US-China Trade Summit at the G20 Amid Fallout From the Protests in Hong Kong | Ho-Fung Hung


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and join our amazing community, and with that, please enjoy this week’s episode. Ho-fung Hung. Welcome to Hidden Forces. My pleasure to be here. It’s great having you on. You are the Henry M and Elizabeth P Wisenfell
professor in political economy at Johns Hopkins. It’s great having you here. Normally we do intros after the episode is
done, but in light of the fact that I want to get this episode out immediately given
the G20 summit, I’m intro’ing you right now. You’re also the author of “Protest, With Chinese
Characteristics,” which was an award winning book that came out in 2011, and you’re also
the author of “The China Boom: Why China Will Not Rule The World.” Yes. It’s wonderful having you here. I don’t know if you know this, but it was
actually Anne Stevenson-Yang who recommended you to me. Yeah. She’s the China Whisperer. She’s great, yeah. She’s my China whisper. Yeah, yeah, yeah. And she’s in China right now, and sometimes
she’d go back and forth between U.S.A and China. She’s had to come back now because of the
relationship between the U.S. and China. Yeah. Some stuff like that. Also, I think some of her writings on some
of these Chinese companies- The financial vulnerability- … Yeah, exactly. … and things like that, yeah. So it’s great having you on. You come of course, like I said, highly recommended
from Anne. Yeah. The reason I asked you to come on the program
was because I wanted to talk about Hong Kong, the recent protests, and then to dig deeper
really, what is this really about? What are the protests really about heading
into the G20. Yeah And that also gives us an opportunity to talk
about U.S. China relations, China, China’s economy, things that we’ve talked about often
on this program, because this is really the area of your research. Yeah. So, starting off, I mean, you mentioned this
to me. I think I had actually read this in a newspaper
recently, but Hong Kong, the citizens or some group, are going to be putting an ad out in
the Wall Street Journal tomorrow. Is that right? It is inThe New York Times, as far as I remember,
and also Financial Times, and a dozen-plus major newspapers around the world. Because they get a very rapid and amazingly
effective fundraising online to gather more than six million dollar Hong Kong dollar,
which is about close to one million U.S. dolar in a day to buy ads in major newspaper around
the world. Basically it’s to try to voice the concern
of the Hong Kong people to urge the [inaudible] countries, besides China, that is going to
be in the G20 to urge them to raise the issues of Hong Kong to Xi Jinping when they see him. And also drive fundraising back to the organization’s
site. Is that what you said? They basically used the money, as far as I
know, and it is reported that, they used the money to to buy ads. Oh right. They raised money and they used it to buy
the ads. Yeah. Yes. That’s what you’re saying. Right, okay. So let’s take a step back. We’re going to talk about the G20, but can
you give us an introduction to these protests because a lot of listeners are going to know,
you know, some people are only going to know that there were protests in Hong Kong. Other people will know that there were protests
in Hong Kong about some extradition amendment. That’s it. Yes. Yes. What’s going on? Yeah. The short answer is that the Hong Kong government
tried to amend the extradition bill, because Hong Kong used to have this extradition arrangement
with a lot of countries including the U.S. but it doesn’t have a extradition arrangement
with Mainland China. It is by design because when Hong Kong’s sovereignty
is reverted to China in 1997, many people in Hong Kong worry about the China legal system,
they trust that the legal system in Hong Kong is fair. It is a criminal system and is transparent. While the legal system in China is more in
a kind of a black box, and it is unfair and there’s a lot of corruption going on. So they resist the extradition arrangement
with Mainland China. So now they want to do it so that if China
says that there’s a fugitive I want, then I can tell the Hong Kong government to arrest
that person and transfer to China, Mainland China. So Hong Kong was a territory of the British
Empire for how long? The transfer happened in 1997, but when…? The British took Hong Kong bit by bit. First it is the 1840s after the Opium War. And they took what is nowadays known as Hong
Kong Island, and Kowloon, and later with another treaty with the Chaing government at that
time they took what is now the rural area, the Lu territories in the 1890s. So 1997 was the time when the U.S. and the
British, and China has an agreement that the British hand over Hong Kong back to China. Right, and that agreement, the conditions
of that agreement were for 50 years and they’re scheduled to end in 2047. I think that’s part of the backdrop of this
larger discussion. Yeah. As far as the amendment is concerned, I think
the issue, it came out of a case of a supposed murder of a woman in Hong Kong. A Taiwanese woman. It is the murder of a Hong Kong woman by her
boyfriend, allegedly- Who was from Taiwan. … that happened in Taiwan. That happened in Taiwan. It happened in Taiwan. Right? Yeah. Okay. And that boy was supposed to face trial and
in Taiwan, but because the current extradition arrangement didn’t include Mainland China,
Taiwan, and also Macau, so now they- So he fled to Hong Kong and they wanted to
extradite him back to Taiwan. … Yeah. And the idea here was that it was presented
to the Hong Kong people- Yes. … by Ms. Lam, what’s her full name? Carrie Lam. By Carrie Lam as something that was strictly
between Hong Kong and Taiwan, or thought for that reason. Yeah. But the suspicion always was that it was actually
Beijing behind it, right? Yes. And actually, the Taiwan government already
issued a statement saying that even without the extradition amendment there will be a
way for Hong Kong to hand over the person to Taiwan, so you don’t need that amendment
to do that. And of course that many Hong Kong people was
suspecting that the Hong government is using this case to put in Mainland China, the extradition
arrangement of Mainland China and Beijing is behind it. And actually in late May, that because in
the beginning many business, even the establishment business elite has question about this because
a lot of Hong Kong business indeed had experience with the legal system in Mainland China. So they also fear that being arrested by Hong
Kong police and transferred to Mainland China for some fabricated charge or something like
that. And then in late May, there is a kind of a
Hong Kong business group that visited Beijing and then some very high rank Beijing official
including the Standing Committee, the Politburo Standing Committee member, Han Zheng, met
with this group of business people and sayed that Beijing is behind this extradition bill
amendment, so business people don’t need to worry about it, you should be behind it. So basically Beijing has put a lot of political
capital in making sure that the business elite, despite the doubt, will support the bill and
get it passed in the legislative country in Hong Kong. So Hong Kong enjoys a very unique special
trading relationship with Western countries. Right? It’s also I think the biggest financial hub
in the East. Is that right? Yes. So how would this amendment impact, from a
practical standpoint economically, how would it impact Hong Kong? Yes, it is very interesting, because this
extradition bill, the amendment is really putting Hong Kong’s special status as a financial
center in China in jeopardy because Hong Kong’s special financial center status is given by
its independent jurisdiction system by its independent legal system, and freedom of speech,
and also freedom of assembly, and also Western countries and Western media. Western companies are based in Hong Kong even
though they have business in China. So they rely on the Hong Kong legal system. And if this extradition bill amendment is
passed, then people doing business in China might worry that they can be arrested by Hong
Kong police and transfered to Mainland China easily. Even if they are journalists, or they are
activists, or they are businessmen who would do something or say something that the Chinese
government don’t like. And with this extradition bill and this possibility
of being transferred to the Mainland Chinese legal system, then many business people or
many company that are headquartered in Hong Kong and even journalists’s organization headquartered
in Hong Kong, they might have doubt about the safety of being in Hong Kong and they
might move to other places. And it is already happening as some journalistic
reports show that some wealthy people, because of the extradition bill and worry about this
possibility of their safety being jeopardized, they’d start to move their money. Right? To like Singapore, a safer place. They will worry that Hong Kong might no longer
be a safe place for their money and for their own safety if that extradition bill is passed. So Hong Kong operates under common law, right? Yes. Which is different than what they have in
the Mainland. Yeah. Also, its democratic culture clearly on display
with approximately two million people in these protests, right? Yes. Yes. With 90% humidity, something in the nineties
in terms of a temperature. Incredible. Yeah. It’s significantly different, as I said, culturally
and legally from China. For those who aren’t familiar with Hong Kong,
have never been there, or lack a deeper appreciation for those differences, can you help us get
a sense of just how different the culture and the system is in Hong Kong versus the
Mainland? Yeah. I think they speak two different languages
also, right? Most people speak Cantonese, and they, many
of them also speak Mandarin and English. In terms of the system, Hong Kong is very
different because you don’t need to feel worried when you criticize the Hong Kong government
and Chinese government. And for journalists who report about corruption
of Chinese officials and financial vulnerability of Chinese state owned company, they feel
safe to say that, which is not the case in Mainland China if you report some corrupt
officials, report about vulnerability of some well connected state companies that the journalists
concerned might be arrested. That, actually, it happened. And if you have a financial dispute with some
powerful people who would be high, in Mainland China you can be arrested because the court
system is very murky, I would say. And it’s run by the communist party. So it is not the case in Hong Kong. So right now, until now, then Hong Kong people
still feel they are protected by a relatively fair legal system and a relatively free media. And this goes back to the point now, it’s
been 20 years since the handoff. They’ve got another 30 years left. These anxieties were expressed, I think as
early, in terms of protests, as early as 2003, right? Yeah. Over Basic Law Article 23. Yeah. So this is an ongoing anxiety among the people
in Hong Kong. What is the general expectation by the people
there? Do they feel…has the hope always been that
as they get closer that they’ll be able to renegotiate the agreement as the leadership
in China has always felt that they are simply going to be reintegrated and there is a misalignment
of objectives and perception? … Yes, that is true. Over the last few years we see a lot of cases
that Beijing tried to tighten its control of Hong Kong for example, the very famous
or infamous case of disappearing bookseller that they publish books that talk about scandals
of Chinese leaders. Then they publish in Hong Kong and they disappear. And- Was that in 2009? When was that? It happened in, there’s a number of cases
where it happened in last few years. It’s raised by the U.S. State Department and
the international community. And also, there is a wealthy Chinese tycoon
by name of So-Jang Wa. He’s regarded as a fugitive from Mainland
China but he was in Hong Kong, then there was a cross border kidnapping by China public
security personnel to kidnap him in the hotel. And then he shows up in Chinese official TV,
and then, and also the same happened to this bookseller. So they succeeded? They succeeded in the kidnapping? They succeeded, but it is illegal because
in current law in Hong Kong there’s no way that the Chinese law enforcement personnel
can do their duty in Hong Kong because of the one country, two systems. So they have been doing it illegally, and
it raised eyebrows and it raised the international community’s concern. So it is what Beijing has been doing. Now, they do this extradition bill amendment
that people are thinking that now they finally tried to legalize the whole process of this
arresting people in Hong Kong and transferring to Mainland China. So it is why it “hit the button” of many Hong
Kong people, because in the past that they have to do it in the dark, and do it carefully,
not to be discovered because it is not legal. And if that extradition bill can happen, is
passed, then they can do it under a formal legal channel, just requesting Hong Kong Police
to arrest the people and then transfer them to Mainland China. So help me understand the circumstances in
which this amendment was attempted to be passed. Was there any willingness on the part of the
government in Hong Kong to engage in a fact based debate with the public over its proposed
amendment prior to the protests? The general feeling that has made the people
angry is that the consultation period was very hasty, very rushed. They kept talking about the Taiwan case in
order to justify it. But everybody pointed out that it’s just an
excuse. The main concern is about Mainland China. It’s about extradition to Mainland China. Mm-hmm (affirmative). So the discussion has been very hasty and
the government has wanted to rush it through, even after the one million strong protests
on June 9th. And the government still wants to go ahead
and pass it in the legislative council, and then the conflict on June 12th erupted and
the protests basically paralyzed the MOT district where the legislative council, and the government
is located. So, they had to postpone and then cancel the
meeting, and then in the end the government backed down and indefinitely postponed the
bill. So let’s talk about the protest, because one
of the interesting things that I read of yours is your description of these protests as,
being “more guerilla,” this time around. What did you mean by that? That is interesting. The last time that Hong Kong protests got
attention internationally is the 2014 with the Occupy Movement. At that time- The Umbrella Movement? … The Umbrella Movement. Why was it called the Umbrella Movement? It was originally called Occupy Central or
Occupy Movement. But in the end when the Hong Kong police force
used tear gas, the young people didn’t have much to defend themself against the tear gas
with so they just raised their umbrellas to block it. It’s not very useful, but many people just
used their umbrellas. So it is quite a scene. So it’s called the Umbrella Movement then,
so in 2014. So the main action of that time is that they
occupied several areas in Hong Kong, one is on the Hong Kong Island side, near the government
headquarter and one is Kowloon side. So they occupied the area for more than 70
days, and the Chinese government is angry about it, and the Hong Kong government eventually
managed to clear them up after they wear out by themself in November, 2014. So this time around that apparently the protester
learned a lesson that they think that it is unwise to hold a territory and occupy it for
a long time. It is difficult to sustain. So this time they just- So just to clarify here. … Yeah. Was the notion of occupying, was that in any
way related to what was going on in the West with Occupy Wall Street? In the beginning, one of the professor who
devised the idea of Occupy – Benny Tai – who is a law professor in the University of Hong
Kong and is now behind bars- He’s behind bars. He’s in prison. … In prison because of his action of “inciting”
other people to public disorder. And he expressly talked about the inspiration
from Occupy Wall Street . and this Occupy Square. That’s interesting, because that was one of
the things I wanted to ask you about, but it was more dealing with the leaderless nature
of this protest, and just thinking about it in terms of the different cultural systems
between the East and the West, and how protests may differ and how important it might be in
the East to have leaders versus in the West. But it’s interesting. So what you’re saying is that at first they
tried to apply some of these principles like occupying a territory, but it turned out they
couldn’t do that effectively in Hong Kong. So they went underground. After 2014, after the occupation ended and
there were arrests and many people continued to be activists and there was a kind of a…2016
there’s Mong Kok, they called it, uprising, or some call it “The Riot.” That is, some of the young activists who were
in the 2014 occupation threw bricks at the police when they tried to clear up some street
foods [inaudible 00:00:16:38]. So after that as well that there’s a mass
arrest of activists and leaders and so that- This is what year you said? … 2016 is the- ’16. … Mong Kok one, and then the mass arrest
happened after 2016, and after 2014, and then the trial and the imprisonment of the leaders
of the Occupy happened just a few months ago, right before this 2019 movement. Did this catch Beijing by surprise? Given the way that they dealt with 2014, did
they feel that they had effectively crushed these protests and that this was not going
to be an issue going forward? I think it definitely caught Beijing, and
it basically caught everybody by surprise. And I think original calculation of Beijing
and Hong government about why they try to pass this extradition bill in such a kind
of a hasty manner, because I think the judgment is that the leaders, the co-activists of the
opposition has been arrested behind bar and two are actually in exile in Germany right
now. So the resistance has been broken. I think it is the original calculation. So the resistance from the society will be
minimal when they pass the bill. So no matter what, they can pass it with no
major incidents. And in the end, even without all these leader,
and without all these famous activists like Josiah Wong, who was behind bar when the thing
erupted. He’s now out, right? He’s just out. He’s that young gentleman. He’s just out. How old is he? 21? He looks very young. I haven’t keep track of it, but he’s, he’s
the first guy- He’s been all over the international press. … Yeah. And all this kind of iconic figures behind
bar. And so even without them, then the people
just organize themselves spontaneous in this gorilla battle with the government on June
12th. So I think the reaction is so strong, and
so self organized that I think definitely it caught Beijing by surprise. It caught them by surprise. Yeah. Another really fascinating thing about not
just these protests, but generally we saw this of course in the Arab Spring in Egypt- Yeah. … how many years back, is the role of technology. Yes. But I think what’s interesting in the East
is that the tools of suppression by the state are much stronger than they are anywhere else. Particularly, specifically speaking in China. I don’t know how powerful the technology is
in Hong Kong. It may be very similar, but the institutional
practices are not as Orwellian or suppressive in Hong Kong. How important was technology, one, on the
suppression side, and then how important was it on the side of the protesters, like encrypted
messaging and things like this to help them organize? Yes, it is very important. And it’s one, another key difference between
Hong Kong and Mainland China. In Mainland China, you don’t have access to
Facebook, Telegram, Google and all these social media, that the homegrown social media in
China available to Chinese people in the Mainland are tightly controlled by the government. While in Hong Kong, the people still have
relatively free access to all these kind of social media that we are familiar with. And reportedly, and actually, there are some
activist who wrote the article in Financial Times to talk about it. And actually that it is this social media
and social media group, discussion group, that help organize the whole thing. Then the young people were really tech savvy
and very aware of the power of this social media and then to organize themselves, even
without hierarchical organization to do the organizing. So Carrie Lam is the fourth chief executive
that may end up not serving out a second term in Hong Kong. That’s four-for-four, right? O-for-four. Yeah, and it is just a speculation, but I
think it is the right speculation that she might have lost the trust of Beijing. That when her term is up, she might not have
a second term, depending on the remaining two, or three years whether she will make
a [crosstalk 00:20:12]. None of the prior chief executive served full
terms, right? Or the second terms. Donald Yung has a second time. He did. But his first term is the kind of- He ended up in jail? Didn’t he end up in jail? … He ended up in jail right after that. So that is, yeah. So basically, what kind of commentary is this
on the adequacy of these institutions in Hong Kong? Yeah, it is the irony that the Hong Kong chief
executive as people find out that the salary is much higher than the U.S. president, the
salary of a U.S. president of many world leader. So actually, they’re well paid. Well I don’t actually know what a salary of
the U.S. president? I don’t have the exact figure, but it is widely
reported that they have the second highest salary behind Singapore prime minister, the
Singapore leader. And so they’re high salary. But the problem is that they always cannot
serve the second term. And don’t end up well because they always
used as a scapegoat for failed policy of Beijing. So that whenever there is a policy like the
Article 23 in 2003, obviously there’s Beijing behind it. What was that about? What was that about? Because the Article 23 is an article in the
Basic Law of Hong Kong saying that the Hong Kong government need to legislate against
action that is a threat to Chinese national security. So anything deemed subversive to Chinese national
interests can be indictable and things like that. So in 2003 they try to legislate. [crosstalk] They’ve got an ambitious. They got ambitious. They like, six years, six years after the
transfer, they got pretty ambitious. Yeah, and it lead to a huge protest and also
international outcry, and then the government shelve it. That is a failure of Beijing in pushing it
and then [inaudible] Chi-wai became the scapegoat of course and then he could not finish his
term. So the same happen for this time around with
Carrie Lam. It is basically this Beijing a scapegoat it
is, and then a Beijing failure up for this back down on this extradition bill, but it’s
going to be Carrie Lam who take all the heat, and if she cannot finish the current term,
or she cannot have a second term, then it mean that is happened again that Beijing make
her a scapegoat of the failure of Beijing to introducing this legislation. So what are the other big issues besides this
amendment that have people worried? Because this has been the thing that the press
has focused on, the international press, but of course we know the international English
speaking press captures only a fraction of reality in foreign countries. Hong Kong people are worrying about a lot
of stuff that besides this extradition bill, Hong Kong people have been worrying about
this slow tightening of the screw on Hong Kong liberty and freedom that Hong Kong used
to enjoy. Is that what it feels like to the Hong Kong
citizen, that there is a tightening of the screw? Yes. And is that also just built out of the cynicism
and the expectation that Beijing has designs on Hong Kong in the long term that don’t align
with what the citizens of Hong Kong want? They’ve always been suspicious of Beijing. And there’s suspicion on one part, the other
part and Beijing has been quite courageous to openly talk about it. For example, the liberty and freedom of Hong
Kong is guaranteed by the sign of British joint declaration that lay out the terms of
the one country, two system, and 50 years, and changing the system, and also the basic
freedom basic right of Hong Kong people. And now the Beijing government and high rank
officials keep saying that this kind of a treaty with the UK is no longer valid because
it’s serve its purpose and now it is totally the internal affair of China and then foreign
Paris and foreign governments shouldn’t say anything about it. So Beijing has been saying out loud that and
they have been saying that one country is bigger than two system, and to Hong Kong people
see that it is not what we expect when we have the deal and we accept the sovereignty
handover in 1997. So it has been happening for a while before- Right. … this blow up. So are you optimistic or pessimistic about
how this is going to work out? Because you know, I think what I’ve seen oftentimes
with these types of situations is that there’s a lot of energy, and passion, and excitement,
and optimism early on among the protestors. Yeah. Regardless of whether it’s in China, Hong
Kong, Greece, Spain, the United States. But the government has unlimited resources,
a seemingly unlimited, to press down and can wait it out, and eventually they’ll slip it
back in. In fact, I want to ask you, one of the demands
of the protesters is that they withdraw, that Carrie Lam withdraw the amendment entirely,
right? Because they’re afraid she’s going to reintroduce
it next year, or two years, or three years from now. Yes. Then, I have been pessimistic, now I’m generally
still pessimistic, but become a bit more optimistic now because before this protest, everybody,
including myself, many people not everybody expect that the resistance of Hong Kong to
this tightening of the screw on Hong Kong has been broken and the civil society is paralyzed
in this resistance. But now that this resistance came out from
nowhere, that’s so it seems that the civil society in Hong Kong is much more resilient
than- That’s interesting. … we thought and also in this time of debate
it come to the forefront is that it is, there’s some huge constraint on what Beijing can do
in cracking down on Hong Kong, that is to Hong Kong special trading status, as recognized
by the U.S. and the international community that serve China very well, particularly in
this current trade war situation that, if China crack down harder on Hong Kong to trigger
a kind of a withdrawal of international recognition of Hong Kong as a special trading territory
and a special custom territory separate from Mainland China, then Chinese financial interest
is going to be hurt. Well that’s the thing because China has capital
controls. Yes. Hong Kong is very important as a financial- Yes, definitely. … center for the Chinese elite in particular
who look to get their money out. Yeah and also Hong Kong special status as
a custom territory separate from Mainland China. For example, Chinese company, if they want
to invest in infrastructure in Australia, in U.S. in other Western countries, very difficult,
and these Western countries going to site the national security concern to ban these
investment. But if that Chinese company somehow can set
up a subsidiary in Hong Kong- Or a shell company in Hong Kong. … a shell in Hong Kong and then invest in
this Western community as a Hong Kong company, it face much less scrutiny. Right. They can invest in port facility in along
the Panama Canal pipeline in Australia, and port facility in the U.S. So it has been the status quo that Chinese
companies is using Hong Kong identity to do is… And also Chinese wealthy people, they will
move their money to Hong Kong first, and then move the money out as a part of the capital
flight going on. And at the same time there’s a lot of high
tech products and equipment that is deemed sensitive and can be used for military purpose. They have export control. For example, U.S. have law, explicit law,
to exporting these kinds of equipment to Mainland China, but Hong Kong, as a special custom
territory, they can import this equipment. So Chinese company like Huawei is just setting
up shops in Hong Kong to import this equipment. This idea, this notion of, again, you said
it earlier, it comes from 1997, or when it was first started I can’t remember, of one
country, two systems. This system in Hong Kong benefits China, it
benefits it tremendously because of how close and controlled China’s system is. Hong Kong is more open and that allows them
to do business internationally in ways that they would otherwise not be able to. Yeah. While still maintaining their capital controls,
while still maintaining X, Y, Z relations. So it’s why he put a constraint on China,
that if China like for example, cracked down Hong Kong, harder stand in the People’s Liberation
Army to shoot the people for example, or they no longer allow Facebook, Instagram and all
these social media to operate freely in Hong Kong, it will trigger a backlash in Western
country, in the U.S. But you’re saying this. So I’m not familiar with the legal relationship,
under the current agreement, is Beijing able to send the People’s Liberation Army into
Hong Kong? They cannot. They cannot. They cannot. They cannot, so yeah. So they would break the agreement. I mean that would be- They’ll break the agreement, yeah. … And how would the international community
understand what that would mean? Because again, it’s one country, two systems. It’s not exactly a break of sovereignty. Hong Kong is part of China, it’s a separate
system. So how would we think about that? How would the international community react? In the case of U.S. there’s explicit law called
the U.S. Hong Kong Policy Act. It was instituted in 1992, that regulate U.S.
policy toward Hong Kong after 1997. Now, according to this law, the U.S. State
Department periodically has published report about the state of autonomy of Hong Kong. According to this report, if it is verified
that Hong Kong is sufficiently autonomous from Mainland China, then U.S. can apply its
law to Hong Kong separate to its application to Mainland China, like export control, immigration
control, and regulation of mail, and investment from Hong Kong viz a viz investment from Mainland
China. So it is establishing in the law in the U.S. And many other country has similar law and
regulation separating Hong Kong from Mainland China. So if countries, Western countries and U.S.
find that actually Hong Kong is no longest sufficient autonomous, they can withdraw this
recognition and start to regard, for example, company from Hong Kong as the same as company
from Mainland China, and so on, and so forth. Yeah. So what do the Taiwanese think about what’s
happening? And we mentioned Taiwan early on because they
were the excuse for the law, but of course Taiwan, the moment they realized what was
going on, they didn’t want the amendment because for them, Hong Kong, it’s even closer to China. That’s a bow-arc to their relationship. That is very interesting thing to observe
because there is a presidential election coming up in Taiwan in January, 2020. And before this extradition bill thing that
the current incoming government, which is a pro independence government led by Tsai
Ing-wen has a low rating because of many administrative mistakes, and so that popularity is not high. Many people would expect that she might lose
the election, and relatively pro Beijing and friend with Beijing- Right, there’s a more pro Beijing government
in Taiwan traditionally, and also more, not necessarily anti Beijing, but more independent
oriented one. And both of them came out against the amendment. … Both of them came out again as an amendment
and the latest polling is showing that incoming government chance or re-election substantially
increase. And then definitely the debate and the conflict
in Hong Kong help. Wow. To let people see it is one country, two systems. Now why do you think that is? So currently, the part of it that’s out of
power is the more pro Beijing government- Yes. Yes. They have a chance to win the election in- … or party. … 2020. They had a chance, now those chances are diminished
because of what’s going on in Hong Kong. According to poll, and- Right. … people speculate that Hong Kong is one
factor of it. So that’s obviously got to raise alarm bells
in Beijing? Yes, definitely. They don’t like that, right? Yeah. Yeah. So it’s actually, that’s very interesting. So what you’re saying is that the reaction
to the protests in Hong Kong to this amendment in particular, which represents tightening
of the screws, as you said, of Beijing on Hong Kong or potentially aversion in Taiwan. The reaction was so strong against that, that
it has actually destabilize the politics in the region, such that Beijing actually wants
to pull back. Yeah. Right? I mean, it’s pretty remarkable. Also the police brutality that is shown then,
of course the police is using tear gas and rubber bullet, and it is quite dramatic measure
by Hong Kong standard because in Hong Kong protesters used to be very peaceful, that
they built barricaded, they didn’t throw- Amazing. … Molotov cocktail, and anything like that. They never did that. So I got to ask you something, I got to ask
you something. What if this ever happened on the Mainland,
right? If this is what we’re seeing in Hong Kong,
right? Two million protestors. What’s the population in Hong Kong? A bit more than seven million. Seven million. Seven million. So it is two million out of seven million
people on the street. Okay. Okay. So that’s like a huge number, right? It’s a huge proportion. Proportion, right. But seven million is only a fraction of a
billion. Yes. Yes, definitely. Right? So this of course is the fear of the Chinese
Communist Party, right? Yes. Ultimately it’s that they would lose- The fear that it spill over to Mainland China,
the protests. Yeah, the fear is that they will lose control
of the country somehow. Not necessarily that it’s going to happen
now, but this is the underlying feel of everything. Right? This was the part of the peace that Deng Xiaoping
made in 1989 with the Tiananmen protests, right? Yeah. So I mean how realistic is it that this could
ever happen in China? I think it already happened in many places
in like in Tibet, in Xinjiang- Xinjiang. … we have a lot of this kind of larger scale
and more violent protests. That’s the Islamic part of the north- That’s the Islamic part of the- … north western part. … Yeah. So it is why they have this concentration
camp as a solution to kind of put down the unrest in Xinjiang. The problem is that in Mainland China, including
in Tibet, in Xinjiang they can resort to these extreme measures. It’s- Right because it’s the Mainland. … [crosstalk] It’s the Mainland. In Hong Kong, they cannot stand in the PLA
to stand. They cannot stand in the army. They cannot actually, they dare not shoot
people and accuse them people- Your point is that they would be able to get
away with much, much, much greater measures on the Mainland, and the international reaction- … Yes. … would be minimal? International reaction is still big, at what
happened in Tibet, in Xinjiang, but it is mostly moral accusation- Which in the U.S. there’s been largely a blackout
of this. … And people don’t know about it. And in Hong Kong there is the presence of
international press and also there’s this international recognition of Hong Kong special
trading status. If they really crack down hard on Hong Kong
and shoot people and establish education cam, things like that. Then immediately the international community
will withdraw its recognition of Hong Kong as a separate entity in trade and other matter,
and it will hurt China financially. So it is why they have the constraint that
they cannot crack down hard on Hong Kong, they don’t see this protest to grow. So the only thing that they can do is to back
down. How much of this is generational? In other words, the many of the protesters
were too young to meaningfully remember Tiananmen, right? Yes. The memory’s still alive and the Tiananmen
part of the collective memory that is transmitted from generation to generation because we,
we can see that in Hong Kong, June 4th, they have these videos and ready to commemorate
the killing in 1989. So the memory is still alive and it’s not
like in Mainland China that people don’t talk about it, don’t say about it, don’t write
about it. Yeah. So Ho, I want you to stick around, I want
to take us to Overtime for our subscribers. I want to talk to you about Chinese leadership. That’s something that you’ve written a lot
about. I also want to talk about the One Belt One
Road Initiative, and the significance of that for safeguarding foreign direct investment
in China, particularly after 2008, with the financial crisis and the drop in exports. And that obviously had a knock-on effect on
foreign exchange reserves, which is something we’ve talked about on the show, and it’s something
that you’ve talked about, the importance of that and the importance of that for the renminbi
dollar peg. And also, this really fascinating thing that
we haven’t spent much time talking about, which you’ve done a lot of research on, which
is the transformation of the population from being a labor input to being a source of consumption. Yes. All right? Yes. And this is also very fascinating. It’s something that Michael Pettis has written
a bit about when it comes to savings. So for regular listeners, you know the drill,
you know where to go. If you’re new to the program, or if you haven’t
subscribed yet to the Hidden Forces Overtime or Autodidact Super Nerd Subscriptions. You can do so at patreon.com/hidden forces
where you can get access to the Overtime audio, to this episode, as well as the transcript,
which will probably take a few days extra to come through because it’s going to take
some time to get it transcribed since we’re going to be releasing this right away, and
the rundown is going to be available immediately. So again, patreon.com/hidden forces and you
can also learn how to integrate the Patreon subscription straight into the Hidden Forces
website at hiddenforces.io/subscribe, where you can get access to over 70 rundowns and
close to 90 transcripts from the beginning of the show. Ho, thank you so much for coming on and stick
around. Thanks. Today’s episode of Hidden Forces was recorded
at Creative Media Design Studio in New York City. For more information about this week’s episode,
or if you want easy access to related programming, visit our website at hiddenforces.io and subscribe
to our free email list. If you want access to Overtime segments, episode
transcripts, and show rundowns full of links and detailed information related to each and
every episode, check out our premium subscription, available through the Hidden Forces website
or through our Patreon page at patreon.com/hidden forces. Today’s episode was produced by me, and edited
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Author Since: Mar 11, 2019

  1. Independency to Hong-Kong!

    YouTube is it allowed by CCP’s Politburo as WeChat/Alipay Ma’copy all dream from USA 😉 God Bless America…

    Detainee Organ Harvesting in China Approaches Genocide, China Tribunal Finds
    The China Tribunal, an independent committee investigating reports of forced organ harvesting in China, has issued its final verdict and its conclusions are horrifying.

    By John Loeffler
    June 20th, 2019

    https://www.google.fr/amp/s/amp.interestingengineering.com/detainee-organ-harvesting-in-china-approaches-genocide-china-tribunal-finds

  2. I'm a third-generation British Chinese (Hong Kong) and I have lived in mainland China, Hong Kong and Taiwan for 4 years as an adult. Increasingly, I take issue with the narrative of "Beijing is bad and repressive, whilst Hong Kong is free and being oppressed".

    I regard this panic being no different to the irrational exodus from HK in the 1980s and 1990s – the Chinese people who left HK then were proven to be dead wrong. If human rights are an issue, then why aren't the people in Macau SAR, who enjoy the same rights as HK, protesting? Simple, the people there aren't being exploited by financial oligarchs and Macau was never a political haven exploited by pro-Beijing, pro-Western or pro-Taiwanese (when the nationalists were in charge) agents.

    Also, Britain stripped the people of HK the right to live in Britain prior to the handover and deprived the people of democracy throughout its history. Conversely, all Macau residents got Portuguese passports; therefore, only the Macau people have right to 'escape communist tyranny' and flee to the UK under the EU's freedom of movement principle. But they're happy under the current system.

    Those talking about the glorious era under Britain are simply delusional. Yes, British rule beats Chairman Mao's tutelage, but the UK, and the white British minority in HK, were never interested in giving the people of Hong Kong democratic rights or full equal status. It was Britain that asked Beijing if universal suffrage could be included into HK's post 1997 constitution, and Deng Xiaoping gave the green light (Hong Kong can now can partially vote for its leader and half of its parliamentarians). The CCP is increasingly becoming like their former rival (KMT) in Taiwan, which slowly morphed the island into a democracy over 3 generations. Funnily enough, Britain and America tolerated Chiang Kai Shek's human rights abuses in Taiwan during the cold war.

    Also, regarding the point about culture, why did Britain deprive the vast majority of HK people's right to live in Britain? Because they're not culturally British or white enough. The people there speak Cantonese and various other southern dialects as their native language. Differences between mainland China and Hong Kong? I urge people to cross the border and go to Guangdong. There's ten times more Cantonese speakers in mainland China than Hong Kong – Cantonese came from 'Canton' (Guangdong) province. Naturally, the young Hong Kong people go into a state of denial when this point is made.

    This extradition bill is a storm in a teacup. Businesses moving to Singapore for freedom? Is this a joke? Singapore has a de-facto extradition agreement with China, requires people to apply for a permit to protest, canes dissidents and utilises censorship. I've already explained this is irrational behaviour on the part of ordinary locals against Beijing. Also if the Hong Kong judicial system is so great, then why did Edward Snowden have to flee from Hong Kong to Russia? That's right, major whistle-blowers in HK are not safe from the US deep state either.

    Why is the business community scared? Hong Kong is the nexus of Chinese financial fraud. The mega rich launder their money there and then divert the capital to real estate in the western world. Now that Xi is cracking down on this, the financial elite, that have pillaged mainland China, embezzled funds, engaged in bribery are running scared. A lot of the mega rich in HK (local or mainland migrants) are no angels and acquired their wealth via unscrupulous means; Beijing are going after them.

  3. It's really easy to understand the difference between Hong Kong and China. HK is an ex British colony that uses British law, HK has a rule of law. China doesn't have a rule of law only a corrupt communist party that doesn't care about individual freedom. HK was set up under a free market capitalist system that's why it has been so successful. Singapore is similar to HK, Singapore is an ex British colony also, that uses British law. Lee Kuan Yew, LKY, who became president of Singapore after independence from the UK kept the English law system and also the free market economy. That's why both Singapore and Hong Kong have been the poster child for success in Asia. For a country to prosper it needs a independent legal system that is fair. It's only now that western companies who have been ripped off by China are figuring out that China doesn't have a rule of law and the CCP is riddled with corruption. Lee Kuan Yew was a trained Barrister in England and new for a country to be successful you need a independent rule of law. That's why China is only going to go backwards. If you've traveled in the region you'll know that most Asian countries are corrupt third world holes full of poverty. Corruption is like a cancer in a country, it literally destroys the country. To be a successful country you need an independent legal system which is independent from corrupt governments. This give people confidence to invest their money there. That's why HK and Singapore have been so successful and that's why China is going backwards as no body trust the Chines Corrupt Government. Corruption is the scourge of a society and it give no one confidence to invest or live there. Remember Hong Kong wanted independence from the UK. Now the HK people are complaining about China strong arm tactics.

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