Hong Kong in crisis over relationship with China – and there does not appear to be a good solution


Mass pro-democracy demonstrations over recent days have underscored the fact that Hong Kong residents are fearful of creeping mainland control.
AAP/EPA/Vernon Yuen

Tony Walker, La Trobe University

When Britain ceded its control of Hong Kong in 1997 – after its 100-year lease expired – concerns were raised that a 50-year “one country, two systems” formula would be insufficient to protect citizens’ rights.

Britain’s last governor of Hong Kong, Chris Patten, was among those warning about the risks to the territory’s autonomy under Chinese control.

However, it was argued at the time the “one country, two systems” deal was the best outcome that could be struck under the circumstances.

Twenty-two years later, not quite halfway through a 50-year transition to a notional end to a “two systems” arrangement, it is clear that the relatively benign outcome envisaged in 1997 is under unusual stress.

Mass pro-democracy demonstrations over recent days have underscored the fact that Hong Kong residents are fearful of creeping mainland control that will obliterate their relatively unfettered rights under the 1997 formula.

Their immediate concern is an extradition bill, before Hong Kong’s legislature, that would enable Beijing to extradite alleged criminals. The legislation invites understandable concerns that it could be misused to secure the extradition to the mainland of China’s critics under the pretext these individuals had engaged in criminal activity.

Hong Kong’s relatively free media are alarmed at threats to press freedom inherent in the bill.

Beijing has done little to assuage these concerns. It has accused “foreign forces” of misleading Hong Kongers as part of an attempt to destabilise China.




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In China, authorities have blocked foreign news sites to prevent the dissemination of reports and images from the streets of Hong Kong. This is no doubt out of concern that street demonstrations might become contagious on the mainland.

The fact these demonstrations coincided with the 30th anniversary of the June 6 1989 Tiananmen massacre in which hundreds, if not thousands, died in a government crackdown will have fuelled Beijing’s nervousness about developments in Hong Kong.

What distinguishes the latest mass protests against Chinese attempts to circumvent its 1997 “one country, two systems” undertakings from protracted disturbances in 2014 is that this time it reflects increasing alarm about Beijing’s stealthy attempts to extend its control.

In 2014, demonstrations against Beijing’s violation of its commitment to autonomous local elections lasted months. This was the so-called “umbrella movement”, distinguished by the symbolic carrying of umbrellas by demonstrators.

In 2019, and judging by events characterised by fairly heavy-handed use of tear gas, water cannons and other methods to break up the demonstrations, the authorities have resolved to try to nip in the bud this challenge to Beijing-dominated Hong Kong rule.

Whether this works remains to be seen.

The disturbances pose a challenge to Western governments at a particularly fraught moment in global affairs. Relations between the US and China are on a knife’s edge over trade and other issues. This includes sales of sophisticated weaponry to Taiwan, tightening sanctions on Iran’s oil exports, moves to bar the telecommunications supplier Huawei from building 5G networks of US allies, including Australia, and a confrontational approach to China in Washington more generally.

Ill will over Hong Kong will not be helpful.




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From Australia’s standpoint, the Hong Kong disturbances come at an awkward moment as a newly elected government in Canberra wrestles with China policy.

Foreign Minister Marise Payne’s initial response to events in Hong Kong was too meek. Through a spokesperson, she said:

The Australian government is taking a close interest in the proposed amendments […]

Australia’s interests in Hong Kong deserve something more forthright than this.

Not only does Hong Kong absorb A$11 billion worth of Australian merchandise exports annually, services trade at A$3 billion is significant, and total investment in Australia of A$116 billion puts the former British territory in the top 10 foreign investors.

On top of that, about 100,000 Australians are resident in Hong Kong. This is not a small number in a population of 7.5 million.

While it is true Hong Kong is less important economically than it was in 1997, when its GDP was 16% of China’s (it’s now 2%), it still remains an indispensable financial conduit and testing ground for financial reforms.

Hong Kong provided the financial platform for China’s cautious experimentation in its move towards making the yuan a global currency. Hong Kong’s stock exchange is an important vehicle for capital-raising for Chinese companies.

The events of recent days have placed Beijing’s woman in Hong Kong, Carrie Lam, who was selected by Beijing as chief executive two years ago, in an invidious position. If she yields to the protesters and withdraws the extradition law, she will run foul of her controllers in Beijing.

If she pushes ahead in the Legislative Council with the support of 43 pro-Beijing lawmakers out of 70, as she insists she will, she risks further disturbances.The Conversation

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Blocking Chinese gas takeover won’t damage Australia’s foreign investment pipeline



File 20181121 161621 4s3rkd.jpg?ixlib=rb 1.1
A single foreign company having sole ownership and control over Australia’s most significant gas transmission business, says Australia’s treasurer, is not in the national interest.
Shutterstock

Simon Segal, Macquarie University

The Morrison government’s decision to block Hong Kong’s largest infrastructure company from buying one of Australia’s key infrastructure companies seems to make a complicated relationship with China even more fraught.

Rejections of foreign takeover bids are extremely rare. This is just the sixth such decision in nearly two decades.

It might be argued the blocking of the A$13 billion bid for gas pipeline operator APA Group by Cheung Kong Infrastructure (CKI) Holdings reflects increasing politicisation of Australia’s process for reviewing foreign investment.

But this is not a political shot across the bows like China’s announced anti-dumping probe into imports of Australian barley. This takeover proposal was always doubtful. News of its knock-back potentially damaging relations with China, or foreign investment more generally, are greatly exaggerated.




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Always unlikely

APA Group owns 15,000 km of natural gas pipelines and supplies about half the gas used in Australia. It owns or has interests in gas storage facilities, gas-fired power stations, and wind and solar renewable energy generators.


APA Group’s infrastructure assets.
APA

Back in September, after APA accepted the takeover offer from a CKI-led consortium, the investment research company Morningstar judged it unlikely that Australia’s Foreign Investment Review Board would approve the bid.

The board is only an advisory body. The final decision rests with the federal treasurer. Josh Frydenberg signalled his intention to block the deal in early November, giving CKI a few weeks to change its proposal, either by selling assets or finding other investment partners, enough to change his mind.

That did not happen. Frydenberg’s final decision to block the bid was based, he said, on “a single foreign company group having sole ownership and control over Australia’s most significant gas transmission business”.

He emphasised the government remained committed to welcoming foreign investment: “foreign investment helps support jobs and rising living standards.”

It’s not all about CKI

CKI is not state-controlled. It is headed by the son of Hong Kong’s richest man, Li Ka-shing, and has a history of considerable success in investing in Australia.

Nonetheless speculation about the rejection damaging the Australia-China relationship has ensued. In the words of the South China Morning Post: “As the most China-dependent developed economy, Australia potentially has a lot to lose should relations with its biggest trading partner deteriorate further.”




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Let’s put this into perspective.

First, there is broad bipartisan agreement that foreign investment is crucial to Australia’s economic prosperity.

Second, as already mentioned, this is just the sixth major public foreign investment proposal blocked since 2000. (All but one, notably, have been by Liberal treasurers.)

Third, all six rejections have been case-specific. Each bid has been considered on its merits.

This case arguably has less to with CKI being Chinese linked than with the size and significance of APA, whose transmission system includes three-quarters of the pipes in NSW and Victoria.

In 2016 CKI’s A$11 billion bid for NSW electricity distributor Ausgrid was also blocked (by then-treasurer Scott Morrison) on national security grounds.

But in 2017 CKI won approval for its A$7.4 billion bid for West Australian-focused electricity and gas distribution giant DUET. And in 2014 CKI’s acquisition of gas distributor Envestra (now Australian Gas Networks) was also cleared.

Shifting emphasis

This is not to deny that politics played a part in Frydenberg’s decision.

The seven-person FIRB board was divided (the exact votes are not known). The Treasurer’s call could have gone either way.

Forces within the Liberal Party that opposed Malcolm Turnbull’s leadership have also been deeply hostile to APA’s sale to CKI. Among the most vociferous was NSW senator Jim Molan, who warned of “hidden dragons” in the deal.

For a minority government lagging in the polls and just months away from an election, such views have assumed inflated importance.

Nonetheless the APA decision was not a surprise. Greater scrutiny is now part and parcel of the Foreign Investment Review Board process. In particular, the emphasis has firmly shifted over the past few years to scrutinising national security and taxation areas.




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The Critical Infrastructure Centre within the Department of Home Affairs, which became fully operational this year, brings together capability from across the federal government to manage national security risks from foreign involvement in Australia’s critical infrastructure. It’s particularly focused on telecommunications, electricity, gas, water and ports.

David Irvine, who has chaired the Foreign Investment Review Board since April 2017, is a former head of the Australian Security Intelligence Organisation.

This shifting emphasis does not equate to a bias against foreign investment per se. There is no evidence investors, including Chinese, are being discouraged or significantly deterred from investing in Australia.

CKI itself demonstrates, by returning to Australia despite previous rejections, that foreign investors will not give up so long as the next deal stacks up. There is already speculation CKI has moved on, and now has its eyes on Spark Infrastructure, an ASX-listed owner of energy asset.The Conversation

Simon Segal, PhD research candidate, Business, Macquarie University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

China: Persecution News Update


The links below are to articles reporting on persecution news from China (the most recent are at the top).

For more visit:
http://www.gospelherald.com/articles/71450/20171004/china-detains-two-christian-women-3-y-o-missionary-work.htm
http://www.scmp.com/news/hong-kong/law-crime/article/2113277/former-hong-kong-eoc-official-loses-gratuity-fee-retrial
http://www.persecution.org/2017/09/27/china-losing-freedom-in-every-aspect/
http://www.christiantimes.com/article/china-intensifies-crackdown-on-churches-with-new-plans-to-force-registration-with-government/72905.htm
https://international.la-croix.com/news/cross-accidentally-set-alight-as-chinese-officials-take-it-from-church/5963
https://www.ucanews.com/news/chinese-priest-gets-jail-time-for-theft-supporters-say-he-was-framed/80303
http://www.chinaaid.org/2017/09/christian-academy-banned-for.html

Two systems, one headache: Hong Kong twenty years after the handover to China



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The CCP seems intent on bringing Hong Kong into line.
Shutterstock

Nick Bisley, La Trobe University

Hong Kong had suffered “more than a century of vicissitudes”. So declared Jiang Zemin on July 1, 1997, at the return of the colony to “the motherland”. Twenty years on from the handover of the British Crown colony, the people of Hong Kong are increasingly experiencing the vicissitudes of communism.

Claimed as a spoil of the first Opium War in 1842, Hong Kong was the last significant colonial outpost relinquished by the British. Zimbabwe had gone in 1980, and in 1984 Margaret Thatcher, of all leaders, agreed to terms with Deng Xiaoping for the handover of the territory to the People’s Republic 13 years later.

A fundamental tenet of the 1984 settlement was that until 2047, Hong Kong would enjoy continuity of the legal, economic and administrative arrangements established by the British. In the words of the Hong Kong Basic Law:

The socialist system and policies shall not be practised in the Hong Kong Special Administrative Region, and the previous capitalist system and way of life shall remain unchanged for 50 years.

While it had not been an electoral democracy, people who lived in the colony had freedom of association, expression and the rule of law administered by an independent judiciary. This was key to its appeal to those, whether expats or refugees seeking an outpost of liberalism in a largely illiberal Cold War Asia. But it was also fundamental to the economic dynamism of the trade and finance hub.

The confidence that multinational firms, banks and entrepreneurs had in the commercial rule of law, from contracts to intellectual property rights, made the city a remarkable economic success story.

Deng’s China had agreed that even though the party-state’s flag would fly over The Peak these freedoms would continue. Indeed, in 1984, less than a decade into the “reform and opening up” program, and in the very first days of the special economic zone initiative, these guarantees were seen as a vital part of the broader program revitalising China’s economy. Hong Kong promised to be one of the most important engines for economic growth; it made no sense to undermine the foundations of that success.

One China, Two Systems was the slogan in 1997, but it also signalled something more. The PRC was moving away from its command economy past and toward a more market oriented future. And at the time, one of unalloyed liberal optimism, some thought that the Hong Kong settlement might be an experiment in political pluralism. Hong Kong could be a model first for Taiwan and then possibly also for a more open Chinese system.

Two decades after the handover and the party-state is uneasy about that the implications of the exceptionalism of “one country, two systems”. Rather than embracing the pluralism that was inherent in the agreement with the UK, the Chinese Communist Party seems intent on bringing Hong Kong into line. But it is discovering that this may be a more difficult task than it realised.

Beijing seems to have fallen for the tired cliché that Hong Kong people are more interested in money and shopping than they are in political issues. As China scholar Graeme Smith recently said on the excellent Little Red Podcast, Hong Kong is not Singapore. It has long had a politically engaged populace.

In 1967, more than 50 people died in riots prompted by discontent with British rule.

In 1970 frustration with public transport boiled over. The CCP should not have been surprised when in 2003, it attempted to bring the Basic Law – the quasi constitutional arrangement established in 1997 – in line with the mainland’s authoritarian sedition and public security arrangements, the people of Hong Kong protested in huge numbers.

Popular protest against public transport changes occurred in 2007 and in 2014 the “umbrella revolution” showed the depth of pro-democracy sentiment in the SAR, especially among the young. Now, there is what has come to be known as the “locallist” movement, which seeks to retain Hong Kong’s distinctive features. It aims to frustrate Beijing’s desire to turn July 1, the felicitously named Special Administrative Region Establishment Day, into a celebration of national glory.

Hong Kong has always been exceptional. From its architecture to its accents, the people’s attitude to their appetites, Hong Kong is unlike anywhere else. Given this, it is understandable that the party state would want to turn the city into a model communist enclave. The problem is that that which makes Hong Kong vibrant, cosmopolitan and globally engaged sits very uneasily with CCP dictates.

As the party state embarks on the difficult journey moving from a middle to a high income country, it should reflect on the problems it faces in Hong Kong. A people who have enjoyed 150 years of freedom do not enjoy those ideas being shackled.

And it is those very ideas that are needed for the PRC to make good on its ambition to become a genuinely prosperous country. At some point the CCP has to make its peace with the freedom of ideas and a plurality of voices. Hong Kong should be the place where it figures out how to do this.

The ConversationInstead, 20 years on from the handover, rather than being a pathfinder for pluralism, Hong Kong looks like it will become another Xinjiang; a troublesome region that needs to be brought to heel. This clamping down on the freedoms agreed to in 1984 is hardly the sign of a strong and confident country looking to project leadership on the global stage.

Nick Bisley, Executive Director of La Trobe Asia and Professor of International Relations, La Trobe University

This article was originally published on The Conversation. Read the original article.

AUSTRALIA: ENVIRONMENTAL DISASTER UNFOLDING ON QUEENSLAND COAST


An environmental disaster is unfolding on the Queensland coast, with the oil spill from the Hong Kong-flagged ship Pacific Adventurer. The Pacific Adventurer was badly damaged during the Cyclone Hamish weather event last week.

The Pacific Adventurer somehow managed to get caught up in the cyclone despite very early warnings concerning the cyclone. Some 31 containers containing ammonium nitrate were washed into the sea during the cyclone and as this occurred the ship itself was badly damaged, leaking some 230 tonnes of oil into the ocean. The initial report from the ship was that some 30 tonnes of oil had been lost.

The environmental disaster is huge, with the oil now affecting over 60km of coastline, including the eastern coast of Moreton Island. Sea life is being severely impacted by the disaster.

The cleanup is being done at a rate of about 1 to 2 km a day, which means it will take quite some time to complete.

Also of concern are the 31 containers of ammonium nitrate that are still missing and which could further contaminate the region. Navy mine hunters are being called in to search for the containers which remain a shipping hazard.