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.
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.
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.
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.”
U.S. Senate passes bill to avert government shutdown, sends to Biden for signature
The Democratic-controlled U.S. Senate on Thursday passed a bill to fund the government through mid-February, averting the risk of a shutdown after overcoming a bid by some Republicans to delay the vote in a protest against vaccine mandates.
The 69-28 vote leaves government funding at current levels through Feb. 18, and gives Democratic President Joe Biden plenty of time to sign the measure before funding was set to run out at midnight on Friday.
The Senate acted just hours after the House of Representatives approved the measure, by a vote of 221-212, with the support of only one Republican.
Congress faces another urgent deadline right on the heels of this one. The federal government is approaching its $28.9 trillion borrowing limit, which the Treasury Department has estimated it could reach by Dec. 15. Failure to extend or lift the limit in time could trigger an economically catastrophic default.
“I am glad that in the end, cooler heads prevailed. The government will stay open and I thank the members of this chamber for walking us back from the brink from an avoidable, needless and costly shutdown,” Democratic Senate Majority Leader Chuck Schumer said on nailing down a deal with Republicans to clear the way for passing the bill.
The vote ended weeks of suspense over whether Washington might be plunged into a government shutdown at a time when officials worry that the potentially dangerous Omicron variant of COVID-19 could take hold in the United States after being discovered in South Africa.
Such a shutdown could have forced layoffs of some U.S. government medical and research personnel.
Senate Democrats defeated an attempt by a handful of conservative Republicans to attach an amendment that would have prevented enforcement of Biden’s coronavirus vaccine mandate for many U.S. workers.
Republican Senators Mike Lee, Ted Cruz and Roger Marshall had earlier raised the possibility that the government could partially shut down over the weekend while the Senate moves slowly toward eventual passage.
“It’s not government’s job, it’s not within government’s authority to tell people that they must be vaccinated and if they don’t get vaccinated, they get fired. It’s wrong. It’s immoral,” Lee said before the defeat of the amendment.
Over the past few days, Senate Minority Leader Mitch McConnell insisted there would be no government shutdown from congressional inaction. But he had to work through the day on Thursday to get his Republican lawmakers in line on a deal allowing quick passage of the funding bill.
The emergency legislation is needed because Congress has not yet passed the 12 annual appropriations bills funding government activities for the fiscal year that began on Oct. 1.
A partial government shutdown https://www.reuters.com/world/us/what-happens-when-us-federal-government-shuts-down-2021-09-27 would have created a political embarrassment for both parties, but especially for Biden’s Democrats, who narrowly control both chambers of Congress.
The fact the temporary spending bill extends funding into February suggested a victory for Republicans in closed-door negotiations. Democrats had pushed for a measure that would run into late January, while Republicans demanded a longer timeline leaving spending at levels agreed to when Republican Donald Trump was president.
“While I wish it were earlier, this agreement allows the appropriations process to move forward toward a final funding agreement which addresses the needs of the American people,” House Appropriations Committee Chairwoman Rosa DeLauro said in a statement announcing the agreement.
But she said Democrats prevailed in including a $7 billion provision for Afghanistan evacuees.
Once enacted, the stopgap funding measure would give Democrats and Republicans nearly 12 weeks to resolve their differences over the annual appropriations bills totaling around $1.5 trillion that fund “discretionary” federal programs for this fiscal year. Those bills do not include mandatory funding for programs such as the Social Security retirement plan that are renewed automatically.
(Reporting by Richard Cowan and Susan Cornwell; Additional reporting by Moira Warburton, Doina Chiacu, David Morgan and Susan Heavey; Editing by Scott Malone, Alistair Bell and Peter Cooney)
Austria's Ex-Chancellor Sebastian Kurz to Quit Politics Amid Corruption Probe – Bloomberg
Austria was thrust into political turmoil after former Chancellor Sebastian Kurz quit his party and politics, prompting his hand-picked successor and finance minister to also resign.
The day of commotion in Vienna started with Kurz’s decision on Thursday to leave his most recent role as leader of the People’s Party amid a corruption probe.
Canada joins U.S, EU and Britain in imposing new Belarus sanctions
Canada imposed new sanctions on Belarusian officials and entities in coordination with international partners on Thursday to protest against what it called attacks on human rights and acts of repression, Ottawa said.
A foreign ministry statement said Canada was acting together with the United States, the European Union and Britain. Separately, the U.S. Treasury imposed restrictions on dealings in new issuances of Belarusian sovereign debt and expanded sanctions, targeting 20 individuals and 12 entities.
(Reporting by David Ljunggren)
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