The Hong Kong Crackdown Is A Financial Disaster For China: Is It Time To Fire The CEO?

Date: Jul 19, 2020
By: George Calhoun, Contributor

Premier Li Keqiang (R) covers his face in his hand as he and China's President Xi Jinping (L) attend the fourth plenary session of the National People's Congress at the Great Hall of the People in Beijing on March 13, 2018. China's rubber-stamp parliament on March 11 endorsed Xi's move to abolish rules limiting heads of state to 10 years in power. AFP VIA GETTY IMAGES

Dateline: March 1, 2021

A News report from the other CNN*…

  • “The announcement this week that China has invited Australia to send a team of medical research scientists and public health experts to Wuhan to help document the origins of the Covid-19 pandemic is being widely welcomed. The Aussies will join scientists from Oxford and Cambridge Universities, already working on site with their colleagues from Tsinghua University and other top Chinese scientific institutions, to sequence the latest mutations of the virus… The move is a follow-up to the joint program announced earlier this month to fully combine American and Chinese programs for vaccine research and production.  
  • “In related news, U.S. President Biden announced that all charges against Huawei, China’s leading international company, will be dropped in exchange for a pledge of full technology sharing. Huawei CFO Meng Wanzhou was welcomed in New York to ring the opening bell as Huawei shares began trading on Nasdaq, surging more than 15% in the first day on news of a major 5G order from Vodafone in the UK.
  • “Simultaneously, Beijing’s decision to fully rescind the new security laws for Hong Kong helped boost the Hang Sent index by 22%, and brought applause from financial markets everywhere. New polls showed public approval of China soaring in Europe and the United States. China’s pending elevation to membership in the G7 has met with universal support from world leaders. Xi Jinping is seen as a shoo-in for the Nobel Peace Prize.…” [fade to grey]

*The Counterfactual News Network 

(How different it all might have been.)

Beijing’s Double Strategy

Back in the real world, China is trying to master two games at the same time. On the one hand, they are learning how to be a geopolitical superpower. On the other, they are building a modern economic and financial system. These are both huge decades-long projects, running in parallel. The strategies obviously interact, and not always happily. In particular, the economic game-plan is vulnerable to inept political moves.

For several decades, starting with the reforms led by Deng Xiaoping in the 1980s and 1990s, Beijing’s foreign policy was careful. This facilitated China’s tremendous economic growth. Encouraged, the West engaged, and made China its (junior) partner in a vast global division of labor — China as “workshop of the world” and all that – and channeled large scale trade and investment into China. Ten years ago most American leaders were inclined to support China’s emergence as a new “major player” – even an incipient superpower, a rival in some ways, but an unthreatening one. It was assumed that economics would prevail over traditional ideological differences. Lion would lay down with lamb, under the aegis of Free Trade. Liberal democracy and free market doctrines would spread a self-reinforcing prosperity. “They” would become like “us.” History would truly end.    [FULL  STORY]