Related to the trade
war?
Trump told us he had nothing to
do with the riots in Hong Kong. It reminds me most thieves never say they have
stolen nothing.
It is rumored they were helped by
CIA or NED
(National Endowment for Democracy) and it is too far-fetched to me. However,
CIA does not have a good record. It could be a bargain chip for the trade war.
When the rioters sang American songs and waved American flags, you can guess
easily who financed the riots. What happens if Americans sing Chinese songs and
wave Chinese flags in America? We would call them traitors and most likely they
are paid by the Chinese.
It could be assisted by Taiwan to
demonstrate that “One Country, Two Systems” does not work.
It could be by the advocates for
Hong Kong independence thinking naively that U.S. would send a carrier to help
them. That would not happen as U.S. does not want to risk WW3. If the
protesters think they have more freedom in the colonial time, think again. Most
high officers including the governor had been appointed by United Kingdom. My
late father told me he knew some high officials who swept the street in London.
It could be a combination of all
three. The protests were obviously well organized and these three have the most
motives and benefits. There are more than a thousand of rioters dressed in same
custom and color.
Hong Kong's root problem
After 10 years, a Hong Kong
college graduate can double his salary but the cost of an average apartment has
been tripled; he can never buy an apartment. Every city in every generation has
its problems. The high costs of housing in Silicon Valley and Vancouver (due to
Chinese immigrants) are not affordable for most local youths. We have not seen
similar riots on this problem.
Hong Kong cancelled the estate
taxes and it led to influx of money from foreign countries and most are wealthy
Chinese. They invest in real estate but not in research / development that
would create good-paid jobs.
About 50 years ago, Hong Kong had
only one decent university and now there are about 10. With more college
graduates chasing the limited number of jobs, employers do not have to pay them
a lot.
The government has not done
enough to suppress the abnormal rise of real estate prices, which has widened
the wealth gap. It is partly due to the developers and real estate owners do
not want to see their investments falling in prices. Now the prices are falling
as many would leave Hong Kong.
The major problem of Hong Kong is
housing and it spreads to most other sectors. However, Hong Kong still has a
lot to go for it such as affordable health care, highest longevity, 15th
GDP per capita, free education, first-class airport and world-class public
transportation. The advantages of being political stable and good legal control
are shaking. I expect that the unemployment rate will be tripled with many
small businesses closed due to the riots.
The revision of extradition is
just an excuse to me. Many countries have extradition agreements, so the
criminals cannot find shelter in foreign land. China does not want to publicize
the criminals (many are corrupted officials) in Hong Kong. So far, Hong Kong
riots are not outrageous. If it happens in other countries such as U.S. there
would be plenty of lootings and the police would have used real bullets
especially when their lives have been endangered.
My predictions
Obviously the results are bad for
Hong Kong especially for the youths. Tourism will be hurt to start, foreign
investments will be withdrawn and more rich HK folks will migrate. The
government will contribute less for social services such as housing and the job
market will be far worse than today. Without tourists and a stable financial
center, I bet Hong Kong will be in an economical depression. The rioters today
will suffer economically tomorrow if they cannot immigrate. Does U.S. have
enough of these ‘trouble makers’?
As of 8/2019, China has not sent
soldiers or police force to suppress the rioters. China tries to avoid the
blame of violating human rights from many countries headed by the U.S. Hong
Kong is not important to China as it was used to and China wants to avoid the
world misguided opinions. China can control Hong Kong easily by turning off the
water supply and the electricity supply without firing a single bullet.
Recently, China stops pilots who were on strike to fly over China. It could
lead Cathy Pacific to face bankruptcy.
A democratic society should let
both sides to express their opinions peacefully. Today, the expedition revision
is not the reason for the riots. Contrary to many beliefs from Hong Kong, I
believe in the police force to maintain the peace of society and the rioters
(not the peaceful protesters) should be punished.
Most overseas Chinese agree with
me while most folks in Hong Kong especially the youth do not.
Update 8/2019. China announced that they will make Shenzhen a
financial center and hence replacing Hong Kong. Hong Kong is digging her own
grave. To me, a small group (about a thousand) started the riot for their own
agenda that will be found out soon, and many have followed without thinking of
the consequences of their actions.
Update 9/2019.
The riots became worse. Several
subway stations had been damaged. Eventually the citizens of Hong Kong will pay
for it with rising fares. Hong Kong is entering a prolong period of recession
with layoffs. Tourism is pretty down to the lowest level for a long while and
foreign investments have been shaken. Many citizens are planning to migrate to
other countries. Hence, the property values will be down. The government will
have less money to fund public housing and the problem of affordable housing
remains. The major real estate developers and owners will lose a lot and they
deserve what they have been trying to maintain the high cost of real estate.
Update 11/2019.
·
U.S. Congress passed a Hong Kong Human Rights and
Democracy Act. Should China pass a law on accusing U.S. allowing constant
shooting of her citizens against each other?
·
The West’s media are biased. Some rioters are
criminals to me. If they do this in U.S., many will be shot for sure. Hong Kong
police so far has been very restrained. I can see at least two cases, the
police should shoot to protect their lives.
·
Some rioters waved U.S. flags and sang U.S.
songs. What happened if it happens in the U.S.? Most likely they would receive
rotten eggs and called traitors.
·
Hong Kong has been used as a pawn in the trade
war with China to me.
·
China has rescued Hong Kong many times from SARS
to economic crisis. China may not do this again this time. Hong Kong used to be
30% of China’s GNP and now it is only 3%. If Hong Kong cannot maintain the
number 3 position in global financial centers, it will be in a recession for a
long time. Many businesses suffer from the riots have gone bankrupt.
·
China does not allow U.S. warships to port in
Hong Kong. We have to find another ports for fuel.
·
Hong Kong will be in a long recession without
tourists and moving financial centers to Macau and/or Shenzhen. China had saved
Hong Kong from many crisis, but not this time.
·
Many companies plan not to hire the recent
college graduates due to they supported the riots. One smart lady encouraged
them to start new businesses with many successful examples. From my estimate,
for every 10,000 businesses, only 1 is successful. The successful one will not
hire the ‘trouble makers’ and 9,999 of them will have miserable lives selling
stuffs in the street and they would be wiped out by the next riot. Another
example of law and punishment.
The above article is from my book "Trade War with China".
# Filler: The most powerful word
I was deeply moved by the
family members of the church victims forgiving the shooter. I wrote a brief post: "Forgive" is
the most powerful word in every language and in every culture. I forgot it until
I received a response from Jim."Tony, Without even knowing it, you made the greatest comment I have seen on here--and it had nothing to do with investing. You mentioned somewhere that "Forgive" is the most powerful word in every language. Wow.
I shared that with my children. Financial commentary is easily forgotten, but that will stay with me forever. Thank you for that. Jim"
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