[SCMP Column] Into the Mid-terms

November 03, 2018
A Trump vindicated would cast a dark cloud, and point towards six gruelling years ahead, not just for China, or Asia, but for the entire global economy. It would test the mettle of all those who believe the liberalisation championed since the 1944 Bretton Woods agreements has in net terms been a source of great good for most people worldwide. These are such interesting times.

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[SCMP Column] WTO Dispute Settlement

September 01, 2018
WTO rules say there should be seven judges on the appeals body, each appointed for four years, with the ability to renew for a second four year term. WTO rules also say that each appeal must be overseen by three judges. As the US has blocked approval for new judges to be appointed when the terms of existing judges have expired, there are now three vacant seats.

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[SCMP Column] The power of wai ya

July 02, 2018
The Japanese call it “gaiatsu”. The Chinese call it “wai ya”. It’s the positive use of foreign pressure to drive domestic reforms that might otherwise be difficult or impossible. Nowhere has it been used more helpfully that in driving trade liberalisation in the face of entrenched domestic lobbies and vested interests.

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[SCMP Column] Colonial Legacy Revisited

November 25, 2017

It is worth remembering that China’s total trade with the entirety of Africa is less than US$180bn a year – less than half its trade with the US, and just two thirds of its trade with Hong Kong. And Zimbabwe is a trade minnow alongside countries like Nigeria, South Africa, Kenya, Congo, or China’s second largest source of oil – Angola. They are embraced by Xi Jinping’s “Belt and Road” vision, but modestly at its margins.

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[SCMP Column] Brexit Madness Revealed

October 30, 2017

Advocates for Brexit have succeeded in creating a trance-like consensus in the UK that the 52 per cent vote in favour of Brexit has created an irreversible commitment to exit that is treasonous to challenge. Why have the 48 per cent who voted to remain been forced into silence, regardless of the reality that every next negotiating round reveals further horrendous consequences for the UK and its future?

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[SCMP Column] No Logic to US Gun Obsession

October 14, 2017

As an outsider, understanding the US obsession with gun ownership is an absolute impossibility. There is something mysterious and unique going on in the American brain that condones such a tragic national masochism. According to the American Journal of Medicine, the gun-related murder rate in the US is 25 times higher than the average of 22 other high-income countries. While the US has seen 28,000 gun deaths so far this year, Japan has seen just one. While gun-deaths per 100,000 people sits at 10.2 in the US, it sits at just 1 in Australia and Germany, and a bare 0.2 in the UK.

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[SCMP Column] Let Cool Heads Prevail

October 09, 2017

For Hong Kong’s preposterous independence movement, Catalonia’s demographics are awkwardly similar to our own, and must surely provide fuel for our (currently small number of) silly separatists: our populations are the same, as is our GDP (at US$320bn). In our glory days in the 1990s Hong Kong also claimed to account for 18 per cent of China’s GDP – within a whisker of Catalonia’s 19 per cent contribution to Spain’s GDP. Perhaps it is no small matter that over the past 20 years Hong Kong’s contribution to national GDP has shrunk to around 2 per cent. This begets a modesty that Catalonians clearly do not feel.

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[SCMP Column] Two Steps Backwards

September 23, 2017

So the “Myanmar problem” has deeper and more complex roots than the Rohingyan crisis, but the international community is right to be alarmed and outraged. There seems a grave danger that the bloody “area clearance” operation, triggered by an August 25 attack on police posts in Rakhine by the Arakan Rohingyan Salvation Army, may explode into something much bigger.

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[SCMP Column] Defusing the War Tension

September 09, 2017

But in recent years – and in particular since Kim Jung-un was anointed in April 2012 – it seems the North Korean’s have begun to imagine a different future. Alongside the fear-driven belief that “nuclear deterrence serves as the strongest treasured sword” – protecting Kim and his regime from the US enemy and the ignominious fate of Gaddafi in Libya and Saddam Hussein in Iraq – the regime has developed a second strategic track, known as the “byungjin line”, which involves economic development, nurturing a private sector and functioning  markets (called jangmadang) and raising wages.

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[SCMP Column] Cost of Miscalculations

June 12, 2017

Instead, they discovered that their own internal Conservative Party concerns about immigration and decision-making in Brussels did not match the wide public’s concerns – which in the 10th year of recession since the 2008 financial markets crash are focused on stagnating wages, unemployment, a loss of job security, and anxiety over savage cuts to health care and old age care.

Electoral missteps on financing health care for the elderly undermined support from traditional elderly supporters of the Conservative Party – supporters who had come out in huge numbers to support the Brexit campaign.

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[SCMP Column] Reign of Terror

June 10, 2017

So Teresa May, wringing her hands over the possible failings of Britain’s security services, and Donald Trump, dreaming he has just brokered the terrorism-smashing deal of the century, are missing the point. The wicked and distorted belief systems of this growing army of jihadi martyrs are not for changing. Their beliefs are so fundamentally at odds with the democratic, freedom-of-speech cultures of which we are part, that compromises are logically impossible.

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[SCMP Column] China Shines as Trump Stumbles

June 05, 2017

For China, the global warming initiative seems a perfect platform. Less motivated by Europe’s anxieties to save the earth than a very direct domestic crisis over appalling environmental degradation, it nevertheless has a strong common interest in attacking the global warming crisis. It is also in the process of capturing the opportunity to dominate the globally dynamic renewable energy industry. China is today by far the world’s biggest manufacturer of clean energy technologies ranging from solar and wind to nuclear.

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[SCMP Column] Europe at Crossroads

April 24, 2017

But while we hold our breaths this morning over “le French May”, across the Channel in the UK a political master-stroke by “la May Anglaise” has for the first time in nine months made me feel that all is not lost for the UK in the Brexit process. If she wins her snap election with a historic landslide on June 8, as most pundits expect, she will have achieved multiple Houdini miracle escapes at one go. She will get off her back the hard-line Brexit fringe that is threatening to hold her to ransom in the exit process. She will win herself the flexibility to make the difficult and perhaps unpalatable compromises that will inevitably have to be made with the EU over the next 23 months of exit negotiations.

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[SCMP Column] Careless tweets

April 03, 2017

Just as Hong Kong people might have targeted their ire a little less masochistically, so Trump – with a little help from some TIAs – might have done the same. One wonders just how many jobs will need to be lost before Trump discovers what British war-time posters warned seven decades ago: “Careless Talk costs lives”. In this case, “Careless Tweets cost jobs”.

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[SCMP Column] Face-to-Face Challenges

March 13, 2017

Set Europe’s deep economic fragility against signs of reasonably robust economic recovery and job growth in the US – with a rise in the Fed’s interest rate predicted on Wednesday this week – and a fistful of powerfully stimulative policies being promised by the new Trump administration, and the surprise must be that the Euro is not weaker than it is.

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[SCMP Column] The Great Wall

January 30, 2017

Even today, we have around the world at least 35 border barriers in “working order”, over half of them constructed since 2000. Many of their stories are quaintly unveiled in the 2008 travelogue “Walls: Travels along the Barricades” by Canadian Marcello Di Cintio – including the berm built by Morocco’s King Hassan II to keep the desert Sahawaris at bay, Indira Gandhi’s 4000km barbed wire barrier separating India from Bangladesh, and of course the Apprentice’s cherished wall along the US-Mexico border, which currently and ineffectually covers 640 miles of the 1,954-mile border.

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[SCMP Column] Lasting Legacy of Obama

January 16, 2017

Paradoxically, his achievements in the economic domain would have done credit to the most dyed-in-the-wool Republican: the GDP has grown by 16% over the course of his presidency, and unemployment has been reduced from an alarming 10% to less than 5%. Despite the upheaval of the financial crisis, average wages have risen by almost 6.5% - faster than at any point since the early 1970s. Extraordinarily for any democratic presidency, corporate profits have jumped by 57%, and federal spending has fallen by 16%. Perhaps more predictably, public debt has jumped by 36%, but that has more to do with QE than with any Democrat agenda.

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[SCMP Column] C-suite team in politics

January 09, 2017

So if Donald Trump’s C-suite team bring into government a zeal to work more efficiently and to eliminate redundant or duplicative processes, all well and good. But if they bring to their new jobs a naïve zealot view that they can impose business-like efficiencies into the US administration, they will either spend their lives frustrated and in constant warfare with officials, or they will inflict serious damage on the “checks and balances” that sit at the heart of all of our functioning democracies.

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[SCMP Column] In the Pursuit of Accuracy

December 12, 2016

By disingenuously calling themselves technology groups rather than media groups, the bosses of Facebook, Google, Twitter et al are willfully and unacceptably trying to side-step the ethical and legal responsibility they have to their readers and audiences, and in the process exposing our democracies to grave danger. They allowed entirely fictional entities like the “Denver Guardian” and the “Event Chronicle” to “report” that George Soros as dead, and to “report” that Hillary Clinton had suffered brain damage, had alcohol and drug addiction problems, and had links to money laundering and even sex crimes against children.

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[SCMP Column] Lasting Sense of Despair

December 05, 2016

But the political cultures of China, Vietnam or Cuba were never truly communist in any philosophical or doctrinal sense of the word. They were all countries in which acute poverty and inequality had arisen as a result of foreign political and economic connivance with corrupt and incompetent political elites. Leaders like Mao and Ho and Castro found resonance with local people not because they were communists or spouted communist mantras, but because they spoke to the pain of local people.

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[SCMP Column] Perilous Day in Europe

December 03, 2016

If alarming dominos fall in Austria and Italy tomorrow, the stage is set for numerous other dominos to wreck political and economic momentum in Europe over the coming year. First, in March, in National elections in Holland, pollsters currently forecast a victory for Geert Wilders’ Party of Freedom. Mr Wilders is currently on trial for inciting racial hatred, in particular against Dutch Moroccans and against Moslems in general. The unrepentant Wilders simply said in a television statement on the last day of the trial that if he is convicted, “millions of Dutch citizens will be convicted with me.” Such is the rising confidence of extremist politicians in Europe today. And Holland is a country that has always in the past been seen – along with the UK – as a champion in Europe for openness and free trade and investment.

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[SCMP Column] Looming Challenges

November 12, 2016

As APEC leaders gather in Peru in the coming week, with President Obama flying in for his “swansong” (is there such a thing as a black swansong?), the Trump victory will cast a long and ominous shadow. Trump’s bark may prove worse than his bite, but leaders in Peru would be rash to understate the challenge looming ahead. The commitment to liberal trade and investment that has unified APEC’s 21 member economies for the past 27 years is under unprecedented threat.

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[SCMP Column] A Year of Tough Challenges

November 07, 2016

Unnoticed, but equally important for Hong Kong, a further casualty may be the Trade in Services Agreement (TiSA). Almost no one pays any attention to this 23-country plurilateral negotiation that has been going swimmingly for the past two years, but for services economies like Hong Kong, this is hugely significant.

Top negotiators are in Geneva as you read this, with the aim of dotting “i”s and crossing “t”s on a deal that is slated to be ratified by Ministers on December 5-6. But key differences remain unresolved between the US and other negotiators – in particular on the freedom of data flows and the treatment of State-owned Enterprises (SOEs).

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[SCMP Column] The Only Way to Democracy

October 24, 2016

Already the country has paid a significant economic price for its failure to forge some form of democratic reconciliation. As the second largest economy in the 10-member ASEAN grouping, with a population of just under 70m, its economy has grown by just 3-3.5% in the recent past, compared with 11.7% in Indonesia, 8.7% in Singapore, and 12.9% in nearby Vietnam. With tourism contributing directly or indirectly about 21% of the country’s GDP, and 2.4m jobs, the frequent coups and red shirt-yellow shirt clashes have had a powerful negative impact on tourism growth and the livelihoods of millions of Thais working in the tourism sector. Many argue that the country has lost its economic edge - neither technologically sophisticated enough to compete with the likes of Korea or Japan, nor cheap enough to compete with neighbours like Vietnam or Cambodia.

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[SCMP Column] First Real Test

October 15, 2016

This is why, before judging him, it is important to review what he has achieved in Davao since he first became Mayor in 1988. Duterte is as close as you can get in Davao to political “royalty”. His father Vicente was once provincial governor to Davao. His daughter Sara is also prominent in local politics. His reputation may have been built on a long-standing “law and order” and anti-drugs platform (he has tough anti-smoking policies in place too) but to his credit Davao counts among the Philippines’ better performing municipal economies. He has build a better transport infrastructure than can be boasted by most municipalities in the country, and Davao is for example one of the few regions that have buried electricity and telephone cables underground – eliminating the shanty raggle taggle of power and telephone lines that decorate most Philippine cities. As a Financial Times commentator noted last week: “He has shown a common touch in promising measures to improve the everyday lives of ordinary Filipinos by restarting delayed rail projects and easing Manila’s notorious traffic gridlock.”

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[SCMP Column] Crazy Strategy

August 13, 2016

It only took the opening up of the global iPhone supply chain to make them realise they were playing a manufacturing mug’s game. Foxcon’s 800,000-odd Mainland workers may boast a monopoly on the supply of millions of svelt new iPhones every year, but when officials discovered that China captured just US$7 of the US$500 value of an iPhone, locking hundreds of thousands of dormitory-based workers in permanent poverty, they quickly changed tack: they began asking “Where along the value chain are the high-value-adding activities, and how can we attract them?” Of course, most of these high-value-adding activities are services in one form or another, and so that is where efforts are being focused to enhance productivity, protect competitiveness, and generate jobs that add more value and pay better salaries. Their riposte to Trump would be simple: if you want those manufacturing jobs back, have them. Lock your manufacturing workers in low-wage poverty if you want. If you think that will make American great again, dream on.

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[SCMP Column] Growing risks

July 23, 2016

last year in the United States there were 372 mass shootings, killing 475 people and wounding nearly 2000. Of these, 64 were school shootings. Yet after just three terrorist atrocities in 18 months in France, a nation is in shock and a national witch hunt is under way to blame officials for failing to anticipate the Nice rampage.

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[SCMP Column] Ahead Lies Madness

June 27, 2016

As the Financial Times’s Martin Wolf noted two months ago: “Avoiding needless and costly risks is how adults differ from children.”  Last Thursday, British people voted as children, with a terrible temper tantrum, for which the price to be paid will be incalculable. Clearly the inchoate desire to hit someone, from a population that has felt patronized and manipulated by their political elites for too long, was irresistible. If Britain has left the EU in haste, it will now suffer the pain of separation at leisure.

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[SCMP Column] Quiet Comfort from Peru

June 13, 2016

It would be difficult to find a better case study of democracy working as we all hope it could work. Despite dreadful domestic hardships in Peru triggered by the global recession, and huge falls in export earnings from Peru’s mainly-commodity economy, the electorate baulked at populist or protectionist “solutions”, and instead voted for a textbook technocrat who on paper is as well-qualified to run a country as anyone I recall. Kuczynski, who is already 77 years old, first came to South America with his Polish-German father, who ran a leper colony in the Amazon. He studied at Oxford and Princeton. He worked as an economist at the World Bank. He has previously served as Peru’s finance minister, mining minister and prime minister. His election campaign targeted the moderate political centre in Peru, promising economic growth and social investment.

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[SCMP Column] Real Inequality

May 14, 2016

This leads Milanovic to some tough conclusions: the shift in economic power away from the rich west to Asia has been strong, and will continue; the economies of the west face decades of stagnation ahead, with their middle classes hurting the most; we see the emergence of a “global plutocracy” built around the interests of the “Top 1%”, which will compromise our democracies, and possibly trigger populist and “localist” backlashes. We can see this already in the US with Donald Trump, in the UK with the right wing call for exit from the European Union, and this week in the election of Davao Mayor Duterte as the Philippines’ new president. Our Occupy movement and youthful unrest are likely part of the same phenomenon.

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[SCMP Column] Costly Divorce

May 09, 2016

For the British debate, there is of course an unusual convergence of bad things at work: eight years of post-2008 recession have fuelled unemployment and job uncertainty at a time when migrant worker flows from poorer eastern European economies have run strong. The recent tragic refugee floods across Europe, with the UK being a preferred target destination, has aggravated prejudice and xenophobia. People also seem to forget that this in-or-out debate on the EU has raged for decades inside David Cameron’s conservative party, and is as much as anything else an ill-conceived attempt to settle this battle. It is of course not helpful that the Brussels apparatus is such an easy whipping boy. Its combination of bureaucratic bombast and French legal opacity makes it easy to be irritated and angry about the unaccountable ways in which it works.

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[SCMP Column] Myanmar's hope

January 23, 2016

First, large numbers in the country’s military leadership retain kleptocratic control of many key industries and industrial franchises. Myanmar is one of the world’s most resource-rich countries – ranging from marine resources off its shores to minerals, rubies and jade, and to forests full of some of the best hardwood in the world – but much of this resource wealth today enriches the families of the military elite. Without “defector” amnesties and other comforting gestures, the potential for backlash remains.

Second, the military retain significant real power despite the electoral success of the National League for Democracy. For example, they automatically retain 25% of the seats in parliament, have reserved the power to run the security and home affairs ministries, and control the country’s “administrative spine” right down to township level. Even if The Lady’s party passionately wanted to sweep military-connected people out of office, the huge “technocratic deficit” that exists in a country that has been cut off from the outside world for most of the past half century would make this impossible. The country is going to remain chronically short of technocratically equipped people for decades to come.

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