Financial media ignore, downplay disruptive Hong Kong crisis

Financial media ignore, downplay disruptive Hong Kong crisis

Hong Kong 2014 protests.
Hong Kong pro-democracy protests geared up again Monday morning, September 29, 2014. (Screenshot of live YouTube video footage)

WASHINGTON, September 29, 2014 – Although Chinese government police are starting to get rough with the largely student-inspired pro-democracy protests in Hong Kong, they haven’t yet deployed the kind of force that resulted in significant casualties a generation ago during the eerily similar protests in Beijing’s Tiananmen Square.

Perhaps the Chinese Communists learned a thing or two about restraint in the aftermath of that humanitarian and international political disaster. But then again with Marxists of all stripes, including our own elite core of impudent Marxist snobs in Washington and in academia, you never can tell when the latest flickering of pro-democracy sentiment is likely to be exterminated.

The Tiananmen Square protests, however, took place in a different era. China was still trying to figure out how to game capitalism to conform to its five-year plan ideology and quest for world domination. In the years since, they’ve generally synchronized the old with the new with increasing success, becoming in the 21st century the kind of industrial superpower they had long aspired to be.

READ ALSO: Hong Kong protests, PIMCO chaos to smash Wall Street Monday

Nevertheless, from Soviet Russia to Yugoslavia, from Cambodia to Vietnam, from Venezuela to Argentina, from Zimbabwe to Somalia, whenever a Marxist or hard left government or dictatorship comes under any stress from its people, the stressors tend to get eliminated, just as any treaty such government negotiate with prospective partners can get torn up at a moment’s notice if it proves to be inconvenient to the Party.

Which gets us back to Hong Kong. As you may recall, part of the UK’s return of its Crown Colony, Hong Kong, to the People’s Republic of China, involved a solemn treaty with the latter that Hong Kong would remain a special, mostly sovereign city for a fifty-year period.

Unfortunately, since Hong Kong’s democratic heritage has remained strong ever since the treaty was signed, Beijing’s Communist oligarchs have found this to be unacceptable as it may very well spread the disease of democracy to the rest of that tightly controlled country. Therefore, it appears that decisions were made in Beijing to forget about that UK treaty and exterminate all traces of Hong Kong democracy starting right now with the central government’s assertion that only its “vetted” (read “loyal Communist”) candidates can run in Hong Kong elections.

The central government’s clear intent to enforce that assertion, and enforce it soon, has led to the current demonstrations.

The government’s choice is, for them, unfortunately unambiguous. They need either to negotiate some kind of agreement with Hong Kong’s majority of pro-democracy supporters; or they need to crush the movement and execute, jail, or exile its leadership.

The latter option, unfortunately, is nearly always what a rigorous Communist state chooses to do. To negotiate with non-Party parties is always seen as a sign of weakness, as it was when the hapless Michael Gorbachev tried to compromise with his growing pro-democracy opposition while attempting to modernize his decaying and near-bankrupt Soviet Empire before it collapsed on its own.

This earned Gorbachev a coup and his ultimate ouster. The lesson was not lost on the wilier Chinese Communists. You either assert and maintain ultimate power at all costs, or you lose power. This notion is common to all dictatorships. But it’s particularly brutal in Communist dictatorships where the Party and its top leadership must always remain all-powerful and must never be challenged.

But what does all this have to do with money, trade, and the economy? The answer: pretty much everything.

In spite of its Byzantine structures and deeply embedded crony capitalist oligarchy, China’s carefully controlled adventures in capitalism have up to now been an astonishing success. The country is now in many ways a first class economic behemoth, similar perhaps in influence in the way the United States once was in the years following the Civil War and once again in the decades following World War II.

Beijing has been feeling its oats, doing its best to offend the U.S. while muting this country’s response due to our current, huge over-reliance on China to buy our outsized national debt. So there is little we can do to overtly support those idealistic, endangered kids attempting to take on the Party in Hong Kong.

If a goodly segment of this kiddie corps and its fellow travelers end up in prison, on scaffolds or in body bags, the world economic dependencies the Chinese Communists have built could come apart, disastrously affecting currencies, international investing, commodity pricing and, worst of all, U.S. and European investments in and dependency on Chinese infrastructure and labor.

Major disruptions in currencies and/or manufacturing could literally destroy major industrial and tech supply chains, particularly for big companies that have strongly invested in Chinese sourcing—notably Apple.

Should enough disruption occur as a result of a violent Chinese government response to the current protests, it could have a massive domino effect that could destroy segments of the international economy.

Details are really unnecessary and indeed unpredictable beyond this point. But one fact remains obvious: a violent Chinese crackdown on the Hong Kong protestors could have a disastrous domino effect in international markets for stocks, bonds and commodities.

It’s this—and the existential risk of a somehow wider conflict—that now has international and U.S. markets on edge. Current headline risk is huge. Actual economic risk is arguably much greater. So investors worldwide are likely to remain super-cautious until some kind of resolution to the current internal Chinese impasse can be put in place. If it can be put in place.

Meanwhile, save for this morning’s Wall Street Journal, the financial and secular western media, however, are not particularly interested in reporting this vitally important showdown, one that’s likely to shape the direction of the Chinese government, likely for the next quarter century. Somewhat cynically, we think we know why: the media elites, nearly all of whom function as indentured servants to the Marxist-dominated Democrats and their faux-socialist, crony capitalist owners. All of them quietly, or not so quietly, wish they could suppress their own citizens’ voices as effectively as Beijing does with their own anti-kleptocracy dissidents.

READ ALSO: Hong Kong protests, PIMCO chaos to smash Wall Street Monday

As we indicated in our other column, now is clearly not the time to make dramatic moves in investment portfolios, as markets nervously eye the action on the streets of Hong Kong. Nonetheless, there’s still nothing that prevents us from keeping those brave Hong Kong kids in our hearts and in our prayers. If nothing else, they should serve as a catalyst for the kind of action that genuine, patriotic Americans should start taking right here in our now nearly former United States of America.

Below: Recent video, via Facebook, with narration by a protesting Hong Kong student, logically and respectfully pleading with Beijing to lighten up a bit on the totalitarianism. 

The video is touching in its sincerity—a sincerity approaching innocence. Plus, it’s clear that these students are looking for outside support—support they’re unlikely to get from a current U.S. regime that probably wishes it had as much control the U.S. as Beijing does over its citizens.

Part of its message, one that we support, is obviously intended for the rest of the world:

We are just innocent people like you. We are just trying to protect the people in government house. We don’t want to see any tragedy performing on once safest city on the planet, like those happened in Syria, Ukraine and China. Maybe all of you are born in democracy States, you are born with democratic election, you have free election right, but we don’t.

We need genuine democracy. We need a popvote [popular vote] on the constitution reform only, nothing more.

Please help us to spread this video and all news of the event over the world. Tell your friends, your family, your mates and all people you contact with, to let the world know what is happening in Hongkong. Thank you!

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17