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Hard Times in Hong Kong?

by: Carl T. Delfeld August 21, 2008 | about stocks: EWH / HKG    
Carl T. Delfeld

Carl T. Delfeld

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Keith Bradsher of the New York Times reports that Beijing will send most of China’s gold medalists to Hong Kong next week, ahead of key September 7th legislative elections. The athletes’ visit, announced Wednesday by the Hong Kong government, comes as democracy advocates here are struggling to hold on to their 26 seats in the 60-member Legislature.

A surging Chinese national pride has helped pro-Beijing candidates rise in the polls this summer. If pro-democracy politicians fall below 21 seats, then the Chinese government’s allies will be in position to reshape election laws and other legislation in ways that would sharply increase Beijing’s control.

Meanwhile, Chinese authorities arrested five Americans on Tuesday after they spelled out “Free Tibet” with blue lights near the National Stadium. Three other people, including a New York artist who fashions giant displays with lasers on buildings, were detained for a separate protest.

In Hong Kong, advocates of democracy consistently win a majority of votes cast by the general public in legislative elections. But a complex electoral system, introduced by the British to limit pressures for local rule and preserved since 1997 by China, has ensured that a legislative majority remains in the hands of a coalition of the pro-Beijing business elite and pro-Beijing labor and community activists.

Unfortunately, the pro-democracy camp has split into a series of rival parties all battling for the same voters, including seven pro-democracy tickets on Hong Kong Island alone. But the pro-Beijing camp has also divided, with the Federation of Trade Unions distancing itself from the Democratic Alliance.

Despie Hong Kong's stunning growth over the years and well-deserved status as the free-est economy in the world, poverty and income inequality have unexpectedly emerged as the top issues in campaign forums. High food and energy prices have pushed up inflation to 6.1% in the 12 months through June, hurting the poor in particular.

There are two ETFs that track Hong Kong's market. The iShares MSCI Hong Kong (EWH) and the NETS Hang Seng (HKG) ETF.

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This article has 7 comments:

  •  
    Aug 21 01:31 PM
    Do you have any outlook for Hang Seng Index compared to other international indices?
    Reply
  •  
    Aug 21 01:45 PM
    Down as with rest of the world, HSI is more representative of Chinese stocks.

    Elections and democracy - not really required since HK is on life line from the China. Better not offend the life giver. Just need a system to keep local government in check.
    Reply
  •  
    Aug 21 10:49 PM
    Advocates of democracy? Where are they before 1997, when there was no election in Hong Kong at all. ---- Then it is easy to understand who is their sponsor. Hong Kong people need real democracy advocates on behalf Hong Kong citizens, but not Washington.

    If you want to comment polictics, please turn to another forum.
    But before doing that, I suggests you read the Hong Kong history first.

    Have you ever commented the democracy situation in Hong Kong before 1997?
    Reply
  •  
    Aug 21 11:56 PM
    Mr. Carl T. Delfeld:

    I'd like to give you the Tibet history lesson for free.

    Tibet was independent, ---- but only before A. D. 1244.
    In A.D. 1244, Tibet surrendered themselves to Genghis Khan's son and Yuan Dynasty.
    Throughout Yuan Dynasty, Ming Dynasty, Tsing Dynasty, Republic of China, and People's Republic of China,
    The Tibet area belongs to China.

    The only thing, which implied that Tibet was relatively independent,
    was that Tibet maintained the slavery system until the Republic of China period. When the communist party wanted to abolish the slavery, nobles rebelled. Similar to the situation of the American Civil War.

    How do you think about the Confederated States of America?
    Reply
  •  
    Aug 22 11:15 AM
    most people are not interested in facts.they form opinions based on almost nothing & stick to them.
    Reply
  •  
    Aug 22 11:43 PM
    BigMouse ; Seems as though your history comes from the Han Chinese perspective and faith to the ' mother land '.

    It seems as though China thinks that wherever there is a Han Chinese it belongs to the ' mother land' .

    China liberates . Right? Then all must follow the Han line of thinking .

    San Francisco could be a future liberation candidate as the Han claim an Admiral Ho sailed into San Francisco Bay in the year 1000 A.D. . Priority claims .
    Reply
  •  
    Aug 29 12:14 AM
    China to Tibet: "All your base are belong to us"
    Reply
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