At an informal dinner of the EU heads of state and government in the Slovenian castle of Brdo, the relationship with China was also on the agenda, albeit a minor topic at the end. Attention is now being drawn to a detail in EU Council President Charles Michel’s communiqué on the meeting. China is considered a “competitor, partner and systemic rival,” the Belgian remarked. Anyone familiar with the EU’s triad for positioning itself towards the People’s Republic will notice: Until now, the order was “partner, competitor, systemic rival.” Now, “competitor” seems to have moved to the front.
In our first analysis of today’s issue, we once again take a look at the drama surrounding indebted real estate giant Evergrande. How will Beijing react? Finn Mayer-Kuckuk explains that the response to other companies that have fallen into the red has varied so far. Huachen Automotive was forced into bankruptcy. Bank Huarong, on the other hand, was rescued. But this is about more than a mere decision over rescue or restructuring. Evergrande’s case displays Beijing’s strategy towards risks in the financial market.
Meanwhile, the treatment of civil society organizations in Hong Kong is painfully predictable: Trade unionists, activists, and media representatives in the city fear prosecution by the authorities – hence why resistance is beginning to move overseas, writes Marcel Grzanna. He spoke to ex-parliamentarian Ted Hui.
I hope you enjoy our latest issue!
No one can say that China is casting too wide a safety net in the crisis. In the first half of the year alone, dozens of large companies went bankrupt, leaving a combined €15 billion in debt. So the financial regulator and the central bank are certainly showing the strength to go bust. In a state economy, the government has the ability to rescue just about anything that runs into trouble. But it is holding back on interventions.
At the same time, however, the slow demise of real estate developer Evergrande has observers and market participants puzzled. How much actual risk does Beijing dare to take? On the one hand, China’s CP has repeatedly announced its intention to increasingly rely on market forces in the financial sector. “We will speed up the development of a multilevel capital market,” Premier Li Keqiang said in 2014, “and develop a well-regulated bond market.” On the one hand, a well-functioning bond market also requires real default risks. But too much depends on the fate of the Evergrande Group. From simple homebuyers to major banks, a wide variety of players are involved. In addition, there are systemic risks in China’s over-indebted real estate sector. Other companies in the sector are already having a hard time restructuring their bonds.
Beijing thus faces a dilemma between maintaining the stability it prides itself on and creating a functioning bond market. In a self-sustaining capital market, however, investors must also share the risks of large institutions. The leadership is aware of this, and so it is quite willing to let market forces prevail and give investors the benefit of the doubt if they have made the wrong bet.
However, these should not be too large, as a series of recent bailouts have shown. Huarong Asset Management was rescued in the spring for €6.5 billion. The procedure used was quite conventional. State banks took over Huarong’s debts. Meanwhile, the HNA conglomerate, which is also over-indebted, is going through a restructuring that recognizes the group’s remaining value.
Beijing is clearly trying to steer a middle course here, moving ever closer to the use of market forces. It is clear that neither of the extremes on the spectrum of financial market systems is an option for China. These two extremes would represent a perfect market economy on one end and pure socialism without a capital market on the other.
In a perfect market economy, there are no bailouts. Those who fail, simply cannot repay their debts. Market participants then have to accept the loss of their investment. Accordingly, they will invest their capital carefully and wisely. They would only entrust it to adequate companies. In pure socialism, on the other hand, there are no business risks. However, the available resources are poorly used. Inefficiency, failure, laziness, bad decisions – all this is quite trivial to a proper state enterprise. It just continues its business after a slap on the wrist for failing to meet the plan.
China is now coming from the second model and, after decades of reforms, has reached a point where the positive effects of the first model are becoming apparent. However, these positive effects require the state not always step into the breach when things get tough. This requires a lot of discipline. Even democratic politicians in a social market economy like to be celebrated for bailouts, even if they make no economic sense. When the consequential damage of loan default is catastrophic, the measures generally find a lot of approval. Especially when there is a threat of a domino effect across the financial and real economy.
In the Evergrande case, it will now be exciting to see the Chinese government’s reaction. After all, it was the one who caused the real estate sector to slide in the first place by imposing new capital requirements with its “three red lines.” But in any case, it is safe to assume that it will not allow a catastrophic bankruptcy.
Instead, it will isolate the real estate market and the financial system from a possible implosion of Evergrande. Because uncontrolled insolvency would put three policy goals at risk at once: The well-being of Chinese real estate buyers, the construction of new housing, and not least the international reputation of the Chinese economy.
When the US bank Lehman Brothers filed for bankruptcy 13 years ago, China was almost gloating. Its financial sector did not produce such hidden systemic risks because it was simpler. Above all, Beijing succeeded with state intervention in raising growth to a record in absolute terms in the crisis year. This was supposed to prove the superiority of its economic model. State leader Xi Jinping will therefore now avoid Evergrande bankruptcy with its far-reaching systemic consequences – no matter the cost. Instead of rescuing the company in its existing form, for example, it would be possible for state banks to take over the real estate portfolio, including the debts.
However, the costs of doing so would be higher than the mere price of the solution. After all, even if bank insolvency has been a possibility from time to time recently, investors continue to rely on government bailouts. However, a credible bond market requires risk. If the state is ultimately liable for everything, then investors will only ever receive minimal interest when they lend money to companies. Interest is also compensation for risk, after all. Without risks, there are no particularly high interest rate opportunities.
Moreover, in a fully insured financial system, investors do not bother to allocate their money only to trustworthy companies. The effort to identify good and bad business models loses its value. So without default risk, the market’s monitoring function also dwindles.
However, the communist government wants to strengthen the advantages of a functioning financial market so that it does not have to continue to supervise everything by hand. The central bank and supervisory authorities still supervise the financial system in far too great detail. In a half-privatized economy with a volume of ten trillion euros, however, this micromanagement has actually become impossible. So China would have an interest in letting market forces take the helm. But the leadership has so far failed to really let go.
Indeed, Europe and the US face similar problems today, and Japan has been wrestling with them since the 1990s. Economists generally see a crisis in the credit system. The independent economist Richard Duncan even diagnoses a fundamental crisis in the capitalist system. Above all, it should at least be able to do one thing: Direct capital to the most economically promising channels. However, interest rates have been ultra-low for over a decade. Duncan notes that capitalism, in which money should normally be scarce and precious, has been replaced by “creditism,” creating growth through ever-increasing lending. To a good extent, it doesn’t matter here where the capital goes. It hardly yields any interest in the bond market anyway. The stock market and the real estate market, on the other hand, are being flooded by a large amount of capital.
Evergrande has also benefited from the effect of the latter. Chinese capitalism is also more of a creditism with Chinese characteristics. Money has always been plentiful. Abundant financing is the foundation of its growth model. True, the government has tried to route funds into sensible channels and placed dams throughout the economy. But in the end, capital in China actually always ends up in the real estate market. Profits in this segment were fantastic and appeared safe. And Evergrande has presented itself accordingly. Talks with investors now confirm the initial expectation that Beijing would by no means allow for such a company to fail.
The important thing is now to let Evergrande’s financial house of cards collapse. Otherwise, the Chinese bond market has no chance of ever credibly reflecting risk. Moreover, a collapse of Evergrande fits the current course of putting heavyweight private entrepreneurs in their place.
However, Chinese economic planners have now come up with a thoroughly practical strategy to limit the impact of mega-bankruptcy. Evergrande itself may well collapse. But it wants to erect walls around the heart of the problems. By injecting capital at the crucial cornerstones, it aims to prevent the problems from spreading to other companies. To use a pandemic analogy, it wants to isolate the infected Evergrande Group to prevent further contagions. Some large investors will have to bear losses, while apartment buyers are to be protected from the consequential damage.
The first effects of the insolvencies that China is allowing and even bringing about are already apparent in the bond market. With a risk-return, both yield and interest rate are rising. Yields are rising while rates in the market are falling – these two metrics are behaving in opposite ways for bonds. Interest rates are rising because investors are taking on larger risks by taking higher markups. But that also means that investing in bonds will become more profitable again in the future and that they will return as an option for investors. And even if an uncontrolled bankruptcy of Evergrande would be catastrophic and will be prevented: Allowing moderate risks could continue to pay off for Beijing.
Hong Kong’s head of government Carrie Lam had nothing but praise for the National Security Law on Wednesday. The chaos in the city had successfully been contained, and it has been ensured that only “patriots” will govern the metropolis in the future, Lam said in her keynote speech to the Hong Kong Legislative Council. The Chinese central government has succeeded in staying true to its promise of implementing the “one country, two systems” concept.
Until a few years ago, her speech would probably have caused fierce political opposition in the city. But all those who believed Lam’s account to be a half-truth at best have been silenced by the National Security Act. Political opposition is no longer publicly displayed in Hong Kong. Civil resistance to Beijing’s authoritarian takeover of the metropolis is increasingly shifting overseas.
While local civil organizations and independent media outlets are disbanding in droves for fear of prosecution under the Security Act, Hong Kong’s exiles are strengthening their lobbying efforts in North America, Europe, and Australia. Former city politicians and activists are spreading their influence, especially in the US capital, Washington.
Members of the Hong Kong Democratic Council (HKDC) had already testified before the US Congress in 2020, exposing the disregard for the rule of law and civil rights. The council has since reshuffled its membership. Former Hong Kong politicians Nathan Law, Ted Hui, and Sunny Cheung join HKDC as new members of the advisory council. In London, the human rights organization Hong Kong Watch is getting a new wind from the involvement of exiles. Pro-democracy pressure groups have formed in Norway, Austria, and Switzerland, and activists in Australia and Canada are also establishing communication channels into politics.
While spread halfway around the globe, activists nevertheless strive for a common goal: To form foreign support for civil society in Hong Kong while linking up with Tibetan and Uighur organizations to jointly exert more influence on democratic governments. They not only want to draw attention to the situation in Hong Kong but also want to raise awareness of the increasing “infiltration of liberal societies by the Chinese Communist Party,” as ex-parliamentarian Ted Hui said in an interview with China.Table.
Hui currently lives with his wife and two children in Adelaide, Australia. Together with his local comrades-in-arms, he has created an educational program that offers extracurricular training in his native language, Cantonese. The goal: To counter, at least from a distance, the further political Sinicization of Hong Kong and to promote democratic values. Melbourne now also has such a service. “Around the world, the CCP spreads its propaganda through educational institutions abroad. We provide an ideological counterweight so that Hong Kong’s culture and language are not exclusively curated by Chinese government channels,” says Hui.
Especially since the flow of people wanting to emigrate is not stopping. Every day, about 1,000 to 2,000 people leave Hong Kong with the intention of never returning. The continuously forced disintegration of civil society in the city is of great concern to them. Many organizations are about to be dissolved or have already been disbanded:
Some of its leaders are in jail or awaiting prosecution because they are considered “hostile” by authorities under government leader Carrie Lam and accused of collaborating with foreign forces, which is punished with hard prison sentences under the Security Law. The 95,000-member teachers’ association, which had democratically shaped the city’s education system since the mid-1970s, was caught in the crossfire of Chinese state media, which had called it a “tumor.” Numerous disruptive teachers at schools and universities have already been removed from civil service.
The Chinese central government, however, officially sees no connection between the force of the political purge and the flight of tens of thousands of families from the city. On the contrary, the city is “on the right track,” as the special envoy for Hong Kong and Macau, Huang Liuquan, emphasized during a recent visit. He recommended that young people from Hong Kong look for good jobs in the People’s Republic.
An independent Chinese-speaking media that could critically comment on Beijing’s position no longer exists in the city. Following the shutdown of the pro-democratic daily Apple Daily at the end of June, its parent company Next Digital has also disbanded. Its executives, including founder and publisher Jimmy Lai, are incarcerated.
Meanwhile, public broadcaster RTHK continues operation, but has received new guidelines that mandate ensuring the preservation of “constitutional order.” In plain language: propaganda in Beijing’s interests. Elements of the RTHK program have therefore already been canned. Instead of its traditional city forum on its Sunday evening slot, which for decades allowed diverse opinions to be heard in live discussions, RTHK now shows historical civil war dramas that tell of the victories of the Communist Party.
Censorship of the Internet is also on the rise. The police are now outfitted with extended measures to nip digital dissent in the bud. Backed by the extraterritorial reach of the security law, authorities are also trying to bring foreign server providers into line and prevent unwanted content.
“The crackdown on the entire democratic infrastructure and rule of law in Hong Kong is not only happening at a pace that surprises everyone. It also shows the true face of the Chinese Communist Party, which does not accept a shred of political dissent,” former Danish culture minister Uffe Elbaek told China.Table.
The Hong Kong Security Bureau had opened an investigation against Elbaek earlier this year – precisely based on the extraterritorial scope of the Security Act. The politician had aided his counterpart, Ted Hui, in feeling the city by deceiving Hong Kong authorities.
“This is a wake-up call for the European Union. Europeans need to understand who they are dealing with,” says Elbaek. The Green politician fears that Hong Kong could be just the prelude to a conquest of the island state of Taiwan. “The slogan ‘Hong Kong today, Taiwan tomorrow’ is something we, the democratic states of this world, should take very, very seriously.” The People’s Republic considers the Republic of China, as Taiwan is officially known, an inseparable part of its territory.
Repair after accident: The container ship Ever Given is being repaired at a shipyard in Qingdao in the eastern Chinese province of Shandong. The freighter, damaged mainly at the bow, will remain at the shipyard for more than 20 days, according to media reports. The Ever Given, owned by a Japanese company and operated by Taiwan-based Evergreen Marine Corp, ran aground in the Suez Canal on March 23, paralyzing global shipping. The ship was then freed with the help of ten tugs.
At an informal dinner of the EU heads of state and government in the Slovenian castle of Brdo, the relationship with China was also on the agenda, albeit a minor topic at the end. Attention is now being drawn to a detail in EU Council President Charles Michel’s communiqué on the meeting. China is considered a “competitor, partner and systemic rival,” the Belgian remarked. Anyone familiar with the EU’s triad for positioning itself towards the People’s Republic will notice: Until now, the order was “partner, competitor, systemic rival.” Now, “competitor” seems to have moved to the front.
In our first analysis of today’s issue, we once again take a look at the drama surrounding indebted real estate giant Evergrande. How will Beijing react? Finn Mayer-Kuckuk explains that the response to other companies that have fallen into the red has varied so far. Huachen Automotive was forced into bankruptcy. Bank Huarong, on the other hand, was rescued. But this is about more than a mere decision over rescue or restructuring. Evergrande’s case displays Beijing’s strategy towards risks in the financial market.
Meanwhile, the treatment of civil society organizations in Hong Kong is painfully predictable: Trade unionists, activists, and media representatives in the city fear prosecution by the authorities – hence why resistance is beginning to move overseas, writes Marcel Grzanna. He spoke to ex-parliamentarian Ted Hui.
I hope you enjoy our latest issue!
No one can say that China is casting too wide a safety net in the crisis. In the first half of the year alone, dozens of large companies went bankrupt, leaving a combined €15 billion in debt. So the financial regulator and the central bank are certainly showing the strength to go bust. In a state economy, the government has the ability to rescue just about anything that runs into trouble. But it is holding back on interventions.
At the same time, however, the slow demise of real estate developer Evergrande has observers and market participants puzzled. How much actual risk does Beijing dare to take? On the one hand, China’s CP has repeatedly announced its intention to increasingly rely on market forces in the financial sector. “We will speed up the development of a multilevel capital market,” Premier Li Keqiang said in 2014, “and develop a well-regulated bond market.” On the one hand, a well-functioning bond market also requires real default risks. But too much depends on the fate of the Evergrande Group. From simple homebuyers to major banks, a wide variety of players are involved. In addition, there are systemic risks in China’s over-indebted real estate sector. Other companies in the sector are already having a hard time restructuring their bonds.
Beijing thus faces a dilemma between maintaining the stability it prides itself on and creating a functioning bond market. In a self-sustaining capital market, however, investors must also share the risks of large institutions. The leadership is aware of this, and so it is quite willing to let market forces prevail and give investors the benefit of the doubt if they have made the wrong bet.
However, these should not be too large, as a series of recent bailouts have shown. Huarong Asset Management was rescued in the spring for €6.5 billion. The procedure used was quite conventional. State banks took over Huarong’s debts. Meanwhile, the HNA conglomerate, which is also over-indebted, is going through a restructuring that recognizes the group’s remaining value.
Beijing is clearly trying to steer a middle course here, moving ever closer to the use of market forces. It is clear that neither of the extremes on the spectrum of financial market systems is an option for China. These two extremes would represent a perfect market economy on one end and pure socialism without a capital market on the other.
In a perfect market economy, there are no bailouts. Those who fail, simply cannot repay their debts. Market participants then have to accept the loss of their investment. Accordingly, they will invest their capital carefully and wisely. They would only entrust it to adequate companies. In pure socialism, on the other hand, there are no business risks. However, the available resources are poorly used. Inefficiency, failure, laziness, bad decisions – all this is quite trivial to a proper state enterprise. It just continues its business after a slap on the wrist for failing to meet the plan.
China is now coming from the second model and, after decades of reforms, has reached a point where the positive effects of the first model are becoming apparent. However, these positive effects require the state not always step into the breach when things get tough. This requires a lot of discipline. Even democratic politicians in a social market economy like to be celebrated for bailouts, even if they make no economic sense. When the consequential damage of loan default is catastrophic, the measures generally find a lot of approval. Especially when there is a threat of a domino effect across the financial and real economy.
In the Evergrande case, it will now be exciting to see the Chinese government’s reaction. After all, it was the one who caused the real estate sector to slide in the first place by imposing new capital requirements with its “three red lines.” But in any case, it is safe to assume that it will not allow a catastrophic bankruptcy.
Instead, it will isolate the real estate market and the financial system from a possible implosion of Evergrande. Because uncontrolled insolvency would put three policy goals at risk at once: The well-being of Chinese real estate buyers, the construction of new housing, and not least the international reputation of the Chinese economy.
When the US bank Lehman Brothers filed for bankruptcy 13 years ago, China was almost gloating. Its financial sector did not produce such hidden systemic risks because it was simpler. Above all, Beijing succeeded with state intervention in raising growth to a record in absolute terms in the crisis year. This was supposed to prove the superiority of its economic model. State leader Xi Jinping will therefore now avoid Evergrande bankruptcy with its far-reaching systemic consequences – no matter the cost. Instead of rescuing the company in its existing form, for example, it would be possible for state banks to take over the real estate portfolio, including the debts.
However, the costs of doing so would be higher than the mere price of the solution. After all, even if bank insolvency has been a possibility from time to time recently, investors continue to rely on government bailouts. However, a credible bond market requires risk. If the state is ultimately liable for everything, then investors will only ever receive minimal interest when they lend money to companies. Interest is also compensation for risk, after all. Without risks, there are no particularly high interest rate opportunities.
Moreover, in a fully insured financial system, investors do not bother to allocate their money only to trustworthy companies. The effort to identify good and bad business models loses its value. So without default risk, the market’s monitoring function also dwindles.
However, the communist government wants to strengthen the advantages of a functioning financial market so that it does not have to continue to supervise everything by hand. The central bank and supervisory authorities still supervise the financial system in far too great detail. In a half-privatized economy with a volume of ten trillion euros, however, this micromanagement has actually become impossible. So China would have an interest in letting market forces take the helm. But the leadership has so far failed to really let go.
Indeed, Europe and the US face similar problems today, and Japan has been wrestling with them since the 1990s. Economists generally see a crisis in the credit system. The independent economist Richard Duncan even diagnoses a fundamental crisis in the capitalist system. Above all, it should at least be able to do one thing: Direct capital to the most economically promising channels. However, interest rates have been ultra-low for over a decade. Duncan notes that capitalism, in which money should normally be scarce and precious, has been replaced by “creditism,” creating growth through ever-increasing lending. To a good extent, it doesn’t matter here where the capital goes. It hardly yields any interest in the bond market anyway. The stock market and the real estate market, on the other hand, are being flooded by a large amount of capital.
Evergrande has also benefited from the effect of the latter. Chinese capitalism is also more of a creditism with Chinese characteristics. Money has always been plentiful. Abundant financing is the foundation of its growth model. True, the government has tried to route funds into sensible channels and placed dams throughout the economy. But in the end, capital in China actually always ends up in the real estate market. Profits in this segment were fantastic and appeared safe. And Evergrande has presented itself accordingly. Talks with investors now confirm the initial expectation that Beijing would by no means allow for such a company to fail.
The important thing is now to let Evergrande’s financial house of cards collapse. Otherwise, the Chinese bond market has no chance of ever credibly reflecting risk. Moreover, a collapse of Evergrande fits the current course of putting heavyweight private entrepreneurs in their place.
However, Chinese economic planners have now come up with a thoroughly practical strategy to limit the impact of mega-bankruptcy. Evergrande itself may well collapse. But it wants to erect walls around the heart of the problems. By injecting capital at the crucial cornerstones, it aims to prevent the problems from spreading to other companies. To use a pandemic analogy, it wants to isolate the infected Evergrande Group to prevent further contagions. Some large investors will have to bear losses, while apartment buyers are to be protected from the consequential damage.
The first effects of the insolvencies that China is allowing and even bringing about are already apparent in the bond market. With a risk-return, both yield and interest rate are rising. Yields are rising while rates in the market are falling – these two metrics are behaving in opposite ways for bonds. Interest rates are rising because investors are taking on larger risks by taking higher markups. But that also means that investing in bonds will become more profitable again in the future and that they will return as an option for investors. And even if an uncontrolled bankruptcy of Evergrande would be catastrophic and will be prevented: Allowing moderate risks could continue to pay off for Beijing.
Hong Kong’s head of government Carrie Lam had nothing but praise for the National Security Law on Wednesday. The chaos in the city had successfully been contained, and it has been ensured that only “patriots” will govern the metropolis in the future, Lam said in her keynote speech to the Hong Kong Legislative Council. The Chinese central government has succeeded in staying true to its promise of implementing the “one country, two systems” concept.
Until a few years ago, her speech would probably have caused fierce political opposition in the city. But all those who believed Lam’s account to be a half-truth at best have been silenced by the National Security Act. Political opposition is no longer publicly displayed in Hong Kong. Civil resistance to Beijing’s authoritarian takeover of the metropolis is increasingly shifting overseas.
While local civil organizations and independent media outlets are disbanding in droves for fear of prosecution under the Security Act, Hong Kong’s exiles are strengthening their lobbying efforts in North America, Europe, and Australia. Former city politicians and activists are spreading their influence, especially in the US capital, Washington.
Members of the Hong Kong Democratic Council (HKDC) had already testified before the US Congress in 2020, exposing the disregard for the rule of law and civil rights. The council has since reshuffled its membership. Former Hong Kong politicians Nathan Law, Ted Hui, and Sunny Cheung join HKDC as new members of the advisory council. In London, the human rights organization Hong Kong Watch is getting a new wind from the involvement of exiles. Pro-democracy pressure groups have formed in Norway, Austria, and Switzerland, and activists in Australia and Canada are also establishing communication channels into politics.
While spread halfway around the globe, activists nevertheless strive for a common goal: To form foreign support for civil society in Hong Kong while linking up with Tibetan and Uighur organizations to jointly exert more influence on democratic governments. They not only want to draw attention to the situation in Hong Kong but also want to raise awareness of the increasing “infiltration of liberal societies by the Chinese Communist Party,” as ex-parliamentarian Ted Hui said in an interview with China.Table.
Hui currently lives with his wife and two children in Adelaide, Australia. Together with his local comrades-in-arms, he has created an educational program that offers extracurricular training in his native language, Cantonese. The goal: To counter, at least from a distance, the further political Sinicization of Hong Kong and to promote democratic values. Melbourne now also has such a service. “Around the world, the CCP spreads its propaganda through educational institutions abroad. We provide an ideological counterweight so that Hong Kong’s culture and language are not exclusively curated by Chinese government channels,” says Hui.
Especially since the flow of people wanting to emigrate is not stopping. Every day, about 1,000 to 2,000 people leave Hong Kong with the intention of never returning. The continuously forced disintegration of civil society in the city is of great concern to them. Many organizations are about to be dissolved or have already been disbanded:
Some of its leaders are in jail or awaiting prosecution because they are considered “hostile” by authorities under government leader Carrie Lam and accused of collaborating with foreign forces, which is punished with hard prison sentences under the Security Law. The 95,000-member teachers’ association, which had democratically shaped the city’s education system since the mid-1970s, was caught in the crossfire of Chinese state media, which had called it a “tumor.” Numerous disruptive teachers at schools and universities have already been removed from civil service.
The Chinese central government, however, officially sees no connection between the force of the political purge and the flight of tens of thousands of families from the city. On the contrary, the city is “on the right track,” as the special envoy for Hong Kong and Macau, Huang Liuquan, emphasized during a recent visit. He recommended that young people from Hong Kong look for good jobs in the People’s Republic.
An independent Chinese-speaking media that could critically comment on Beijing’s position no longer exists in the city. Following the shutdown of the pro-democratic daily Apple Daily at the end of June, its parent company Next Digital has also disbanded. Its executives, including founder and publisher Jimmy Lai, are incarcerated.
Meanwhile, public broadcaster RTHK continues operation, but has received new guidelines that mandate ensuring the preservation of “constitutional order.” In plain language: propaganda in Beijing’s interests. Elements of the RTHK program have therefore already been canned. Instead of its traditional city forum on its Sunday evening slot, which for decades allowed diverse opinions to be heard in live discussions, RTHK now shows historical civil war dramas that tell of the victories of the Communist Party.
Censorship of the Internet is also on the rise. The police are now outfitted with extended measures to nip digital dissent in the bud. Backed by the extraterritorial reach of the security law, authorities are also trying to bring foreign server providers into line and prevent unwanted content.
“The crackdown on the entire democratic infrastructure and rule of law in Hong Kong is not only happening at a pace that surprises everyone. It also shows the true face of the Chinese Communist Party, which does not accept a shred of political dissent,” former Danish culture minister Uffe Elbaek told China.Table.
The Hong Kong Security Bureau had opened an investigation against Elbaek earlier this year – precisely based on the extraterritorial scope of the Security Act. The politician had aided his counterpart, Ted Hui, in feeling the city by deceiving Hong Kong authorities.
“This is a wake-up call for the European Union. Europeans need to understand who they are dealing with,” says Elbaek. The Green politician fears that Hong Kong could be just the prelude to a conquest of the island state of Taiwan. “The slogan ‘Hong Kong today, Taiwan tomorrow’ is something we, the democratic states of this world, should take very, very seriously.” The People’s Republic considers the Republic of China, as Taiwan is officially known, an inseparable part of its territory.
Repair after accident: The container ship Ever Given is being repaired at a shipyard in Qingdao in the eastern Chinese province of Shandong. The freighter, damaged mainly at the bow, will remain at the shipyard for more than 20 days, according to media reports. The Ever Given, owned by a Japanese company and operated by Taiwan-based Evergreen Marine Corp, ran aground in the Suez Canal on March 23, paralyzing global shipping. The ship was then freed with the help of ten tugs.
