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Hong Kong’s security law is going to devastate its economy
- bitxbitxbitcoin 6y agoThe sad fact of the matter is that Xi has already calculated that and deemed it an acceptable loss in the name of "national security."
- rwmj 6y agoI'm kind of wondering if he will step down next year, or find a reason to keep going. (I don't know what the constitutional arrangements are, but assume that he can only have a single 10 year term)
- green-bottle 6y agoI doubt Xi's going away anytime soon. He got constitutional term limits on Presidency removed. https://www.bbc.com/news/world-asia-china-43361276 https://www.bbc.com/news/world-asia-china-43361276
- deleted 6y ago[deleted]
- jorblumesea 6y agoIf anything, doesn't that strengthen China's hand? More reliance on the mainland for jobs and handouts, more protests and counter protests so they can justify additional crackdowns. Less westerners and less international firms, less exposure to the West. Feels like a calculated move.
- dade_ 6y agoThe CCP can now afford to sacrifice HK, their economy is now much larger than it was in 97.
- adventured 6y agoThey can't. For one thing they desperately need the dollars that flow through Hong Kong. The GDP size is now among the least valuable aspects of Hong Kong as it pertains to China. That has never been primary. Hong Kong is the economic staging point that much of the world uses to enter China's economy. Think of it as a translating middleman, that the world uses to convert from foreign market-based economics to China's domestic way of running things as a rigid command economy that is operated by fiat and is often hostile to foreign operators/owners/investors. Hong Kong's role in that respect has been critical to China's economic rise.
- wahern 6y agoThey're positioning Shanghai for that. Shanghai was something like a free city until WWII. I think things escalated in Hong Kong much quicker than the CCP wanted--Shanghai isn't ready to take its place. But Shanghai is the long game, and business leaders in HK know that.
- khuey 6y agoShanghai doesn't (and never will, at the rate things are going) have things that international companies care about like the rule of law.
- wahern 6y agoI don't disagree, but what matters for HK's fate is what the CCP believes is possible and, presently, particularly what Xi Jinping believes.
- z3ncyberpunk 6y agoSince when do international companies care about laws? If they did, tax havens wouldn't be a thing.
- mafm 6y agoWhen Hong Kong went back to China in 1997, it was 30% of China's GDP. In 2019, HK was less than 2.5% of Chinese GDP. HK has grown since 1997, but China has gotten so much richer that HK is now basically economically irrelevant to the mainland. As far as the mainland is concerned, Hong Kong is now only a political issue.
- adventured 6y ago> More reliance on the mainland for jobs and handouts, more protests and counter protests so they can justify additional crackdowns. Less westerners and less international firms, less exposure to the West. That the US is announcing this now, means the context is already well past the tipping point. The US has been reluctant to go too far regarding Hong Kong, because of its importance to the rest of the global economy as a conduit into China's economy (a large share of all foreign direct investment into China goes through HK, and they depend on it as a large source of US Dollars to conduct trade with the rest of the world). This response is actually quite late, running from behind. The writing has been on the wall in extra large letters for several years now, for much of Xi's reign.
- supernova87a 6y agoI read all these headlines, but when I then followup to read more about the text of the proposed laws [1], I have a hard time seeing that aside from freedom of speech infringements (and ability to imprison, fine based on those -- which are clearly a bit vague in terms of enforcement, but otherwise as bland as a lot of US legislation), these laws are not egregiously different from what exist in some other countries. Aside from the symbolism, can someone enlighten me why they have practical, real worries that this is going to cause some massive political or social change over there? Or whether companies will really shy away from doing business when they already face laws like this elsewhere? Or that the economy there is going to dry up because of this? [1] https://en.wikipedia.org/wiki/National_People%27s_Congress_Decision_on_Hong_Kong_national_security_legislation https://en.wikipedia.org/wiki/National_People%27s_Congress_D...
- jhvkjhk 6y agoThis will cause massive social change because all the headlines said so. Most people won't read the original law, they only read the media's story.
- elliekelly 6y agoThere's a reason businesses use Hong Kong as a home base to access the Chinese market and that reason is the legal system. Hong Kong is like the Delaware of China - an established and reliable system that protects business interests. It's fair, it's transparent, and it's predictable. None of those things can be said about China's legal system.
- Mediterraneo10 6y agoThe special treatment that Hong Kong gets from various other nations, treatment different from mainland China, is dependent on Hong Kong being viewed as autonomous. The laws in the territory aren’t really the point, what matters is the source of those laws (Beijing as opposed to truly local efforts).
- akamaka 6y agoThis law, if implemented fully, will effectively demolish the “one country, two systems” agreement, which has been the basis of Hong Kong’s stability and success for the last 23 years. The Beijing government is pulling out of their side of the deal they made in 1997. What will happen next is not something I can predict, but history shows us some of the things that can happen when communist parties impose their rule onto a new territory. Usually it’s not good for business.
- draw_down 6y agoI rather imagine that was the idea.
- kyrra 6y agoRelated: https://www.wsj.com/articles/u-s-officially-declares-that-hong-kong-is-no-longer-autonomous-11590596133?mod=hp_lead_pos2 https://www.wsj.com/articles/u-s-officially-declares-that-ho... "U.S. Officially Declares That Hong Kong Is No Longer Autonomous WASHINGTON—The State Department has officially determined that Hong Kong is no longer autonomous from China, Secretary of State Mike Pompeo said in a statement Wednesday that holds implications for the future of economic ties and could lead to sanctions against China. The State Department is required by the Hong Kong Policy Act to assess the autonomy of the territory from China. It certified to Congress on Thursday that Hong Kong is no longer autonomous."
- smaili 6y agoBesides sanctions, what other implications would this declaration realistically have?
- Kalium 6y agoPreviously, Hong Kong had a status that let it trade with the US under terms very different from those mainland China is subject to. Clear consequences have not, as near as I can tell, be spelled out yet. The gist is that US trade policy will stop privileging HK. US/HK trade seems to be something like $66 Billion a year, so this is potentially a major thing.
- bigie35 6y agoIt's going to devastate the Swiss watch industry which is already in rough shape from COVID. Hong Kong WAS their No. 1 market. https://www.nytimes.com/2019/09/11/fashion/watches-hong-kong-protests.html https://www.nytimes.com/2019/09/11/fashion/watches-hong-kong...
- av_engr 6y agoBut the Swiss arm industry probably made some good fortune during the protest by exporting equipment to HK police.
- Aunche 6y ago
- m-p-3 6y agoAnd the real losers in this fight here are Hongkongese citizens, who fought for their freedom and ultimately are losing it, on top of facing an economic crisis.
- f00_ 6y agoyeah, hopefully they just move to taiwan
- gpm 6y agoOr the UK, or really anywhere else outside of CCP control.
- magicsmoke 6y agoThe smart ones already moved out in 1997 to Hongkouver. The ones left in HK are those without the money or skills to emigrate.
- elliekelly 6y agoFriendly reminder that wealth does not equal intelligence.
- tasogare 6y agoYet Taiwan is also under threat from PRC. Also emigrating (ie leaving born place, family, friends, etc) is not that easy even when money/job is not an issue.
- ericmay 6y agoIt's a much different threat, however. As I've covered in other threads, CCP action against Taiwan will result in an actual war which may or may not involve the U.S. and to an unknown degree.
- pkaye 6y agoElsewhere I've ready that Hong Kong and Taiwan have a lot of differences like Mandarin vs Cantonese. Also Hong Kong has a much higher GDP per capita.
- voisin 6y agoAnyone else wonder why legitimate, thoughtful responses are being downvoted?
- bitxbitxbitcoin 6y agoWumao aka the 50 Cent Party is "In Da Club."[1] [1] https://en.wikipedia.org/wiki/50_Cent_Party https://en.wikipedia.org/wiki/50_Cent_Party
- av_engr 6y agoI remember seeing somewhere that showed recent transaction of an "internet commentator" (WuMao/50cent). They got a pay raise and earn 70cents a thread/post now. lol
- dang 6y agoPlease follow the site guidelines when posting here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- billme 6y agoThere are a lot of “shadow” voters on HN. One might speculate there’s voting rings, but given HN doesn’t allow a given user’s voting history to be public, impossible to audit it to look dark patterns, puppet masters, etc.
- ganzuul 6y agoI regularly upvote downvoted comments if it looks like someone used a downvote as an "I disagree"-button. Just undo that nonsense.
- dang 6y agoPlease follow the site guidelines when posting here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- lyrachord 6y agoWalking dead says the same as well.
- supernova87a 6y agoSo in terms of after-effects and alternatives, should we all start investing in... Singapore real estate?
- ab_testing 6y agoI don't understand why the world in general is worried about Hong Kong being taken over by the Chinese. In 1842, Hong Kong was a chinese territory. It was taken over by the British during the first and second opium wars and then leased out to the British for 99 years. The keyword here being leased out. If now China is wresting back control of its territory, how is that disputed. The people of Hong Kong always knew that their autonomy was only till the time when the lease ends. Interestingly, When the union flag was raised over Possession Point on 26 January 1841, the population of Hong Kong island was about 7,450, mostly Tanka fishermen and Hakka charcoal burners living in a number of coastal villages. Today Hong Kong's population is 7.5 Million so 1000 times its original population. So every body who came later knew about the lease and the length of the autonomy.
- spacehunt 6y agoThe key detail you missed is One Country Two Systems, which is what allowed Hong Kong to have a financial system integrated with the Western world's, and a legal system that works more or less the same as in London and New York.
- PunchTornado 6y agoonly part of HK was leased for 99 years. the main island was taken over permanently after the war.
- ww520 6y agoThis is better understood in the context of Hong Kong's trade relating to China. HK import volume 2018: USD $627 billion [1] HK export volume 2018: USD $568 billion [2] The top 2 imports are: (see [3]) 1. Electrical machinery, equipment: US$307.7 billion (53.2% of total imports) 2. Machinery including computers: US$66.4 billion (11.5%) HK has only 7 million people. There's no way it can consume that much import nor produce that much export, especially not consuming $307 billion worth of machine equipment. Hong Kong is China's 2nd top trading partner [4]; China is basically using Hong Kong as a trading proxy to evade sanction. Most of the imports are purchased by China because it cannot buy them legally and has to use HK's "autonomous" status to import. Most of the exports are routed by China to take advantage of its tax free zone status. Not to mention 70% of the foreign money going into China every year is via Hong Kong. Killing Hong Kong's "autonomous" status is the stupidest move done by China in the recent years. It allows the outside world to plug the last gateway into China. [1] https://www.tid.gov.hk/english/aboutus/publications/tradestat/wmtimp.html https://www.tid.gov.hk/english/aboutus/publications/tradesta... [2] https://www.tid.gov.hk/english/aboutus/publications/tradestat/wmtexp.html https://www.tid.gov.hk/english/aboutus/publications/tradesta... [3] http://www.worldstopexports.com/hong-kongs-top-10-imports/ http://www.worldstopexports.com/hong-kongs-top-10-imports/ [4] http://www.worldstopexports.com/chinas-top-import-partners/ http://www.worldstopexports.com/chinas-top-import-partners/
- blackrock 6y agoPlugging up the China gateway, also kills the billions of dollars in profits, that American companies make in China. Look it up. Qualcomm now makes over 60% of their revenue from China! Just in Intellectual Property royalties alone. Boeing, Coke, KFC, Microsoft, Apple, AMD, Intel, nVidia, Ford, GM, Starbucks, and on and on.. All American companies. These companies depend on China, to make the cream of their profits, so they can pump that back into new research, to keep their edge. Say goodbye to all those sweet juicy dollars.
- ww520 6y agoWhat these companies do are selling/shipping components to China for assembly and then re-export the final products, which make the biggest revenue and profit. It's relatively easy for these companies to shift the manufacture (assembly) to other countries to keep the same revenue and profit. An India or Vietnam assembled iPhone generates the same profit for Apple. Foreign companies have difficult time making profit in China due to protectionism. McDonald opened thousands of restaurants in China and had to sell their ownership to Chinese companies last year.
- blackrock 6y agoYou have to wonder about the hypocrisy about all this. Every country, every territory, all over the world, has anti-sedition laws. Hong Kong, as part of the agreement between China and Britain, must enact their own security and anti-sedition laws. They had 23 years to do it! Hong Kong failed to do so. Now, a security law, is going to be shoved down their throats, whether they like it or not. Foreign forces have successfully infiltrated Hong Kong, and brainwashed the young, into believing what the western world wanted them to believe. The white western nations love Hong Kong for what it is, because the place is lawless. Capitalism is unbridled over there. It’s predatory, and it eats the young, and the poor. The rich take all the spoils. It’s about laws that favors the rich. But really, Britain should step up, and give these Hong Kong residents, the right to British citizenship. They extracted trillions of dollars from China, from their plunders during their opium terrorism reign. It’s time to give back what they owe. But I doubt it. The British don’t have any morals or balls to do anything. They’re all talk.
- throwaway1997 6y agoWhat are you even talking about. Hong Kong has one of the strongest legal systems in Asia, although it's being slowly eroded by the government. Have you even visited or do you just watch shitty Kung Fu movies and assume the whole place is Kowloon Walled City or Chungking Mansion?
- sunstone 6y agoXi is following the game plan laid out by Putin but at a faster pace. It's not clear to me that Xi is personally as corrupt as Putin but he's definitely as destructive.