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Hong Kong expects negative growth amid protests
History
Britain governed Hong Kong until 1997. Following the end of colonial rule, Hong Kong returned to Chinese governance. China and Hong Kong agreed to implement a “one country, two systems” arrangement. Under the “one country, two systems” arrangement, Hong Kong has autonomy. Furthermore, citizens of Hong Kong have more rights and civil liberties compared to citizens of China.Hong Kong vs Mainland China
Hong Kong protects civil liberties such as freedom of speech, freedom of expression and freedom of religion. Moreover, Hong Kong believes that personal liberties cannot be abridged without due process. China frequently censors speech and expression. Furthermore, it does not protect freedom of religion. For instance, China has been detaining Uyghur Muslims, and sending them to re-education camps since 2014. In comparison with China, Hong Kong provides a larger sphere of freedom to its citizens.Extradition Bill
China introduced an extradition bill in April. The bill proposed to allow the extradition of Hong Kong to mainland China. Among other critical implications, the bill requested criminal suspects in Hong Kong to be sent to mainland China for investigation. Due to its history of governance, Hong Kong has a different political and social culture than China. Consequently, the proposal to allow extradition led to civil disobedience in Hong Kong.Protests
Protests started in June. They continue as of today. The bill threatens Hong Kong’s judicial independence. Protesters oppose the extradition bill. They believe it is unacceptable to bring undemocratic processes implemented in mainland China to Hong Kong. The bill risks exposing citizens of Hong Kong to unfair trials, violent punishment and oppression in mainland China. Protesters believe that China will use the bill to target activists, writers and academics. Protesters commit to protecting civil liberties in Hong Kong under any circumstances. If the extradition bill passes, Hong Kongers face the risk of losing their autonomy.Extradition Bill Suspended
Hong Kong’s leader officially suspended the extradition bill in September with the hope of putting an end to protests. Nevertheless, protests continue. Concerned about the vulnerability of Hong Kong’s democracy, protestors ask for a system of full democracy and transparency. Many believe that current civil liberties allowed in Hong Kong are not extensive enough. Furthermore, protestors seek a comprehensive investigation into police actions in Hong Kong.Recession
As protests grow larger every day, tourists stay away from Hong Kong due to safety concerns. Five months of protests caused a devastating blow to businesses in Hong Kong. Foreign businesses and investors are pulling away due to political and economic instability caused by protests. Retailers fear unemployment amid a drop in sales across different sectors. Employees shorten trading hours as protests get violent. Workers in central areas of Hong Kong fear for their safety. Furthermore, corporations report incidents of vandalism. Angry protestors target Hong Kong headquarters of big Chinese firms. For instance, the tech giant Xiaomi (HKG: 1810) reported that its branches have been vandalised. Moreover, protestors targeted Bank of China (SHA: 601988) branches across Hong Kong. It will take time and money for Hong Kong to recover from the damage caused by protests. Hong Kong’s economy is likely to experience negative growth this year. Consequently, Hong Kong’s leader warns that she expects recession.Carpetright ponder takeover bid as shares collapse
Brexit and Labour’s missed opportunity
How Labour should have responded
Thursday, 17th of October: the day most well-known for Boris bringing back a new deal proposal from the EU, but also the day I reported that “Labour will likely make any deal-passing conditional”. … ‘Super’ Saturday, 19th of October: the day the Letwin amendment was passed, triggering the Benn Act. That small window of opportunity was crucial, but ultimately an opportunity missed. The Deal was blocked by a coalition largely made up of Labour MPs, many of whom were pushing for a confirmatory Brexit vote. Instead, with a spirit of greater compromise, what Labour could have done was offer to support the deal, with their backing contingent on a series of conditions being met. Such conditions could have included, but not limited to, the enshrinement of worker’s rights and preservation of centralised public services such as the NHS (perhaps within a new British Bill of Rights), and perhaps even a confirmatory vote which would be based on the new, conditional deal. I appreciate this wouldn’t have been a perfect fix. Not only would it be a legislative nightmare to enshrine and protect any conditions from future amendment (corrosion), but even with a conditional deal, there would still be sizeable support within both Commons and the general public for Remain, or a deregulation-focused Brexit. In response, I’d say that the legislative and political legwork would’ve been far more manageable than what we now have to prepare ourselves for, and the conditions would have offered a more palatable means to bringing the withdrawal phase of Brexit to a close – and I think such an idea becomes more inviting by the day. As for Labour, their offer of conditional support would have knocked the ball back into the Conservative’s proverbial court. And as far as the political gameplaying is concerned, any hesitation or refusal by the Conservatives would have given them the opportunity to fire off one of the following cathartic retaliations: ‘now they’re the ones stopping Brexit!’, ‘they don’t want a deal that guarantees a decent quality of life’ or something equally pointed and inflammatory, I’m sure. Instead, bursting our hypothetical bubble, Labour now faces a general election with a Tory majority on the cards. With a few weeks gone by, we now know some of the more moderate ex-Conservative MPs won’t stand or will have to fight for re-election, all the while Boris seems largely unfazed by his Halloween deadline trick, as many still see him as the most suitable conduit for voicing their grievances. My hopes for the prime minister offering more than inflammatory bluster are waning, and I’m disillusioned by the notion that Jeremy Corbyn’s window to effectively shape the Brexit agenda is closing day-by-day. Maybe as a habitual protester, assertive and proactive action only come to him with hindsight. Alternatively, some suggest he has a master plan to push through Brexit on his terms (contingent on him winning the election, of course) and become a hero. If this happened to be the case, his desire to give his ‘once in a generation opportunity’ policy package a go at the ballot box actively risks the possibility of what he views as a damaging Boris-led Brexit coming to pass. It isn’t only a huge gamble, but perhaps only a semi-satisfying reason to have missed a golden opportunity. Alas, if the expected election result comes to pass, he’ll be able to do little more than protest against those who’ll be glad he missed his chance. Elsewhere, I’ve weighed in on Jo Swinson’s direction for the Lib Dems and Scotland’s renewables policy.Samsung operating profits sink due to challenging economic conditions
- Operating profit: 7.78 trillion Korean won ($6.7 billion) vs. 17.57 trillion won a year ago
- Net profit: 6.29 trillion Korean won vs. 13.15 trillion won a year ago
- Consolidated sales: 62 trillion Korean won vs. 65.46 trillion won a year ago
- Basic earnings per share was 899 Korean won compared to 1,909 won from a year ago.
Halloween morning review: Lloyds spook and Fed rate cut treat
“As expected Jerome Powell and his FOMC buddies slashed interest rates by another 25 basis points on Wednesday.”
“However, it seems like that’ll be it for the foreseeable future. The Fed chair even went as far to say that monetary policy is now in a ‘good place’ after his trio of historic cuts, downplaying the likelihood of any further move lower while also stating the US would need a ‘really significant’ rise in inflation before a hike was considered.”
“The great unknown hanging over all this, of course, is the US-China trade situation. ‘Phase one’ of a deal may be nearing completion, but that’s only the first baby steps towards properly ending the war.”
“Nevertheless, the Fed sufficiently pleased the markets without doing too much to excite them, leading to a broadly, blandly positive open on Thursday. One, admittedly, that required investors to ignore the pair of worse than forecast PMIs out of China overnight (the manufacturing reading was particularly alarming, hence the red start for commodity stocks).”
“With the Dow Jones looking to cross 27200 this afternoon, the DAX and CAC added 0.3% apiece. The FTSE, meanwhile, quickly managed to reduce its early 0.6% decline to a milder 0.1% dip in the early moments of the session.”
Other causes for concern and excitement in commodities in recent weeks, have included; a general election on the horizon, a new Brexit deal being agreed and the UK economy looking likely to avoid recession.“It was another rough morning for its banking sector, with Lloyds the latest firm to disappoint. The horsiest finance firm around revealed a 97% plunge in underlying pre-tax profit, after setting aside another £1.8 billion to cover PPI claims – that takes its total payouts related to the scandal to more than £20 million.”
“Despite Goldman Sachs (NYSE: GS) advising forex traders to steer well clear of sterling in the coming months, the pound continued its post-election confirmation gains on Thursday. Rising 0.4%, cable struck a 9-day high of $1.2946, while a 0.2% increase against the euro lifted the currency above €1.16.”
Elsewhere in the banking sector, Deutsche Bank (ETR: DBK) reported losses during the third quarter.