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World News

Asia-Pacific markets rise; Hong Kong’s Hold Seng in bear territory

SINGAPORE – Asia Pacific stocks rose in trading Monday morning as investors look to the Hong Kong opening after the Hang Seng index plunged into a bear market last week.

Japan’s Nikkei 225 rose 0.99% in early trading while the Topix index rose 1.29%.

Kospi from South Korea gained 0.78%. In Australia, the S & P / ASX 200 climbed 0.31%.

MSCI’s broadest index for Asia Pacific stocks outside of Japan traded 0.23% higher.

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Investors will be watching the Hong Kong market, which opens at 9:30 a.m. HK / SIN after the Hang Seng index fell more than 20% from its mid-February high through heavy losses last week as regulatory uncertainty over the outlook continues to cloud for Chinese technology companies.

Other factors that could weigh on investor sentiment include concerns about a possible withdrawal of monetary policy stimulus by the US Federal Reserve and the continued proliferation of the Delta-Covid-19 variant.

Currencies and oil

The US dollar index, which tracks the greenback versus a basket of its competitors, hit 93.485 after its recent surge from below 93.2.

The Japanese yen was trading at 109.85, stronger than levels above 110 against the greenback last week. The Australian dollar was trading at $ 0.7142 after falling above $ 0.729 last week.

Oil prices were higher on the morning of Asian trading hours, with international benchmark Brent crude oil futures rising 0.6% to $ 65.57 a barrel. US crude oil futures rose 0.48% to $ 62.44 a barrel.

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Health

Singapore to raise quarantines for some vacationers from Germany, Hong Kong

A Singapore Airlines plane is parked beside Scoots passenger planes on the terminal tarmac at Changi International Airport in Singapore on March 15, 2021.

Roslan Rahman | AFP | Getty Images

SINGAPORE — Singapore is reopening its borders to more destinations, and some travelers from Hong Kong, Macao, Germany and Brunei will soon be able to enter without having to serve quarantine.

The city-state announced the lifting of border restrictions for visitors from Hong Kong and Macao, who can apply for entry immediately and enter Singapore as soon as Aug. 26, according to Transport Minister S. Iswaran.

Singapore will also be opening a so-called vaccinated travel lane with Germany and Brunei in September, the national aviation authority said. It means Singaporeans can travel to Germany and Brunei, while visitors from those countries can travel to Singapore without quarantine, if the conditions are met.

“As an open and small economy, our connectivity with the rest of the world is essential, if not existential. That is why we need to start reopening,” Iswaran told reporters. “The longer our borders remain closed, the greater the risk of lasting damage to our economy, our livelihoods and our status as an aviation hub.”

Singapore has unilaterally opened its borders to travelers from Taiwan, New Zealand and most visitors from mainland China. The Southeast Asian country closed its borders to Australia and Vietnam after a resurgence of the virus in those countries.

Hong Kong and Macao

Travelers from Hong Kong and Macao, regardless of vaccination status, can now apply for an air travel pass to enter Singapore.

They will need to take a Covid test when they arrive in Singapore, and self-isolate until they receive a negative test result. There will be no need to serve quarantine.

Visitors need to have spent the last 21 consecutive days in Hong Kong or Macao before traveling to Singapore.

This arrangement is unilateral, which means people traveling from Singapore to Hong Kong or Macao will be subject to the rules of each destination.

For example, Singapore is classified as a medium-risk country in Hong Kong, and people arriving from Singapore will have to be quarantined for seven days to 21 days, depending on their vaccination status, among other factors.

Germany and Brunei

Singapore’s arrangement with Germany and Brunei allows only fully vaccinated travelers to skip quarantines. They will have to take four Covid tests — one two days before departure, one upon arrival, one on day three and another on day seven.

If the travel lane with Germany is successfully launched in September, it will be the first time Singapore residents can travel for leisure to any country without quarantine since the city-state closed its borders last year. Singapore postponed its travel bubble with Hong Kong twice because of rising Covid cases.

Applications to travel to Germany or Brunei open on Sept. 1, and conditions include:

  • Traveling on designated, nonstop flights for the vaccinated travel lane (VTL);
  • Remaining in Singapore, Germany or Brunei for 21 consecutive days before the flight;
  • Downloading a contact tracing app in Singapore.

The arrangement is a “welcome move and seems to be justified in light of Singapore’s successful vaccination campaign,” said German Ambassador to Singapore, Norbert Riedel.

“We are confident that those individuals travelling under the VTL scheme will show the necessary self-discipline and self-responsibility by adhering to the necessary testing requirements,” he said in a statement.

Iswaran said at the virtual press briefing, “The vaccinated travel lanes with Germany and Brunei mark a measured start to the resumption of air travel with an essential set of safeguards. We have chosen to start with these two countries based on overall risk and operational assessments.”

Around 57% of Germany’s population has been fully vaccinated, compared with 71.3% of Singapore’s population, according to Our World in Data. Only 11.9% of Brunei’s population is fully vaccinated.

“Our higher population vaccination rates now give us the foundation to introduce vaccination-differentiated border measures for travelers from countries/regions that have controlled the pandemic well and also vaccinated large parts of their population,” Singapore’s health ministry said in a press release.

Correction: This story has been updated to accurately reflect that if the travel lane with Germany is implemented, it will be the first time Singapore residents can travel for leisure without quarantine.

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Politics

Biden blocks elimination of Hong Kong residents, cites China repression

United States President Joe Biden delivers a speech in the East Room of the White House in Washington, DC on July 29, 2021.

Anna Money Maker | Getty Images

President Joe Biden signed an order on Wednesday blocking the forced deportation of many Hong Kong residents from the United States for 18 months and giving them a “temporary safe haven” from ongoing Chinese repression in the region, the White House said.

The order allows Hong Kong residents whose U.S. visas have expired and who are otherwise legally removable to remain in the United States.

Biden on Wednesday also directed the Department of Homeland Security to legally work in the United States for Hong Kong residents subject to the order.

“With politically motivated arrests and trials, media silence, and the shrinking space for elections and democratic opposition, we will continue to take steps to support the people of Hong Kong,” White House press secretary Jen Psaki said in a written statement.

The order imposing memorandum signed by Biden also states that China has undermined “the enjoyment of rights and freedoms” in the Hong Kong Special Administrative Region, including those protected by the so-called Basic Law and the Sino-British Joint Declaration.

Since June 2020, when China unilaterally imposed its national security law on Hong Kong, police in the semi-autonomous region have detained at least 100 opposition politicians, activists and protesters on charges under the law, the memo said.

In addition, police arrested more than 10,000 people in connection with protests against the government.

China’s action came in response to the anti-government protests that began in Hong Kong in 2019.

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“There are compelling foreign policy reasons to postpone the forced exit of Hong Kong residents currently in the United States,” the memo said.

“The United States is committed to a foreign policy that combines our democratic values ​​with our foreign policy goals that focus on defending democracy and promoting human rights around the world,” the memo reads.

“Providing a safe haven for Hong Kong residents who have been deprived of their guaranteed freedoms in Hong Kong promotes US interests in the region.”

Biden’s order applies to Hong Kong residents currently in the United States, with certain exceptions.

These exceptions include those who cannot be admitted or deported to the United States under immigration law, those convicted of one or more offenses in the United States, and those whose presence is not in the interests of the United States

Senator Ben Sasse, the Republican from Nebraska who tabled a bill last year that automatically grants asylum to Hong Kong residents in the US, said Biden’s order was “a solid step, but we need to go further.”

“We must offer full asylum to Hong Kong people who are fleeing the brutal repression of Chairman Xi,” said Sasse, referring to the general secretary of the Chinese Communist Party, Xi Jingping.

“America must stand firmly behind the victims of communism and show the world that we will always stand up for freedom around the world.”

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World News

Hong Kong Protester Is Sentenced to 9 Years in First Safety Legislation Case

HONG KONG — A Hong Kong court sentenced a protester to nine years in prison on Friday for terrorism and inciting secession, highlighting the power of a sweeping new national security law to deter those who might speak out against the authorities.

The protester, Tong Ying-kit, had faced up to life in prison after being convicted earlier this week. The case against Mr. Tong, who crashed a motorcycle into police officers while flying a protest flag, was the first brought under the security law, which was imposed on Hong Kong by China’s central government last year.

His case has heightened concerns among activists and legal experts that the security law is transforming Hong Kong’s judicial system, which is separate from mainland China’s. They fear that cherished civil and political rights are being trampled under a push to eliminate the sort of unrest and widespread opposition that was seen in the city during months of mass protests in 2019.

The power to interpret the security law rests with Beijing, and some observers say the outcome of Mr. Tong’s trial shows how much less space Hong Kong’s courts will have to weigh individual rights when considering security-related charges.

“Thus far, the government has run the table on N.S.L. cases, both on key procedural matters and now on guilty verdicts,” said Thomas Kellogg, executive director of the Georgetown Center for Asian Law, using an abbreviation for the national security law. “This is not a good sign that the courts will be able to mitigate the worst elements of the N.S.L..”

Mr. Tong, 24, was arrested on July 1 of last year after colliding with police officers while driving his motorcycle, which had a flag mounted on it that bore a popular protest slogan. Three officers were injured.

He was held for a year without bail. Instead of facing a jury, as is customary for serious crimes in Hong Kong, he was tried by a panel of three judges, all of them from a group of jurists selected by Hong Kong’s chief executive, Carrie Lam, to hear security law cases.

Mr. Tong’s lawyers acknowledged that he had driven dangerously but said his actions did not amount to terrorism. They noted that he had been carrying first aid equipment, and that he had scheduled a lunch meeting with friends near the site of his collision with police.

During the 2019 protests, the slogan on Mr. Tong’s banner — “Liberate Hong Kong, Revolution of Our Times” — was widely chanted, written on signs and spray-painted on walls. Defense witnesses argued that the phrase did not have a single, specific meaning, but instead expressed a broad desire for fundamental change.

But the court ruled that a call to separate Hong Kong from China was one key meaning of the phrase, and that the context of Mr. Tong’s motorcycle ride — in which he repeatedly defied the police on the day after the security law came into effect — showed that he intended to convey that secessionist message.

Legal scholars said that finding would be significant not just for other cases involving the “Liberate Hong Kong” slogan, but for an array of language that will now be parsed for illegal meanings.

“This is a green light for the prosecution to do more ambitious prosecutions in the future,” said Surya Deva, an associate professor of law at City University of Hong Kong. “People will be more careful about what they say and what they write about, because anything could be argued by the government as being capable of having that meaning of inciting secession.”

More than 130 people have been arrested under the security law over the past year, and more than 60 have been charged. Most of those awaiting trial are accused of nonviolent offenses. They include dozens of opposition politicians who prosecutors say committed subversion by trying to win an election, gain control of Hong Kong’s legislature and block the government’s agenda.

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World News

Asia-Pacific shares dip as buyers watch China tech shares in Hong Kong

SINGAPORE — Shares in Asia-Pacific were lower in Friday morning trade as investors monitor Chinese tech stocks in Hong Kong after regulatory concerns resurfaced.

South Korea’s Kospi sat below the flatline in early trade. In Australia, the S&P/ASX 200 shed 0.18%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.07% lower.

Markets in Japan are closed on Friday for a holiday.

China tech stock watch

Investors will watch Chinese tech shares in Hong Kong after Bloomberg News reported that Beijing is considering harsh penalties on ride-hailing giant Didi. The penalties being planned range from a fine likely bigger than the record $2.8 billion Alibaba paid earlier this year to even a forced delisting after Didi’s IPO last month.

Shares of Didi stateside plunged more than 11% on Thursday. Earlier in July, the firm was forced to stop signing up new users and also had its app removed from Chinese app stores due to alleged collection and use of personal data.

That development came as Beijing continues its months-long crackdown on China’s tech behemoths, targeting issues from anti-trust to data regulation.

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Overnight stateside, the Dow Jones Industrial Average edged 25.35 points higher to 34,823.35 while the S&P 500 gained 0.2% to 4,367.48. The Nasdaq Composite rose 0.36% to 14,684.60.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.805 — off levels above 93 seen earlier in the week.

The Japanese yen traded at 110.12 per dollar, weaker than levels below 109.6 seen against the greenback earlier this week. The Australian dollar changed hands at $0.738, above levels below $0.732 seen earlier in the trading week.

Oil prices were lower in the morning of Asia trading hours, with international benchmark Brent crude futures down 0.23% to $73.62 per barrel. U.S. crude futures slipped 0.24% to $71.74 per barrel.

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World News

U.S. warning about Hong Kong alerts Washington might do extra: Lawyer

The U.S. has issued a warning to U.S. companies operating in Hong Kong — signaling that Washington could take further action, says a lawyer who specializes in international trade compliance.

Adam Smith, a partner at law firm Gibson, Dunn & Crutcher, said Friday’s financial and regulatory risks advisory was “quite substantial” but it “doesn’t actually do anything with respect to changing the rules” right now.

However, it does indicate “there’s a lot more the U.S. could do” from a policy perspective, he told CNBC’s “Capital Connection” on Monday.

The nine-page advisory on Friday warned that U.S. firms are encountering several risks posed by China’s national security law in Hong Kong. Washington also announced sanctions on seven Chinese officials for violating Hong Kong’s autonomy.

Possible next steps

In response to Beijing’s crackdown on the former British colony, Smith said, what would “really change the nature of engagement and risk for parties in Hong Kong” would be sanctions on organizations, entities and institutions, which have been absent so far.

Sanctions on individuals can be a challenge to U.S. firms in Hong Kong, but the “real difficulty” would come from restrictions on organizations that businesses need to interact with frequently, he said.

People wearing face masks crossing a street at Hong Kong’s Wan Chai district on Feb. 16, 2021.

Zhang Wei | China News Service | Getty Images

Hong Kong’s attraction

For now, however, there remains “too much opportunity” in Hong Kong for businesses to move out of the city.

“Hong Kong … still has an unbelievable amount of human capital that many companies still need,” he said.

Kurt Tong, a former consul general representing the U.S., and chief of mission in Hong Kong and Macao, said Hong Kong is still a good place for businesses to be despite the risks.

“There’s legal risk, there’s reputational risk, there’s a certain amount of operation risk — but I think that those risks are measured,” he said.

“At the same time, (businesses) need to keep their eye on the big picture, which is that China is an enormous and attractive economy to do business with. And Hong Kong is in many ways, still … one of the best platforms to do that work,” he added.

The rhetoric has been so tough from both sides, so there’s a lot of face-saving that needs to be done.

Kurt Tong

partner, The Asia Group

Tong, a partner at advisory firm The Asia Group, said the rule of law in Hong Kong has deteriorated, but most businesses are not convinced that it has been completely wiped out.

“I think it will take more to drive companies out of Hong Kong than the changes that have taken place thus far,” he told CNBC’s “Squawk Box Asia.”

Biden-Xi meeting?

As for the path forward, Tong said he expects U.S. President Joe Biden and Chinese President Xi Jinping to meet in the fall, and discuss each of their “red lines” that cannot be crossed.

In the meantime, he said, “diplomatic jousting” will continue.

“The rhetoric has been so tough from both sides, so there’s a lot of face-saving that needs to be done,” he added.

Trade discussions between the two sides have stalled for now, and the U.S. doesn’t have incentives to enter negotiations because it doesn’t believe such talks will be successful, Tong said.

“It’s a complex picture … the U.S.-China relationship under the Biden-Xi era,” Tong said. “We’re still on the … first scene of the first act of how this is going to play out over the coming year.”

Indeed. After Tong and Smith spoke, a new alliance of NATO member states, the European Union, Australia, New Zealand and Japan blamed China’s Ministry of State Security for a massive cyberattack on Microsoft Exchange email servers earlier this year.

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Politics

U.S. warns firms concerning the dangers of doing enterprise in Hong Kong as China clamps down on rights

The national flags of the USA and China fly in front of a building.

The Eng Koon | AFP via Getty Images

WASHINGTON – The Biden government on Friday warned companies with offices in Hong Kong of far-reaching financial and regulatory risks as China continues to restrict political and economic freedoms in the area.

The nine-page Hong Kong Business Advisory – jointly published by the Departments of State, Finance, Trade and Homeland Security – warns that US firms in Hong Kong are exposed to a number of risks posed by China’s national security law.

The report states that “companies are exposed to risks in connection with electronic surveillance without an arrest warrant and the disclosure of data to authorities as well as“ restricted access to information ”.

“Beijing has damaged Hong Kong’s reputation for accountable, transparent governance and respect for individual freedoms and has broken its promise to keep Hong Kong’s high levels of autonomy unchanged for 50 years,” Foreign Minister Antony Blinken wrote in a statement.

“In light of Beijing’s decisions last year that stifled the democratic aspirations of the Hong Kong people, we are taking action. Today we are sending a clear message that the United States is resolutely on the side of the Hong Kong people, ”added the country’s top diplomat.

The Biden government also imposed US sanctions on seven Chinese officials for violating Hong Kong’s autonomy.

The Chinese embassy in Washington did not immediately respond to a request for comment.

Earlier this week, the Biden government issued a warning to companies with investment ties to China’s Xinjiang Province, citing growing evidence of genocide and other human rights abuses in the country’s northwestern region.

Washington has openly criticized Beijing’s comprehensive national security law, passed in June 2020, aimed at restricting Hong Kong’s autonomy and banning critical literature about the Chinese Communist Party.

The then Foreign Secretary Mike Pompeo described the measure as an “Orwellian move” and an attack “on the rights and freedoms of the people of Hong Kong”.

Former President Donald Trump soon signed a law imposing sanctions on China in response to its interference with Hong Kong’s autonomy. He also signed an executive order ending the preferential treatment that Hong Kong has long enjoyed.

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“Hong Kong is now being treated like mainland China,” Trump said during a July 2020 speech from the White House rose garden.

“No special privileges, no special economic treatment and no export of sensitive technologies,” said Trump. “Also, as you know, we are imposing massive tariffs and have imposed very high tariffs on China.”

China’s State Department fired back, saying Beijing would impose retaliatory sanctions on US people and businesses.

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Health

Hong Kong biotech start-up Prenetics plans $1.three billion SPAC merger

Signage for Prenetics, a Hong Kong-based biotechnology company, at the company’s laboratory in Hong Kong, China, on Jan. 26, 2018.

Anthony Kwan| Bloomberg | Getty Images

Hong Kong biotech company Prenetics is set to merge with Artisan Acquisition, a special purpose acquisition company, in a deal that will value the new entity at $1.3 billion or more, according to a source close to the deal.

The transaction is expected to close by the end of this year. The SPAC is already traded on the Nasdaq under the ticker ARTU.

SPACs are shell companies set up to raise money through an initial public offering — their sole purpose is to merge with or acquire an existing private company and to take it public. They bypass Wall Street’s traditional IPO process.

Artisan Acquisition is backed by Adrian Cheng, the CEO and Executive Vice Chairman of Hong Kong-listed New World Development, a conglomerate with $88 billion in assets.

Prenetics is a diagnostic and genetic testing company with significant operations in Hong Kong and the U.K. It was founded by serial entrepreneur Danny Yeung and will become the first billion-dollar start-up in Hong Kong to go public.

A technician handles a sample at a Prenetics laboratory in Hong Kong, China, on Jan. 26, 2018.

Anthony Kwan | Bloomberg | Getty Images

UBS, Citi, Credit Suisse and CICC are financial advisors on the potential de-SPAC transaction.

Artisan raised $339 million in the SPAC, and has signed a further $60 million forward purchase agreements with investment firm Aspex and PAG, a private asset manager for institutional investors, according to the source who requested anonymity as that person was not allowed to discuss the information publicly.

Talks with additional pipe investors are said to be ongoing, with strong initial demand, the source said.

The company has grown significantly since its founding in 2014, and 2021 revenue is projected to surpass $200 million. That would mark 400% growth over the year prior, according to the source.

Annual revenue is expected to reach $600 million by 2025, said the source.

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Entertainment

‘No. 7 Cherry Lane’ Overview: A Heady Daydream in 1967 Hong Kong

As sumptuous as it is odd, “No. 7 Cherry Lane” is an exercise in harnessing nostalgia for innovation. The first animated film from the director Yonfan is a deeply eccentric chronicle of a forbidden affair in 1960s Hong Kong, as the spirit of Mao Zedong’s anti-imperialist, communist revolution arrives in what was still a British colony. Fan Ziming, a beguiling English literature student, becomes embroiled in a knotty love triangle between Mrs. Yu, a divorced Taiwanese exile and former revolutionary who now deals in luxury goods, and her daughter Meiling, a nubile 18-year-old student taking English lessons from Ziming.

At times, “No. 7 Cherry Lane” unfolds as a hallucinatory daydream, flowing with starry-eyed voice-over narration: “Look how the golden years flowed away,” reads the opening title card, as the narrator describes the time as an “era of prosperity amidst simplicity.” The Hong Kong of 1967 is rendered in rich detail through pencil on rice paper, with radiant color blooming onscreen, illustrations of bustling streets and movie theaters constituting the film’s universe. There are cerebral, erudite dialogues about Proust, French art films and classic Chinese literature that drive the liaisons at its center. The animation is often slow-moving — figures shuffle stiffly across the screen as they muse about art and philosophy, a choice that may challenge viewers accustomed to more fluid gestures. But the approach contributes to the film’s thematic commitment to nostalgia and adds a quiet elegance and slow-paced intimacy to each scene.

Fortunately, “No. 7 Cherry Lane” transcends pure wistfulness or intellectual indulgence. The film embraces a lovely surreal sensibility that bleeds through all of its details: puffs of smoke wafting off a theater screen into the characters’ world; a clowder of cats explaining Hong Kong’s floor-numbering practices; effervescent, jarring synth pop soundtracking the peak of a violent protest. These details seem minor, but they infuse an otherwise heady film with heart and levity. The movie’s bizarre and sexually explicit dream sequences, which include the abduction of a Taoist nun and Ziming being pleasured by a cat, further illustrate the film’s enigmatic quality — but they also prevent it from becoming a simple trip down memory lane. Consider this film a master class in world-building, a bewildering but poignant dream — one that will leave you with plenty of burning questions.

No. 7 Cherry Lane
Not rated. In Mandarin, Cantonese, French and Shanghainese, with subtitles. Running time: 2 hours 5 minutes. Watch on Criterion Channel.

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World News

Hong Kong’s Safety Regulation: One 12 months Later, a Metropolis Remade

HONG KONG – With each passing day, the border between Hong Kong and the rest of China is fading faster.

The Chinese Communist Party is rebuilding this city, permeating its once lively, irreverent character with ever more open signs of its authoritarian will. The structure of daily life is attacked as Beijing shapes Hong Kong into something more familiar, more docile.

Local residents are now teeming with police hotlines with reports of disloyal neighbors or colleagues. Teachers were told to fill students with patriotic zeal through 48-volume book sets entitled “My Home Is In China.” Public libraries have withdrawn dozens of books, including one on Rev. Dr. Martin Luther King Jr. and Nelson Mandela.

Hong Kong has always been an improbability. It was a flourishing metropolis on a headland of inhospitable land, an oasis of civil liberties under iron rule. As a former British colony that returned to China in 1997, the city was promised freedom of speech, assembly and press unimaginable on the mainland in an agreement that Beijing called “one country, two systems”.

But under Xi Jinping, China’s leader, the Communist Party is fed up with Hong Kong’s dueling identities. For the party, they made the city unpredictable and even brought it to the brink of rebellion in 2019 when anti-government protests erupted.

Now, armed with the sweeping national security law it imposed on the city a year ago, Beijing is pushing to transform Hong Kong into yet another of its mainland megacities: economic engines that instantly stifle disagreements.

“Hong Kong people from all walks of life have also recognized that ‘one country’ is the foundation and foundation of ‘two systems’,” said Luo Huining, Beijing’s senior official in Hong Kong, this month.

Hong Kong today is a montage of unfamiliar and for many unsettling scenes. Police officers were goose-stepped in the Chinese military style, replacing decades of British-style marching. City guides regularly denounce “external elements” that seek to undermine the country’s stability.

Senior officials in Hong Kong have gathered with their hands raised to pledge allegiance to the country, just as mainland bureaucrats are regularly called to “biao tai”, Mandarin, to “express their position”.

When the government ordered ordinary employees to sign a written version of the oath, HW Li, a seven-year-old civil servant, resigned.

The new requirements not only require loyalty professions; they also warn of dismissal or other vague consequences in the event of violations. Mr. Li heard some supervisors nag their co-workers to fill out the form right away, and employees vie for how quickly they complied.

“The rules that should protect everyone – as employees and as citizens alike – are being weakened,” said Mr. Li.

In some corners of society the rules have been completely rewritten. However, Beijing denies failing to keep its promises to Hong Kong and insists on reiterating them.

When China revised Hong Kong’s electoral system to purge disloyal candidates, Beijing described the change as “Hong Kong’s perfecting electoral system.” When Apple Daily, a major pro-democracy newspaper, was forced to close after police arrested its senior executives, the party said the publication had abused “so-called freedom of the press”. When dozens of opposition politicians organized an informal pre-election, Chinese officials accused them of subversion and arrested them.

China’s power has become so ubiquitous that Chan Tat Ching, once a hero of the Hong Kong democracy movement, spent the past year urging his friends not to challenge Beijing.

Three decades ago, after the Tiananmen Square massacre in 1989, Chan, a Hong Kong businessman, helped direct an operation that smuggled students and academics from the mainland.

But Beijing is more demanding today than it was in 1989, Chan said. It had intimidated Hong Kong without even sending troops; that demanded respect.

He admitted that the security law was enforced too strictly, but said that nothing could be done.

“Some young people don’t understand. They think the Communist Party is a paper tiger, ”he said. “The Communist Party is a real tiger.”

China’s new power has also established itself in the Hong Kong business community. For decades, the mainland economy had tried to catch up with that of Hong Kong, the financial center so proud of its global identity that its government dubbed it “Asia’s metropolis.”

Now China’s economy is booming, and officials are increasingly turning Hong Kong’s global identity towards that one country.

Chinese state-owned companies have recently moved into offices in Hong Kong’s iconic skyscrapers that have been vacated by foreign banks. In November, Meituan, a Chinese grocer, ousted Swire, a British conglomerate, from the city’s main stock index. Financial analysts have called it the end of an era.

The rush on the mainland money has brought some new conditions with it.

After Beijing ruled that only “patriots” could run for office in Hong Kong earlier this year, the Bank of China International – a state-run institution – posted an advertisement for a director-level position stating that candidates should be “the country.” love”.

The central government is trying to convince Hong Kongers that the compromises on the mainland’s promise of prosperity are worthwhile. Officials encourage young Hong Kong residents to study and work in southern China’s cities of Shenzhen and Guangzhou, saying that those who do not go risk missing out on opportunities.

Toby Wong, 23, grew up in Hong Kong and had never considered working on the mainland. Her mother came from the mainland for work decades earlier. The salaries there were significantly lower.

But recently, Ms. Wong saw a subway advertisement promoting open positions in Shenzhen, in which the Hong Kong government promised to subsidize nearly $ 1,300 from a $ 2,300 monthly wage – more than at many entry-level positions at home. A high-speed rail link between the two cities allowed her to return to her mother at the weekend, who has to support Ms. Wong financially.

Ms. Wong applied to two Chinese technology companies.

“It’s not a political question. It’s a practical question, ”she said.

After all, the government is hoping to make the motivation political. At the heart of Beijing’s campaign is an attempt to educate future generations who will never think of separating the party’s interests from their own.

China’s firm grip

    • Behind the Hong Kong acquisition: A year ago, the city’s freedoms were being curtailed at breakneck speed. But the crackdown took years and many signals were overlooked.
    • Mapping China’s Post-Covid Path: China’s leader Xi Jinping tries to balance trust and caution as his country moves forward while other places continue to grapple with the pandemic.
    • A challenge for US global leadership: As President Biden predicts a battle between democracies and their adversaries, Beijing seeks to defend the other side.
    • ‘Red Tourism’ is flourishing: New and improved attractions dedicated to the history of the Communist Party, or an adjusted version of it, draw crowds ahead of the party’s centenary.

The Hong Kong government has issued hundreds of pages of new curriculum guidelines designed to “inspire affection for the Chinese people.” The geography class must confirm China’s control over the disputed areas of the South China Sea. Schoolchildren from the age of 6 learn the criminal offenses according to the Security Act.

Lo Kit Ling, who teaches a citizenship course at a high school, now makes sure to say only positive things about China in class. Although she has always tried to offer multiple perspectives on any subject, she feared that a critical perspective could be taken out of context by a student or parent.

Ms. Lo’s subject is particularly sensitive – city leaders have accused her of poisoning Hong Kong’s youth. The course had encouraged students to critically analyze China and convey the country’s economic successes alongside topics such as the Tiananmen Square raid.

Officials have ordered that the subject be replaced with an abbreviated version that emphasizes the positive.

“It’s not a class. It’s like brainwashing, ”said Ms. Lo. Instead, she will teach an elective in Hospitality Studies.

Not only school children are asked to watch out for dissenting opinions. In November, Hong Kong police opened a hotline to report suspected security law violations. “#YouCanHelp #SaveHK,” wrote the police on Twitter. An official recently applauded residents for leaving more than 100,000 messages in six months.

Constant neighborhood surveillance by informants is one of the Communist Party’s most effective tools for social control on the mainland. It’s supposed to keep people like Johnny Yui Siu Lau, a radio host in Hong Kong, from being so free in his criticism of China.

Mr. Lau said a producer recently told him that a listener reported him to the Broadcasting Authority.

“It will be a competition or a struggle to see how people in Hong Kong can protect freedom of expression,” Lau said.

Other freedoms that were once at the core of Hong Kong’s identity are disappearing. The government announced that it would censor films that are considered a threat to national security. Some officials have called for works of art by dissidents like Ai Weiwei to be banned from museums.

However, Hong Kong is not just another metropolis on the mainland. Residents have proven extremely reluctant to give up their freedom, and some have rushed to preserve totems of a discreet Hong Kong identity.

Masks labeled “Made in Hong Kong” are very popular. A local boy band, Mirror, has become a source of hope and pride as interest in canto pop resurfaces.

Last summer, Herbert Chow, who owns the children’s clothing chain Chickeeduck, installed a two-meter-tall protester figure – a woman with a gas mask and a protest flag – and other protest art in his shops.

But Mr Chow, 57, has come under pressure from his landlords, several of whom have refused to renew his leases. Last year there were 13 chickeeduck stores in Hong Kong; now there are five. He is unsure how long his city can withstand the burglaries of Beijing.

“Fear – it can make you stronger because you don’t want to live under fear,” he said. Or “it can kill your desire to fight.”

Joy Dong contributed to the research.