Tale of Two Cities

Singapore will soon scrap the outdoor mask mandate

Hong Kong and Singapore have always been rival cities. When the pandemic hit, the virus looked out of control in the Lion City, while Hong Kong shut down its borders and imposed strict quarantines.

But today over two years later, the two metropolises have gone completely different directions in their response to Covid-19 and the contrast could not be more stark.

Lee made the happy announcement today

Chief Executive Carrie Lam Cheng Yuet-ngor is still imposing strict social-distancing measures on residents, and expecting them to report positive Covid-19 tests that will result in them being sent to jail-like isolation quarters. While the flight ban on nine countries will be lifted on April 1 and travellers will only need to hotel quarantine for seven days, they will still need to self-monitor and have a final test on the 12th day to confirm they are indeed negative.

Across the pond, Singaporean Prime Minister Lee Hsien Loong declared that the outdoor mask mandate would be scrapped, fully vaccinated travellers could enter the city state quarantine-free, and his government was working towards a full resumption of air and land travel with its neighbour, Malaysia.

Singapore is obviously moving towards "living with Covid", compared to Hong Kong's "dynamic zero Covid", where we are still not sure what "dynamic" means.

Nevertheless, Lam was on the defensive today when asked if Hong Kong would follow Singapore's lead.

Lam is still pursuing "dynamic zero Covid" policy

"As I've also said on many occasions, the policies and measures to be adopted by each government in combating the Covid-19 epidemic will differ. I don't think that there's one size that fits all. I also don't believe that there are only two pathways," she said.

"That's why I said that perhaps it's not meaningful to ask us to choose whether we're going for route A or route B."

So does she mean there's a third or fourth pathway?

Lam also refused to be drawn into the debate as to whether Singapore had snatched the title of "Asia's global hub" from Hong Kong.

She argued Hong Kong remained an attractive financial centre and aviation base, as well as "a good place to live and work".

Perhaps before the coronavirus pandemic erupted in January 2020?

Children playing outdoors must wear a mask

It's 2022 and Hong Kong is struggling to survive economically. Bloomberg has released a report saying nearly 50 percent of European firms intend to either fully relocate staff out of the city or partially as a direct result of the draconian Covid-19 restrictions.

But Lam seems to think people and companies are still patiently waiting.

"I remain very optimistic that once this wave subsides, we'll pick up on the earlier discussions [on reopening the mainland border], and at the same time we'll be able to open up to the rest of the world," she said.

The rest of the world has moved on, Carrie... Hong Kong has already been long forgotten...

Today the city recorded 13,074 cases, of which 7,342 were from rapid antigen tests. Another 201 deaths were logged, including 42 backlogged. There are now over 1.1 million Covid-19 cases in Hong Kong and 6,770 deaths since the start of the pandemic.

Hong Kong Sends Warning Shot to WSJ

Tsang threatened to take "necessary action" against WSJ

The Hong Kong government continues to be on the offensive against anyone who may seem to be appear to be directing people on how to vote in the upcoming Legislative Council elections on December 19.

Its latest salvo was against the Wall Street Journal which published an editorial last Tuesday that said because the city's electoral system has been completely overhauled so that only "patriots" hold political power, so that "boycotts and blank votes are one of the last ways for Hongkongers to express their political views".

A screenshot of Tsang's letter headline

Secretary for Constitutional Affairs Erick Tsang Kwok-wai took offence to the editorial and threatened "to take necessary action".

He wrote a letter to the WSJ dated December 1, but in it he mentions the election "next month". Nevertheless, the letter was printed in full with the headline: "Hong Kong Issues a Threat to the WSJ", hinting that freedom of the press was also being intimidated.

Tsang claimed there were "factual inaccuracies and baseless assumptions" in the WSJ editorial.

In his letter, Tsang claimed to be "shocked" that Hongkongers could only either cast a blank vote or boycott the election.

"Please be advised that inciting another person not to vote, or to cast invalid vote, by activity in public during election period is an offence under... the Elections (Corrupt and Illegal Conduct) Ordinance, irrespective whether the incitement is made in Hong Kong or abroad," he wrote. "We reserve the right to take necessary action."

Chan says WSJ made a statement, not opinion

Last month Tsang also wrote to Bloomberg about its article about the upcoming election, claiming it was "sensationalist and biased reporting" that was "extremely deplorable".

However, Hong Kong Journalists Association chairman Ronson Chan Ron-sing expressed doubts over the need for Tsang to issue such warnings to a media outlet.

"The WSJ only made a statement that boycotts and blank votes are one of the ways voters can choose to express their political views. You can disagree with the WSJ and put forward your arguments." he said.

"Warning that it is against the law serves no purpose, and only makes you look like you are losing your bearings."

Ouch, but true.

Beijing Tempers Jack Ma

Ma's ambition to have the world's largest IPO was deflated

 

Ant Financial is refunding investors who had applied for the record US$39.67 billion IPO after the offering was suspended yesterday. The dual Shanghai and Hong Kong listing, which would have been the world's largest IPO was suspended less than 48 hours before listing because it may not meet listing and disclosure requirements due to changes in the regulatory environment in China.

Ant Financial focuses on small lenders

It's a shocking development for Ant Financial and founder Jack Ma Yun, and one he could not salvage. But it also shows Beijing doesn't want anyone to get bigger or more powerful than the Communist Party and is doing this to temper Ma.

"The party is flexing its muscle," said Victor Shih, associate professor at UC San Diego. "It's saying to Jack Ma, you are going to have the biggest IPO in the world, but that's not a big deal for the CCP, which overseas the world's second-largest economy."

For foreign investors, Bloomberg says the incident raises questions over the viability of Shanghai and Hong Kong as premium financial centres. The suspension of the IPO comes after Chinese President Xi Jinping said China would open up to allow more foreign access and gradually relax controls over the yuan and capital flows.

Maybe "gradual" means glacial gradual.

Xi said China will open up to foreign markets

The conflicting signals will make foreign investors question China's commitment to greater transparency that is needed in modern, open markets.

But there is also the problem of regulating an innovative hi-tech banking giant Ant Financial. 

Ma, who owns 50.5 percent of Ant Financial has said traditional lenders are run like "pawn shops", as banks always demand collateral before lending. In the future, he said, lending decisions should be decided by big data analysis.

Currently it allows people to pay for goods using Alipay, but it can also help clients, particularly small businesses get access to small loans. Ant's strategy is to earn fees by providing a digital platform for banks to reach small borrowers, and more accurately assess the credit risk.  

But perhaps this concept is too risky -- and it does sound risky -- for Beijing. 

Xiao Jianhua was kidnapped from HK in 2017

As a result Ma was summoned to Beijing on Monday for a rare meeting, and the IPO suspended the following day.

Ant Financial is not the first company to be tempered by Beijing. There are numerous previous examples such as Anbang Insurance Group, HNA Group, Tomorrrow Holding (where the founder was kidnapped from the Four Seasons Hong Kong in 2017), and China Evergrande Group.

Will Ma recover from this? He will have to surrender and lick his wounds, but perhaps Ant Financial is too far ahead of its time. Ma may have to bide his time and keep his head down for a while...

The Chinese Riddle

Rupert Murdoch with Xi Jinping in the Great Hall of the People

The Chinese like to talk in riddles, particularly their leaders.

Chinese President Xi Jinping received Rupert Murdoch in the Great Hall of the People today. The News Corp chairman probably wanted to pay his respects in the hopes that he might get a sign that the ban would be lifted on his Wall Street Journal website.

Wen Jiabao's family's wealth was unraveled by the NYT

According to Xinhua Xi said: "[We] welcome foreign media and correspondents to cover China stories, introducing China's development to the world, and helping the world grasp the opportunities (afforded by) China's development."

What did Murdoch say in return?

He apparently said to China Daily: "We are very happy, in my newspapers and different news outlets, to try and foster more understanding between our two countries (the United States and China), I think not just on a formal basis, but also with people themselves."

What Xi and Murdoch said need to be taken with huge grains of salt because Chinese state media aren't the most accurate when reporting what people, particularly foreigners say. Their words can be massaged to fit the agenda, and here it's to give the impression that China is open for reporting.

Wendi Deng on the day her divorce was finalized in New York

But what of blocking not only WSJ, but also The New York Times, Reuters and Bloomberg sites?

And not issuing journalist visas to both The New York Times and Bloomberg apparently in retaliation for them publishing stories about senior leaders' families and their web of wealth?

Meanwhile it's interesting Murdoch is making this pilgrimage after his 14-year divorce from Wendi Deng, who wasn't able to help him crack the China market... or perhaps she had other things in mind?

In any case it's no illusion that Murdoch is keen for global media domination and China is the biggest market he has yet to conquer. Apparently 21st Century Fox is looking for a Chinese partner to build theme parks around popular films and TV shows like The Simpsons.

Will we see a Simpsons' themed park in China soon?

Will China let him in?

Does Xi's statement above give any indication?

Fact of the Day: Jack Ma's Uber Loaded

China's one-time English teacher is now Asia's richest man

Move over Li Ka-shing -- Alibaba's Jack Ma is now Asia's richest man.

Rather than be sore about the news, the Hong Kong tycoon was happy to see someone else take top spot, a place Li had occupied since 2012 according to the Bloomberg Billionaire Index.

"I am nothing but happy when young people from China do well," said the 86-year-old Li through a spokeswoman. A spokesman from Alibaba refused to comment on Ma's net worth.

According to the Bloomberg ranking, Ma has a fortune of $28.6 billion and his personal worth is $28.3 billion, after his company went public in September, and has surged 54 percent since.

Another interesting fact is that Alibaba's $259 billion market capitalization makes it larger than Amazon and eBay combined.

"The billionaires in China are growing their wealth faster because China's economy is still developing, with plenty of room for growth," said Francis Ying, an analyst with Yuanta Research.

That means Ma's wealth will be expanding much more in the coming future, so he may be Asia's richest man for a while...

Forcing the Issue

American VP Joe Biden had tough words for Chinese President Xi Jinping

Earlier this week UK Prime Minister David Cameron was meek and compliant on his trip to China. He thought the submissive tactic would win him brownie points, but instead he was ridiculed for kowtowing to Beijing.

Then a few days later came American Vice-President Joe Biden who voiced his displeasure of the prospect of 24 journalists working for Bloomberg and the New York Times not having their China visas renewed in the next few weeks and may have to leave the country. That could mean the end of their on-the-ground reporting in China.

In a speech to an American business group (where he was preaching to the converted), Biden said, "Innovation thrives where people breathe freely, speak freely and are able to challenge orthodoxy, where newspapers can report the truth without fear of consequences."

He also encouraged young Chinese visiting the US to "challenge the government, challenge your teachers, challenge religious leaders".

For the deputy leader of the most powerful nation on earth to make these statements shows confidence despite the US's shortcomings.

At a meeting on Thursday with Beijing-based journalists for Bloomberg and the New York Times, Biden said he warned Chinese leaders over dinner that there would be serious consequences, especially from Congress if China forced out the journalists.

However, he added that Chinese President Xi Jinping appeared unmoved, saying the authorities would treat them according to Chinese law. But right now those processing their visa renewals are not following Chinese law...

It's quite obvious this latest development is retaliation against the two news outlets for digging through public records to piece together what they believe are pretty accurate financial pictures of both then Premier Wen Jiabao's and Xi's families.

Their series of stories were considered award-winning pieces of journalism outside of China, but not for Beijing, who considers delving into the private lives of its senior leaders as taboo.

After Bloomberg's explosive story about Xi's family seemingly benefiting from his political position, state-owned enterprises in the financial industry were instructed not to purchase Bloomberg terminals for the latest financial information.

This hit the company hard, its sales plummeted and have not recovered at all. One can imagine the Chinese firms also losing out on this precious timely financial information as well.

Bloomberg's chief editor Matthew Winkler is also currently caught in a tough situation, accused of not publishing another investigative piece for fear of the China reporters being expelled. He also unfortunately compared the Chinese Communist Party to the Nazis...

The fallout from this ongoing scandal is that one of Bloomberg's most seasoned China journalists Mike Forsythe has left the company.

Why is this all so important?

We, the west need people on the ground to tell us what is really going on in China. Even being in Hong Kong is not enough to feel the subtle shifts that happen politically, economically and socially.

By having this information we can make better business and political decisions; it also shapes our perception of the country by having these China journalists documenting every development there.

So if two dozen reporters are really forced to leave China by the end of the year, that's 24 less experts helping us discern what is really going on in the Middle Kingdom. And that's where miscommunication and misperceptions begin.

Beijing's seemingly retaliatory moves are not doing it any favours either. But it seems to think soft power is not the way to go when it comes to controlling foreign media's coverage of China.