the negotiations need to start soon....

Ed 1 day ago
Festival Walk shops and owners are burning....
Hong Kong protests: vandalised Festival Walk to remain closed until first quarter of 2020 for repairs, hitting retail and catering brands
  • Mall’s owner says it will need to repair glass entrances, glass curtain walls, escalators, lifts, and glass balustrades that were vandalised
  • The closure will mean even less earnings to businesses which are already struggling from a decline in tourist arrivals and a weak consumer sentiment

Ed 23 hrs ago
Slogans...   catchy....  emotive....  but generally empty...
Obama had "Change we can believe in" 
("More of the Same" would have been more appropriate)
Trump has "MAGA" (Make America Great Again) 
I'll be walking on water before MAGA happens.... 
Then in HK we have "We Burn - You Burn" 
No empty promises there --- they have lit the city on fire --- just walk through Soho to see the burned out hulks of many restaurants and shops ---- the flames are licking at thousands more across the city....  the massive Festival Walk shopping mall is shut.... 
Property owners are walking over scorching coals at the moment (both commercial and residential)...
Airlines and hotels are sweating like a banker in a suit running to catch a cab in Central in August ....   
Tourists can smell the smoke from thousands of km away.... and they are not coming...  would-be expats have gotten a whiff as well - and are not interested in accepting positions in HK...   
We are running a substantial campaign for a company that assists broiling expats with moving money out of Hong Kong at a better rate than the banks.... 
The protesters are following through on their promise....   
Will the gov't call in the water bombers to douse the fire by indicating a willingness to negotiate?   

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