Hong Kong tycoons with US$140 billion of fortunes at stake put their names behind China’s proposed security law for city

• A developer association said it backs China’s proposed national security bill for Hong Kong because it will guarantee stability and prosperity
• The families behind Swire Pacific, Galaxy Entertainment Group and Jardine Matheson Holdings have issued similar endorsements.

• After 12 months of political turmoil, a pandemic and the worst recession on record, Hong Kong’s richest people have emerged with their fortunes intact.

  The billionaire class of real estate developers, taipans and conglomerate founders who dominate Hong Kong’s economy are now lining up to support a controversial national security law, siding with the Chinese government despite widespread opposition from local residents and Western leaders.

  The nine richest people with companies listed in the city have endorsed the bill, either personally – as was the case with 

  Li Ka-shing

   and Michael Kadoorie – or through one of their businesses or relatives. Their fortunes are worth a combined US$140 billion.

  “Business leaders in Hong Kong have no choice if they do not relocate themselves and their businesses,” said Steve Tsang, director of the China Institute at SOAS University of London. “The passing of the decision on the national security law is a clear warning to them, and if they do not publicly support it, they know they risk being seen as opposing it.”

  

  A 70-strong delegation of tycoons, business elites and professionals meet President Xi Jinping in the Great Hall of People on 21 September 2014. The tycoons sitting in the front row include (from left to right) Bank of East Asia chairman David Li Kwok-po; New World Development chairman Henry Cheng Kar-shun; K Wah Group chairman and Galaxy Entertainment Group founder Lui Che-woo; Wharf (Holdings) chairman Peter Woo Kwong-ching; Chairman of Kerry Group, Robert Kuok Hock Nien; Henderson Land Development chairman Lee Shau-kee; Cheung Kong (Holdings) chairman Li Ka-shing; and Tung Chee-hwa, a vice-chairman of CPPCC . Photo: Handout

  A developer association representing firms including 

  Lee Shau-kee’s Henderson Land Development

   and the Kwok family’s Sun Hung Kai Properties said it backs the law because it will guarantee stability and prosperity. The families behind 

  Swire Pacific

  , Galaxy Entertainment Group and 

  Jardine Matheson Holdings

   have issued similar endorsements.

  Critics have argued that Beijing’s plan to impose the security bill by sidestepping Hong Kong’s legislature will mark the end of the “one country, two systems” principle that has underpinned the city’s status as a global financial hub.

• One of the law’s staunchest opponents is media tycoon Jimmy Lai, who has called out his fellow moguls for kowtowing to Beijing. Lai was arrested along with others earlier this year as part of a crackdown on pro-democracy figures who supported demonstrations that began last June.
• While those protests kicked off one of the most turbulent 12 months in Hong Kong’s history, the collective fortunes of the city’s richest haven’t suffered. Since the unrest started, their net worth has actually climbed 0.7 per cent, according to the Bloomberg Billionaires Index. That compares with an 8.1 per cent slide in the benchmark Hang Seng Index over the same period.One of the law’s staunchest opponents is media tycoon Jimmy Lai, who has called out his fellow moguls for kowtowing to Beijing. Lai was arrested along with others earlier this year as part of a crackdown on pro-democracy figures who supported demonstrations that began last June.While those protests kicked off one of the most turbulent 12 months in Hong Kong’s history, the collective fortunes of the city’s richest haven’t suffered. Since the unrest started, their net worth has actually climbed 0.7 per cent, according to the Bloomberg Billionaires Index. That compares with an 8.1 per cent slide in the benchmark Hang Seng Index over the same period.

Vietnam ratifies significant trade deal with European Union

Vietnam on Monday ratified a significant trade deal with the European Union, which is expected to boost the country’s manufacturing sector and exports, as it recovers from a dip caused by the coronavirus pandemic.

Lawmakers approved the agreement as they met in the National Assembly for the first time since the pandemic began. The deal was signed in Hanoi last June and was ratified by the European Parliament in February.

When it takes effect next month, the EU will lift 85% of its tariffs on Vietnamese goods, gradually cutting the rest over the next seven years. Vietnam will lift 49% of its import duties on EU exports and phase out the rest over 10 years.

The implementation of the EU-Vietnam Free Trade Agreement "can’t come at a better time for Vietnam when it’s on the path of economic recovery after several months of closure due to COVID-19,” said economist Pham Chi Lan, former adviser to several of Vietnam’s prime ministers.

Vietnam prioritized public health and safety when the coronavirus started to peak in China. It closed the border with China in January and with the world in February while imposing a social shutdown that lasted until the end of April. The tough measures contained Vietnam's outbreak to just over 300 cases with no deaths and no local infections have been reported for almost two months.

Still, its economy has dipped because of the illness and containment measures elsewhere, and the manufacturing sector has been hit by restrictions in the movements of goods and people.

The pandemic revealed shortcomings in its manufacturing sector. While Vietnam's own factories were safe to open, they could not operate because they sourced their materials from China, particularly for major export products in textiles, footwear and electronics.

“COVID-19 has given Vietnam a hard lesson about being dependent on China,” Lan said. “It also showed other countries, including the EU, the negative impacts of relying too much on China in their product value chain and the EVFTA comes in the right time as all parties realize they need to pivot and restructure to diversify the supply chain.”

Following the trend of manufacturing shifting from China to other countries, accelerated first by the China-US trade war then COVID-19, the agreement is expected to raise Vietnam’s competitiveness in attracting investors.

Vietnam is the EU’s second-largest trading partner in Southeast Asia, with the trade turnover reaching $56 billion last year, according to the national general statistics office.

With Singapore being the only other country in Southeast Asia holding a free-trade agreement with the EU, Vietnam will have an edge regionally.

“EVFTA will add to the positive momentum drawing manufacturing to Vietnam,” said Michael Sieburg, a partner of YCP Solidiance, a corporate strategy consulting firm focusing on Asia.

“Manufacturers looking to locate in the region and seeking a more competitive access to EU markets will be more inclined to shift manufacturing to Vietnam as a result of EVFTA,” Sieburg said.

Foreign direct investment in Vietnam reached over $38 billion in 2019, marking a 10-year high. With about two-thirds of it going into manufacturing, the agreement should help sustain the trend, Sieburg said.

Lawmakers also ratified a second pact that protects investors. They had been negotiated since 2012 and give EU companies equal treatment with domestic bidders in competing for public contracts in Vietnam. They also commit Vietnam to standards for sustainable development, including improving its human rights record, protecting labor rights and upholding its pledges to deal with climate change under the Paris accord.

More than 30 years since carrying out economic reforms to integrate with the global economy, the country with a population of 95 million, is emerging to be one of the world’s next factories.

“Vietnam has to attract (investment) from countries with high technologies and upholding good corporate governance, gradually replacing the partnership with countries having outdated standards. The free trade agreement with EU will help Vietnam raise its skills and standard. It is a great opportunity for Vietnam to excel,” Lan said.

Signs of infighting surface among Chinese leadership Chinese Premier Li Keqiang’s ‘stall economy’ proposal met with criticism from within CCP

The two most powerful figures in the Chinese leadership appear at odds with each other over a stimulus approach for the economic recovery, pointing to a rift in the Chinese Communist Party (CCP).

Chinese Premier Li Keqiang (李克強) on May 28 proposed the notion of a "stall economy" as a way to revive the battered state of things and spur spending amid the coronavirus fallout. The policy would signal the return of street vendors, who were largely cracked down on prior to the pandemic.

Less than a week later, however, CCP mouthpieces and a number of government media outlets have mounted a campaign against that approach over its potential to blemish the image of cities.

In a commentary on Saturday (June 6), Beijing Daily lashed out at vendors for being the source of fake products, noise pollution, and traffic woes, and claimed their return would only compromise efforts to improve hygiene and promote a civilized society. China Central Television (CCTV) also carried an opinion piece on its website Sunday (June 7) slamming major cities for jumping on the bandwagon in pursuit of the stall economy model.

Street vendors are not an elixir to economic woes, and blindly adopting the method will see years of "delicate management" of urban development go down the drain, the article proclaimed.

The backlash from the party's own mouthpieces indicates the opposing views of Li Keqiang and Chinese leader Xi Jinping (習近平), sparking talk of conflict brewing within the CCP. Xi was allegedly riled by Li's remark at the annual National People's Congress last month that China still has 600 million people living on a monthly income of 1,000 yuan (US$141), a reminder of the country's ongoing struggle to lift its people out of poverty.

Huawei’s founder declares ‘war’ on West

Meng Wanzhou, daughter of Huawei founder Ren Zhengfei, is wearing a GPS monitor on her ankle while under house arrest in Vancouver

BLOOMBERG

Huawei’s founder urged workers to crush rivals and “blaze a trail of blood” in the Chinese telecoms giant’s battle for supremacy.

Ren Zhengfei ordered staff at Huawei’s research and development centre in Hangzhou, eastern China, to learn from Google’s unrelenting march. “Surge forward, killing as you go, to blaze us a trail of blood,” he said a month after the arrest of his daughter in Canada in 2018, according to a transcript seen by The Wall Street Journal.

Russia and Turkey just escalated a war while you weren’t watching

Russia and Turkey just escalated their two-front war over which country will be the big dog in the Middle East. The two rivals have been at this game for a couple of centuries, but it just got a lot more serious this week when Russia introduced jet fighters into the Libyan civil war.

Coronavirus may have shut down Texas beauty parlors and Louisiana bars, stopped international travel, and cleared streets across the globe, but hasn’t brought war to a halt. Rather, Russia and Turkey are in the midst of a multifront proxy escalation in both Libya and Syria.

Russians have long memories. They recall when Imperial Russia fought Ottoman Turkey in the bloody Crimean War. Ottoman Muslim forces fought Christian Tsarist troops on the Black Sea peninsula, where more fighters fell to the Asiatic cholera epidemic than on the battlefield.

Turkey won. Russia today, however, once again occupies Crimea. The 19th-century Crimean War was the crucible in which were forged Russo-Turkish antagonisms and their 21st-century imperial dreams.

Both Russia and Turkey want to take advantage of a dysfunctional and shrinking European Union, a solipsistic America and a China focused on consolidating power in its own neighborhood first. The global pandemic provides an opening for two ambitious nations to both stand their ground and stake new claims.

Syria and Libya may seem like booby prizes, but what happens in Damascus and Tripoli matters. It certainly matters to the victims of indiscriminate killings. People have deeply suffered in Syria, under the brutal Assad regimes and, since 2011, when a Syrian version of the Arab Awakening was quickly quashed. Images of the total destruction of Raqqa and Aleppo look like post-World War II Berlin.

Russians targeted and ran air sorties hitting hospitals, schools, and any infrastructure providing solace and survival. Bashar Assad’s Russian-supported regime sought total annihilation and rebel capitulation. Most of the nation was brought to its knees by Putin and Assad’s one-two punch.

The only hope for normalcy and peace was in Syria’s northeast—a predominantly Kurdish region—where until 2018, well-protected American forces had a minimal presence and maximal effect. It was a relatively safe American military investment for an active role in the region’s future. The U.S. presence guaranteed the safety and security of the region’s toughest anti-ISIS fighters: the Kurds.

What blew-up this accommodation was not a Russian bomb or a Syrian troop incursion. What upset this American humanitarian effort and the fragile balance of power was a single, unexpected and capitulating White House phone call with Turkish President Recep Tayyip Erdoğan. The gist of the conversation? America was pulling out; Turkey could move in.

America’s departure was Turkey’s invitation to run amok. The cost? Syrian lives, regional stability, American credibility, allies’ trust and a seriously messed-up neighborhood with no immediate prospect for lasting peace. Russia and Turkey continue their violent geopolitical game in Syria, testing each other’s will to grab what they can and dig in where they must

Moscow and Ankara, fighting for influence, oil and a bigger Mediterranean footprint, have now also squared off in North Africa. Libya is the new theater for both soldiers of fortune and modern imperial forces. Russia’s introduction of advanced fighter planes indicates that things started to go south for Moscow’s ally, opposition leader General Khalifa Haftar.

Two major fighting forces act as Turkish and Russian proxies. One, the U.N.-backed Libyan Government of National Accord, is partly underwritten and fully supported by Turkey and is fighting for dear life. The other is Haftar’s Russian-tied insurgent group with a base of operations in Benghazi. Haftar claims popular legitimacy, seeks international recognition and, until recently, was rapidly closing in on Libya’s capital, Tripoli. The place is a hot mess.

Libyan lawlessness and violence make the country ungovernable. That makes it the perfect place for drug runners, migrant smugglers, arms dealers, oil thieves and marauding men terrorizing innocent citizens.

Meanwhile, Russia and Turkey pump up their respective Libyan teams’ sides and pretend to broker ceasefires. Lulls in battle allow the warring factions to regroup and jockey for international advantage and sympathy in this endless on-again, off-again war.

Vladimir Putin longs for the days of the Soviet Union. Erdoğan pines for the Ottoman Empire’s lost glory. Both leaders are facing political challenges at home as the coronavirus crisis runs rampant throughout their countries. During these unsettling times at home, there is no better distraction for faltering leaders than a foreign war against a traditional foe. Turkey and Russia are just warming up.

Wartime presidents capitalize on national pride and military adventure. The losers of these ill-considered and vain wars invariably are civilians. Last weekend reminded us that Memorial Days come and go, but memories of hardship, horror and war inevitably fade—even as global conflicts flare anew.

The views expressed in this article do not necessarily reflect the views this blog

Pressures increasing on Indonesia and Malaysia in the South China Sea. By Ben Westcott and Brad Lendon

An Indonesian air force pilot prepares for taking off in an F-16 at an air base in Pekanbaru, Riau .

Chinese and Malaysian vessels were locked in a high-stakes standoff for more than one month earlier this year, near the island of Borneo in the South China Sea.

The Malaysian-authorized drill ship, the West Capella, was looking for resources in waters also claimed by Beijing, when a Chinese survey vessel, accompanied by coast guard ships, sailed into the area and began conducting scans, according to satellite images analyzed by the Asia Maritime Transparency Institute (AMTI).

Malaysia deployed naval vessels to the area, which were later backed by US warships that had been on joint exercises in the South China Sea.

Beijing claimed it was conducting "normal activities in waters under Chinese jurisdiction," but for years Chinese vessels have been accused of hounding countries who try to explore for resources in waters that China claims as its own.

Now, experts say the Chinese ships are adopting increasingly forceful tactics, which risks sparking new conflicts with major regional powers such as Malaysia and Indonesia.

Greg Poling, director of the AMTI, said the countries are more important than ever as Chinese ships expand their reach in the region, mostly due to the advanced construction of Beijing's artificial islands in the South China Sea.

"(The islands) provide forward basing for Chinese ships, effectively turning Malaysia and Indonesia into front line states," Poling said. "On any given day, there about dozen coast guard ships buzzing around the Spratly Islands, and about a hundred fishing boats, ready to go."

Nine-dash line

The South China Sea is one of the most hotly contested regions in the world, with competing claims from China, Vietnam, Philippines, Malaysia, Brunei and Taiwan and Indonesia.

Beijing's territorial claims, known as the nine-dash line -- owing to the markings printed on Chinese maps of the region -- are by far the largest and encompass almost the entirety of the sea, from Hainan Island down to the top of Indonesia. China's claims have no basis under international law and were found to be invalid in a 2016 international court ruling.

Despite this, from about 2015 the Chinese government began to bolster its territorial ambitions by building artificial islands on reefs and shoals in the South China Sea, and then militarizing them with aircraft strips, harbors and radar facilities.

"These (islands) are bristling with radar and surveillance capabilities, they see everything that goes on in the South China Sea," Poling said. "In the past, China didn't know where you were drilling. Now they certainly do."

Experts say Beijing has created an armada of coast guard and Chinese fishing vessels that can be deployed in the South China Sea to harass other claimant's ships or sail in politically sensitive areas.

Growing aggression

The confrontation over the Malaysian drill ship wasn't the first act of aggression by the Chinese government in the region in 2020.

The year began with a standoff in the Natuna Islands on the far southern end of the South China Sea, territory claimed by China and Indonesia. Vessels from both countries were involved in the standoff, which began when Chinese fishing vessels started to operate inside Indonesia's exclusive economic zone.

Eventually, Indonesia deployed F-16 fighters and naval ships to the islands and President Joko Widodo personally flew to the area, in an unusual show of strength from the country.

In April, a Chinese maritime surveillance vessel rammed and sank a Vietnamese fishing boat near the disputed Paracel Islands in the South China Sea.

The act prompted Vietnam to send a diplomatic note to the United Nations restating its sovereignty over its exclusive economic zone in the South China Sea. Foreign Ministry spokesman Geng Shuang responded by saying China would take "all measures necessary" to safeguard Beijing's interests in the region.

"I want to stress this: attempts by any country to negate in any means China's sovereignty, rights and interests in the South China Sea and to reinforce its own illegal claim are bound to be fruitless," Geng said.

China's push to modernize its military (2017) 02:26

Insecurity

Beijing has a long history of harassing other countries' vessels in the South China Sea, mostly from Vietnam and the Philippines and also occasionally from Malaysia and Indonesia.

In the past, Chinese diplomats have helped soothed aggrieved parties, but experts say the fallout from the coronavirus and the rise of so-called "wolf warrior" diplomacy in Beijing have removed any circuit breaker in the relationship between China and its regional rivals.

"What has changed is that they've really taken the glove off of the fist diplomatically. The statements are brash and unhelpful," said Poling.

Experts said Beijing's growing forcefulness in the region is partly driven by the global coronavirus pandemic, which has dealt a heavy blow to China's rapid economic growth and damaged the country's international reputation.

At the meeting of its parliament in May, the Chinese government didn't set a target for annual GDP growth for the first time in years, a sign that it is concerned about falling economic performance.

At the same time, tensions are rising with the United States and Europe over Beijing's role in containing the initial outbreak and whether it gave the world enough time to respond to the pandemic, which has killed more than 380,000 people.

China is embracing a new brand of foreign policy. Here's what wolf warrior diplomacy means

Concerned about appearing like its grip on power is slipping, the ruling Communist Party is doubling down on its rhetoric and on its nationalistic agenda, which includes control of the South China Sea, experts said.

Beijing is keen to foster a narrative that the US is retreating as a global power to solidify its hold on the region, said Ian Storey, senior fellow at ISEAS-Yusof Ishak Institute in Singapore.

"It will want to show Southeast Asian claimants that American military power is on the decline and its commitment to the region is waning," Storey said. "(It will want to show that) the economic problems that China is facing will not impact its policy on the South China Sea."

So far, Malaysia and Indonesia have tried to avoid letting South China Sea dominate their relationship with China, but with Beijing marking its territory in the region, the days of quiet diplomacy might not last forever.

"At what level of aggression does it become impossible to ignore? ... At what point do they add their voice to the criticism that you've been getting for years and years from Hanoi and Manila?" AMTI's Poling said.

US increases military pressure on China as tensions rise over pandemic

Free-for-all

Facing an entrenched Chinese presence on their doorstep, now might seem like the time for Southeast Asian nations to band together and face down Beijing's presence in the region.

But Storey said with regional powers preoccupied with coronavirus as well as their own economic and political crises, any hope of unity in the Association of Southeast Asian Nations (ASEAN) was unlikely.

"No matter how hard China pushes I don't think we're going to see the ASEAN members coalesce and present that strong united front against China," he said.

"I think going forward in the next six months, towards the end of 2020, we can expect China to double down on its assertive behavior in the South China Sea."

Malaysia has long worked to balance the benefits of a close relationship with China with running its own independent foreign policy, AMTI's Poling said, which is why previous clashes with Chinese vessels in Malaysian waters were kept out of the media as much as possible.

Indonesia has in the past opened fire on Chinese fishing vessels that failed to leave its waters, and President Widodo's tough behavior in January showed he will not sit by while Beijing moves into the Natuna Islands.

But experts say China won't be easily deterred.

"Beijing believes it can wear down Indonesian opposition; and eventually Indonesia, much like Malaysia, will realize that it has little choice but to accommodate China's presence," Foreign Policy Research Institute senior fellow Felix Chang wrote in January.

Still, there is risk too for the Chinese government. The United States is already increasing its freedom of navigation operations in the South China Sea, holding half as many in the first five months of 2020 as it did in the whole of last year.

Coronavirus may be giving Beijing an opening in the South China Sea

Washington is

also working to directly support Southeast Asian nations in the South China Sea. The Malaysian Navy received its first batch of surveillance drones from the US in May.

And, during the West Capella's operations, US Navy warships performed what the US Navy called "presence operations" near the drill ship while it was being monitored by the Chinese vessels.

"The US supports the efforts of our allies and partners in the lawful pursuit of their economic interests," Vice Adm. Bill Merz, commander of the US 7th Fleet, said in a statement at the time.

Speaking in a public lecture in May, James Holmes, a professor at the US Naval War College and former Navy officer, said that as Beijing pushes harder in the South China Sea, the US may look like the better bet for a steady friend.

"I think China has actually seriously overplayed its hand by being so bullying and by being so aggressive," Holmes said.

"That starts driving together allies that are worried about Chinese aggression ... The more China pushes the more coalition partners are likely to unite and push back."

Any push back could cost Beijing economically.

China has close trade ties with many of its regional neighbors, such as the Philippines, Malaysia and Indonesia, and needs them for parts of its international agenda such as its much trumpeted Belt and Road Initiative -- the country's interlinking web of regional trade deals and infrastructure projects.

"I think there's already been a lot of unease in the region about how China has used Covid-19 to push its claims in the South China Sea," said Storey, from ISEAS-Yusof Ishak Institute.

"China won't want to completely destroy its relations with Southeast Asia by pushing too hard."