Generation 40s – 四十世代

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Hong Kong’s young democracy campaigners risk losing sight of the real changes needed in society

Anson Au says democracy is just another form of government, far from perfect and equally prone to ideological excess. Instead of chasing universal suffrage, Hong Kong needs to negotiate the best way forward to create a better society

The past couple of weeks have seen a resurgence in the push for democracy among youth in Hong Kong. Zealous cries for a new order have filled the air once more, in the wake of the anniversary on September 28 of Occupy Central, which ignited massive dissent among thousands of youth bound to the vision of democracy.

And just two weeks ago, former governor Chris Patten concluded his four-day visit by rallying Hongkongers to the pursuit of democracy and urging Beijing to consent.

Joined by a host of global media outlets, these sentiments betray a belief in the inherent good of ­democracy – but overlook the purpose of governance itself.

We must stay grounded. ­Democracy, as with all forms of governance, is but a means to an end – which is the establishment of a good society. My research explores what constitutes a good society and what can destroy it, and it shows that the answers don’t lie in any one form of governance.

We must separate ideology from practicality in the context of governance for a good society. As history tells us, it’s when we fail to do so that a society moves to atrocious ­extremes.

First, democracy is not without its dark side. Whereas popular belief holds that it’s inherently good, political research uncovers the ­uncomfortable truth that this isn’t the case. Democracy is not built upon the premise of bringing about “the most good for the majority”. Rather, it’s structured upon “the most good decided by the majority”.

Both modern history and the ­recent past have witnessed atrocities willed into being by the majority of a given society. Minorities in a populace often belong to economically impoverished and politically marginalised categories. As such, they possess significantly less ability to resist convenient and swift suppression by a hostile, intolerant majority. In Yugoslavia, they were the Bosnian Muslims and Croats, popularly hated minorities unable to resist violence by Serb militants.

In the days leading up to the establishment of Nazi Germany, they were the already stigmatised Jews, homosexuals, elderly and disabled – powerless to resist oppression, arrest and cleansing by a regime that channelled, rather than moderated, ideological hatred among the majority.

In Rwanda, they were the Tutsi and moderate Hutu leaders, defenceless against the anti-Tutsi radicalism washing over the Hutu state. The result was the infamous Rwandan genocide, whose ghosts still haunt the nation and human rights committees the world over. When organised by the majority alone, the state becomes a voice for the majority alone – rather than moderate hateful sentiments harboured by the majority, it channels them.

Strongman ­tyrants can ascend to power in democracies by capitalising on ideological fervour and insecurities among the majority. We need not look very far into history: the broad, recent rise of the far right across Europe and America prove the contemporary relevance of this admonition.

Both Geert Wilders in the Netherlands and Marine Le Pen in France championed, to great success, Islamophobia and the rejection of refugees in appealing to lower- and middle-class xenophobia. They were only narrowly beaten by more moderate candidates.

In the UK, Brexit attracted popular support, despite the economic disasters that pundits confirmed it would bring. On the ill-informed, misleading platform that Britain could accrue more capital outside the European Union, Brexit succeeded in convincing a majority more invested in nationalism than practicality. And most recently, Donald Trump rose to the White House by targeting immigrants and trumpeting the purge of big money from governance. Manipulated for their insecurities with employment, a majority rallied behind his claims, despite his very apparent financial conflicts of interest.

Second, Hong Kong is seeing divisions between the young and old. Young adults have lashed out against older citizens for retreating from the push for democracy, ­accusing them of political apathy, or worse, treason against Hong Kong society. But difference should beget discussion, not exclusion.

The legacy of Occupy Central has been … distorted into ideological fervour among youth

Incendiary reactions to difference show how the legacy of Occupy Central has been an improved consciousness of democracy, but distorted into ideological fervour among youth not unlike that of the Red Guard and other cross-national cases in world history. The convergences evoke historical memories of very real dangers.

In China, the Red Guards turned over their families, peers, teachers and schools to state punishment. In Cambodia, French-trained cadres led by Pol Pot swept the country with party purges and fratricides for a modernised, agrarian society.

Both cases show what happens when a country’s young ideologues rally behind a mode of governance for its own sake. Families are divided; the younger and older generations are split; unrest and violence ensue. Institutions embodying tradition are destroyed, and evidence-based assessments of what’s good for society are abandoned. Uprooting a plant always pulls up with it soil, grass, and living creatures. What does a heavy-handed democratic revolution threaten to uproot – policies, relations, institutions – along with the existing mode of governance? What will fill the gaping hole left in the earth afterwards? Who will benefit?

What does a heavy-handed democratic revolution threaten to uproot along with the existing mode of governance?

Third, stop focusing on democracy. Democracy, as with any governance, is only a means to an end. Thinking otherwise gives rise to ideological sentiments with disastrous consequences, as historical precedents have shown.

Furthermore, it distracts us from discussing the changes, the actual fruits of governance, that we want to see. Affordable housing; more ­resources for health services; a better old-age living allowance.

The calls for universal suffrage fail to address how any such issues or policies would be improved.

Real, positive change can only happen in Hong Kong by negotiating at the table, not by overturning it and attempting to build a new one; by engaging with actual policies and relations, instead of an abstract “fight”; by discussing the real, concrete needs of Hong Kong citizens, more than ideals written by a few on paper. We must forego visions of governance motivated by ideology to see the ends, rather than the means, in order to build a better society and prevent disaster.

I do not blame ethnic majorities for extreme crises. Ethnic majorities do not create extreme crises, but they can empower the ones who do: ranging from the endorsement of right-wing fascism to platforms that literally fracture nations.

Democracy claims to benefit all of society, but so does virtually every other mode of governance – what matters is how it is brought to effect.

A system lives for the people – not the other way around. We must refocus on the practical consequences of governance itself.

As Nelson Mandela – at a widely televised New York town hall in 1990 with American news anchor Ted Koppel – said in response to a question about the type of economy he envisioned for South Africa: “We are not concerned with models. We are not concerned with labels. We are practical men and women whose solutions are dictated by the actual conditions existing in our country. It does not matter whether the cat is black or white – so long as it can catch mice.”

Anson Au is a visiting researcher in the Department of Sociology at the Hong Kong Baptist University and a research officer at the LSE Health and Social Care and Department of Social Policy (joint) at the London School of Economics and Political Science.


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If Chris Patten truly cares for Hong Kong, he should fight for equal rights for British National (Overseas) passport holders

CommentInsight & Opinion
Albert Cheng says the BN(O) passport is a grievous wound inflicted by the British government, a betrayal of the people of Hong Kong. The test of the former governor’s fine words will be whether he can help right that wrong

Hong Kong’s last governor, Chris Patten, was recently in town to promote his new book, First Confession. Patten is a charming, energetic and experienced politician, and his polished speeches hold great fascination for his audience. This time, he praised Chief Executive Carrie Lam Cheng Yuet-ngor for doing a better job than Leung Chun-ying, and eulogised the new generation for adhering to their principles.

Patten’s pertinent comments on Hong Kong’s political environment have won him worldwide applause. However, at a lunch organised by the Hong Kong Democratic Foundation, Patten seemed rather baffled by an issue raised by veteran democrat Emily Lau Wai-hing. She asked if Patten, a member of the House of Lords, would raise in Parliament the issue of giving the right of abode to British National (Overseas) passport holders. Patten promised to raise the matter when the issue of whether to count foreign students in the government’s immigration target was tabled again, but also reminded Lau not to overestimate the influence of the upper chamber. The underlying message was that there was nothing he could do.

The BN(O) issue has inflicted a long-lasting and grievous wound on the Hong Kong people. Originally, there were about 3 million British Dependent Territories Citizen (BDTC) passport holders (including people born before July 1, 1997 in Hong Kong, and naturalised British subjects). However, due the handover, the British government amended its constitution, changing the BDTC classification to BN(O), who do not have the right of abode in the UK.

The British government went back on its word and betrayed the Hong Kong people. In fact, after the June 4 incident in 1989, due to strong community pressure, it reluctantly granted 50,000 right of abode places for Hong Kong families. But people instead flocked to emigrate to the US, Canada, Australia, New Zealand, Singapore, and so on. The arrogant attitude of the UK government caused an apathetic response to the “right of abode” scheme and it ended up being underutilised.

The idea of a BN(O) passport is absurd. It comes with the same cover as any British passport but can be used only as a travel document. Holders have no right of abode in the UK and are not treated equally when passing through immigration. I visited Britain recently and, from my observation, British customs officers have absolutely no idea what a BN(O) passport is. They direct holders to the European passports line, where they have to queue at the “foreigners” counter.

If Patten truly cared about Hong Kong people, as he claims, he would spend more effort fighting for equality on behalf of BN(O) passport holders. In fact, in February 1997, now-deceased House of Lords member Lord Avebury put forward a private member’s bill – the British Nationality (Hong Kong) Act – proposing that BN(O) passport holders who did not hold Chinese citizenship could register to be British citizens. At that time, Patten strongly urged the government to support the bill, which was subsequently passed. In 2009, Lord Avebury proposed an amendment to the British Nationality Act Section 4B, that any BN(O) who involuntarily lost the citizenship of other countries would automatically become a British citizen. The proposal was accepted by the Labour government.

In the past 50 years, tens of thousands of Hongkongers have gone to Britain to study, bringing huge economic benefits to the country. However, this summer, students bound for Britain were stranded in Hong Kong due to some errors made by the visa service provider. It has been a painful procedure.

It has been 20 years since Hong Kong’s return to China; “one country, two systems” has been deformed and the promised “ high degree of autonomy” has diminished. The Chinese government has been acting against the Sino-British Joint Declaration, sparking concerns among Hong Kong people. Many have already applied for extensions of their BN(O) passports as a last resort. Patten should keep his promise and join hands with other House of Lords members who are concerned about Hong Kong people’s rights, to allow BN(O) passport holders to be treated equally with other British passport holders. This is the least Patten can do.

Albert Cheng King-hon is a political commentator.

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Hong Kong needs to throw more caution to the wind when it comes to backing start-ups

The biggest problem is an acute shortage of angel investors and seed money available, even before any venture capital money becomes involved – we need to take unconventional risks to succeed

The Hong Kong government is trying to transform the economy from its traditional to a new innovative economy, but doesn’t realise that creative failure rather than cautious success will lead the way.

Last week, Hong Kong launched its HK$2 billion (US$256 million) Innovation and Technology Venture Fund (IVTF) to encourage investment in local innovation and technology start-ups in an effort to improve economic activity.

The government is inviting venture capital funds to apply to become co-investment partners of the new fund, said Nicholas Yang Wei-hsiung, the Secretary for Innovation and Technology. The government will only make investments alongside VC funds.

The government is risk averse even though it needs to take more risks to build Hong Kong’s new economy. It does not want to directly and autonomously choose which investments to make because historically, civil servants do not want to take responsibility for losses.

Yet successful venture-capital investing requires the ability to accept and learn from losses. So the IVTF is depending on venture capitalists to do the due diligence and cover the bureaucrats’ collective reputations.

Matching funds are the easy way out for the government because this assumes that venture capitalists in Hong Kong are actually effectively serving the unique needs and problems of the city’s start-up ecosystem. Instead, the government needs to take on the most difficult part of kick-starting a new economy – tech or otherwise.

The biggest problem in funding start-ups in Hong Kong is that there is an acute shortage of angel investors and seed money available before venture money.

VCs prefer to invest minimum amounts of about US$3 million and more. Then, there is so much private equity available globally that private companies like Uber can be valued at US$60 billion and still be funded by private money. VC has grown so big that you can’t tell the difference from private equity.

And that tends to crowd out investment at the smaller, seed levels. As high net worth investors would prefer to make bigger investments in bigger, non-listed companies.

But, the problem in Hong Kong’s funding channel is that many start-ups are looking for less than a million US dollars, more like US$500,000 to roll out their product after a few years of development, or angel money of US$100,000 to begin a business.

Start-ups can attract investments of US$3 million and up if they demonstrate revenue or profits, or have completed a desirable technology. But Hong Kong’s relatively new world of new-economy start-ups require more support at an earlier stage. And only the government has the resources.

Hong Kong entrepreneurs have less experience in developing start-ups and even fewer have the initial capital. Even the GoGoVan founders had to desperately scrape together HK$20,000 each seven years ago. Lack of capital and experience are major problems in Hong Kong.

Incubators in Hong Kong tend to rent or give out shared office space; some may render business advice, but few are capable of actually funding start-ups.

Start-ups and their founders also tend to require lots of attention from their investors. Business plans rarely go according to plan. And turnaround strategies rarely turn around, since so much guidance and intervention is required.

The start-up game requires a tolerance of low-level failure. Using a VC expression, this means it is important to “fail early and fail often”.

The success rate is low for start-ups. And most people should be working for someone as employees rather than running their own business. It takes tremendous self-confidence and determination to launch a business. Historically, it has been much easier to flip property.

Local Hong Kong investors tend to ask start-ups the wrong questions. They ask, “How does it make money?” The right question is “ What problem does this solve?” There’s a big difference in mentality and mission.

It is difficult to raise VC money in Hong Kong. Many of them are interested in businesses that can scale outside Hong Kong, into mainland China and internationally. They are looking to turn a 10-million dollar company into a billion-dollar company in a few years. Mainland China is the only place in Asia where this can happen quickly.

I detect a natural prejudice against Hong Kong Chinese-founded start-ups. Most VCs think Hong Kong Chinese cannot operate successfully in China and are treated like foreigners in China as they need to take on a mainland joint venture partner.

This is especially risky in terms of divergent management attitudes or outright intellectual property theft or misappropriation.

The entire government and local financial community needs to take on more risk if it wants to transform the Hong Kong economy away from property development and traditional industries.

Hong Kong’s financial industry professionals are still divided over how they can remake the city’s stock exchange. Many of the conservative, traditional stockbrokers think the proposed start-up board is too risky in terms of regulation.

But we will need to take unconventional risks to succeed.

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China’s crackdown on grey rhinos won’t reduce its debt burden, it will only redistribute it

CommentInsight & Opinion
Andy Xie says the government’s resolve to reduce financial leverage in the economy does not extend to cleaning up its bloated state sector, or making systemic changes. That means the sound and fury is unlikely to last

China is putting grey rhinos – business empires that inflate through debt-fuelled asset acquisitions – on a financial diet. Unfortunately, most of China’s grey rhinos are really Ponzi schemes that live on more and more debt. Dieting is a kind of death sentence. Unless the government is privately backing off from its public stance, many carcasses will soon float up to the surface of China’s debt ocean.

The crackdown on the grey rhinos stems from the authorities’ belief that a financial crisis is sparked by a Lehman Brothers or a Bernie Madoff. If the government can take them out first, a crisis could be avoided.

This is different from the generally accepted belief that a crisis happens because the system has gone wrong. In this line of thinking, where and who started the crisis is not important. The right question to ask, in China’s context, is why there are so many grey rhinos.

The answer will determine whether China can wean itself off its debt addiction. The elephant in the room is really China’s annual monetary and credit growth targets that consistently exceed the nominal GDP growth rate. The debt bubble is a consequence of this policy.

Grey rhinos are created when credit policies are loosened to meet the credit growth targets. Grey rhinos, who thrive in this ecosystem, rely on more debt to sustain cash flow. If there are no grey rhinos, credit growth would surely slow sharply, possibly below the nominal GDP growth rate. Only people who don’t intend to repay want to borrow again and again.

The deleveraging push is being undermined by these macro targets. As some grey rhinos try to slim down by selling assets, other companies will surely buy them with debt financing. Debt will be shuffled around. Genuine liquidation, which would trigger a credit crush, is unlikely to happen.

Reshuffling the debt with no new rhinos created could mean progress, because at least it caps the total amount of debt while the economy grows, though slower than before. This would mean a slowly declining debt-to-GDP ratio. But I seriously doubt this will happen.

I believe total debt will continue to rise faster than GDP growth. The best outcome we can hope for in this crackdown is a slowdown in the rise of national indebtedness, because, behind the rhinos and the elephants, a dinosaur lies in wait.

The most powerful force in China’s relentless rise in debt leverage is its vast and inefficient state sector. State-owned enterprises and local governments gobble up vast amounts of cash every day. The hole is plugged by imposing heavy and direct taxes on households, or an inflation tax through excessive monetary expansion.

The Chinese economy is the most heavily taxed among all major economies in the world. While European economies have higher tax revenue-to-GDP ratios, effective redistribution allows the revenue to be better shared. In China, the government sector spends most of the revenue.

China’s property bubble is a form of tax. New residential property sales have reached 15 per cent of gross domestic product in recent years. Two thirds of the proceeds are transfers to the government sector. The burden on the household sector from the property bubble is a form of inflation tax.

China has held down the inflation rate despite excessive and persistent monetary expansion because it has been successful in channelling monetary growth into the property market and other asset classes. By making credit easily available and suppressing household disposable income, monetary expansion is channelled into speculation in asset markets.

Monetary expansion through targeted credit creation is most pronounced in the leverage build-up of state-owned enterprises. The state sector has been running negative cash flows. One could argue that, when an enterprise invests for growth, it should run negative cash flows. But, after 20 years, when the same company still has a negative cash flow, it may never make money. Very few state-owned companies run positive cash flows like China Mobile. But, then again, the country’s three big telecoms companies are protected against competition and benefit from the declining costs that come with rapid technological progress.

Other state-owned enterprises in industries with less technological advances have no place to hide their inefficiencies. They have to borrow more and more to stay afloat. The rise in national leverage reflects at the micro level the rising leverage ratios among most state firms.

The property bubble, as a form of inflation tax, does not reflect the total cost of that tax. The most important component of the cost is how labour has seen so little productivity growth.

After four decades of rapid GDP growth, China’s currency is unusually weak, as reflected in the country’s per capita income of about US$8,000, and China’s household disposable income, at about 45 per cent of GDP, is unusually low.

When an economy develops, its productivity should be high with more capital spending on labour and more efficiency in capital formation. Real wages should rise faster than the economy as efficiency reduces the need to invest. And the real exchange rate should appreciate to reflect the narrowing gap in productivity with developed economies.

Japan, for example, saw its currency triple against the dollar during its four decades of rapid growth. Its per capita income caught up with the West mainly due to currency appreciation rather than GDP growth. And its household disposable income’s share in the economy also caught up with the West. After four decades of rapid growth, China’s per capita income is only at one-fifth of the level among developed economies, and its household disposable income’s share in the economy has consistently declined. China’s household discretionary consumption is less than Germany’s.

People walk through a shopping district in Tokyo. Japan saw its currency triple against the dollar during its four decades of rapid growth. Its household disposable income’s share in the economy also caught up with the West. Photo: Reuters

If we benchmark China’s performance against other East Asian economies that have pursued an investment and export development model, China has underperformed both in terms of per capita income and household disposable income share. We should keep in mind that China’s economy is based on sacrificing people’s living standards.

China’s dinosaur, its vast state sector, exists to secure political stability, and stability of the political system is its top priority. The economy, the financial system and everything else must serve the aim of maintaining stability.

Since maintaining a vast state sector is considered vital for sustaining the system, the crackdown on financial leverage may not last. At some point, the spigot will be turned on again.

Suddenly, new faces will pop up to become dealmakers from China. And the Western media will celebrate them as heralding China’s arrival.

Andy Xie is an independent economist

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青年整體工資增 按教育程度比較則下降


不過當按教育程度比較,青年工資收入顯著下降,而不按教育程度分組比較,下跌幅度則輕微得多甚至反而上升,在統計學中這個結果就是一個「辛普森悖論」(Simpson’s Paradox)。其基本含義是,兩個變量(在這裏是工資與年份)之間在不同分組裏皆有相同方向的關係;但在不作分組的時候,兩個變量的關係卻可以大大減弱、消失甚至相反。統計學家認為這個現象的主要原因,是因為有第三個(或第四個)變項在影響兩者之關係。而這裏就是組別構成的變化。









以數據闡釋 須注意會否呈現片面「現實」