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Hong Kong's new leader is Beijing's designated 'enforcer' – POLITICO

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John Lee’s election signals heightened risks to the foreign business community.
John Lee Ka-chiu, the territory’s former secretary of security, won an uncontested vote Sunday as the ruling Chinese Communist Party’s candidate of choice. | Anthony Kwan/Getty Images
By Phelim Kine

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John Lee Ka-chiu’s election as Hong Kong’s new chief executive signals a decisive turn in the territory’s lurch toward Beijing-style authoritarian rule.
Lee, the territory’s former secretary of security, won an uncontested vote Sunday as the ruling Chinese Communist Party’s candidate of choice.
Lee’s victory underscores Chinese President Xi Jinping’s determination to eradicate rule of law in the former British colony — but it also risks its viability as a regional business center as foreign businesses rethink the dangers of operating in Hong Kong.
“[Beijing] chose the guy who could crush people and use the judicial system for national security purposes. … The people the Party trusts are the people who can go for the jugular and erase protests and any kind of dissent,” said Samuel Chu, president of the nonprofit The Campaign for Hong Kong. “[Lee] isn’t addressing pocketbook or livelihood issues. He’s checked the boxes to say, ‘I am going to be Beijing’s enforcer here.’”
Lee’s record of zero-tolerance for peaceful dissent made him Beijing’s natural preferred candidate to replace the widely reviled chief executive, Carrie Lam. Not that Lee looks to be any more popular with the locals.
As security chief, Lee oversaw brutal police responses to pro-democracy protests. And his implementation of the draconian National Security Law introduced in June 2020 prompted the U.S. Treasury Department to place him and Lam on a sanctions list.
Police enforcement of the National Security Law has led to the arrests of more than 160 people since June 2020 — for crimes including organizing informal public opinion polls — and the closure of over 150 civil society organizations. Lee’s election signals Beijing’s endorsement of his role in gutting rights and freedoms guaranteed to Hong Kong for 50 years under the Sino-British Joint Declaration and Hong Kong’s Basic Law that govern the post-1997 British handover of the territory to China.
Lee’s election constitutes “a continued assault on political pluralism and fundamental freedoms” in the territory, the G-7 foreign ministers said Monday in a statement.
Beijing dismissed such concerns. “Certain Western countries should face squarely the fact that Hong Kong returned to its motherland 25 years ago … and immediately stop all forms of attempts to disrupt Hong Kong and contain China,” Chinese Foreign Ministry spokesperson Zhao Lijian said Monday.
The U.S. government is under no illusions about Hong Kong’s direction under Lee. Secretary of State Antony Blinken last month accused the Chinese government of seeking to “dismantle Hong Kong’s democratic institutions, placed unprecedented pressure on the judiciary, and stifled academic, cultural, and press freedoms,” during the release of this year’s Hong Kong Policy Act Report.
Foreign Policy
By Phelim Kine and Gavin Bade
GOP lawmakers are demanding the Biden administration widen its sanctions of Hong Kong officials deemed complicit in those abuses.
“We believe that the Committee for Safeguarding National Security of the Hong Kong Special Administrative Region, National Security Law designated judges, and prosecutors should be subject to sanctions,” a group of seven lawmakers, including Reps. Vicky Hartzler (R-Mo.), John Curtis (R-Utah) and Young Kim (R-Calif.) said in a letter to Biden last week.
Hong Kong pro-democracy activists say the Biden administration’s combination of sanctions and stern rhetoric are toothless deterrents to Beijing’s tightening stranglehold on the city. “Beijing basically made a calculation that if they do this to Hong Kong, the international community and the U.S. government will condemn them, but essentially will roll over which is what they’re doing,” said Dennis Kwok, former Civic Party member of Hong Kong’s Legislative Council and senior fellow at Harvard’s Kennedy School of Government.
The ordeal of former Hong Kong-based American lawyer Samuel Bickett illustrates that foreign expatriates working in the city’s financial sector aren’t immune to the Lee-supervised roll back of rule of law.
Bickett, who was a financial compliance director at Bank of America Merrill Lynch, intervened to stop a vicious assault by a baton wielding assailant on a teenager in December 2019. Police responded by charging Bickett with assaulting a police officer even though the assailant was officially retired at the time of the incident. Despite inconsistencies, eyewitnesses and surveillance camera footage supporting Bickett’s account of the incident, a Hong Kong court sentenced him to a four-month, two-week prison term then deported him in March after he served two-thirds of that sentence.
“It was just shocking how blatant the judicial misconduct was,” Bickett told POLITICO. “My case was one of the early ones where you saw this dive into the abyss by the judiciary from a legal [integrity] standpoint.”
Observers see Bickett’s case as a sinister bellwether for the foreign business community’s vulnerability to unlawful attack from Hong Kong’s security forces and judiciary.
“[Bicketts case] shows that Hong Kong has changed immeasurably and there’s a lot of uncertainties that did not used to exist — nobody knows what the rules are anymore,” said Tara Joseph, who stepped down as president of the American Chamber of Commerce in Hong Kong in November.
One metric of the growing insecurity felt by foreign citizens in Hong Kong who long took the city’s freedoms and rule of law for granted was the decision last month by Hong Kong’s Foreign Correspondents’ Club to suspend its annual Human Rights Press Awards. “Over the last two years, journalists in Hong Kong have been operating under new ‘red lines’ on what is and is not permissible, but there remain significant areas of uncertainty and we do not wish unintentionally to violate the law,” Keith Richburg, the club’s president, said in a statement.
The fate of Hong Kong media mogul Jimmy Lai underscores the vulnerability of the city’s corporate sector to Beijing’s hostility to dissent.
Lai is currently serving a 20-month prison term for his alleged role in organizing what the Hong Kong government calls illegal protests. Lai also faces prosecution for allegedly masterminding an “international propaganda campaign” aimed to bring foreign sanctions against China. The Hong Kong authorities have frozen Lai’s assets, arrested top editorial staff at his flagship newspaper Apple Daily then forced it to close in June. Officials then capped it off by ordering the liquidation of Apple Daily’s company, Next Digital Ltd., in December.
“The message to the business community is they can shut you down overnight and no matter how much assets or the global worth of your company, you will not have legal rights either as an entity or as an individual,” Chu said.
Observers say that the city’s foreign business community is passively complicit in the government’s attack on rule of law by failing to criticize those abuses. Even worse, international business executives in the city have attacked the media for reporting on those violations, reflecting a longtime corporate alignment with a government whose approval is essential to access the Chinese market.
Foreign Policy
By Phelim Kine
“When I introduced the Hong Kong Universal Democracy Act back in 2014, I had the business community beat down my door with phone calls saying, ‘What are you doing!’” Rep. Chris Smith (R-N.J.) told POLITICO.
That mindset persists.
“People in business and finance still have their blinders on as to the risks that they can face, which is stunning,” Joseph said. “Companies will really think twice before they pull the plug there, but what some of them are doing is moving departments or executives to other [places] with Singapore being the prime example.”
U.S. lawmakers are serving notice that they won’t tolerate corporate complicity with Hong Kong authorities’ efforts to undermine rights and freedoms. The bipartisan Congressional-Executive Commission on China in March warned the Hong Kong and Shanghai Banking Corporation Ltd., a British multinational financial services and investment bank, that any moves to freeze Hong Kong media and civil society groups’ access to their bank accounts may violate the terms of the Hong Kong Autonomy Act.
HSBC is unfazed. “Like every bank, we are required to operate within the law and legal frameworks of all the countries and territories in which we operate,” Matt Ward, head of communications at HSBC Bank USA, said in a statement.
Imposing financial penalties on foreign firms facilitating Hong Kong authorities’ assault on rule of law may be the only meaningful tactic left to activists and concerned foreign governments.
“Shaming them from an ethical standpoint … is not going to get them to lose money,” Bickett said. “Two years of protests and unethical and downright criminal behavior by the Hong Kong government and the Chinese government in Hong Kong did very little to move Western corporations and money [out of Hong Kong], but what seems to be doing it now is COVID … because ultimately, they’re not making money there.”
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Beijing Surging Equipment to Moscow to Help War…

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Beijing Surging Equipment to Moscow to Help War…

WASHINGTON (AP) — China has surged sales to Russia of machine tools, microelectronics and other technology that Moscow in turn is using to produce missiles, tanks, aircraft and other weaponry for use in its war against Ukraine, according to a U.S. assessment.

Two senior Biden administration officials, who discussed the sensitive findings Friday on the condition of anonymity, said that in 2023 about 90% of Russia’s microelectronics came from China, which Russia has used to make missiles, tanks and aircraft. Nearly 70% of Russia’s approximately $900 million in machine tool imports in the last quarter of 2023 came from China.

Chinese and Russian entities have also been working to jointly produce unmanned aerial vehicles inside Russia, and Chinese companies are likely providing Russia with nitrocellulose used in the manufacture of ammunition, the officials said. China-based companies Wuhan Global Sensor Technology Co., Wuhan Tongsheng Technology Co. Ltd. and Hikvision are providing optical components for use in Russian tanks and armored vehicles.

The officials said Russia has received military optics for use in tanks and armored vehicles manufactured by Chinese firms iRay Technology and North China Research Institute of Electro-Optics, and China has been providing Russia with UAV engines and turbojet engines for cruise missiles.

Russia’s semiconductor imports from China jumped from $200 million in 2021 to over $500 million in 2022, according to Russian customs data analyzed by the Free Russia Foundation, a group that advocates for civil society development.

Beijing is also working with Russia to improve its satellite and other space-based capabilities for use in Ukraine, a development the officials say could in the longer term increase the threat Russia poses across Europe. The officials, citing downgraded intelligence findings, said the U.S. has also determined that China is providing imagery to Russia for its war on Ukraine.

The officials discussed the findings as Secretary of State Antony Blinken is expected to travel to China this month for talks. Blinken is scheduled to travel next week to the Group of 7 foreign ministers meeting in Capri, Italy, where he’s expected to raise concerns about China’s growing indirect support for Russia as Moscow revamps its military and looks to consolidate recent gains in Ukraine.

President Joe Biden has previously raised his concerns directly with Chinese President Xi Jinping about Beijing indirectly supporting Russia’s war effort.

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While China has not provided direct lethal military support for Russia, it has backed it diplomatically in blaming the West for provoking Russian President Vladimir Putin’s decision to launch the war and refrained from calling it an invasion in deference to the Kremlin.

China has repeatedly said it isn’t providing Russia with arms or military assistance, although it has maintained robust economic connections with Moscow, alongside India and other countries, amid sanctions from Washington and its allies.

“The normal trade between China and Russia should not be interfered or restricted,” said Liu Pengyu, spokesman of the Chinese Embassy in Washington. “We urge the U.S. side to refrain from disparaging and scapegoating the normal relationship between China and Russia.”

Xi met in Beijing on Tuesday with Russian Foreign Minister Sergey Lavrov, who heaped praise on Xi’s leadership.

Russia’s growing economic and diplomatic isolation has made it increasingly reliant on China, its former rival for leadership of the Communist bloc during the Cold War.

Treasury Secretary Janet Yellen, who returned to Washington this week from a visit to Beijing, said she warned Chinese officials that the Biden administration was prepared to sanction Chinese banks, companies and Beijing’s leadership, if they assist Russia’s armed forces with its ongoing invasion of Ukraine.

The Democratic president issued an executive order in December giving Yellen the authority to sanction financial institutions that aided Russia’s military-industrial complex.

“We continue to be concerned about the role that any firms, including those in the PRC, are playing in Russia’s military procurement,” Yellen told reporters, using the initials for the People’s Republic of China. “I stressed that companies, including those in the PRC, must not provide material support for Russia’s war and that they will face significant consequences if they do. And I reinforced that any banks that facilitate significant transactions that channel military or dual-use goods to Russia’s defense industrial base expose themselves to the risk of U.S. sanctions.”

The U.S. has frequently downgraded and unveiled intelligence findings about Russia’s plans and operations over the course of the more than 2-year-old war with Ukraine.

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Such efforts have been focused on highlighting plans for Russian misinformation operations or to throw attention on Moscow’s difficulties in prosecuting its war against Ukraine as well as its coordination with Iran and North Korea to supply it with badly needed weaponry. Blinken last year spotlighted intelligence that showed China was considering providing arms and ammunition to Russia.

The White House believes that the public airing of the intelligence findings has led China, at least for now, to hold off on directly arming Russia. China’s economy has also been slow to emerge from the COVID-19 pandemic. Chinese officials could be sensitive to reaction from European capitals, which have maintained closer ties to Beijing even as the U.S.-China relationship has become more complicated.

Meanwhile, China on Thursday announced rare sanctions against two U.S. defense companies over what it called their support for arms sales to Taiwan, the self-governing island democracy Beijing claims as its own territory to be recovered by force if necessary.

The announcement freezes the assets of General Atomics Aeronautical Systems and General Dynamics Land Systems held within China. It also bars the companies’ management from entering the country.

Filings show General Dynamics operates a half-dozen Gulfstream and jet aviation services operations in China, which remains heavily reliant on foreign aerospace technology even as it attempts to build its own presence in the field.

The company also helps make the Abrams tank being purchased by Taiwan to replace outdated armor intended to deter or resist an invasion from China.

General Atomics produces the Predator and Reaper drones used by the U.S. military.

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AP writers Didi Tang and Fatima Hussein contributed reporting.

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China’s gambling hub of Macao holds its its final horse race, ending a tradition of over 40 years

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China’s gambling hub of Macao holds its its final horse race, ending a tradition of over 40 years

MACAO (AP) — After more than 40 years, Macao’s horse racing track hosted its final races on Saturday, bringing an end to the sport in the city famous for its massive casinos.

In January, the city’s government said it would terminate its contract with the Macao Jockey Club in April. The decision came at the request of the Macao Horse Race Company, which cited operational challenges as part of the reasons for the closure.

On Saturday, gamblers congregated in the half-full stands and placed their final bets. Some tourists also visited the track.

Mai Wan-zun, a student from mainland China in Macao, said she wanted to get a taste of the atmosphere. “We could come to see horse racing here in Macao, but not in mainland China,” she said.

Helena Chong, a Macao resident, decided to visit the race course for the first and last time to see what it’s all about.

“It’s a pity to see the end of all this gambling and entertainment,” she said.

Horse racing in the former Portuguese colony has struggled with economic challenges in recent years and has yet to rebound from the impacts of the COVID-19 pandemic. Its jockey club had accumulated operating losses of over $311 million, the Macau News Agency earlier reported.

Under the termination arrangement, the horse racing firm had pledged to arrange for transportation of owners’ horses to other locations by March 2025, and handle the company’s employees according to the law, the government said.

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In neighboring Hong Kong, horse-racing remains popular and profitable. Its jockey club runs various gambling activities and is the city’s major donor of many charity works.

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Migrant workers who helped build modern China have scant or no pensions, and can’t retire

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Migrant workers who helped build modern China have scant or no pensions, and can’t retire

BEIJING (AP) — At 53, Guan Junling is too old to get hired at factories anymore. But for migrant workers like her, not working is not an option.

For decades, they have come from farming villages to find work in the cities. Toiling in sweatshops and building apartment complexes they could never afford to live in, they played a vital role in China’s transformation into an economic powerhouse.

As they grow older, the first generation of migrant workers is struggling to find jobs in a slowing economy. Many are financially strapped, so they have to keep looking.

“There is no such thing as a ‘retirement’ or ‘pensions’ for rural people. You can only rely on yourself and work,” Guan said. “When can you stop working? It’s really not until you have to lie in bed and you can’t do anything.”

She now relies on housecleaning gigs, working long days to squirrel away a little money in case of a health emergency. Migrant workers can get subsidized health care in their hometowns, but they have little or no coverage elsewhere. If Guan needs to go to hospital in Beijing, she has to pay out of pocket.

As China’s population ages, so are its migrant workers. About 85 million were over 50 in 2022, the latest year for which data is available, accounting for 29% of all migrant workers and up from 15% a decade earlier. With limited or no pensions and health insurance, they need to keep working.

About 75% said they would work beyond the age of 60 in a questionnaire distributed to 2,500 first-generation migrant workers between 2018 to 2022, according to Qiu Fengxian, a scholar on rural sociology who described her research in a talk last year. The first-generation refers to those born in the 1970s or earlier.

Older workers are being hit by a double whammy. Jobs have dried up in construction due to a downturn in the real estate market and in factories because of automation and the slowing economy. Age discrimination is common, so jobs tend to go to younger people.

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“For young people, of course, you can still find a job, positions are available, though the wage is not high enough,” said Zhang Chenggang of Beijing’s Capital University of Economics and Business, where he directs a center researching new forms of employment.

“But for older migrant workers, there simply are no positions,” said Zhang, who conducted field studies at four labor markets across China late last year. “Now, the problem is that no matter how low the wage is, as long as someone pays, you will take the job.”

Some job recruiters contacted by AP said older workers don’t work well or have underlying illnesses. Others declined to answer and hung up.

Many are turning to temporary work. Zhang Zixing was looking for gigs on a cold winter day late last year at a sprawling outdoor labor market on the outskirts of Beijing.

He said he was fired from a job delivering packages because of his age about three years ago, when he reached 55. In December, he was earning 260 yuan (about $35) a day installing cables at construction sites.

Zhang Quanshou, a village official in Henan province and a delegate to China’s National People’s Congress, said some older migrant workers are just looking for work near their hometowns, while others still head to larger cities.

“Some older migrant workers are finding temporary jobs, so it is important to build the temporary job market and provide a better platform for such services,” Zhang, the Communist Party secretary of the village, said in an emailed response to questions during a recent annual meeting of the Congress.

Guan, who comes from a rice-farming region in the north, worked on a clothing factory assembly line until she was laid off when she was in her 40s. She then worked various jobs in different cities, winding up in Beijing in 2018.

She works seven days a week, partly because she’s afraid labor agencies won’t call again if she turns an offer down.

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Over February’s Lunar New Year holiday, when migrant workers traditionally go home to visit their families, she stayed in Beijing as a caretaker for an elderly woman, because the woman needed help and she needed the money.

“People either want someone who’s educated or young, and I don’t meet either of those requirements,” said Guan, who dropped out after middle school because her parents had only enough money to educate their son. “But then I think, regardless of how other people look at me, I have to survive.”

Guan worries jobs will be even harder to find when she reaches 55. The retirement age for women in China is 50 or 55, depending on the company and type of work. For men, it is 60.

Lu Guoquan, a trade union official, has proposed relaxing age limits for jobs, judging workers by their physical condition instead of their age and making it easier for older people to find work through labor markets and online platforms.

“A large number of farmers have entered cities, making an important contribution to the modernization of our country,” said his proposal, made to an advisory body during the recent national congress and seen by the AP.

As workers grow older, “they are gradually becoming a relatively vulnerable group in the labor market and face a number of thresholds and problems in continuing to work,” it said.

Lu, director of the general office of the All-China Federation of Trade Unions, declined an interview request.

Duan Shuangzhu has spent 25 years collecting trash in one Beijing neighborhood after giving up a life of raising sheep and cows in north China’s Shanxi province when he was in his 40s. He gets up at 3:30 a.m. seven days a week to make his rounds. For that, he earns 3,300 yuan ($460) a month and has a basement room to live in.

Duan’s wife stayed on the farm, where she looks after their grandchildren. Duan has managed to save money for himself, his children and his grandchildren, but never paid into a pension system, directing what little he earns to his family.

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That fits the pattern Qiu found in her research, which she published in a book last year. Older migrant workers moved to the cities to improve the lives of their children and other relatives, not themselves, she found. Most have limited or no savings, and few have climbed the economic ladder. They hoped their children would, but most ended up as migrant workers, too.

Most migrant workers’ earnings were spent on their children’s marriages, homes and education, Qiu said in her talk. “Basically, they did not begin working for themselves and planning for their own late years until the age of 55.”

Duan, at 68, has no plans to quit.

“As long as I can work every day, it’s enough to survive,” he said, standing next to a set of community rubbish bins, color-coded for recycling. “I didn’t grow up in a wealthy family — just filling my stomach each day is enough for me.”

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Associated Press researcher Wanqing Chen contributed to this story.

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