In Asia’s World City, a push for “localism”

Hong Kong is days away from legislative elections that are unlikely to alter the city’s political power balance but certain to highlight residents’ alienation from their mainland overseers.

I have an essay titled “China’s Hong Kong Dilemma” in the current issue of Bloomberg BusinessWeek in which I ponder the curious rise of Hong Kong’s “independence” movement. In fairness, to call this group a “movement” probably overstates its significance. There is zero chance China’s leaders will permit Hong Kong, which the mainland reclaimed from Britain in 1997, to break away and set itself up as some sort of separate, sovereign entity. Hong Kong relies on China for 70% of its water, most of its food and half its trade. For good measure, Beijing keeps 6,000 People’s Liberation Army troops garrisoned here.

Pro-independence leaders are a fractious and quixotic bunch–nearly all of them idealistic twenty-somethings, fresh from university. To date, their rallies have drawn crowds of no more than a few thousand. But, as with protests here two years ago, a heavy-handed response by Hong Kong’s mainland-controlled government has succeeded in transforming a loose collection of fringe dissenters into high-profile political heroes. In the case of the independence leaders,  Hong Kong’s Electoral Affairs Commission rushed out new rules for registration to disqualify six “localist” candidates from running in legislative elections, thereby guaranteeing them public sympathy and extensive media coverage. In recent days, Hong Kong officials have doubled down on their ham-fisted approach, deploying nearly as many police as protestors to monitor pro-independence rallies, and then warning of dire consequences for students and teachers who have the temerity to discuss Hong Kong independence in the city’s schools. Predictably, those moves only hardened localists’ resolve.

How all this will affect election results is anyone’s guess. Mike Rowse, a former Hong Kong government official, warns localists may draw thousands of votes and cannibalize support for the legislature’s mainstream pro-democracy candidates, breaking the democrats’ ability to block further reductions in civil liberties.  In the South China Morning Post, Gary Cheung and Owen Fung argue that whatever the outcome of the legislative election (which will take place on Sept. 4), the pro-independence movement is just getting started.

Here are some other things we’re watching today….

The Hong Kong woman convicted of assaulting a police office with her breast probably won’t have to do jail time.  But 30-year-old Ng Lai-ying failed to overturn her conviction on assault charges for obstructing an officer last March during a protest against parallel traders from China’s mainland. The office charged that Ng assaulted him by bumping him with her chest. The case drew international media attention, inspired protesters to organize a “breast walk” outside police headquarters in Wanchai–and offered a boon to stand-up comics everywhere. SCMP

More Hong Kong students are applying to mainland universities: If anti-mainland sentiment is rising among students in Hong Kong, it hasn’t deterred them from applying for places at mainland universities. The South China Morning Post reports that the number of Hong Kong students applying to mainland universities has risen tenfold over the past decade, from below 1% of all students applying in 2006 to over 7% in 2012. The SCMP notes that last year, about 3500 Hong Kong students, or about 6% of the total, applied to mainland universities. SCMP

Preparations for the G20 summit in Hangzhou proceed apace. The China Digital Times reports that the Hangzhou government “has gone full-throttle in its face-lifting efforts” constructing a new airport expressway, overhauling the city’s traffic network, building new pedestrian walkways and cyclist lanes. Those last two are bit of a puzzle given that, to ease congestion during the summit, Hangzhou’s municipal government also has declared a week-long holiday, ordered closing of restaurants and shops, and offered residents free admission to tourist attractions in outside Hangzhou.  It’s unclear whether all these emoluments will be sufficient to outweigh the trial of passing through the Hangzhou airport, which was last week named by China’s Civil Aviation Administration one of the worst-managed in the country.

Are auto sales in China running out of gas? New car sales in China roared to 24 million vehicles in 2015, a record high and up from just 2 million vehicles in 2000. Last year China became the world’s biggest market for passenger cars. But now, according to a report in The Wall Street Journal, foreign auto giants including Toyota, Ford and General Motors are scaling back their China ambitions. The problem? Apparently, there are several, including rising competition from domestic manufacturers and minimal brand loyalty of Chinese car buyers. But this story doesn’t entirely make sense to me. Just two weeks ago, the WSJ reported that China’s auto market grew in July at its fastest pace in three-and-a-half years. July was the third consecutive month that auto sales grew at a double-digit rate.

Things are tough for China’s electric vehicle makers too. Bloomberg predicts a “massive shakeout” in China’s electric vehicle market as the government imposes stricter technology standards. China has more than 200 manufacturers of new-energy passenger vehicles, buses and special use vehicles. The Bloomberg story cites a “senior executive with the state-backed auto manufacturers’ association” and a “government-linked newspaper” as sources for its warning that new standards could “push as many as 90% of EV startups toward extinction.” Bloomberg

Meanwhile, the broader economy shows few signs of recovery. A thoughtful analysis in The Wall Street Journal notes that while China’s currency has remained relatively stable in the last few months, many investors worry that China’s economy is fragile and that the time-honored remedies of lower interest rates and increased government spending are unlikely to revive it this time around. The Journal says many investors think the Chinese currency is overvalued relative to the state of its economy, which most fundamental indicators show to be in deteriorating health. Says the Journal: “Signs abound that consumers and businesses are bracing for further devaluation.” The story quotes former IMF China expert Eswar Prasad as speculating that China’s leaders will do “everything in their power” to maintain domestic and external stability before and immediately after the September G20 summit. But it can’t prop up a weakening system forever, especially if the US Federal Reserve raises interest rates. WSJ

And finally, Matt Damon makes Chinese audiences swoon–and not in a good way. Many Chinese moviegoers took to social media this past week to complain that 3-D versions of the latest Jason Bourne action thriller left them feeling dizzy and even sick. Hollywood and China’s cinema chains have made a huge effort to push the 3-D format in China. Nearly 90% of China’s movie screens have 3-D technology. The new Bourne flick was mostly shown in 2-D elsewhere in the world. But in China, many have complained that director Paul Greengrass’s signature style of quick-cuts shot with hand-held cameras is just too overwhelming. WSJ

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