Thursday 5 September 2019

The Colour Revolution in Hong Kong


- Cui Bono?

Source: Asia Times; No, this is NOT a protest in the US
The protests in Hong Kong initially started as a push-back against an extradition law passed by the Hong Kong government to extradite suspected criminals from Hong Kong, Macau and Taiwan to mainland China for prosecution. Globally, such an agreement is signed between many nations (Hong Kong HAS an Extradition Treaty with the US and Britain), and is regarded as normal legislature, but as a result of the push-back the Bill was shelved indefinitely. What then is the purpose of the ongoing protests, if said objective was achieved? To get a perspective of what is going on in Hong Kong, we need to understand the historical significance of the current situation.

A Colonial Enclave

Hong Kong was ruled by Imperial Britain for 156 years between 1841 (after the First Opium war against China) and 1997. Contrary to popular belief, Hong Kong was no democracy. There was no elected government, no right to a minimum wage, unions, decent housing or health care, and no freedom of the press or freedom of speech. A British Governor was appointed to rule Hong Kong to ensure the protection of British economic interests, until the handover to China in 1997.

Under British Capitalist rule, Hong Kong became a Bastion of free trade. The (Fascist) Heritage Foundation Index for Economic Freedom has crowned Hong Kong as the freest economy for the last 25 years. This accolade was bestowed primarily as a result of low taxes, strong property rights and overall business freedom; lenient regulations to global commerce and a vibrant entrepreneurial climate; but most importantly, no restrictions on foreign banks. Under this favorable trading environment, Hong Kong produced no fewer than 20 Billionaires who holds the monopoly of all trade.

With its reintegration to China in 1997, the “One country, two systems Agreement” ensured the government maintain the Capitalist system for another 50 years to guarantee that its economic prosperity was preserved. Some would argue it was a British façade to maintain its colonial and economic influence over Hong Kong. Others claim that the Chinese were desperate to have funds released from Hong Kong for development on mainland China, as a sanctions and trade blockade by the British after the 1949 Revolution, ensured no economic progress and development on the mainland. Either way, both parties seemed to derive benefit from it.

At the time of this agreement, Hong Kong’s contribution to the Chinese economy was around 27%. It was largely seen as the economic engine for the mainland. Its GDP growth was an average of 6% per annum. In comparison to OECD first world countries, Hong Kong’s GDP per Capita was the highest at US$49,000 compared to an average of US$30,000. Over the last 10 years, the Government has accumulated a GDP surplus of HK$690Billion (US$88,4B), with HK$1,1Trillion (US$141B) in reserves. Unemployment is the lowest of the OECD countries, with a labour force at 100% of the working population. With low taxes, tariff-free trade and very lenient trade regulations, Hong Kong became the poster boy of free market Capitalism in Asia.

On the surface, everything about Hong Kong looks swimmingly positive, but scratch below the surface and a whole different picture emerges.

An Inequality that competes with the worst

According to a Hong Kong census report, its Gini-coefficient has risen from 0.533 in 2006 to the current figure of around 0.54. When compared to other developed countries, it ranks as the worst, with Singapore at 0.356, United States at 0.391, United Kingdom at 0.351, Australia at 0.337 and Canada at 0.318. Suffice it to say that a Gini-coefficient of 0.54 is one of the worst reflections of inequality globally, as most developed countries have a Gini-coefficient below 0.40. This is a clear reflection of the widening gap between the rich and the poor in Hong Kong, and indicates that the government has no appetite for reducing poverty.

How did this inequality come about in one of the richest regions in Asia?

The total net worth of the wealthiest Oligarchs, in 2018, amounted to HK$1,83Tr (US$234B), which is a tad more than the country’s total fiscal reserves. The top 5 tycoons received HK$23Billion (US$3,2B) in untaxed dividends on investment stocks. A company profits tax of 16,5% is substantially lower than the 28% average of the OECD countries. Although government has accumulated a HK$690B (US$88,4B) surplus over the last ten years, expenditure on Healthcare and Social programs has decreased considerably. The government has spent the least on public services out of all the first world OECD countries. It has failed to allocate sufficient resources to reduce the gap in inequality, and may arguably be seen as a reflection of a poor economic system, where the rich get richer, but the poor do not benefit from the country’s economic fortunes.

The number of the population living in poverty has risen to 21% in the last 10 years. That’s one in every 5 people of the population totaling 1,38 million and that number has increased by 25,000 in the last 2 years. This was primarily due to an aggressive increase in property rentals (sub-divided apartments whose size is less than a parking space), a lower than inflationary increase in the minimum wage, and a rising cost of public services (which is run by Private sector Enterprises – a familiar trend of a Neoliberal Capitalist system). As a result of the government’s failure to allocate sufficiently for Social Programs, the most vulnerable of Society became the victims;
  • A general increase in the number of pensioners falling into poverty, because of pension benefits not keeping up with inflationary costs.
  • One in every three elderly persons lives in poverty, at a rate of 36.6% of the elderly population.
  • A poverty rate among children stands at 25.2%, with a serious shortage of Child care Services.
  • The poverty rate among ethnic minorities is around 23.5%.
Corruption – You’ll find it everywhere

With the most liberal and lenient banking laws globally, Hong Kong has become a sanctuary for illegal money transactions, money laundering, and shady investments amounting to billions of dollars. Because of lax financial regulation, this behavior is seldom called out or exposed by the Hong Kong Authorities.  As such, the Oligarchs are being investigated by the Chinese government for a range of fraud and corruption charges. Among them are Jimmy Lai (Chi Ying), Martin Lee, Joseph Zen and Anson Chan. Their shady business relationships with prominent politicians have been the bedrock of the enormous wealth they’ve acquired. Then there’s Joshua Wong, the leader of the Desmosisto Party who led proceedings during the protests, and Nathan Law the US College student who mobilizes protesters from his dorm room in the US.

Jimmy Lai, the Media Tycoon, is under investigation for corruption involving various political party donations in return for business favours. Anson Chan Fang On-sang, the former Chief Secretary under British Governor Chris Patton, accumulated her wealth during and after her stint as Chief Secretary. Her cozy relationship with the Oligarchs during her tenure has prompted the Chinese government to take a special interest in her accumulated wealth. Martin Lee and Joseph Zen, the primary instigators and organizers of the Occupy Central protests in 2014, is known for their close ties with influential officials in the US Government and receiving millions of dollars from the National Endowment for Democracy, (aka CIA tool to spread “Democracy”) and the National Democratic Institute. These “NGOs”, funded by the US government, are notorious for bankrolling the Colour Revolutions that spread across Eastern Europe, the Middle East and Latin America. [The most recent being the attempted coup by the Opposition (Juan Guaido and Leopoldo Lopez) to the Maduro Government in Venezuela and the Maidan coup in Ukraine in 2014, which was funded and organised by the NED in collaboration with Ukrainian Oligarchs, Petro Poroshenko, Vitaly Klitschko, Yulia Tymoschenko.]

Obama and his “Pivot to Asia”
Obama's Pivot to Asia; US military bases encircling China

The collusion between these influential businessmen and top US government Officials, namely, John Bolton, Mike Pence and Mike Pompeo has been openly flaunted in the media. This relationship started way back in 1994, three years before the handover of Hong Kong to the Chinese government. With funding from the US government through the NED and NDI, the US built up a strong opposition, and pro-Western, Fifth Column of resistance against the Beijing Government. Shortly before the current protests, the Oligarchs met US officials at least once on US soil. The primary agenda for these meetings was to plan and stage the destabilization of the Hong Kong political establishment. The blatant displays of US and UK flags by protesters, further demonstrates the influence these countries have on disrupting the order of business.

US intentions of destabilization on the Asian continent are nothing new.  During the Obama era, his foreign policy for Asia was primarily to “contain” China through his “Pivot to Asia” doctrine. The recent spat in the South China Seas involving the Spratly Islands, and the disruption of shipping by the US navy is testament to the US goal of maintaining control in the region. (What would the US do if the Chinese or the Russians did the same thing in the Gulf of Mexico?) The current trade wars and ever burgeoning trade sanctions on Chinese officials and trading goods is just a continuation of the “Pivot to Asia” policy. The goal is to disrupt the Chinese economy and cause chaos in Asian markets, in order to maintain control over these markets with the exclusion of Beijing’s influence. The liberal banking laws and lenient trade regulations in Hong Kong is used by Global banking giants like the fraudulent HSBC and Citi Group precisely for this purpose.

As mentioned, the initial reason given for the protests was a rejection of the extradition law, which was eventually withdrawn and shelved indefinitely. Then an alternative narrative flaunted in the mainstream media repeats the holier-than-thou belief that the people are fighting to maintain their democratic rights, rather than be ruled by the autocratic Chinese government. Its no coincidence that a similar rhetoric was repeated during all the Colour Revolution protests in Eastern Europe. When asked on the streets of Hong Kong, the protesters were unclear what their goal was and what was the primary reason for the ongoing protests. Some spewed the “democracy” narrative, while others uhm’ed and erred in confusion. There were scattered groups of individuals who voiced their concern of the declining living standards and the spiraling costs of living; these were the protesters with real issues that they felt needed to be resolved.

The general consensus among the adult population in Hong Kong is that they prefer integration with the Chinese government as a majority have learnt over the years how the local Government works in cahoots with the elite, yet exclude the millions from reaping the benefits from the mainstream economy. The Oligarchs predominantly used the naive youth to drive an empty “democratic” agenda that serves the purposes of their Western friends, and masks their real intentions of dodging the Beijing extradition bullet.

So who REALLY benefits from the protests?

To summarize, we need to demystify the myths from reality:

  1.  The narrative of fighting for freedom, democracy, liberty and rights is nothing but a political smokescreen. The double standards displayed by Western nations in supporting this narrative is astounding when compared to the same protest issues happening in France with Gilets Jaunes (Yellow Vests). Here, the French people have been protesting for the last 40+ weeks, against the suppression of their Liberté, égalité, fraternité as a result of sweeping, draconian labour reforms by Emmanuel Macron. The difference between the two acts of rebellion is that in the Hong Kong case, the protesters are being used by Billionaire tycoons to prevent criminal prosecution and the restriction of their rights to milk the economy dry, with the US stoking the fire for their own “Pivot to Asia” agenda. The French situation is a genuine protest of preserving democracy in France and a rebellion against corruption and greed. Only one of these cases is of huge interest to the powers that be, while the other is barely mentioned in the media.
  2. While Hong Kong’s economy was voted as the freest for the last 25 years, due to lenient trade regulations, what is not revealed is that the economy is monopolised by a handful of Billionaires. Not to be excluded from the Oligarchs mentioned earlier, the richest man in Hong Kong, one Li Ka Shing owns a chain of supermarkets, pharmacies and furniture/appliance stores, complemented by thousands of square metres of property; with his son dominating the television services space. One can barely call it a free economy when its run by a few Billionaire tycoons who have easy access to political influence that ensures competition is suppressed in major Industries.
  3. Hong Kongers do not despise their mainland neighbours. Hong Kong is closely intertwined with Mainland China through the economy and society. Most Hong Kongers have family and friends on the mainland and travel there frequently. Businesses are dependent on mainland tourists as their primary source of revenue. Hong Kongers may not agree with China’s policies, but they have much in common with the mainland people.
  4. Hong Kong’s economy is NOT vital to China. Currently, its contribution to China's economy is a measly 2,7%, with occasional funding from the Beijing government. The contributions from Shanghai and Shenzhen province to the Chinese GDP have surpassed Hong Kong and have grown to become the main economic powerhouses in the PRC. The poverty rate in Hong Kong is the highest between all the provinces, compared to only 1% on the mainland. GDP per Capita in real wages has decreased substantially compared to Shanghai and Shenzhen. Over the last few decades Shanghai has become the financial hub of China, where the US dollar is bypassed as the preferred currency of trade. Thus, Hong Kong has become insignificant to the Chinese government, due to its lacklustre growth (only 0,5% GDP growth for 2019), a widening inequality gap, and its abuse of the Capitalist system that is slowly destroying the economic prosperity of the broader population.
  5. Hong Kongers want to remain a British Colony. Based on the diverse reasons for the protests, one could conclude that this is debatable. However, to reiterate, the majority of protesters are the disillusioned youth who are being used to smokescreen an agenda contrary to what they believe for what they protesting. They barely understand what their cause is after the announcement of the withdrawal of the Extradition Bill. Although they don’t agree with China’s policies, most adults favour reintegration, because they are comfortable in the knowledge that the Beijing government is able to provide for them what the Hong Kong administration is lacking, i.e. eradicating poverty among the masses and reversing the inequality gap. This is seen as a minor issue in the eyes of the Hong Kong administration and the elite.
What is the reality?
  1. The "One Country, Two systems" Agreement, allows Hong Kong the status of a semi-autonomous territory with its own Judicial, Legislative, and economic systems. Through the years these systems have been compromised by government deregulation policies that favoured the minority of elite businessmen at the expense of the wider population.
  2. Based on the agreement, the Colonial intervention in the Hong Kong administration were to end as at 1997, signalling the end of the rule of a British appointed governor with the Chief Executive replacing his authority. The Chief Executive's role has become increasingly weak as the policies of deregulation slowly shifted the balance of economic power to private Business.
  3. Hong Kong is no longer the "Goose that lays the Golden egg" for China. That was 20 years ago, but instead has become more of a burden on the Chinese economy when compared to the other high growth territories like Shanghai, Shenzhen, Jiangsu and Shandong.
  4. The intervention of US government officials in Hong Kong is starkly evident and is a direct violation of the handover agreement. Their tactic to disrupt the Hong Kong markets in an attempt to unsettle the Chinese economy, will be less significant than it may have been twenty years ago, when Hong Kong was the primary economic hub for the Chinese economy.
  5. Hong Kong, as a province of Sovereign China has an Extradition Treaty with the US and Britain, but none with China, its benefactor.

At this point, I think it’s plain to see who really benefits from ongoing disruptions and chaos in Hong Kong. The Chinese Government is well aware of the influence of external forces in the rebellion, in conjunction with the motives of the Oligarchs. The fact that they have not cracked down forcefully on the protests, may be an indication that they are not willing to waste political capital on an entity that is serving no real benefit to the mainland in general. That the Extradition Bill has been withdrawn is not a reflection of weakness from the Chinese government, but merely a minor setback. It must be acknowledged that Beijing does not operate on short term objectives, but would have already mapped out a long term strategic goal for the region. Hong Kong has a population of 7,4 Million people compared to China's 1,3 Billion, and Beijing is not going to allow a small group of islanders to pull rank on them.

Could the premature end of the “One country, two systems” Agreement be seeing its final hours? One thing is certain, the Chief Executive, Carrie Lam, has inadvertently ended her political career by withdrawing the Extradition Bill against Beijing's wishes, and will be replaced with someone who can deliver what Beijing wants.