Monday 12 August 2019

What's a China to do? (To intervene or not to intervene in HK?)

China's growth in the last 30 years have been spectacular, unprecedented, and unlikely to be repeated. If Singapore/Singaporeans can be proud of how we grew from Third World to First in one Generation, China can equally be proud that they lifted hundreds of millions (about 600m) of their citizens out of poverty in one generation.

Now they are the second largest economy (in terms of GDP) in the world. Second only to the US, which has about 1/4 of their population. Which means China's per capita GDP is not more than 1/4 of the US (closer to 1/5, IIRC).

AND... their economy is slowing.


This is natural. When starting from a small base, 2-digit year-on-year growth is easy. (SG was doing the same when we were 'Third World'.) Then the same absolute growth when you are a larger economy translates to a smaller percentage of GDP growth.

Then all the easy, low-skilled/no-skilled jobs jobs are no longer enough to grow the economy in 2-digits. Then other countries, can offer the same (e.g. Vietnam) bargain and it no longer make sense to compete based on "cheap", and you need something better than "cheap" to grow.

And when you have dreams/delusions of avenging your "Century of Humiliation", and retaking your "Place in History", and revive your status as the "Middle Kingdom" around which the world revolves... that kinda will attract resistance, and pushback, and opposition. Especially if you want topple the sole Superpower and change the world order. And try to claim a large swath of the sea that you have strategic need for but you bump up against other claimants. And you want to reunite a "Rogue Province" that for all intents and purposes is a de facto whole other independent nation.

And then you try to assimilate a returned colony wrested from your control during your Century of Humiliation. And face resistance. At first it was small and a minor nuisance. Then it grew. And your veiled threats to intervene are ignored at best, or triggers more provocation.

Meanwhile, you already have a (piffling) Human Rights irritation in a restive religious minority province (Xinjiang).

And then there is Tibet.

There is always Tibet.

And that fool in North Korea.

And the other fool in the White House. Not that he is YOUR problem. But he is *A* problem. Trade wars when you least need one. What an idiot! Annoying idiot!

The point is China has a lot of problems. Some are historical. Some are of its own making. Some are problems thrust unwanted upon it. 

Like Climate Change. And pollution in the cities. And plastics (and the recycling thereof). And environmental degradation. And Trump and his trade war.

And of course, the HK "riots". 

What was supposed to be simple has become a mess.

At this point I am inclined to believe that China is likely to intervene in HK. It may have no choice. It has gone on for over 2 months, and the upheaval and unrest is spreading. What happens if it goes on for another month? For another 2 months?

The other effect of this is that it is turning Taiwanese off the peaceful "One country, Many systems" re-unification plan that China is offering/hoping for. How China allows the HK issue to resolve itself WITHOUT overtly intervening is therefore important. Otherwise, Taiwan would be completely turned off from unification with China, and China would have to use force to take Taiwan. And that is no sure thing today.

China would not want to intervene unless absolutely necessary. 


It would be bad for its image. For Xi Jinping's image and standing. 

If China has to intervene militarily in HK, it would be Xi's "Tiananmen". He would rather not have that on his record, on his watch.

But, HK has no leverage. What it has is simply a promise from Beijing to leave it alone for 50 years. 

That expires in 2047.

Meanwhile the city that had a GDP that was 20% of China's in 1997, now is less than 3% of China's. Not because HK economy has shrunk, but because, other Chinese cities - Shanghai, Beijing, Shenzhen, Guangdong, Suzhou had grown by leaps and bounds.

In other words, HK is just another Chinese city.

Well, not exactly. HK status as a free market means it is not subject to import restrictions.

This means that China would like to be able to use HK's special status. 

But not if the price (e.g. "greater democracy") is too high.

For now, the educated opinion/best guess/last vestiges of hope is that China would not send in the PLA until after the Beidaihe (which may have started on 4 Aug 2019, and may be over now). There is also the opinion that Beijing may wait out the protesters, who are believed to be mostly students. One the school term starts in Sept, the authorities hope the protests would end.

But if things get bad (for Beijing) they may decide to bite the bullet and send in the troops anyway.

[Update, 20 Oct 2019: The protests or riots continue. There is no clear way to a resolution. The protesters may have to start to upgrade their "equipment". ]






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