Hong Kong

Just my opinion…….

Hong Kong is now just another province of Mainland China. The 'One country - Two Systems' has been rendered invalid by the action of the Chinese Communist Party (CCP) invoking their new security law in Hong Kong. The reality is China never fully implemented the 'Basic Law' and subsequently made a number of attempts to undermine it. The attempt in 2019 to invoke laws allowing China to extradite Hong Kong citizens to China is contrary to the Basic Law and resulted in widespread protests, civil disorder and significant damage to public and private property. The CCP has used these protests as a reason for introducing the new security law when they created the initial problem.

I suspect the CCP agreed to the 'One Country - Two Systems' for two strategic reasons.

1. At the time they believed they needed an unchanged Hong Kong as an economic and financial gateway to the rest of the world.

2. Agreeing to 'One Country - Two Systems' was also aimed at Taiwan. The CCP hoped their 'one country - two systems’ approach to Hong Kong would result in Taiwan re-joining China.

The UK was looking for a way to extricate itself from Hong Kong when the 99 years lease on the mainland portion of Hong Kong (the New Territories) was due to expire. Hong Kong island and Kowloon were not viable without the mainland portion. Perhaps the British government though a 50 year transition period might result in China being a more democratic country at the end of the period? It's quite possible the British didn't realise communist China was going to rapidly transition in a major economic power by abandoning communism.

Whilst China might be ruled by the Chinese Communist Party, the country is no longer communist. Communism is when the state owns everything and everyone contributes to the best of their ability, taking only what they need. This isn't the case in China. The reality is the country is ruled by a totalitarian government where all power is centralized and dictatorial and requires complete subservience to the state.

The CCP can only keep the general population subservient if the people continue to enjoy the benefits of a rapidly expanding economy (ie, share in the wealth). China has been making and selling "stuff" to the world for several decades. Low wages means the CCP has been awash in cash. As the South American drug cartels discovered; having cash isn't particularly useful. It needs to be invested! China has been frenetically spending money in areas such as:

1. Domestic infrastructure

2. USA Government Bonds; and

3. Acquiring overseas raw materials, land, property and means of production.

They have now picked all the low hanging fruit! 

More recently the CCP announced the 'Belts and Roads Initiative' (BRI). China would loan countries money to build a transport network with China at its hub. The BRI comes with strings attached such as; defaulting on the repayments results in China taking control of the asset; and the work on constructing the infrastructure must go to Chinese companies. The BRI is stalling leaving China with cash it can't spend.  Moreover many countries in the West have introduced restrictions on overseas investment.

China is entering a period of economic trouble. Recently there have been 'runs' on two Chinese banks and the central government has introduced tough new restrictions preventing it’s citizens sending money overseas. Combine this with other factors such as the South China Sea expansion; tension on the Indian-China border. Economic action against Australia and recent massive cyber attacks, all indicate China has adopted a more aggressive stance.

My concern is the CCP is attempting to deflect public dissatisfaction with bellicose patriotism and 'sabre rattling'. The potential for armed conflict is rising!