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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: Julius Wong who wrote (1507)	4/1/1998 10:17:00 PM
From: George Papadopoulos	Read Replies (1) \| Respond to of 2951

Global Intelligence Update Red Alert April 2, 1998 China Attacks Protests as Undermining the Rule of Law An interesting article was published in Tuesday's edition of Ta Kung Pao, published in Hong Kong. Entitled "Maintaining the Foundations for the Rule of Law and Social Stability," the article attacked a number of developments in post-reversion Hong Kong. Among these developments, the article attacked social workers who actively organized the children of illegal immigrants, causing them to stage demonstrations asking for permanent residence. Also criticized were shop keepers who went on strike protesting lower prices, and asked their land lords for reduced rent and apartment owners who had lost equity when housing prices declined. The article said: "We can certainly understand that ordinary citizens without specialized knowledge who work hard and live poor lives may fiercely take action when their hard-earned deposits, tiny though they are, are lost when the market suddenly changes. However, they can still calm down when things are clearly exchanged." So much for the class struggle. The article went on to blame two categories of people who are trying to destroy the rule of law. First, there are those who, allied with anti- China forces overseas, want to prevent a smooth transition and use the desire of people to hold on to petty gains, including gains in the stock market, to "inflame and agitate the people." The second category are members of political groups and of the legislative council who have used these economic declines as opportunities to express their sympathy with people who suffered losses in order to increase their popularity. As the article put it: "They took advantage of some city-dwellers psychological weaknesses to inflame and agitate the people, making them discontented with the slumping stock market, the sharp decline in housing values, the economic depression and the increase in unemployment, all of which was caused by the financial crisis. They did so in an attempt to create social disorder and affect the people's confidence in Hong Kong. Protest marches, presenting petitions, holding sit-down demonstrations and lodging protests have become their "specialties." We must be alert and guard against such people's activities lest their plots succeed, and we must sternly punish law-breakers according to the law." Now, from most perspectives, protest marches, petitioning the government, sit-down demonstrations and lodging of protests are what democracy is all about. What is particularly interesting here is that these commonplace activities are being criticized in an article on maintaining the rule of law. From the standpoint of the authorities, these normal activities are being regarded as undermining the law. While obviously ominous in its own right, the article is extraordinarily revealing about the general attitudes of the Beijing regime toward the economic meltdown. First, the article makes clear that there has been substantial unhappiness over what the article now refers to as a "depression." What is fascinating is the manner in which the article trivializes and dismisses the losses of ordinary people. Essentially, the article is asserting that the reason that people are unhappy is that agitators with hidden agendas have misled them. Otherwise, they would understand the reasons for the problem and not protest. Second, the article reveals that the regime has been dealing with substantial unhappiness in urban areas, to the point that it has felt constrained to issue a warning that the activities are pushing the limits of the law. The government's response to economic collapse is also being clarified. It does not intend to represent the interests of urban workers or petit bourgeoisie. This article shows clearly that the economic crisis is being viewed from the standpoint of the wealthy urban bourgeoisie, who are owed rent rather than who owe rent, and the party apparatus, whose interest demands social stability and whose definition of lawful behavior is more circumscribed than most. These are troubling times for China and we continue to feel that the prognosis is not good. This article is particularly revealing as to the strange battle lines being drawn in Chinese politics in general and Hong Kong in particular. ___________________________________________________ To receive free daily Global Intelligence Updates or Computer Security Alerts, sign up on the web at stratfor.com, or send your name, organization, position, mailing address, phone number, and e-mail address to alert@stratfor.com ___________________________________________________