World
Taiwan to swap office with breakaway state Somaliland
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| Taiwan has seen seven diplomatic allies poached by mainland China since President Tsai Ing-wen came into office (AFP Photo/Sam Yeh) |
Taiwan announced Wednesday it was opening representative offices with the breakaway state of Somaliland, warming ties between two de facto sovereign territories that are denied widespread international recognition.
Foreign minister Joseph Wu said Taiwan and Somaliland had signed an agreement in February to swap representative offices and cooperate in areas such as agriculture, mining and health.
"We're thousands of miles apart, but share a deep-seated love of freedom and democracy," Wu tweeted.
Somaliland declared independence from Somalia in 1991 but remains unrecognised by the international community.
While anarchic southern Somalia has been riven by years of fighting between multiple militia forces and Islamist violence, Somaliland has enjoyed relative peace.
Democratic and self-ruled Taiwan is officially recognised by only 15 countries -- China poached seven of its diplomatic allies after President Tsai Ing-wen came to power in 2016.
Tsai describes Taiwan as "already independent" but China views the island as its own territory and has vowed to seize it one day, by force if necessary.
Beijing has cut official communication with Taiwan while also ramping up military and economic pressure since Tsai was first elected four years ago.
"Taiwan's situation in the international community is difficult but we will not cower. We will continue to strengthen pragmatic relations with like-minded countries," Wu told reporters.
"China's pressure on us in the international community is very big."
The office will bear the name Taiwan rather than Taipei which is used in the island's offices in countries without diplomatic relations.
Taiwan and Beijing have been engaged in a diplomatic tug-of-war for decades trying to woo away each other's allies with financial and other incentives.
In the last decade, only a handful -- largely impoverished countries in Latin America and the Pacific -- have remained loyal to Taiwan.
The only European state to still recognise Taiwan is the Vatican.
Business
China wields currency as weapon with Trump tensions rising
China has quietly allowed its currency, the yuan, to slide to its weakest level against the U.S. dollar in over a decade as the Trump administration ratcheted up attacks on Beijing over its crackdown on Hong Kong and handling of the COVID-19 outbreak.
The so-called renminbi, or RMB, which has slid 2.47 percent versus the U.S. dollar year-to-date, on Wednesday fell to less than 7.17 per dollar, its weakest since 2008. That pushed the currency below the levels that last summer caused the Trump administration to label Beijing a currency manipulator. The label was removed in January as the two sides ironed out an initial trade agreement.
“It's almost like a game of bridge, where using non-verbal communication, the parties express their will,” Marc Chandler, chief market strategist at the capital markets trading firm Bannockburn Global Forex, told FOX Business.
“It's not so much the magnitude, but rather level – the RMB now at its weakest level in many months,” he added. “I think this is all related to the political pressure.”
Tensions between Washington and Beijing have escalated as the Trump administration has sought ways to punish China for its initial handling of the COVID-19 outbreak, which originated in its city of Wuhan. The virus has infected more than 5.99 million people worldwide and inflicted trillions of dollars of economic damage due to stay-at-home measures taken to slow its spread.
The strain from the pandemic has been heightened by friction between the world's two largest economies on other matters. The U.S. has moved in recent weeks to sanction Chinese officials for mistreating Uighurs, a Muslim minority in Xinjiang, blocking pension funds from investing in companies in China and clamping down on rules for those firms listed on U.S. exchanges.
Beijing is simultaneously grappling with troop movements along its contested border with India, and on Thursday, China’s Congress passed a national security bill that bypassed Hong Kong’s legislature, effectively ending the “one country, two systems” governing principle that Beijing had guaranteed for the 50 years following Great Britain’s handover of the territory in 1997.
HONG KONG'S 'ONE PARTY, TWO SYSTEMS' RULE IS DEAD, ACTIVIST WARNS
As a result, President Trump said Friday that he would direct his administration to “begin the process of eliminating policy exemptions that give Hong Kong different and special treatment” including agreements with Hong Kong on extradition, export controls on dual-use technologies and more.
Trump also instructed his presidential working group on financial markets to “study the differing practices of Chinese companies listed on the U.S. financial markets with the goal of protecting American investors.” Firms from China, and elsewhere, listed on U.S. exchanges do not have to abide by the same accounting standards as American companies.
The U.S. will, at least for now, remain in the trade agreement with Beijing, which calls for purchases of an additional $200 billion of American products over the next two years.
So far, the moves of China's yuan against the dollar have been “orderly and controlled and within the realms of what we've seen in the past,” Alan Ruskin, global head of G10 currency strategy at Deutsche Bank, told FOX Business.
He believes the current rate of exchange is “psychologically important” and a breakout to fresh decade-plus dollar highs would suggest Beijing is “tolerant of this new zone and tolerant of additional weakness” in its currency.
A weaker yuan is a double-edged sword as it would make China’s exports cheaper, but also make it more expensive to fulfill Beijing’s obligations under the trade deal, a signature accomplishment for Trump, who had imposed tariffs on hundreds of billions of dollars in Chinese goods to pressure Xi's government into negotiating.
'TESLA OF CHINA' SALES PLUNGE DURING CORONAVIRUS OUTBREAK
While there has been speculation that Trump may tear up the deal now, Ruskin says that’s “not in the U.S.'s interest” as the target levels for Chinese imports are “extremely high in the context of a weak global economy.”
Market risk points to the yuan weakening, but in a “very controlled fashion,” according to Ruskin. Really letting the currency go would be “disruptive” for Chinese markets and economic confidence, he said, adding that Beijing doesn’t “want to make this another source of tension.”
For good reason. Conventional wisdom is that China is “eating our lunch,” but the reality is China is “very weak,” Chandler said.
He pointed to President Xi Jinping’s signature Belt and Road Initiative and Made in China 2025 programs as being “in despair.”
CLICK HERE TO READ MORE ON FOX BUSINESS
The Belt and Road Initiative, which aimed to build a so-called New Silk Road connecting China to Europe, is becoming a debt albatross, leaving all the countries that borrowed money from Beijing looking to restructure their debt.
Additionally, Beijing has seen a likely peak in the internationalization of China's yuan, Chandler said, noting that “people aren’t really using it.”
That, coupled with the mishandling of Hong Kong -- which also alienates Taiwan, leaves China in a “weakened position” and its actions on the economic front “seem to be defensive rather than aggressive,” Chandler said. “China is under a lot of pressure.”
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The Telegraph
Why the UK has no teeth when it comes to China and Hong Kong
https://news.yahoo.com/why-uk-no-teeth-comes-183320839.html
China’s move to impose national security law in Hong Kong has drawn international outcry, including from the UK, over worries that the territory’s treasured liberties are coming to an end.
Activists have welcomed greater international attention on the issue. But the UK’s window to pressure Beijing to change course in a meaningful way has largely closed.
Hong Kong has experienced shrinking rights and freedoms for years. Elected lawmakers have been disqualified from their positions and outspoken professors have been removed from their posts.
Booksellers publishing on sensitive topics have disappeared, later appearing in mainland China on state television “confessing” to various crimes. A British journalist was even expelled from Hong Kong, seemingly for having chaired a talk by a pro-democracy figure.
Such instances are among many reasons why mass protests have erupted periodically since the former British colony was returned to Chinese rule in 1997. Each round of unrest has been more chaotic than the last, as people rushed to denounce Beijing’s encroaching influence.
China has long made clear it’s position. Officials conveyed for the first time in 2014 that Beijing no longer considered valid the Sino-British Joint Declaration, an international treaty meant to guarantee rights and freedoms for those in Hong Kong. The Chinese government has continued to reiterate outright the document no longer carried any significance.
“The time to say something was at latest about six years ago,” said Alvin Cheung, a legal scholar at New York University’s US-Asia Law Institute.
“It’s a pretty grim indictment of the international community that all the warning signs have been around for this long and they have been consistently swept under the carpet until the very end.”
Aside from pressing economic sanctions, what’s left now in the UK’s response toolbox are largely symbolic gestures.
The UK could, for instance, raise discussion at the United Nations about China breaching the Joint Declaration.
Read more https://news.yahoo.com/why-uk-no-teeth-comes-183320839.html
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National Review
The End of Hong Kong?
The 1997 handover of Hong Kong from Britain to the People’s Republic of China marked the end of Western colonial rule in the region. Optimistic Western policy hands hoped that the final mending of the “unequal treaties,” as they were called by the Chinese Communist Party, would initiate Beijing’s integration into the rules-based world order.
Recent events in Hong Kong put paid to this hope.
The days of China’s “peaceful rise,” when the CCP steadfastly denied its hegemonic ambitions, are long gone. In light of China’s clampdown on Hong Kong, the transfer of the autonomous region now appears to have entailed swapping one imperial government for another. As if to remove any doubt, China’s National People’s Congress bypassed the Hong Kong Legislative Council this week and imposed a new national-security law. The law, which bans all “seditious activity,” effectively nullifies the Hong Kong Basic Law according to which the territory is guaranteed autonomy from the Mainland until 2047.
Secretary of State Mike Pompeo responded appropriately in announcing that, under the Hong Kong Human Rights and Democracy Act passed last year, Washington would no longer consider Hong Kong independent of China. The White House will reconsider the privileges and immunities granted to the autonomous region, including its preferential trade status, visa exemptions, and flexible foreign-exchange regime.
Critics argue that the measures will cause undue economic harm to the region. Hong Kong’s economy will suffer, but the millions of Hong Kongers who have taken to the streets in protest have demonstrated in no uncertain terms that they value freedom over GDP growth. Indeed, the rule of law is what allowed Hong Kong to build a thriving economy in the first place. The short-term harms from reduced trade and investment pale in comparison to the disaster of Mainland dominance of Hong Kong. Worse, allowing China to violate the 1984 Sino–British Joint Declaration, registered at the U.N., will send a signal that the U.S. is unwilling to stand by a basic element of the international order.
In any event, the White House ultimately has little choice. Congress has all but required the administration to decertify Hong Kong’s autonomous status in this circumstance. The legislation also calls for sanctions against Chinese officials responsible for Hong Kong’s suppression, a measure that the White House should undertake as Beijing moves to implement the law.
We obviously also need a strategy to combat Chinese belligerence elsewhere. Control of Hong Kong is only one step in China’s quest to “occupy a central position in the world,” as Chinese president Xi Jinping has put it. The Hong Kong security law coincides with increasingly aggressive naval exercises in the South and East China Seas and a sudden military buildup on the Sino–Indian border. The Chinese have also made clear their intention to annex Taiwan, and show no signs of rolling back their programs of industrial espionage and anti-competitive trade practices. The White House must resist China on all fronts.
The administration should mobilize our allies in the fight. As Pompeo made his announcement, German chancellor Angela Merkel said that the European Union has a “great strategic interest” in cooperating with China. Neither have the British, who designed the transfer of Hong Kong, shown much interest in pushing back on Chinese aggression. European leaders are enticed by the economic benefits of cooperating with Beijing, and it will require a deft diplomatic touch to persuade them to take a more strategically sound posture.
Hong Kong is the last redoubt of freedom and decency in China’s contiguous territory. The White House should do everything reasonably within its power to try to safeguard it.
More from National Review
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South China Morning Post
Hong Kong warned WTO challenge to potential US trade sanctions could be 'counterproductive'
In a statement released late on Thursday, hours after China's National People's Congress approved the proposal for the controversial legislation, the Hong Kong government said that as a full member of the World Trade Organisation (WTO), "we expect to be fairly treated by our trading partners".
Should the US revoke Hong Kong's special trading status, the special administrative region could be subjected to the same trade war tariffs imposed on Chinese exports to the US, or even unilateral tariffs against Hong Kong specifically, as well as export controls and potentially greater scrutiny of its financial and payments landscapes, experts said.
In the case of tariffs, analysts said it is "factually possible and legally correct" that Hong Kong could bring a WTO case against the US, given that it retains its own WTO membership and should be treated on a "most-favoured nation" basis, which punitive tariffs would violate.
But analysts believe any such future action would be "counterproductive", since even if Hong Kong was to win a case, it could be permitted to introduce retaliatory tariffs on the US, which would harm Hong Kong's economy and image as a beacon of free trade.
Furthermore, it is unlikely that a WTO case, which would take years to process, would resonate in a White House which is openly scornful of the Geneva-based trade body.
"Hong Kong is really limited in what it can do. Taking a WTO case would be symbolic, and even if Hong Kong prevails, the damages would be very low. So if Hong Kong decides to put tariffs on the US " which would be a first " what does it target? Consumer products or food? What kind of message does that send about Hong Kong? Who is that really hurting?" said Bryan Mercurio, a professor covering the WTO at the Chinese University of Hong Kong.
Hong Kong is a free port, with zero tariffs on goods shipped in and out, however, it has very little direct trade of its own. As a entrepot for trade with China, the vast majority of goods passing through are re-exported to and from the mainland.
While Hong Kong was the world's sixth largest exporter in 2018, according to WTO statistics, just US$13 billion of its US$556 billion in shipments were domestic exports. For imports, just US$155 billion of US$628 billion were consumed domestically.
"Removing from US law the commitment to Hong Kong's non-discriminatory trade treatment would make it easier for the US Trade Representative to defend unilaterally slapping tariffs on the city's exports. This would most likely violate WTO rules, but this has not deterred the US from placing tariffs on imports from the mainland," read a Capital Economics research note.
"If this happened, shipments to the US would suffer. Gross exports from Hong Kong to the US are worth 13 per cent of [gross domestic product]. But the vast majority of products are being reshipped through the city. US-bound goods exports, generate under 3 per cent of [gross domestic product], mainly in logistics and postal services rather than manufacturing."
Hong Kong has been a member of the WTO since January 1995, but it has only brought a single case " a complaint against the Turkish garment trade in 1996 that was "largely a matter of principle" rather than economic wrongdoing, said Julien Chaisse, a trade professor at the City University of Hong Kong.
However, Chaisse said that Hong Kong could learn from another historical precedent of a smaller WTO member successfully bringing a case against a more powerful member, but eventually being left dissatisfied with the spoils of victory.
In 2003, tiny Antigua and Barbuda accused the US of discrimination after it was frozen out of the world's largest gambling market after the Caribbean nation had built up a giant online betting market designed to replace its struggling tourism sector.
WTO judges eventually ruled in its favour, awarding compensation of US$21 million per year, but the US refused to pay. Antigua and Barbuda therefore had the right to impose tariffs on the US, but declined to do so, thinking that it would be an act of economic self-harm.
"Why would a place like Hong Kong or Antigua impose tariffs on the US?" Chaisse added. "Who would hurt from such action, apart from the domestic middle class?"
Chaisse added that should the national security law lead to an erosion in the "one country, two systems" model under which city is supposed to be governed until 2047, Hong Kong could also find itself on the receiving end of investor disputes and trade lawsuits, especially if the goalposts are moved for investors in the city.
Hong Kong has 20 bilateral investment treaties, more than half of which were signed with developed nations in the run up to the handover from Britain to China in 1997, a means of assuaging fears of changing business conditions.
"I would not exclude the possibility of, in the future, investors from these places using investment protection courts to sue Hong Kong," Chaisse said.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
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China says US action on Hong Kong ‘doomed to fail’
https://www.yahoo.com/finance/m/df49e833-3c28-325b-8c46-a7a8d28ca777/china-says-us-action-on-hong.html
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| China says US action on Hong Kong ‘doomed to fail’ |
The mouthpiece newspaper of China's ruling Communist Party said Saturday that the U.S. decision to end some trading privileges for Hong Kong “grossly interferes” in China's internal affairs and is “doomed to fail.” The Hong Kong government called President Donald Trump's announcement unjustified and said it is “not unduly worried by such threats,” despite concern that they could drive companies away from the Asian financial and trading center. Trump's move came after China's ceremonial parliament voted Thursday to bypass Hong Kong's legislature and develop and enact national security legislation on its own for the semi-autonomous territory.
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World
Taiwan pledges help for fleeing Hong Kongers, riles China
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| FILE PHOTO: Protesters holding banners in support of Hong Kong pro-democracy demonstrators attend a rally against the Chinese government’s newly announced national security legislation for Hong Kong, at Taipei main train station |
By Yimou Lee
TAIPEI (Reuters) - Taiwan promised on Thursday to settle Hong Kongers who flee the Chinese-ruled city for political reasons, offering help from employment to counselling, and prompting angry condemnation from Beijing as it pushes security legislation for Hong Kong.
Taiwan President Tsai Ing-wen this week became the first world leader to pledge specific measures to help people from Hong Kong who may leave the former British colony because of the new legislation.
Chen Ming-tong, head of Taiwan's top China-policy maker, the Mainland Affairs Council, told parliament the government will establish an organisation to deliver "humanitarian relief" that includes settlement and employment in a joint effort with activists groups.
He said counselling services will also be available for Hong Kongers, some of whom may take part in increasingly violent pro-democracy protests in Hong Kong.
"Many Hong Kongers want to come to Taiwan. Our goal is to give them settlement and care," Chen said, urging the public not use the word refugee as it could be "emotionally harmful" for people from the city.
Chen did not give details, such as scale and timing of the relief when pressed by lawmakers, saying the government is still working on the programme.
China denounced Taiwan's move, saying its ruling Democratic Progressive Party was seeking to "loot a burning house" and sow discord.
"Bringing black, violent forces into Taiwan will bring disaster to Taiwan's people," China's Taiwan Affairs Office said, in language Beijing typically uses to refer to Hong Kong protesters.
Hong Kong's demonstrators have won widespread sympathy in democratic Taiwan, which China considers as its territory to be taken by force, if necessary. Taiwan has shown no interest in being ruled by autocratic China.
Help for Hong Kong has won rare bipartisan support in politically polarised Taiwan and three opposition parties have introduced bills to make it easier for Hong Kongers to live in Taiwan if they have to leave the city due to political reasons.
Taiwan has no law on refugees that could be applied to protesters seeking asylum, but its laws promise to help Hong Kongers whose safety and liberty are threatened for political reasons.
Some say Tsai's government is not moving fast enough.
"Please come up with details of the humanitarian relief at the soonest. Don't wait until people shed blood like water," Chen Yu-jen, a lawmaker from main opposition Kuomintang party, said.
Ivan Tang, a Hong Kong pro-democracy activist, welcomed Tsai's support and said there was a sense of urgency among protesters in the city, some of whom had been barred from entering Taiwan because of travel restrictions to contain the coronavirus pandemic.
Taiwan has become a popular destination for Hong Kongers leaving the city, with the number of Hong Kong citizens granted Taiwan residency jumping 150% to 2,383 in the first four months of 2020 compared with a year ago, official data shows.
University applications to Taiwan from Hong Kong also rose 62% in 2020 from a year ago. The island's education ministry said this week it was planning to raise the quota for Hong Kong students.
(Reporting by Yimou Lee; Additional reporting by Ben Blanchard, and Ryan Woo in Beijing; Editing by Lincoln Feast and Barbara Lewis)
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World
U.S. business to Trump: Go slowly on Hong Kong response
By David Lawder
https://www.yahoo.com/news/u-business-trump-slowly-hong-021028467.html
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U.S. business to Trump: Go slowly on Hong Kong responseAnti-government demonstrators take part in a protest during a lunch time in Hong Kong |
WASHINGTON (Reuters) - Business groups are urging U.S. President Donald Trump to go slowly in responding to Beijing's planned imposition of new national security laws on Hong Kong, warning revoking the city's special U.S. privileges will hurt the territory and its people.
U.S. Secretary of State Mike Pompeo declared https://www.reuters.com/article/us-hongkong-protests/pompeo-says-hong-kong-no-longer-warrants-pre-1997-treatment-idUSKBN233053 on Wednesday China's actions had voided Hong Kong's autonomy.
That cleared the way for White House steps ranging from imposing sanctions on some senior Chinese officials to fully ending the 22-year U.S. practice of treating Hong Kong separately from China on trade, visas, investments and export controls.
Hong Kong's special status has helped keep the former British colony of 7.5 million - which hosts operations of 1,300 U.S. companies and some 85,000 American residents - one of the world's premier financial hubs since reverting to Chinese rule in 1997.
Details of the new Chinese legislation, which could see mainland security agencies to set up operations in Hong Kong, are being deliberated this week by China's parliament.
"The text of the law in China has not yet been released. Words matter," said Craig Allen, the president of the U.S.-China Business Council. The group would like to see all sides "de-escalate and maintain the 'one-country two systems' model for Hong Kong, which has served everyone so well for so many years," he said.
The U.S. Chamber of Commerce on Tuesday stressed https://www.uschamber.com/press-release/us-chamber-of-commerce-urges-chinese-government-preserve-hong-kong-s-one-country-two jeopardizing Hong Kong's special status would be a "serious mistake."
Pompeo's declaration leaves room to move slowly, and acting quickly could inflict pain on Hong Kong and waste U.S. leverage over Beijing, said Scott Kennedy, a senior adviser and China expert at the Center for Strategic and International Studies in Washington.
The U.S. declaration has "opened the door to massive changes but they have not walked through it yet," Kennedy said. "It may rattle markets and have executive suites examining Plan Bs and Plan Cs but not necessarily immediately moving."
Pressure in the U.S.-China relationship is mounting over issues including trade, technology restrictions and the coronavirus pandemic. On Wednesday, the House of Representatives backed legislation calling on Trump to impose sanctions on Chinese officials responsible for oppression of China's Uighur Muslim minority.
DRIP BY DRIP
Some international financial firms have halted Hong Kong expansion plans and shifted staff to other Asian centers after protests in the city last year. A major change in Hong Kong's legal status could accelerate that trend, risk managers and consultants say.
"I do think that the drip-by-drip process of companies leaving had already begun. The promulgation of a national security law really throws fuel on that fire," said Todd Mariano, director of Eurasia Group's U.S. practice in Washington.
Dane Chamorro, a partner in Control Risk Group's Asia Pacific practice, said a larger exodus would depend on whether the security law preserves Hong Kong's business law framework and the free movement of capital.
"You will have people concerned about it for sure, but they're not going to leave as long as those two things are there," Chamorro said, adding many international companies operate in countries with onerous security regimes.
What's more important is preserving the sanctity of contracts, consistent labor rules and predictable regulation, Chamorro said.
Peter Humphrey, a former corporate fraud investigator who was imprisoned by China for nearly two years, said few companies are prepared for a "sudden event" where Chinese security forces seize control.
"Hong Kong is now under much greater threat of intervention than it has been before, that's how I see it," said Humphrey, now an external research associate with Harvard University's Fairbank Center for Chinese Studies.
Foreign companies in Hong Kong, especially those dealing with confidential information, need plans "to switch off their operations instantly", he said.
(Reporting by David Lawder; Editing by Heather Timmons and Lincoln Feast.)
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Politics
China parliament approves Hong Kong security bill
China's parliament approved a decision to impose national security legislation on Hong Kong in a landslide vote on Thursday (May 28).
The bill tackles subversion, separatism, terrorism, foreign interference and could see Chinese intelligence agencies set up in Hong Kong.
The vote now moves to the standing committee to draft the legislation.
The legislation which was unveiled only last week - triggered the first big protests in Hong Kong for months.
Chinese Premier Li Keqiang said the legislation would benefit the territory's long-term stability and prosperity.
It comes after a tense day in Hong Kong, as scuffles broke out -- rotten plants were thrown -- and heckles erupted between councilors inside Hong Kong's Legislative Council as they also sat on Thursday (May 28) to debate another piece of legislation: a bill that would criminalize disrespect of China's national anthem.
Protesters see the bill as a move by Beijing that delivers a severe blow to the city's freedoms.
Pro-democracy lawmaker Eddie Chu, was taken out of the chamber holding a placard mocking the pro-establishment lawmaker Starry Lee.
Also on Thursday, Activist Joshua Wong called for sanctions after U.S Secretary of State Mike Pompeo said Hong Kong is quote "no longer autonomous from China".
"Sanction is not exist name in only, partial sanctions, embargoes or even freeze the separate economic entity in Hong Kong would also be the way for some of the weapons or equipment for the world to let Beijing to know that it's a must to completely withdraw and stop the implementation of national security law."
The national security law is expected to be enacted before September.
Around the world the U.S., Britain and the European Union have expressed concerns for the former British colony and one of the world's financial hubs.
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