Hong Kong Intelligence Report #147: Reform for 0.0015 or True Reform for the People of Hong Kong?
- Ryota Nakanishi
- Jan 19
- 6 min read
Updated: Jan 21
Open-source intelligence (OSINT)
🔻 IMPORTANT
True Reform
▪️The most important political topic for Hong Kong is the ‘reform.’ The latest remarks by the Director of HKMAO, Xia Baolong on January 9, 2025, and President of China, Xi Jinping, on January 15, 2025, form the complete ‘manifest’ for the reform nationwide. Undoubtedly, it’s also for Hong Kong and Macau.
(1) It reconfirmed that the ‘integration’ / ‘unification’ of the Guangdong–Hong Kong–Macao Greater Bay Area is going to be constructed based on the principle of ‘One Country, Two Systems, Three Customs Territories, Three Currencies.’ This is the advanced phase of ‘One Country, Two Systems.’ In other words, the barometer for the potentialities of the forceful unification of Taiwan, ‘1C2S,’ is now contrasted by the new concept, ‘1C2S3CT3C.’ However, it’s still only meant that ‘1C2S’ is maintained during the construction phase, and the process is not guaranteed beyond that. Anyway, ‘1C2S’ itself principally will disappear after the world supposedly enters into ‘Communism.’ ‘1C2S’ is intrinsically a temporal measure from the beginning, as it isn’t the complete unification with China under the unitary government. What many misunderstand is that the intension of the ‘capitalist system’ is not defined, while it practically means the HKSARG. Thus, ‘2S’ is accurately two governments.
(2) Xi Jinping pointed out that the ‘reform’ is a synthesis of both ‘Stalinist’ Mao and ‘Revisionist’ Deng periods. The most important line is: ‘Neither follow the old closed and rigid path nor take the evil path of changing the flag.’ This thesis is Xi’s original standing point in Marxism.
Note: the two concepts—preexisting—are nothing new themselves. The point here is the ‘manifest.’
References:
▪️ The entire number of Capitalists or the Capital in this city: Listed Companies 2283 (2023) Registered Companies: local 1,460,494 and external 15,126 (2024).
These numbers are objectively the minimum number of the ruling class of this city. The total is 1,475,620 capitalist entities at least. Not 1% but this 0.0015 (2283/1,475,620) is always the center of the ‘economic’ policy of this city.
Qi Bin, a deputy at the central government's liaison office in Hong Kong, made remarks on January 16, 2025, on the publication of the ‘Hong Kong Capital Market White Paper.’ Although major banks in this city publish their versions of the ‘Hong Kong Capital Market White Paper,’ the publication itself is nothing to add. The concern is that if the ‘financial’ reform could be replaced as the ‘whole’ term of the ‘reform.’ In other words, a financial reform for 0.0015 (2283/1,475,620) can easily replace the entire ‘reform,’ and nothing beneficial for the workers can result in the end. This risk at present can’t be eliminated even though Qi Bin made lip service by saying, ‘If there is only finance but no real industry, it will easily become a castle in the air, which is not conducive to safeguarding the livelihood of the society.’ Again, a financial reform for 0.0015 (2283/1,475,620) only means a neoliberal scheme not for the benefit of people. This is not what the ‘reform’ means for us, far from it.
Reference:
▪️ HKU Business School published the “Hong Kong Economic Policy Green Paper 2025” (“Green Paper”) on January 9, 2025. In short, it’s HKSARG propaganda without any concrete policy resolutions provided. The below part is effective in reflecting the social reality:
The fiscal balances of 36 developed economies in the world are shown for the fiscal years 2022 and 2023. The cyclical and structural balances shown in the chart are analyzed in detail below, and the sum of the two is the total fiscal balance. Hong Kong has the second largest deficit in the world, right after Italy, followed by the US, the UK, and France.
However, the problem is the below part:
Compared with the fiscal positions of the local governments in the Mainland, Hong Kong's performance was slightly better. Fiscal deficits across the mainland were generally at a relatively high level due to a combination of factors, including economic restructuring, the downturn in the real estate sector, and local government debt ([Chart 3]). Nonetheless, the fiscal positions of the more economically developed regions, including Beijing, Guangdong, and the Yangtze River Delta (Shanghai, Jiangsu, Zhejiang, etc.), were relatively more favorable, with deficit levels close to those of Hong Kong.
It’s unfair and inaccurate to flatly compare with different governing units of the mainland with ‘One Country, Two Systems.’ Beginning in the 1990s, China divided its tax revenues into state and local taxes, with state taxes paid to the central government and local taxes reserved for localities. In addition, customs duties are collected by customs agencies and paid to the central government, while non-tax revenues are collected by local tax authorities. Thus, both Hong Kong and Macau, as independent customs territories that excluded the burden from state taxes, can't be compared with any other mainland cities in terms of financial deficits at all.
Furthermore, it’s ridiculous that the worst # 2 fiscal balance among 36 developed economies is put in the top # 6 best fiscal balances among all Chinese cities while Macau (top # 3) and Taiwan's (# 36) fiscal balances unequivocally outperformed mainland-Hong Kong (# 90) in the IMF fiscal balance ranking of the Fiscal Monitor in 151 economies around the world. In conclusion, HKU Business School just gave us the propaganda ranking to deceive us of HKSARG’s ineptness in handling this city. If there are outperforming cities that deserve compliments, those are both Macau and Taiwan among all Chinese cities.
References:
▪️The absolute poverty is neither cyclical nor fluid. It is about private properties, especially those who own the methods of production of necessities. However, absolute poverty is indirectly reflected in the ‘structural’ changes in the income level provided by the New Youth Forum:
The report also calculates the changes in the income of first-time job seekers aged 20 to 24 in various years after adjustment by the property price index. In 2003, the median income of first-time job seekers was as high as $16,233, which was the highest in all years, followed by $15,673 in 1988. However, with the rise in property prices in 2013, the income of university first-time jobholders dropped to only $5,156 after adjustment for property prices and further dropped to only $4,028 in 2018. Similarly, in 2023, due to the fall in property prices, the figure also slightly increased to $5,927.
In the 35 years from 1988 to 2023, the overall property price index of Hong Kong has risen from 31.9 points to 337.4 points, representing an increase of 957.7%, while the overall rental index has also risen from 54.8 points to 181.1 points, representing an increase of 230.5%. However, the inflation rate during the period only rose from 34.7 points to 105.5 points, representing an increase of 204.0%.
This indicates one imperative feature that the hyperinflation of the real estate properties is treated and excluded outside of the ordinary term of inflation. As a result of the structural manipulation of hyperinflation in the field of real estate, the total actual monthly wage is socially decreased to an average of 5,000 HKD per month, merely a third of the nominal monthly wage shown in advertisements. Undoubtedly, this is a phenomenon of the structural poverty of this city. What does this mean? It’s where the true politics of Hong Kong and the core of all the propaganda by greedy monopolies lie. Furthermore, this is what the so-called ‘deep-seated contradictions.’ A real class antagonism, a true class offense from the ruling class, is embodied in the number of HKD 5,927 per month – what an individual can actually buy in the social amount - here. Thus, it’s idiotic to blindly support the ruling class ‘elitists’ who are causing and systematically maintaining this total misery for poor citizens.
A ‘true reform’ is to solve this hostile class contradiction.
References:
b. 研究報告及新聞稿
Comments