Archive for the ‘Tycoons’ Category

Black-eye Fridays all round

December 19, 2014


cam gowns formalcam jumping in river examscam spies

Of all the great Cambridge traditions — wearing silly capes to dinner, jumping in the river, spying for the Soviets — Black-Eye Friday is surely the finest spectacle. On the last Friday before Christmas (today!) the good townspeople of the city remind us of their presence by getting as drunk as possible and fighting in St Andrew’s street, between Downing and Emmanuel colleges.

cam street booze 5 cam street booze 4 cam street booze 3 cam street booze 2 cam street booze 1

So seriously is this tradition observed that a special medical team from the 254 Medical Regiment Army Reserves is called in to attend to the wounded. A legion of Black-Eye Friday ‘street pastors’ roams the city through the night, sweeping up broken glass, offering flip-flops to inebriated women in high heels, and ‘reasoning’ with those who just want to get on with a good fight. Police gobble up precious overtime and get to tell people to ‘spread ’em’ against the railings of Emmanuel college (through which those detained can conveniently vomit while awaiting their fate).

cam emmanuel

So far the build-up to the most violent day of the year has been auspicious. Sub-editors at the Cambridge News were gifted the most prized headline in journalism before dawn on Monday when a man involved in a violent altercation allegedly bit a dog before dying of a heart attack.

In mid-week, the News sent its crime reporter to test the waters of St. Andrew’s street and he was pleased to report on a large-scale drunken brawl between a group of men dressed in Christmas jumpers. In a separate incident, a pastor offered a blanket to a young, insensible woman whose lower half was clad only in a pair of black lace knickers; she told him to go away, explaining that she had ‘come out like this’. Sadly, the News declined to publish photos of these interesting incidents.

Global link with Chinese food reference

thomas kwok

But it is not only in Cambridge that people are getting black eyes today. Over in Hong Kong, spooky-looking mega-billionaire Thomas Kwok, of Sun Hung Kai fame, has been found guilty of bribing the man who was about to become the second-most powerful politician in the territory (FT sub needed). Tommy might well be sent for a bit of prison congee when sentencing happens next week.

It is all rather shocking. The judge apparently failed to understand the Asian culture of gift giving, in which a consultancy retainer while holding public office, a couple of rent-free flats and an interest-free loan are simply ways of saying: ‘Hello, how are you?’ The sort of treatment that has been meted out to church-going born-again Christian Tommy suggests that almost any act of friendship can be called into question — as, for instance, when uber-billionaire Li Ka-shing gave retiring HSBC chief executive Michael Sandberg a metre-high, solid gold statue of the HSBC headquarters building. Thank god that black-eye Friday is only one day a year.

More from Hong Kong

Bloomberg details testimony from the trial about money, mistresses and paranoia. The ransom paid to Big Spender, who kidnapped elder brother Walter, was also stated in the trial, as HK$600 million. (Big Spender later kidnapped Li Ka-shing’s eldest son, Victor. It is all in Asian Godfathers…)

 

Targeted consumer boycotts

October 8, 2014

Here is a very interesting article from Foreign Policy about possible future strategies in the Hong Kong protests. It is written by academic researchers of successful non-violent protest movements around the world.

Following my FT oped, the idea of targeted consumer boycotts is what jumps out…

In addition… there were lots of comments on the FT article. As with this blog, I don’t think that comments which do not add substance, or challenge substance, in what is being said are useful. But several people did say things on the FT site that seem to me interesting enough to re-post. I was struck by the comparison with Singapore. Is it possible the Harry and the PAP are more responsive on the question of social equity and competition than the Hong Kong government? I think the full answer would be more nuanced than the commenter suggests, but it is an interesting idea.

Great article.  So true.  We Chinese generally don’t take to the streets unless our bellies are empty.  Usually too busy working and making money!

Singapore has a supermarket chain run by the National Trade Union Congress, which was put in place to keep prices competitive.  Its produce is often superior to the so-called upmarket chains.  I remember as a child the beginning of this chain and how it put the lid on the supermarket chains left behind by the British.  In fact, one of those chains, Fitzpatrick ended up going out of business!

As for food, there are many hawker centres where hawker stalls are rented out at ridiculously low rents to stallholders who “inherited” these stalls from their parents or other relatives.  As a result, you get delicious food (from secret recipes passed down generation to generation) at super-low prices.  I just had a “home-cooked” type meal of rice and dishes (1 veg, 1 meat and 1 toufu) for a total of S$3, in the Central Business District.  And it gets cheaper in the “heartlands”.

At the last General Elections, the PAP lost seven seats to the opposition.  It is now implementing even more social transfers in response to popular sentiment.

I think that’s what ordinary Hongkongers want.  Someone to listen to their woes and take action.

I came across the following stats at Bloomberg to quantify the hurt inflicted on so many living in HK as a result of money and power being in the hands of so few.

Hong Kong’s Gini coefficient, a measure of income inequality, rose to 0.537 in 2011 from 0.525 in 2001, the government said last June. The score, a high for the city since records began in 1971, is above the 0.4 level used by analysts as a gauge of the potential for social unrest.

The average gross household income of the poorest 10 percent of the population fell 16 percent to HK$2,170 a month in 2011, from 10 years earlier, according to a government report. The comparable income for the richest 10 percent jumped to HK$137,480 a month, a 12 percent increase.

Not good for creating social harmony.

Studwell’s refocus on economic questions is correct, and would be very good for Hong Kong, but it would never receive the kind of universal support that the Western press has given the democracy movement. In fact, the West is proposing the opposite of Studwell’s economic fairness: to break the current Chinese social structure and open the gates for multinational business, a kind of Yeltsin years for China. Every Western journalist knows that democracy without campaign finance will lead to the election of money – i.e., the election of a tycoon or someone backed by one (CY Leung was an anti-tycoon candidate compared to Henry Tang, and look where he is now).  Studwell seems concerned with actually improving Hong Kong, but that is not what the press coverage of the democracy movement is about, otherwise they would have used real facts rather than cinderella stories. Nevertheless, the FT should be commended for printing this piece, as well as for keeping comment board open.

There is no questions that HK is run by monopolies, duopoly and oligopolies and things are more expensive than it could have been.

However, the author who learn much by looking in the back yards, especially the VAT inclusive prices here..  For example, one can run a price comparision between watsons.com.hk and boots.com, Johnson baby shampoo 500ml cost £3.35/£0.67 per 100ml at boots and cost HKD56.9/£4.60 for the 800ml version -> £0.575 per 100ml.

Toyrus HK : Nerf CS18 : HKD399.9 / £32.07,  ToysrUS UK : £39.99
HK Electricty prices : Max HKD186.4 or £0.1495 per kwh
http://www.hkelectric.com/web/DomesticServices/BillingPaymentAndElectricityTariff/TariffTable/Index_en.htm

UK Electricity prices: British gas £0.1535 per kwh.

Looks like we all have our own ‘monopolies’ problem to deal with (for us, including the one at Brussels).

It is encouraging to read an FT an article which says it like it is regarding Hong Kong and much of Asia, perhaps best summarised as ‘Winner takes all, loser hard luck’. Consider the Gini coefficients of wealth inequality and you’ll find Hong Kong and Singapore, two of the ‘wealthiest’ places on the planet with the worst ‘developed nation’ Gini coefficients, these being on a par with some of the poorest African nations. It’s long been apparent that the propertly developers, Government, ‘managed land releases and sales’ operate in a manner beneficial to the few and disenfranchising the majority. Arguments that this is a hang over from the past don’t quite stack up, as the present leaders have all the powers they need to do something about it. One has to ask why not, with the answer perhaps reducing to such tolerance of vast inequalities being an inherent part of the region’s social fabric and culture. Surprising that the majority have tolerated this for so long but then this too, fortitude in the face of injustice, even from within, is a regional trait. Perhaps, with modern dissemination of information, so that it is clearer to all as to what is going on, the majority will start to exercise their influence. Without this, nothing is likely to change.

How to make enemies and alienate people…

October 6, 2014

Here is the FT op-ed I wrote over the weekend. It just went live on their online edition.

Can’t say it is likely to get me many tycoon dinner invites, but I do think it is true:

 

 

October 6, 2014 5:14 pm

Hong Kong should focus its fight on the tycoon economy

The real target is the anti-competitive, anti-consumer economy, writes Joe Studwell
A woman holds a placard at a large pro-democracy protest in Hong Kong on October 1, 2014. Hong Kong has been plunged into the worst political crisis since its 1997 handover as pro-democracy activists take over the streets following China's refusal to grant citizens full universal suffrage. AFP PHOTO / ALEX OGLE (Photo credit should read Alex Ogle/AFP/Getty Images)©AFP

Hong Kong stepped back from the brink on Friday night, when chief executive CY Leung belatedly authorised a senior official to “hold talks” with protesters and those same protesters decided, for now, not to enter government buildings. It was a fortunate outcome. Beijing would characterise the occupation of official property as an attack on the Chinese state.

What Hong Kong needs is not a strategy that backs Xi Jinping, the Chinese president, into a corner, but one that resonates with his own mindset. This is why the protesters should refocus on Hong Kong’s tycoon economy, and the anti-competitive, anti-consumer arrangements that define it. You may think,like the Heritage Foundation, that Hong Kong is a free market. However, except for external trade, it is not. Instead it is what one of the richest men in the city once described to me as “a nice bowl of fish soup”. That soup is fed to the few, making ordinary people poorer, stoking resentment, and indirectly contributing to acute pollution.

Cartels are everywhere in Hong Kong. Supermarkets are a duopoly, one whose pricing power allows the chains to charge higher prices for the same products in some of Hong Kong’s most deprived areas. Drug stores are a duopoly. Buses are a cartel: high-priced, mostly cash-only, running shoddy, dirty diesel vehicles with drivers who earn a pittance. Electricity is provided by two, expensive monopolies that handle everything from generation to distribution, one on Hong Kong island and the other in Kowloon. The container ports are an oligopoly, with the world’s highest handling charges. Yet they will not supply onshore electricity to vessels, which must instead run diesel generators that pollute the city air.

The biggest stitch-up remains the lousy construction standards and sky-high costs in a residential property market dominated by the “Four Families”, which in the 1990s were estimated to be selling property for between two and four times what it cost to develop.

You may think of the territory as a free market but, except for external trade, it is not

Add in the jiggery-pokery of a Boys’ Own stock market with 1970s-style governance, and a taxation system that tycoons circumvent by taking out their money through tax-free dividends, and you begin to get the picture.

Hong Kong has had a Competition Ordinance and a Competition Commission since 2012. But so far nothing has changed. In a striking contrast with mainland China, where the Communist party after 1989 first increased transfer payments to the urban poor, and then increased transfers and cut taxes for the rural poor in the 2000s, the Hong Kong government lets a colonial rentier economy carry merrily on.

Mr Xi launched his new administration with not only a brutal anti-corruption campaign, but also an anti-monopoly drive. Unfortunately he seems unaware that Hong Kong is at least as rigged as the mainland.

So here is a plan. Speak to Mr Xi in terms he understands. Refocus the protests on the cartels. I am no protester, but it is not hard to think of peaceful tactics that would be difficult for the tycoons to ignore as they sweep into their basement car parks and ascend in private elevators to their penthouse offices. Where possible, boycott the cartels.

Would this be the end for the tycoons? Not at all. In my experience they are people of extraordinary entrepreneurial acumen. Like all of us, they enjoy a capacious free lunch. But if that is taken away they will adjust and add more value to the economy by doing so.

It is time for Hong Kong to work for the majority. If the protesters make Mr Xi understand the economic problem, it becomes easier to compromise on the politics – probably with a more open nomination process in 2022. I hold, perhaps wrongly, that Beijing’s intransigence is born of ignorance, not malice.


The writer is author of ‘How Asia Works: success and failure in the world’s most dynamic region’

 

More:

This just went up from Han Donfang. Very much worth a read. The lead explains who he is if you do not know.

And here is a nice piece from The Age about CY Leung trousering US$7m during the sale of his insolvent firm. Now that is leadership.

Rubber bullets can and do kill

October 2, 2014

rubber bullets arrive

This is a picture of rubber bullets being prepared on Hong Kong island today, 2 October 2014.

It looks like protesters are ready to attempt to break into government buildings to occupy them and that police, after first using tear gas (not yet done so, but will), may be ready to shoot.

I maintain that the protesters would be better to refocus on a strategy of blockading the Tycoons’ Towers, most obviously the car parks, thereby forcing them to use the main door like everybody else when Hong Kong goes back to work. At such a point there might be an opportunity to confront KS Li, Lee Shau-kee, Robert Kuok and the rest. CY Leung won’t meet the people, so what about the tycoons? They are the ‘prefects’ of this system.

The other good target would be to stake out these guys’ homes, including on Deepwater Bay Road, the tycoon alley where many of them live. Then there is the golf club, where they play in the early morning.  But the most obvious target is the Towers.

The point is to refocus the protest on Hong Kong, the backward nature of government, the monopolies and oligopolies that lead to far higher real estate, utility, supermarket, bus fare and other costs than should be the case. This is why Hong Kong needs genuine universal suffrage.

A move on government offices will be deemed in Beijing to be an attack on the state. This may be very hard to reverse back from to a position where an accommodation can be reached, something I believe is entirely possible. Plus people are quite possibly going to get maimed or killed.

A move on the tycoons, by contrast, is something that everyone can live with. They’ll be absolutely livid, but they are big boys and can deal with it. Start with K.S. and Cheung Kong Tower. He’s the smartest of the gang. Greedy but affable and, let’s remember, the son of a teacher.

CY Leung will hold a press conference at 11.30pm tonight, Hong Kong time (very soon). More in a bit.

 

Update (midnight in Hong Kong):

CY Leung said at the presser that he has asked a senior civil servant to ‘hold talks’ with protesters.

Here is livestream that collates 4 different live TV sources in HK and contains some English notes for those of us who can’t do Cantonese. You’ll get a couple of ads before it runs.

Happy holiday?

September 30, 2014

Tuesday 30 September 2014 in Hong Kong. Tomorrow is China’s National Day, symbol of ‘Liberation’, symbol of the Party. What will it bring?

Central has not yet been occupied, so that is one thing.

But if I was these students and workers and housewives and children, I would occupy the space around the main tycoons’ towers. Each of the big boys works out of a penthouse in their HQ tower. Imagine if they couldn’t get in! Start with Cheung Kong Tower in Central and carry peacefully on from there.

I should say, of course, that as a gweilo I ought not to be recommending such things. But it is important to remember that this protest, at least a decade in the making, is about far more than just the electoral arrangements for 2017. It is about justice for the ordinary man and woman, about fair trade, about an end to rip-offs and the economics of the few. I have always said that I love my tycoon acquaintances, but they know as well as anyone that life moves forward and that the real tycoon is able to adjust.

 

Hong Kong, the day before 1 October

Hong Kong, the day before 1 October

Link:

Latest from Keith Bradsher in the NYT here, of interest mainly because of CY Leung’s drivel half way down the story. He really is not a good advertisement for Bristol Polytechnic. Perhaps that is why they changed their name to the University of the West of England.

Video:

From Dominic Meagher, 8.30-9pm Hong Kong time, Tuesday 30 September, wandering through the crowds in Admiralty. This is his Facebook page. This should be the specific video. Huge numbers of people, few police, no tear gas, party atmosphere (thus far)…

Cripes:

Forgot about Hemlock, whose blog is here. Just now he is writing about snowy-haired nutcase Robert Chow. But what we really want to hear is dear, politically-rather-well-connected Hemlock explain his erstwhile deep affection for CY ‘He’s going to change things’ Leung. Think I’ll send him an email…

Chinese:

Here is what Xi Jinping says about Hong Kong and Taiwan in his National Day speech. It seems accommodating inasmuch as he reasserts commitment to the Basic Law and does not (if I am reading this right) say anything about ‘Basic Law as we decide to interpret it’. But of course they have already said that, so who knows?

不断推进“一国两制”事业,是包括香港同胞、澳门同胞在内的全体中华儿女的共同愿望,符合国家根本利益和香港、澳门长远利益。中央政府将坚定不移贯彻“一国两制”方针和基本法,坚定不移维护香港、澳门长期繁荣稳定。我们坚信,在祖国大家庭中,香港同胞、澳门同胞一定能够创造更加美好的未来。

兄弟同心,其利断金。解决台湾问题、实现祖国完全统一,是海内外全体中华儿女的共同心愿。两岸同胞要继续努力,巩固和发展两岸关系和平发展良好势头,坚持一个中国原则,坚决反对“台独”分裂活动,为祖国和平统一创造更充分的条件,使两岸一家亲、共筑中国梦。

 

Update, 1 October:

All is well on 1 October. No violence around the China flag-raising ceremony by the Convention Centre in the morning, just well-earned heckling for CY Leung.

This is a very useful piece linking HK, Taiwan and Xinjiang by Michael Cole in The Diplomat. Good context for anyone who needs it, which is pretty much everyone. This is not bad by the BBC’s Carrie Gracie trying to figure what might be going through Xi Jinping’s head at this point; of course it is speculative, but Carrie has a lot of experience. In Chinese, this is today’s People’s Daily (the CPC mouthpiece) editorial on Hong Kong. It is tough-ish, but as various well-informed people have pointed out, not as tough as the infamous 26 April 1989 People’s Daily editorial that presaged the troops going in. As I said yesterday re. Xi Jingping’s national day speech (above, in Chinese), Beijing appears to be leaving a little wriggle room. But will it be a deal that wriggles through, or people with guns?

Hong Kong and the Emperor… and Tohti

September 25, 2014

A pleasant, somewhat lazy, couple of weeks <working> in Hong Kong and Shenzhen. Sitting on a surprisingly pleasant Shenzhen beach this week I watched the Hong Kong tycoon fraternity make its school trip to Beijing. Led by Head Boy Li Ka-shing, it was a full court press. Senior prefects Lee Shau-kee and Robert Kuok kept good order, while the dim but dependable Tung Chee-hwa explained his love of games and recited a short Ode to the Celestial Throne before the assembled Chinese leadership. A tremendous time was had by all, with the boys remarking that carpet and decor quality in the Great Hall is now almost as good as at home.

On the street of course, things are not quite so happy.

While the sixth form of St. Swag’s was up in Beijing learning how all is well in Hong Kong as is, school kids in the Special Administrative Region are boycotting classes this week to protest China’s gerrymandering of the 2017 election arrangements. If you haven’t followed it, the game is that everyone in Hong Kong will get a vote (as promised in the Basic Law), but Beijing will choose the candidates (<two or three>). It is actually a step back from the current arrangements which at least allowed the election of Henry Tang to Chief Executive to be blocked, replaced instead by the ineffectual but more brain-functional CY Leung.

Hong Kong, though it is rarely stated, is now just like Taiwan. The Taiwanese call it <Three Thirds>. In Taiwan, one third is Deep Blue (older, KMT, pro mainland integration). One third is Deep Green (younger, Democratic Progressive Party, pro independence). One third is in the middle.

So too, with only modest variation, in Hong Kong. There is no explicit pro independence camp but the generational gap is just the same. Hong Kong, like Taiwan, has entered its 1960s. And in the 1960s students on campus get beaten, and even shot if you remember, in their fight for what is right.

If you care at all, it is time to do whatever you can to prevent violence from arriving. You might write to the Chinese. But if you are a gweilo, that is likely counter-productive. Better to write to the American and British consuls in Hong Kong (emails below), and to the British and American governments, urging them to stand up for the spirit as well as the letter of the Basic Law, and to be ready to grant visas to Hong Kong students who will get arrest records, even criminal convictions, for peacefully protesting Beijing’s behaviour. It does make a difference if you have a moment.

Meanwhile, the Emperor. At the same time it is gently screwing Hong Kong, the Xi Jinping government’s decision to give a life sentence to, and seize all the assets of, the leading, non-separatist voice of Uighur nationalism, Ilham Tohti, is surely the most horrible, colonial, racist act we have seen from China for a very long time. Obama may have a lot on the Middle East, but he needs to draw some lines in the sand in East Asia. There are still plenty of rational voices in China, like there were in 1920s Japan. But the longer this stuff goes on, the harder, I think, the negotiating process becomes. I do not want to read this blog entry in 10 years time and find that some very unpleasant historical analogies going through my head were justified.

Well, enough of the misery. Tomorrow I return to Hong Kong for dinner with dear Hemlock. Back when CY Leung was elected, Hemlock had a hard-on for him, said he was going to change stuff. Not so much on the democratisation front, which would have to occur through a degree of managed confrontation, but in terms of the godfather economy and all those stitch-up oligopolies in real estate and retail and the securities markets. You gotta love Hemlock, even if he’s not as funny as he used to be. It is so heartening that after all these decades, the old boy could still be an ingenue (accent missing). It is so strange that it should turn out that I am the cynical one.

tycoons in beijing 0914

Above: Can’t get a bigger photo. Running anti-clockwise from Xi Jin-ping on the right, looks to me like Tung, K.S., Lee Shau-kee, Robert Kuok, Henry Cheng (son of Cheng Yu-tung, now decrepit), Lui, possibly Michael Kadoorie, and finally David Li of Bank of East Asia.

Saint Swag’s. September 2014 School trip to Beijing. 6th Form boys attending.

(Parents please note: the wearing of non-school uniform items such flat caps is strictly against school policy, including on school trips. Lui Senior (Cuthberts), who has already been in trouble this term for playing cards in dorm, has been fined a week’s tuck and given leaf sweeping for his transgression. This sort of thing will not be tolerated at St. Swag’s.)

Cheung Kong (Holdings) chairman Li Ka-shing

Chairman of Kerry Group, Robert Kuok

Chief executive officer of Shangri-La Asia, Kuok Khoon Chen

PCCW chairman and younger son of Li Ka-shing, Richard Li Tzar-kai

K Wah Group chairman and Galaxy Entertainment Group founder Lui Che-woo

Henderson Land Development chairman Lee Shau-kee and his elder son Peter Lee Ka-kit

Sun Hung Kai Properties Alternate Director Adam Kwok Kai-fai

Bank of East Asia chairman David Li Kwok-po

New World Development chairman Henry Cheng Kar-shun

CLP Holdings chairman Michael Kadoorie

Sino Land chairman Robert Ng Chee Siong

Harilela Group vice-chairman Gary Harilela

Hang Lung Properties chairman Ronnie Chan Chichung

Shui On Land chairman Vincent Lo Hong-sui

MGM China’s co-chairman and daughter of casino mogul Stanley Ho Hung-sun, Pansy Ho Chiu-king

Ian Fok Chun-wan, son of the late Henry Fok Ying-tung

Wharf (Holdings) chairman Peter Woo Kwong-ching

Asia Financial Holdings chairman Robin Chan Yau-hing

Li & Fung honorary chairman Victor Fung Kwok-king

Lai Sun Development chairman Peter Lam Kin-ngok,

Oriental Press Group former chairman Ma Ching-kwan

Glorious Sun Enterprises chairman Yeung Chun-kam

Phoenix Satellite Television chairman Liu Changle

Swire Pacific director Ian Shiu Sai-cheung

Shimao Property Holdings founder and chairman Hui Wing-mau

China Grand Forestry Resources Group founder Ng Leung-ho

Goldlion Holdings deputy chairman Ricky Tsang Chi-ming

Novel Enterprises vice-chairman Ronald Chao Kee-young

HKR International managing director Victor Cha Mou-zing

Hongkong and Shanghai Banking Corporation chief executive officer Peter Wong Tung-shun

Prof Anna Pao Sohmen, daughter of late tycoon Pao Yue-kong

Far East Consortium International chairman David Chiu Tat-cheong

Shun Hing Group vice-chairman David Mong Tak-yeung

Galaxy Entertainment Group deputy chairman Francis Lui Yiu-tung

Dah Sing Life Assurance Company chairman David Wong Shou-yeh

Far East Holdings International chairman Deacon Chiu’s son, Duncan Chiu

Bank of China International Holdings deputy chief executive officer Tse Yung-hoi

Sing Tao News Corporation chairman Charles Ho Tsu-kwok

More:

UK Consul General to write to about standing up for the Basic Law, granting visas, etc is Caroline Wilson. hongkong.consular@fco.gov.uk

US Consul General to write to about standing up for the Basic Law (an agreement lodged with the United Nations), granting visas, etc is Clifford Hart. hartca@state.gov

Why foreigners do have a dog in any Hong Kong fight. Re-posted NYT oped.

Op-ed about the Hong Kong situation by former Chinese political prisoners in the Wall Street Journal.

Video stream of Hong Kong student protests this week.

On why allowing everyone to vote but restricting the candidates isn’t democracy, Georgetown professor Don Clarke offers this nicely phrased US 3rd Circuit decision in a corporate voting case from 1985. Here’s the actual law library link (Durkin v National Bank of Olyphant). Of course what the Chinese are doing is just what British colonial governments did, but let’s not go there.

<We rest our holding as well on the common sense notion that the unadorned right to cast a ballot in a contest for office, a vehicle for participatory decisionmaking and the exercise of choice, is meaningless without the right to participate in selecting the contestants. As the nominating process circumscribes the range of the choice to be made, it is a fundamental and outcome-determinative step in the election of officeholders. To allow for voting while maintaining a closed candidate selection process thus renders the former an empty exercise. This is as true in the corporate suffrage contest as it is in civic elections, where federal law recognizes that access to the candidate selection process is a component of constitutionally-mandated voting rights.>

On Tohti:

Teng Biao writes in The Guardian that the guy sent down for life actually deserves the Nobel. Here is the background.

Nicholas Bequelin writes in the NYT that the treatment of Tohti will radicalise more Uighurs. This is your key piece of analysis.

English translation of Chang Ping article trying to find logic in the treatment of Ilham Tohti. See also the translated extracts from Tohti’s statement after sentencing, below.

Ilham Tohti’s statement after sentencing in Chinese. Here are some heart-rending extracts in English:

<My outcries are for our people and, even more, for the future of China.

Before entering prison, I kept worrying I wouldn’t be able to deal with the harshness inside. I worried I would betray my conscience, career, friends and family. I made it!

The upcoming life in prison is not something I’ve experienced, but it will nonetheless become our life and my experience. I don’t know how long my life can go on. I have courage; I will not be as fragile as that. If you hear news that I mutilated or killed myself, you can be certain it is made-up.

After seeing the judgment against me, contrary to what people may think, I now think I have a more important duty to bear.

Even though I have departed, I still live in anticipation of the sun and the future. I am convinced that China will become better, and that the constitutional rights of the Uighur people will, one day, be honored.

Peace is a heavenly gift to the Uighur and Han people. Only peace and good will can create a common interest.

I wear my shackles twenty-four hours a day, and was only allowed physical exercise for three hours out of eight months. My cell mates are eight sentenced Han prisoners. These are fairly harsh conditions. However, I count myself fortunate when I look at what has happened to my students and other Uighurs accused of separatist crimes. I had my own Han lawyer whom I appointed to defend me, and my family was allowed to attend my trial. I was able to say what I wanted to say. I hope that, through my case, rule of law in Xinjiang can improve, even if it is only a baby step.

After yesterday’s sentencing, I slept better than I ever did in the eight months (of my detention.) I never realized I had this in me. The only thing is don’t tell my old mother what happened. Tell my family to tell her that it’s only a five-year sentence. Last night, in the cell next door Parhat [student of Tohti’s] slammed himself against the door and cried out loud. I heard the sound of shackles, nonstop, as they were taken to interrogations. Maybe my students have been sentenced too.

(To his wife): My love, for the sake of our children, please be strong and don’t cry! In a future not too far away, we will be in each other’s arms once more. Take care of yourself! Love, Ilham.>

Only in Chinese on Hong Kong:

Wen Wei Po, Beijing mouthpiece in Hong Kong, says that Hong Kong student organiser Joshua Wong has received training from <black hands> in the US navy. I understand there is lots of this stuff doing the rounds in the official press.

Update, 29 September:

Well, it’s game on after a weekend of student-led confrontations with the police. Parts of HK island (Admiralty, Causeway Bay) are at a standstill, but Central still functioning. Speculation that Xi Jinping is going to can CY Leung, try to buy off the student leaders with small gestures. A talk-first strategy worked well with both Tiananmen in 1989 and more recently with the Falunggong protests in Beijing. But once you have lulled protesters into a false sense of security in HK, it is not so easy to send in secret police to round up the organisers, let alone send in troops. This is a whole new ball game for the CPC…

Here are the early instructions from the Propaganda Dept to mainland media outlets about handling information on the Hong Kong protests, courtesy of China Digital Times:

<All websites must immediately clear away information about Hong Kong students violently assaulting the government and about “Occupy Central”. Promptly report any issues. Strictly manage interactive channels, and resolutely delete harmful information. This [directive] must be followed precisely. (September 28, 2014)

各网站对香港学生暴力冲击政府和“占中”相关信息一定要立即清理,有问题及时报告。严格管好互动栏目,坚决删除有害信息。要严格执行。[Original text]>

At the end of this SCMP story on the protests is a 9-minute embedded video interview with student leader Joshua Wong (you will have to do some kind of registration to access this). It is well worth watching. Not only Beijing, but the HK tycoons, have a very serious young man on their hands.

28 September 2014

28 September 2014

HK 280914b

28 September 2014

28 September 2014

Cordon created by police around Tamar/Admiralty, keeping protests out of central for now. 28 September

Cordon created by police around Tamar/Admiralty, keeping protests out of central for now. 28 September

 

Sounds like my book

October 31, 2013

A long trip through Malaysia, Indonesia and China leaves me more convinced than ever that east Asia has two distinct destinies in economic development terms, and that the south-east Asian states are on the wrong side of the tracks.

I start off in Malaysia, where the United Malays National Organisation (UMNO) holds power despite winning a slightly smaller vote share than the opposition in May’s elections. The effect has been a skittish, neurotic administration confronted with deep-seated developmental problems it has no desire or capacity to address. The government commissions reports from the likes of McKinsey as if believing foreign management consultants are likely to come up with some brilliant idea to solve the nation’s problems. In reality, locals know all too well what the issues are — a coddled plantation sector and ignored smallholders in agriculture, low levels of indigenous industrial competitiveness, an untamed army of oligarchs that does almost nothing to promote national economic development and recycles its cash flows offshore, a financial system that pushes out consumer debt rather than supporting industrial development, and resurgent speculation in high-end real estate. Despite oil and gas revenues that cover around two-fifths of the national budget, the government still runs a budget deficit of 5 percent of GDP as it strives to buy off discontent.

In Malaysia today, there is a general sense of malaise, compounded by a recently much increased crime rate — particularly theft, burglary and violent crime. This was never a country that you associated with crime (other than expropriation by godfathers), but that seems to have changed.

On 9 October, a nearly 90-year-old Mahathir was kind enough to grant me a meeting. After corresponding with him during the writing of How Asia Works, I was looking forward to sitting down with him. However the experience did nothing to change the conclusions I had already reached.

Here are the highlights: On agriculture, Mahathir insisted that plantations always produce better yields than smallholders. On Malaysia’s tycoons staying out of manufacturing and not contributing to industrialisation, he commented: ‘They do what they think they can do best. We don’t direct them.’ On the future of economic development, he said he never did, and does not now, see ASEAN as a vehicle for economic policy cooperation and joint development. ‘Economic cooperation is secondary in ASEAN,’ he said. Instead Mahathir talked of the tourism potential of millions of Chinese visitors and of China as a source of cheap manufactured products for Malaysia; he favours buying a Chinese high-speed rail line to run the length of the country.

For me, the takeaway was that Mahathir doesn’t think a country like Malaysia ‘ought’ to be able to compete with a country like China. His parting shot was to say that it was unfair of me to compare the manufacturing development of Malaysia and Korea in How Asia Works: ‘We are not a single ethnic country. We are a multi-ethnic country. That makes it more difficult. They [Malaysia’s ethnic groups] are not at the same level.’ It was the race-based outlook that I describe in How Asia Works as having been so devisive and detrimental to effective policy in every south-east Asian country.

Would Indonesia be any different? I spoke at an event generously hosted by Trade Minister Gita Wirjawan, who read How Asia Works soon after it was published and announced himself ‘a fan’. However, while he might agree with the analysis of south-east Asia’s problems, at the event he offered no clear statements as to policy changes he believes are required if Indonesia is to improve its development prospects. All I picked up in Jakarta was the same, general sense of discontent after 15 post-Asian crisis years of partial economic recovery based on commodity trade (principally with China) and zero industrial progress.

On this topic, I spent the day before the Trade Ministry event at what used to be called IPTN in Bandung, now known as Indonesian Aerospace. People I asked in Jakarta assumed that the aircraft-building industrial policy adventure sponsored by BJ Habibie — which the IMF insisted be cut off from further state funding as a condition of providing credit to Indonesia in 1998 — is long dead.

But not so. IPTN/IAe lends a little support to my assertion in the book that even failed industrial policy will produce some tangible benefits (just very expensive ones compared with well organised industrial policy). Up in Bandung, IPTN had 15,600 employees, including 3,500 engineers, before the Asian crisis hit. The firm was receiving monthly government remittances to cover development costs for Indonesia’s indigenous N-250, 50-seat turbo-prop aircraft. With almost no cash reserves, when the cash was cut off the firm went into freefall. Management did not stabilise the business until the headcount had been cut by more than 12,000, to just 3,000. They did so by turning what had been an aircraft building business into a low-cost parts supplier, particularly to Airbus.

Today, the two N-250 prototypes sit disconsolate in a parking area of the 80 hectare site (the one at the bottom is three metres longer and can seat 70, so was really the N-270, as in two engines, 70 seats). Suharto himself launched the first prototype in 1995, naming it Gatotkoco after a character in Hindu-Javanese legend. Something of the order of US$1 billion had been pumped into the N-250 programme by 1998. The renamed Indonesian Aerospace kept flying its prototypes — racking up 1,200 test hours — until 2007 in the vain hope of finding cash to finish the project. The outside technical reviews were generally positive, but the will and capacity of the government to back the project were gone.

IPTN N250 GatotkocoIPTN N250IPTN N270

After the state cash flow was cut, Indonesian Aerospace first obtained work making wing ribs for the Airbus A380. Then it obtained contracts for the A320, and for Boeing and other aircraft. There was no way for the firm itself to invest in development projects because residual government debt made it unbankable. Only in 2011 did the government agree to a debt write-off (technically a debt-equity swap). This was followed in 2012 by a Rupiah1.2 trillion (circa US$100m) ‘goodbye’ capital injection from the state.

Indonesian Aerospace continued to assemble small aircraft after the crisis that it had assembled before 1998 in a joint venture with a Spanish firm — now owned by Airbus Military. Gradually it has managed improve the terms of its cooperation with Airbus, moving, for instance, to profit sharing on the most popular model it builds. Critically, the post-crisis era focused Indonesian Aerospace on selling aircraft as well as making them. It currently exports around one-fifth of the small aircraft it assembles — to Thailand for rain-seeding, to South Korea for coastal surveillance, to Malaysia, Pakistan and Turkey. Exports, however, are still nowhere near as strong as they were in Embraer’s formative stages in Brazil, before that firm went on to be truly globally competitive. Indonesian non-weaponized defence procurement is the current backbone of Indonesian Aerospace’s order backlog, which stands at US$1 billion.

Perhaps most interesting is that the firm, after conducting five years of market studies (what would have been an unthinkably long period of analysis in the pre-crisis era when it was rushing straight from the N250 to the N2130, a 130-seat jet aircraft), has committed to develop a new civilian aircraft of its own. Indonesian Aerospace managers say they have 150 non-binding commitments for a very small, 19-seat passenger aircraft designed for low-cost travel between second-tier cities in the provinces. Indonesia, like the rest of south-east Asia, already has a booming low-cost sector between key cities based on Boeing and Airbus aircraft. This is an attempt to grab a bit of market share below the radar of the big boys. The aircraft will work off short landing strips, be able to carry substantial amounts of freight relative to passengers, and is designed for use with minimal air traffic control; a prototype will fly in 2015.

Indonesia’s industrial policy was badly conceived, with too little competition, no involvement of leading entrepreneurs, and almost zero export orientation. Even today Indonesian Aerospace has failed to build a supplier cluster around Bandung. But it looks like the firm may in the end produce a marketable aircraft worthy of the name of indigenous technological capacity.

The big point of contemporary comparison, of course, is China. Earlier in 2013 there was a mild panic among foreign observers that that country’s accumulation of bad debt — largely a result of the aggressive industrial policy orientation of its financial sector — could lead to imminent financial melt-down. But not so. Unlike Indonesia, which had no capital controls in 1997, China is protected from changes of sentiment about its banks by capital controls that trap money in the country and keep the system liquid. China’s capacity to grow away from debt is declining as its growth rate gradually falls, but the basic fact of capital controls still meant that this year’s panic was a storm in a teacup. There is always a lot of waste involved in industrial policy, but control of the domestic financial system allows a government to socialise the cost.

Riding the high-speed rail system (HSR) from Shanghai to Suzhou to Xuzhou to Beijing, visiting firms, I also reflected how massively greater is China’s technological capacity today than was Indonesia’s when that country hit the skids in 1997-8. The entire Chinese economy makes stuff that the world economy is willing to pay for. Manufacturing activity is not confined to one or two bellwether projects like IPTN or Malaysia’s Proton. If crisis struck China today, the country would be way more competitive, in more value-added activities, once the crisis abated than was Indonesia after 1998. And China doesn’t face a crisis today because it has not been dumb enough to abandon capital controls. I suspect the country only has one more economic cycle to go before its control over capital is insufficient to escape crisis — the irony of its present stage of development is that China must begin to deregulate finance in order to waste less capital in an era of slowing growth. But by the time crisis does strike, China’s technological competitiveness and its roster of globally competitive large firms will be substantially higher again that it is today.

So what I came back to England thinking is that there is just a lack of political will and political self-belief in south-east Asia to do things differently. I am not sure it was ever really any different. Even Mahathir, who talked the best game in the region in terms of promising a shift to a Japanese-Korean model when he was premier, says that Malaysians cannot really follow the model because they are not racially up to it. On that view, you have lost before you start.

Singapore reaps what it sowed

June 22, 2013

Sing smog 1 Sing smog 2

 

 

Sing smog 3

 

See the 22 April AFP story below about the life-threatening smog enveloping Singapore. It comes (largely) from deliberately set fires on and around oil palm plantations in Sumatra, fires illegally set to facilitate land clearance.

You need additional information to read the story properly. Here it is. The story identifies two firms as largely responsible for the fires:

1. APP (Asia Pulp & Paper). The tale is too long to tell in detail here. Look it up in Asian Godfathers. Controlled by the Widjaya family, who defaulted on US$14 billion of debt (no, that is not a typing error) during the Asian crisis and then set out to buy the debt back at cents on the dollar. They did this by the most extraordinary acts of financial subterfuge, many of which were run through Singapore-based and Singapore-‘regulated’ institutions. A 2002 petition by creditors to the Singapore courts to have APP taken over and run by a local administrator was rejected. The Widjayas are serial law breakers. Where is their business run from? Singapore. Where did they hole up, and who protected them, after the Asian crisis? Singapore.

2. APRIL (Asia Pacific Resources International Holdings Ltd). Controlled by Sukanto Tanoto, who in the wake of the Asian crisis in 2006 was listed by Indonesian state bank Mandiri as one of its six biggest delinquent debtors. He owed Rupiah5.4 trillion. Tanoto was also under investigation for fraud at his own bank, Unibank, which after the Asian crisis was reported by regulators to have extended 51% of its loans to Tanoto firms; the maximum legal limit for loans to related parties was 20%. Tanoto is a serial law breaker. Where is his business run from? Singapore. Where did he hole up, and who protected him, after the Asian crisis? Singapore.

Finally, what is the east Asian market where it has been least possible to distribute Asian Godfathers since its publication in 2007 (way more difficult than in ‘authoritarian’ China). That’s right. Singapore!

Palm oil companies behind Singapore smog: Greenpeace

Fires on Indonesia’s Sumatra, which have cloaked Singapore in record-breaking smog, are raging on palm oil plantations owned by Indonesian, Malaysian and Singaporean companies, environmental activist group Greenpeace International said.

“NASA hotspot data in Sumatra over the past 10 days (11-21 June) has revealed hundreds of fire hotspots in palm oil concessions that are owned by Indonesian, Malaysian and Singaporean companies,” the group said in a statement received by AFP.

Singapore’s smog index hit the critical 400 level on Friday, making it potentially life-threatening to the ill and elderly, a government monitoring site said. On Saturday morning, the reading was at 323, still in the “hazardous” zone.

Parts of Malaysia close to Singapore have also been severely affected by the smog this week.

“Fires across Sumatra are wreaking havoc for millions of people in the region and destroying the climate. Palm oil producers must immediately deploy fire crews to extinguish these fires. But really cleaning up their act starts with adopting a zero deforestation policy,” said Bustar Maitar, head of Greenpeace Indonesia’s forest campaign.

The Indonesian environment minister Balthasar Kambuaya said Friday that a team has investigated eight companies suspected to be behind the fires and promised to reveal the companies’ names after the probe.

A senior presidential aide Kuntoro Mangkusubroto said Friday that the fires happened in concession areas belonging to Asia Pulp & Paper (APP) and Asia Pacific Resources International (APRIL).

“It is very clear that the fires are in APP concessions and APRIL. We need to settle this matter,” he told reporters while showing the distribution of fires from 1 to 18 June in concession areas in Riau.

APP, the world’s third-largest paper producer said in a statement late Friday that “ground verification” detected “only 7 points that are actually forest fire, affecting around 200 hectares of land”.

“They are under and being controlled by approximately a thousand fire fighting crews and their team. Our team’s preliminary investigation found that 5 of the fires were set by the community to clear land for crops and 2 cases are still under investigation”, APP added.

APRIL could not be reached for comment.

Indonesia stepped up its fire-fighting efforts Friday by deploying aircraft to artificially create rain and to water bomb the blaze.

The haze crisis has caused a dramatic escalation in tensions between tiny Singapore and its vast neighbour, with the city-state repeatedly demanding that Jakarta steps up its efforts to put out the fires.

 

More:

Sunny places for shady people.

Weekend reading & viewing: on the theme of money (and other stuff)

May 11, 2013

Gold

George Monbiot has a go at tackling the ‘what motivates the very rich?’ issue. His thoughts are not a million miles from mine. What I have noticed about the billionaires I spent time with for research is that their reading matter consists largely of copies of Forbes, that they are engaged in ‘a game’ against their peer group in which they have little perspective on the challenges facing a wider society, and that therefore their activities need to be framed by rules made by politicians.

How four tourists were charged Euro64 for four ice creams in Rome and how the bar says it is fair.

Meanwhile Sir Michael Jagger and Keith Richards, well-known anti-Establishment radicals, wax lyrical on the price function, the price of tickets for their US gigs, and why US$65 million is a fair return on a short tour. It’s very like the defence put up by the Roman ice cream sellers, except with more ‘you know, man’ and ‘some cat said’ thrown in.

I was once hitchhiking through Ireland and saw the most arresting biblical words I have come across written on a wall in huge letters. It didn’t seem like much at the time because Ireland was still pisspoor back then. But the words have gained resonance since: ‘What shall it profit a man that he should gain the world and thereby lose his soul?’ Let me know the answer when you have a moment Roman, or Mario, or Sir Mick.

If this isn’t enough about the trouble that money can cause, I am informed there will be in interview with Stanley Ho’s daughter Pansy in tomorrow’s UK Sunday Times. Here’s the background from this blog if you don’t know it.

Otherwise:

Here is a review of Amanda Knox’s biography. Here is another one by the co-writer of Sollecito’s book. And here is a typically snooty, but also useful, review by the Grey Matriarch of Manhattan.

I would recommend reading this book even though I have not done so yet. However you will have to buy an import if you are in the UK or get an electronic download (as I will). This is because British libel law and publisher spinelessness mean that Knox’s book has not been published in Britain.

Finally, here is a link to The Economist blogging on the subject of China Dreams. I post this for no better reason than that I wrote a book called The China Dream in 2002 and I think this was the first use of the term in this recent period. However I seem to recall finding one or more older books in the British library that referenced China dreams. Mind too befuddled to remember clearly and no time to check. (Later: for some reason The Economist then publishes a letter saying what the blog already pointed out in the print edition.)


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