Europe and China: a difficult dialogue

The summit call that took place today between the EU leaders and President Xi revealed a gulf of differences between the two sides when it comes to political values and the interference of the State in the economy. On the European side, reference was made to human rights as a fundamental value, as well as to the Chinese leadership’s policies towards the Uighur minority, Hong Kong, and Taiwan. President Xi did not like what he heard. But he could notice that the Europeans consider these matters fundamental and will continue to be raised in the future. At the same time, the economic relationship between both sides will continue – the trade between them amounts to one billion euros a day. And on this matter, the key issues will remain and must be addressed. The Chinese must open up to European investment and cease all kinds of political meddling in the governance of European firms already operating in China.

In the meantime, and as we wait for progress on these fronts to be achieved it is becoming clear that Chinese investments in critical European infrastructure can only be accepted if they do not put at stake the strategic dimensions of European security and stability.

The two sides must cooperate. They are key players in the international scene. It is therefore important they keep talking and be frank when doing it.

For Hong Kong and a bit more

The new Hong Kong National Security Law is a clear violation of the legal process as established by the territory’s Basic Law – there was no consultation with the local population and their representatives – as well as of the agreed principle “One Country, Two Systems”. Furthermore, the key offences it contemplates – subversion, secession, terrorism, and collusion with foreign powers – are defined in overly broad terms. That means the Hong Kong Executive is given extensive flexibility to judge and condemn. They are the ones, not the judiciary, that will apply the law, meaning, they will decide on the offences and the punishments. They will certainly follow a targeted approach to repression.

Another “innovation” of such new law is that it also applies to people outside Hong Kong and Mainland China. If someone in Paris, a French citizen resident in France, says that the territory should be independent and later in life travels to Hong Kong, he or she can be prosecuted for such a statement.

I feel sorry for the people of Hong Kong who cherish freedom and democracy. I have the same feeling for those in the Mainland that share these same values. And I ask myself what kind of political relationship our democracies should have with the leadership in Beijing. It is time to reflect on that before it is too late. The message should be simple. It must tell them that we are not prepared to accept their vision of politics. And we should keep an all-weather distance, as wide as possible, between them and us.

The international arena must be guided by values. It is time to say that again, loud, and clear. Very straightforward values, that take their inspiration from individual rights, the protection of each person against authoritarian States, from our inherent right to freedom and human security. Some might see this aspiration as a utopic one. I hear you. But, please, believe me, the post-covid world opens the door to imagine a more dignified approach to each human being.

China prefers Donald Trump

It is now clear that the Chinese leadership would prefer Donald Trump. The messages we are getting from Beijing are that they believe that Joe Biden would be tougher on China than Trump. They now know the current President relatively well and they think that if there is an agreement on trade everything else will be manageable. They see Donald Trump as a transactional leader. He is aware of the Chinese geopolitical ambitions and must refer to them in his public speeches. But he can be satisfied with a trade agreement if he thinks the agreement is good for his electoral basis. And it is true he has a good personal rapport with President Xi Jinping. On the other side, the Chinese leadership see Biden as more ideological. He will be raising issues that are particularly unpleasant to the ears of the Chinese Communist bosses. Issues such as human rights, the special status and freedom in Hong Kong, the re-education camps in Xinjiang Province, the relations with Taiwan, and so on. These are extremely sensitive matters for Beijing. Trade is a small business when compared with any of these challenges. Therefore, they will try to do anything they can to make sure that Donald Trump gets re-elected.

The initial comments about the Hong Kong elections

Three points about today’s local elections in Hong Kong. One, it is about the very impressive voter turnout. People participated in the election in very large numbers. The turnout is 71.2 per cent of the registered voters. Much higher than the one in 2015, which reached 47 per cent. Two, it is about the tranquillity of the day. There was no unrest, no confusion either during the vote or in the evening, as the papers were counted, and the first results announced. Three, initial results show that the pro-democracy candidates are gaining most of the seats. That will be a major blow to the Hong Kong Chief Minister. But, above all, to the Communist leaders in Beijing.

Again, the events as they happen in Hong Kong raise major issues about what next in China.

Hong Kong: the politics of escalation

The Hong Kong political crisis calls for a deep analysis. It raises many questions. What is happening in the city for several months now is unique and a major challenge to President Xi Jinping’s authority. The population in Mainland China is not properly informed about the events. But I am told that the younger professionals in key Chinese cities are particularly interested in what is taking place in Hong Kong. To get a better picture, they are looking for alternative sources of information. And they are able to get to them, notwithstanding the extreme control the authorities try to impose on access to information. A new narrative, different from the official one, is now circulating among the younger segments of society, those with higher levels of education. It is yet too early to assess how significant that can be. But what it is clear is that in Mainland China some people are now getting a strong message coming from the demonstrations in Hong Kong. That is, there are Chinese people that do not want to live under the dictatorship imposed by the Communist leaders. They are ready to fight for their freedom. The only dimension that is tarnishing the message is the violence that is also taking place. And the Communist leaders know that they can take advantage of such violence. But playing with violence is not a good political bet.

A brief commentary on Hong Kong

Fourteen weeks after the beginning of the ongoing unrest in Hong Kong and notwithstanding the growing chaos, and violence, Beijing still looks at the situation as a local problem. The Communist leaders do not see any risk of contagion, either in Macau or in any Mainland big city. That explains why they have decided to let the Hong Kong authorities – and above all, the Police – deal with the crisis. It is true that the city authorities have not been very artful or politically astute. But for the time being, Beijing is convinced that the Chief Executive and her people should be the crisis managers. That’s a way of sending the message that this is not a wider problem.

Beijing has also been actively promoting its narrative of what is taking place in Hong Kong. They tell the Mainlanders that these are just some youngsters who are encouraged by outside powers to break the law and rebel against the established system of government. They show on the Chinese TV the scenes of violence and destruction, as a way of discrediting the protesters.

Beijing hopes the protest movement will die out, after a few more weeks or so. They are also betting on the impact that mass arrests might have in terms of discouraging the crowds.

I am not sure Beijing is getting the full understanding of what is taking place in Hong Kong. The protests are deeper than what the leaders think. One of the reasons for Police ineffectiveness in dealing with the demonstrations resides in the widespread support the demonstrators get from the general population of Hong Kong. The young people are on the streets but most of the older people are not against the street actions. This makes it a very distinctive case, when I compare it to other riots I have studied.

Hong Kong people send strong messages

A huge crowd rallied today in Hong Kong. Its size has sent a strong message to Mainland China. The pro-democracy movement is deeply rooted in the Hong Kong society. It can’t be addressed with militarised police coming from the other side of the border line. And there is a second message, as pressing as the first one: Carrie Lam, the Chief Minister, and her governing team must be replaced. They have no capacity to respond to the complex challenges the territory is facing, from democracy to housing, and beyond. Also, they have lost the confidence of large segments of the population.

Crossing the line in Hong Kong

The key messages the Chinese government wants to put across are very clear: the demonstrators are violent; they have disrupted the operations of a key international airport for two days in a row; and brought chaos to the territory. In the opinion of the leadership in Beijing, such messages are essential to justify an armed intervention of Mainland forces in Hong Kong. Their content is further reinforced by the image of a powerless Hong Kong Administration. It is true that Carrie Lam, the HK Chief Executive, seems to have lost the sense of direction. She now cuts a very sorry figure. But in the case of the HK Police, I see a deliberate Beijing move behind the erratic tactics the Police is following. The aim is to show that the territory’s Police are out of their depth. And that would be another strong justification for Mainland to cross the border line.

The odds of an intervention are now very high. Any further escalation of the crisis, and the Mainland boots will walk around the Victoria Harbour.

Hong Kong and Xi's response

Today, the Hong Kong crisis led to the cancellation of all flights to and from its international airport. That is a major development. It shows clearly that Hong Kong is now a critical challenge for President Xi Jinping in Beijing.

Knowing the all-out importance the Chinese leadership give to law and order, as well as to obeisance to the rulings of the Communist Party, one can only expect a crushing reaction to the mass demonstrations and, in particular, to the young leaders that have been at the core of the movement. Xi and his circle cannot be perceived by the citizens of other Chinese cities as being confused, unable to respond and condoning mass protests. Their power is based as much on keeping the grip on people as it is on economic well-being.

In view of this political culture of power, the response they are preparing must be extraordinarily worrisome.

Hong Kong and the fire wall

The people of Hong Kong are very brave. In addition, they might be giving some sleepless nights to President Xi and the leadership circle in Beijing. Xi Jinping and his inner group are probably asking themselves if this type of mass movement could one day happen in any of the big cities of Mainland China.

We might think that is a very remote possibility. That mass demonstrations will not occur in the Mainland. That the Communist leaders will keep strengthening the police and security controls, as they have been doing. They will also black out all the information regarding the protests in Hong Kong, as they did today and in the last few days.

But one never knows. There are many giant cities in China and lots of people are now travelling abroad and seeing other realities. Including many young Chinese professionals, who have studied abroad or are still studying in Japan, Thailand, Australia, Europe, Canada and the US.

Beijing might say all this unrest is caused by foreign powers. But they know that is not the case. I trust the leaders do not believe in their own discredited propaganda. They are very much aware that things are changing rapidly all over the world and that no fire wall can keep the human aspiration for freedom on just one side of the barrier. Sooner or later, they are afraid, the opening of the wall will happen.

Tax havens

Hong Kong is included in the just published EU list of tax havens for corporations. It is one of the 30 countries and territories enumerated.

The Hong Kong authorities have reacted with great surprise to their listing. And they are right as the territory has now in place a number of mechanisms to share information. It is true that the territory´s taxes are low. But that´s a political choice. It is part of the competition at the international level.

Many other countries have low corporate taxes and are not listed by the EU. Do you want an example? Look at the Delaware tax system in the US and you will see what competition means. Not to mention Luxembourg, an EU country with a very advantageous tax system for big companies. Luxembourg is not in the list…

Hong Kong is different

The Hong Kong mass demonstrations show once again that people cherish their freedom once they have been able to acquire it. Freedom is one of the top aspirations of humankind.

The political pact that underwrites stability and state control in China is based on growing well-being for the people. The Chinese accept at this stage, not always with a warm heart, that their liberty be curtailed as long as the government keeps the economic expansion and is in a position to augment the population´s purchasing power.

In Hong Kong, the standard of living is much higher than in Mainland China. Therefore, that part of the pact has very attraction. People are already there, they are wealthy. But they have also enjoyed political freedom. And they do not want to lose it. Once you have tasted it you want to keep it.

Furthermore, the people of Hong Kong have a serious dislike for the Mainlanders. They look at their fellow compatriots from Mainland China with a deep, open feeling of superiority. Hong Kong citizens complaint about the other Chinese by saying they are greedy, dishonest, uneducated and too narrow-minded. That feeling is quite perceptible when you talk to the people in Hong Kong. If you tell them that you are planning to visit the Mainland, as I did, they will keep warning you about the cheating you might be subject to once you have crossed the border.

The Beijing authorities know they cannot send the army to deal with the street protests in Hong Kong. They would like the demonstrators to take a false step and try to invade the administrative buildings in the city. But that seems not to be the case. So, Beijing will wait. They know that the streets will get tired and the demonstrations will end up by fading away. That will probably be the case.

But Beijing also knows that the people of Hong Kong do not want the kind of political dispensation that prevails in the Mainland. And that´s a very strong message.