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Can Hong Kong’s economy survive China’s political crackdown? – Al Jazeera English

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Hong Kong, China – Rumours that the Hong Kong dollar will be unpegged from the United States dollar percolate through local brokerages. Thousands of middle-class families have sold their flats and cashed out for a new life abroad. Hong Kong’s powerful developers cringe when Beijing demands that they alleviate the territory’s housing shortage.

Over the past year, Hong Kong’s society has been torn apart by the Beijing-imposed national security law and changes to the electoral process designed to ensure only people deemed “patriots” can hold office in the territory.

Now attention is turning to whether its famously free economy and status as a global financial centre can survive.

Observers are not optimistic.

“Economic freedom without democracy and other freedoms is not stable in the long term,” said Fred McMahon, a resident fellow with the Fraser Institute, an independent non-partisan think-tank in Canada.

Last month, the institute’s annual report on economic freedom still crowned Hong Kong’s the freest economy in the world, but it pointed to the national security law and the city’s “descent into tyranny” as threats to holding on to the title for much longer.

“The key aspect of economic freedom is the rule of law, which doesn’t bow to power but enforces justice and independence of the government,” McMahon told Al Jazeera. However, for the Chinese Communist Party “the law is subservient to politics,” he added.

Experts question whether Hong Kong can remain economically free in the wake of the national security law [File: Jerome Favre/EPA]

Last year, The Heritage Foundation, which for decades toasted the city as the poster child of laissez-faire economics, dumped Hong Kong from its ranking.

Within months of the security law coming into effect, Next Digital, a thriving business that published the popular pro-democracy Apple Daily, was forced to close after owner Jimmy Lai was accused of “colluding with a foreign power”, and the company’s assets were frozen.

While Lai is behind bars awaiting trial and has since been charged with other offences, businesspeople are wondering whether the tycoon’s prosecution under the new law proves to be a singular exception – or the proverbial canary in the coal mine.

“This is a special case that has put the international business community on guard,” said George Cautherley, vice chairman of the International Chamber of Commerce – Hong Kong. “They’re waiting to see if the government will go further than this and how this is going to evolve.”

Hong Kong’s economy still seems to be humming along for now, but Beijing’s recent mainland crackdowns on tech giants, tuition centres and debt-binging real-estate developers have raised suspicion about what might be in store.

Assuming history is any guide, it could be only a matter of time before Beijing extends its interest to Hong Kong’s economic affairs.

A case in point: The national security law was promulgated in mainland China only a few years before it was imposed on Hong Kong, bypassing the territory’s own elected legislature.

More recently, the city’s “big four” developers, faulted for some of the world’s highest home prices and smallest flats, were told to do their bit to solve the territory’s housing problems.

Hong Kong Chief Executive Carrie Lam (left) has made it clear that aligning the territory with China, including over the territory’s punishing COVID-19 quarantine policy, is her priority [File: Jerome Favre/EPA]

For businesspeople, there is also the spectre of the past: when China was a command economy and private ownership outlawed.

“Businesspeople are worried perhaps not so much as their own personal freedom as the value of their assets invested in Hong Kong and China,” said Joseph Lian, former commentator and top editor at the city’s business press who now teaches economics at Yamanashi Gakuin University in Japan. They “would be in for a tough ride”, he said.

Eye on Beijing

But it is not only the well-heeled who worry. Middle-class families convulsed by the crackdowns are also looking to protect their money and investments.

Tens of thousands of Hong Kong people who are planning to emigrate have put up the family flat – often their most valuable asset – for sale. Some – and not only those who are planning to leave – are also opening offshore bank accounts out of concern that the territory may soon be subject to the same kind of capital controls as the mainland.

The world’s longest and most costly quarantine mandate – between 14 and 21 days in a hotel for all residents returning from overseas – has also been weighing on the minds of business and once-regular travellers.

The European Chamber of Commerce warned earlier this month that many of its member companies were considering relocating some of their operations elsewhere – including Singapore – because of the mandate, which the local government has shown little willingness to relax even for the fully vaccinated.

Chief Executive Carrie Lam has hammered home her objective of aligning the city’s pandemic control with the mainland’s zero-COVID goal – whatever the cost.

But the price of an increasingly restricted economy could end up being hefty.

Next Digital CEO Cheung Kim Hung – shown here arriving at the Lai Chi Kok Reception Centre in Hong Kong – has, along with other top executives, been charged with ‘collusion with a foreign power’ and the company has now been wound up [File: Jerome Favre/EPA]

Hong Kong’s separate economic system has long underpinned its status both as China’s most important financial hub and a global one.

But with the territory on an ever-shorter leash from Beijing, Lian expects the investment dollars that propelled it into pre-eminence over the last half-century could soon give way to an influx of speculative funds, known as hot money.

“A mature financial centre has a lower proportion of hot money; Hong Kong may be going in the opposite direction,” said Lian. “It may still make money for a lot of people; casinos do, too, but that’s not what a financial centre is for.”

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‘Disgraceful:’ N.S. Tory leader slams school’s request that military remove uniform

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HALIFAX – Nova Scotia Premier Tim Houston says it’s “disgraceful and demeaning” that a Halifax-area school would request that service members not wear military uniforms to its Remembrance Day ceremony.

Houston’s comments were part of a chorus of criticism levelled at the school — Sackville Heights Elementary — whose administration decided to back away from the plan after the outcry.

A November newsletter from the school in Middle Sackville, N.S., invited Armed Forces members to attend its ceremony but asked that all attendees arrive in civilian attire to “maintain a welcoming environment for all.”

Houston, who is currently running for re-election, accused the school’s leaders of “disgracing themselves while demeaning the people who protect our country” in a post on the social media platform X Thursday night.

“If the people behind this decision had a shred of the courage that our veterans have, this cowardly and insulting idea would have been rejected immediately,” Houston’s post read. There were also several calls for resignations within the school’s administration attached to Houston’s post.

In an email to families Thursday night, the school’s principal, Rachael Webster, apologized and welcomed military family members to attend “in the attire that makes them most comfortable.”

“I recognize this request has caused harm and I am deeply sorry,” Webster’s email read, adding later that the school has the “utmost respect for what the uniform represents.”

Webster said the initial request was out of concern for some students who come from countries experiencing conflict and who she said expressed discomfort with images of war, including military uniforms.

Her email said any students who have concerns about seeing Armed Forces members in uniform can be accommodated in a way that makes them feel safe, but she provided no further details in the message.

Webster did not immediately respond to a request for comment.

At a news conference Friday, Houston said he’s glad the initial request was reversed but said he is still concerned.

“I can’t actually fathom how a decision like that was made,” Houston told reporters Friday, adding that he grew up moving between military bases around the country while his father was in the Armed Forces.

“My story of growing up in a military family is not unique in our province. The tradition of service is something so many of us share,” he said.

“Saying ‘lest we forget’ is a solemn promise to the fallen. It’s our commitment to those that continue to serve and our commitment that we will pass on our respects to the next generation.”

Liberal Leader Zach Churchill also said he’s happy with the school’s decision to allow uniformed Armed Forces members to attend the ceremony, but he said he didn’t think it was fair to question the intentions of those behind the original decision.

“We need to have them (uniforms) on display at Remembrance Day,” he said. “Not only are we celebrating (veterans) … we’re also commemorating our dead who gave the greatest sacrifice for our country and for the freedoms we have.”

NDP Leader Claudia Chender said that while Remembrance Day is an important occasion to honour veterans and current service members’ sacrifices, she said she hopes Houston wasn’t taking advantage of the decision to “play politics with this solemn occasion for his own political gain.”

“I hope Tim Houston reached out to the principal of the school before making a public statement,” she said in a statement.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

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Saskatchewan NDP’s Beck holds first caucus meeting after election, outlines plans

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REGINA – Saskatchewan Opposition NDP Leader Carla Beck says she wants to prove to residents her party is the government in waiting as she heads into the incoming legislative session.

Beck held her first caucus meeting with 27 members, nearly double than what she had before the Oct. 28 election but short of the 31 required to form a majority in the 61-seat legislature.

She says her priorities will be health care and cost-of-living issues.

Beck says people need affordability help right now and will press Premier Scott Moe’s Saskatchewan Party government to cut the gas tax and the provincial sales tax on children’s clothing and some grocery items.

Beck’s NDP is Saskatchewan’s largest Opposition in nearly two decades after sweeping Regina and winning all but one seat in Saskatoon.

The Saskatchewan Party won 34 seats, retaining its hold on all of the rural ridings and smaller cities.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

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Nova Scotia election: Liberals say province’s immigration levels are too high

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HALIFAX – Nova Scotia‘s growing population was the subject of debate on Day 12 of the provincial election campaign, with Liberal Leader Zach Churchill arguing immigration levels must be reduced until the province can provide enough housing and health-care services.

Churchill said Thursday a plan by the incumbent Progressive Conservatives to double the province’s population to two million people by the year 2060 is unrealistic and unsustainable.

“That’s a big leap and it’s making life harder for people who live here, (including ) young people looking for a place to live and seniors looking to downsize,” he told a news conference at his campaign headquarters in Halifax.

Anticipating that his call for less immigration might provoke protests from the immigrant community, Churchill was careful to note that he is among the third generation of a family that moved to Nova Scotia from Lebanon.

“I know the value of immigration, the importance of it to our province. We have been built on the backs of an immigrant population. But we just need to do it in a responsible way.”

The Liberal leader said Tim Houston’s Tories, who are seeking a second term in office, have made a mistake by exceeding immigration targets set by the province’s Department of Labour and Immigration. Churchill said a Liberal government would abide by the department’s targets.

In the most recent fiscal year, the government welcomed almost 12,000 immigrants through its nominee program, exceeding the department’s limit by more than 4,000, he said. The numbers aren’t huge, but the increase won’t help ease the province’s shortages in housing and doctors, and the increased strain on its infrastructure, including roads, schools and cellphone networks, Churchill said.

“(The Immigration Department) has done the hard work on this,” he said. “They know where the labour gaps are, and they know what growth is sustainable.”

In response, Houston said his commitment to double the population was a “stretch goal.” And he said the province had long struggled with a declining population before that trend was recently reversed.

“The only immigration that can come into this province at this time is if they are a skilled trade worker or a health-care worker,” Houston said. “The population has grown by two per cent a year, actually quite similar growth to what we experienced under the Liberal government before us.”

Still, Houston said he’s heard Nova Scotians’ concerns about population growth, and he then pivoted to criticize Prime Minister Justin Trudeau for trying to send 6,000 asylum seekers to Nova Scotia, an assertion the federal government has denied.

Churchill said Houston’s claim about asylum seekers was shameful.

“It’s smoke and mirrors,” the Liberal leader said. “He is overshooting his own department’s numbers for sustainable population growth and yet he is trying to blame this on asylum seekers … who aren’t even here.”

In September, federal Immigration Minister Marc Miller said there is no plan to send any asylum seekers to the province without compensation or the consent of the premier. He said the 6,000 number was an “aspirational” figure based on models that reflect each province’s population.

In Halifax, NDP Leader Claudia Chender said it’s clear Nova Scotia needs more doctors, nurses and skilled trades people.

“Immigration has been and always will be a part of the Nova Scotia story, but we need to build as we grow,” Chender said. “This is why we have been pushing the Houston government to build more affordable housing.”

Chender was in a Halifax cafe on Thursday when she promised her party would remove the province’s portion of the harmonized sales tax from all grocery, cellphone and internet bills if elected to govern on Nov. 26. The tax would also be removed from the sale and installation of heat pumps.

“Our focus is on helping people to afford their lives,” Chender told reporters. “We know there are certain things that you can’t live without: food, internet and a phone …. So we know this will have the single biggest impact.”

The party estimates the measure would save the average Nova Scotia family about $1,300 a year.

“That’s a lot more than a one or two per cent HST cut,” Chender said, referring to the Progressive Conservative pledge to reduce the tax by one percentage point and the Liberal promise to trim it by two percentage points.

Elsewhere on the campaign trail, Houston announced that a Progressive Conservative government would make parking free at all Nova Scotia hospitals and health-care centres. The promise was also made by the Liberals in their election platform released Monday.

“Free parking may not seem like a big deal to some, but … the parking, especially for people working at the facilities, can add up to hundreds of dollars,” the premier told a news conference at his campaign headquarters in Halifax.

This report by The Canadian Press was first published Nov. 7, 2024.

— With files from Keith Doucette in Halifax

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