Wednesday, January 26, 2022

[Diplomat] The Dilemma of Hong Kong’s Fixation on Zero COVID

Hong Kong’s obsession with zero COVID is leading it down unproductive rabbit holes — like hamster culling — rather than finding long-term solutions.

In the past couple weeks, Hong Kong’s battle against the COVID-19 pandemic made international headlines in a strange and unexpected way. Facing a virus outbreak in recent weeks, Hong Kong officials implemented a range of measures in response to what was labelled a “fifth wave,” but the one that caught the most attention must be the culling of more than 2,200 hamsters after a COVID-19 case was traced to workers of a pet shop, and traces of the virus were found on 11 hamsters out of the 178 tested.

Authorities then called on the public to turn in their pet hamsters to be culled en masse, in spite of outcry from animal lovers. An expert from the WHO also said that the risk of animals like hamsters infecting humans with the coronavirus “remains low.” So far at least one hamster which was turned in by its owner, as opposed to the previous lot in pet shops, was found to be carrying the virus.

Another recent COVID-19 report that became the talk of the town was how a schoolteacher caught the virus apparently by encountering two other infected people in a subway station tunnel, for a brief period of nine seconds, while all were wearing masks and had no direct contact. Such detective-work in tracing individual cases has become a hallmark of the zero COVID tactics undertaken by Hong Kong authorities ever since the beginning of the COVID-19 outbreak.

The Distraction of the Hamsters

ands of residents in both buildings. Mandatory COVID-19 testing was ordered for hundreds of thousands of citizens across the city, based on contact tracing or just being residents or workers in buildings with confirmed cases. And, in a case of bad timing, all these are happening as the city heads into the Lunar New Year holiday period, traditionally the most festive time of the year. Restaurants have been ordered to reduce capacity and the traditional annual flower markets are cancelled.

Amid the current wave, medical experts continue to emphasize to the public the need for Hong Kong to achieve a higher full vaccination rate – Hong Kong’s fully vaccinated rate of 63 percent is on par with the U.S., but is starkly lower than regional peers such as Taiwan (72 percent), Japan (79 percent), South Korea (85 percent) and Singapore (87 percent). Meanwhile, however, Hong Kong’s experts are also sidetracked into defending government actions such as the culling of hamsters, by partially blaming the mass euthanasia on people who did not get vaccinated.

All these are regrettable distractions in Hong Kong’s fight against COVID-19. The government seems to be trapped in a rabbit hole to justify what Chief Executive Carrie Lam has called the “dynamic zero-infection” strategy, code words for adhering to China’s overall zero COVID approach. The team of government medical advisers continues to correctly stress that, despite the overall lower rate of serious infection from the Omicron variant, the effect on the older population and those with chronic illness may still be severe. However, there is a lack of any effective plan of communication and action to relate such concerns in a way that will convince more of the holdouts to get vaccinated.

Moreover, although most people would agree that getting more Hong Kongers to vaccinate is a good thing, it would be misleading to simply infer that a high vaccination rate would automatically mean zero or even low infection. We can see this from the recent surge of cases in South Korea, one of the countries with the highest vaccination rates.

It is a mismanagement of both policy messaging and public resources to fixate on relatively unproductive matters such as culling hamsters. Instead, in order to protect the most vulnerable, what has the Hong Kong government done to prioritize the protection of senior citizens and directly assist those who are most in need of medical attention? In order to maintain social distancing, rather than or in addition to suspending crowd gatherings such as flower markets, what have the authorities done to effectively encourage or even mandate measures such as working from home? The answer is, very little.

The Urgent Need to Manage the Jump From Zero

As other countries increasingly emphasize the large-scale provision of frequent, voluntary, and free self-testing at home for all, Hong Kong continues to rely on officially mandated compulsory testing drives by having the police round up residents of entire buildings overnight to get all inside tested, causing them much anxiety and discomfort, and thereby creating an undesirable stigma for what should be an effective and fundamental safeguard against infection.

Understandably, going from zero COVID-19 cases to any positive number, however small, would be a big shock. For a population trained and accustomed to the comfort of zero infections for most of the last two years, it can be frightening to accept a new reality of “living with COVID.” That may explain why, while many people in Hong Kong are unhappy and dissatisfied with the government’s responses, they are just as uncomfortable with the concept of treating COVID-19 as endemic, with many expressing shock at the relaxed and “callous” manner with which some in the West regard the COVID-19 virus.

But like it or not, if the rest of the world has decided to “live with COVID,” it will be more and more impractical for any government to insist on a zero COVID stand. This is true for Hong Kong as much as it is true for China. Indeed, the cost of isolation appears to be mounting, with no end in sight. In a recent survey by the American Chamber of Commerce in Hong Kong, 44 percent of the respondents indicated they may leave Hong Kong due to its draconian border controls and social restrictions. Currently, flights from a list of “Group A” countries are suspended, and no individuals who have stayed for more than two hours in any of these countries within the last 21 days will be allowed to enter Hong Kong – even if they are Hong Kong citizens. These countries include Australia, Canada, France, India, Pakistan, the Philippines, the U.K. and the U.S.

Such travel bans are hardly scientific, and even the World Health Organization has recommended against them in a recent report as unsustainable. These border closures can bring dire consequences to the economy, and the interruption to the supply chain of goods and business confidence has already been increasingly felt by local and global businesses. Lam has acknowledged that “rising costs will be felt by everyone.” Nonetheless, the government has offered no alternative, no solution, and no relief.

Zero COVID Is More Politics Than Science

Just as regrettably, criticizing or casting doubts on zero COVID is politically incorrect and a taboo in Hong Kong. Even among the medical community, there is a lack of open discussion in search of a more balanced approach than a practically unattainable and unsustainable target of zero COVID. Only a few medical academics have come out to express doubts over matters such as the lack of scientific reasons to support the 21-days centralized quarantine period for infection, compared with quarantining at home for as short as five days in many other countries. If science is not driving Hong Kong’s COVID-19 response, what is?

The government’s “key goal” is to open its border with mainland China, which would require matching the mainland’s zero CVID stance. This ambition is the real cause of draconian measures, including the hamster culling.

Such is the awkward situation that Hong Kong has found itself in, being an international hub for finance and commerce, yet with no choice but to follow China’s zero COVID obsession. Over the past year, the Hong Kong administration along with the local pro-Beijing politicians – now unopposed after the purging of all opposition from Hong Kong’s political scene – has been adamantly pursuing harsher and harsher domestic measures, purportedly trying to meet Beijing’s requirements for re-opening the border with the mainland. While the re-opening is still denied by Beijing, Hong Kong has instead succeeded in isolating itself from the rest of the world.

The longer Hong Kong holds out before it finds a way to counterbalance its zero COVID deference to Beijing with the real-world costs to its people, the more difficult and the higher the cost it will be for Hong Kong to extract itself from the hole it dug for itself. On the other hand, Beijing should see Hong Kong as the ideal testing ground for an exit plan from zero COVID. After all, Hong Kong’s value is always its differentiation from the mainland, rather than complete integration and sameness.

However, judging from the political development in the last few years, such rethinking on the role of Hong Kong will prove elusive. That’s doubly true in 2022, which is an exceptionally political year for China – with Xi Jinping’s planned ascension to a precedent-breaking third term – and for Hong Kong, with Beijing loyalists jockeying for Beijing’s favor to be anointed as the next chief executive. Under those circumstances, it’s unlikely either Beijing or Hong Kong will take the political risks needed to move away from zero COVID. So, sadly, while many in the rest of the world may see the beginning of the end to the pandemic, Hong Kong, and indeed China, show no signs of moving forward.

Published: The Diplomat, Jan 25 2022

Saturday, December 18, 2021

[FNF] Elections in Hong Kong: What choice do the people have?

On 19 December, HK is electing a new legislative council. This is the election that should have taken place in 2020, and that was postponed amid claims of pandemic concerns. Since then, a new election law has been passed – and people in HK have less of a choice than ever. interviewed MR Charles Mok, a former LegCo Councillor, about this upcoming election, what it means for HK and where the city is going from here. Mr Mok, you were a member of LegCo for several years. How will this newly elected LegCo be different from the LegCo you served in?

Charles Mok: When I served in the Legco between 2012-2020, we had 70 legislators, half of whom (35) were elected from geographical constituency (GC), on a proportional representation basis, and the other half (35) were from various functional constituencies (FC). Among this 35, 30 of them would be the so-called “traditional” FCs, representing professionals such as accountants, doctors, teachers, lawyers, IT workers, etc, as well as business chambers and various industries such as tourism, transportation, etc. Five of the 35 functional constituency seats were the so-called “super district council” seats, who were district councillors nominated and elected by all of the rest of the Hong Kong citizens who did not already hold a traditional FC vote.

Many in Hong Kong have always believed that functional constituency seats are less democratic and should, according to people’s understanding of the Basic Law, Hong Kong’s mini-constitution since the handover in 1997, FCs should be eventually removed and the whole Legco should be directly elected, with every citizen having an equal voting weight.

Now, the Legco is expanded to 90 seats, with only 20 of them directly elected from the geographical district, a reduction of 15 seats (i.e. >42.9%) from before. The 30 traditional FCs remain, but some of them (such as for IT, doctors and nurses) underwent drastic reduction of voter base and limitations of voter eligibility. And then, a newly created Election Committee (EC) constituency was formed with a whooping 40 seats, and they will be simply elected by a Beijing-controlled group of only 1,500 EC members.

The control does not stop here. Candidates must receive a number of nominations from among the Election Committee members, meaning that the EC essentially has a veto power over candidacies. On top of that, a Candidate Eligibility Review Committee was set up to vet and approve all candidates based on criteria including national security consideration. And their decisions are final and not up for any challenge, administratively or by the court. In the running up to this election, some candidates were arrested for holding pre-elections, and a new voting right was introduced in HK. How much of a choice do HKers still have in this election?

Charles Mok: In all previous Legco elections in Hong Kong, ever since there was direct elections held, the pro-democracy camp has won the majority of the geographical constituency, before and after the handover, up until the last Legco election in 2016. This time, all of those pro-democracy candidates who tried to run in the cancelled election in 2020 are no longer candidates. Many of them were among those arrested, detained and awaiting trials. 

For an average citizen in Hong Kong, the number of seats they can vote for and the number of candidates to choose from are both greatly reduced, not to mention that most of those who used to receive the most votes and won the most seats simply cannot run anymore. This election is under the slogan “Patriots only”. What does this mean, and who is a patriot under this definition?

Charles Mok: One of the biggest problems with such a system is that Candidate Eligibility Review Committee is largely opaque and lacks any due process of appeal. In this sense, one can only take it that only those that the Beijing regime considers to be acceptable politically would be considered “patriotic” enough. In democracy theory, an elected government is deemed legitimate because the majority of people that has the right to vote has voted for them. How would you assess the legitimacy of the LegCo that will be elected this Sunday?

Charles Mok: In addition to getting the majority of the votes of the people who have the right to vote, it is as important to have a system where the right to stand as candidates and the right to be elected are also guaranteed and not arbitrarily or overly limited.

It is of course also important that the voting weight of each citizen be equal, and not for some people — by virtue of being a member of either the EC (1,500 voters for 40 seats!) or FC (30 seats) — to have a much larger voting power, and hence a much large representation, than an average citizen who has only one single vote for one of the 20 GC seats, the smallest block in the new Legco of 90 seats.

If we believe that a primary function of the legislature is to monitor the administration, then it would be ludicrous to have the administration control the candidacy and hence the outcomes of the legislature. In your opinion, how does the new election law fit with the freedoms guaranteed in HK’s Basic Law?

Charles Mok: Article 68 of the Hong Kong Basic Law states: “The method for forming the Legislative Council shall be specified in the light of the actual situation in the Hong Kong Special Administrative Region and in accordance with the principle of gradual and orderly progress. The ultimate aim is the election of all the members of the Legislative Council by universal suffrage.”

The government would argue that the current arrangement is just what Hong Kong needs “in light of the actual situation”. However, it is quite clearly not “gradual and orderly progress” toward more democracy and universal suffrage, but rather going in reverse.

Published: Friedrich Naumann Foundation, Dec 17 2021

Welche Wahl haben die Menschen in Hongkong noch?

Am 19. Dezember wird das Hongkonger Parlament, genannt LegCo, neu gewählt. Diese Wahl hätte eigentlich schon 2020 stattfinden sollen, wurde aber mit Verweis auf Bedenken hinsichtlich der Corona Pandemie verschoben. In der Zwischenzeit hat ein neues weitreichendes Gesetz das Wahlrecht der Hongkonger drastisch eingeschränkt. sprach mit Charles Mok, einem ehemaligen Abgeordneten des LegCo, über die bevorstehenden Wahlen, was sie für Hongkong bedeuten und wie es mit der Stadt weitergeht. Herr Mok, Sie waren mehrere Jahre lang Abgeordneter im Legislative Council. Wie wird sich das neu gewählte LegCo von dem unterscheiden, dem Sie damals angehörten?

Charles Mok: Als ich zwischen 2012 und 2020 dem LegCo angehörte, hatten wir 70 Abgeordnete, von denen die Hälfte nach dem Verhältniswahlrecht aus geografischen Wahlkreisen direkt gewählt wurde. Die andere Hälfte wurde aus verschiedenen Fach-Wahlkreisen gewählt. Von diesen 35 Abgeordneten aus den Fach-Wahlkreisen gehören 30 zu den so genannten „traditionellen“ Wahlkreisen. Sie vertreten Berufsgruppen wie Buchhalterinnen und Buchhalter, Ärztinnen und Ärzte, Lehrpersonen, Anwältinnen und Anwälte und IT-Fachkräfte. Sie repräsentieren außerdem Wirtschaftskammern und verschiedene Branchen wie Tourismus und Verkehr. Die restlichen fünf Sitze wurden von all den Bürgerinnen und Bürgern Hongkongs nominiert und gewählt, die nicht in einem der Fach-Wahlkreise wählen durften.

Durch das neue Wahlgesetz wurde das LegCo auf 90 Sitze erweitert. Von diesen werden nun aber nur noch 20 Sitze direkt gewählt, also aus den geografischen Wahlkreisen. Das sind 15 Sitze oder 42,9 % weniger als früher. Die 30 traditionellen Fach-Wahlkreise bleiben bestehen, aber bei einigen von ihnen (zum Beispiel für IT, oder medizinisches Personal) wurde die Anzahl der Menschen drastisch reduziert, die in diesen Fach-Wahlkreisen wahlberechtigt sind. Zusätzlich wurde ein neuer „Wahlkreis des Wahlausschusses“ geschaffen. Aus diesem Wahlkreis werden ganze 40 Sitze besetzt. Gewählt werden die Abgeordneten für diese Sitze von den 1.500 Mitgliedern des Wahlausschusses, der von Peking kontrolliert wird.

Doch die Kontrolle hört hier nicht auf. Alle Kandidatinnen und Kandidaten müssen von den Mitgliedern des Wahlausschusses eine bestimmte Anzahl von Nominierungen erhalten. Das bedeutet, dass der Wahlausschuss im Wesentlichen ein Vetorecht hinsichtlich der Kandidaturen hat. Darüber hinaus wurde ein Ausschuss zur Überprüfung der Wählbarkeit der Kandidatinnen und Kandidaten eingesetzt. Dieser überprüft alle Kandidaturen anhand von Kriterien wie der nationalen Sicherheit und genehmigt sie – oder lehnt sie ab. Die Entscheidungen des Wahlausschusses sind endgültig und können nicht angefochten werden. Inwieweit haben die Bürger von Hongkong bei dieser Wahl noch eine Wahl?

Charles Mok: Bei allen bisherigen LegCo Wahlen in Hongkong, also seit es Direktwahlen gibt, hat das prodemokratische Lager die Mehrheit der direkt gewählten geografischen Wahlkreise gewonnen. Und zwar sowohl vor als auch nach der Machtübergabe! Bei der anstehenden Wahl steht keiner der prodemokratischen Kandidatinnen und Kandidaten, die versucht haben, bei der abgesagten Wahl 2020 anzutreten, mehr zur Wahl. Viele von ihnen wurden festgenommen, inhaftiert und warten auf ihren Prozess.

Für den Durchschnittsbürger in Hongkong ist die Zahl der Sitze, für die er seine Stimme abgeben kann, und die Zahl der Kandidatinnen und Kandidaten, die zur Auswahl stehen, stark reduziert. Diese Wahl steht unter dem Slogan „Nur Patrioten“. Was bedeutet das, und wer ist nach dieser Definition ein Patriot?

Charles Mok: Eines der größten Probleme bei einem solchen System ist, dass der Ausschuss zur Überprüfung der Wählbarkeit der Kandidaten weitgehend undurchsichtig ist und es an einem ordnungsgemäßen Berufungsverfahren fehlt. In diesem Sinne kann man nur annehmen, dass nur diejenigen, die das Pekinger Regime für politisch akzeptabel hält, als „patriotisch“ genug angesehen werden. Wie würden Sie die Legitimität des LegCo einschätzen, welches am Sonntag gewählt wird?

Charles Mok: Für Legitimität ist nicht nur wichtig, die Mehrheit der Stimmen der Wahlberechtigten zu bekommen. Es muss auch ein System existieren, in dem das passive Wahlrecht garantiert ist und nicht willkürlich oder übermäßig eingeschränkt wird.

Es ist natürlich auch wichtig, dass jede Stimme gleich viel wert ist. In Hongkong ist das nicht so. Die Mitglieder im neu geschaffenen „Wahlkreis des Wahlausschusses“ (1.500 Wählerinnen und Wähler für 40 Sitze!) haben ein viel größeres Stimmgewicht als diejenigen, die nur eine Stimme für einen der 20 geographischen Wahlkreis-Sitze haben, dem kleinsten Block im neuen LegCo.

Wenn wir davon ausgehen, dass eine der Hauptaufgaben der Legislative darin besteht, die Verwaltung zu kontrollieren, dann ist es absurd, dass die Verwaltung die Kandidaturen und damit die Ergebnisse der Legislative kontrolliert. Wie passt das neue Wahlgesetz Ihrer Meinung nach mit den im Basic Law von Hongkong garantierten Freiheiten zusammen?

Charles Mok: In Artikel 68 des Hongkonger Grundgesetzes Basic Law heißt es: „Die Methode zur Bildung des LegCo wird unter Berücksichtigung der tatsächlichen Verhältnisse in der Sonderverwaltungszone Hongkong und nach dem Grundsatz des schrittweisen und geordneten Fortschritts festgelegt. Das Endziel ist die Wahl aller Mitglieder des Legislativrats durch allgemeine Wahlen.“

Die Regierung argumentiert, dass die derzeitige Regelung genau das ist, was Hongkong „angesichts der tatsächlichen Situation“ braucht. Es handelt sich jedoch ganz eindeutig nicht um einen „allmählichen und geordneten Fortschritt“ hin zu mehr Demokratie und allgemeinem Wahlrecht, sondern eher um einen umgekehrten Weg.

German version:

Thursday, December 09, 2021

[WSJ] Hong Kong Listing Means More Trouble for Didi

'National Security' laws allow Beijing to operate with impunity, free from foreign regulatory scrutiny. 

By Dennis Kwok and Charles Mok

The announcement that Didi Chuxing, China’s leading ride-hailing company, intends to delist its shares from the New York Stock Exchange sent shock waves through the global financial markets and investment community. Didi’s plan is to relist on the Hong Kong Stock Exchange, allowing investors who bought shares on the NYSE to swap them for shares if and when there is a Hong Kong listing.

Less than six months ago, Didi raised billions of dollars from U.S. pension funds and international investors in a much-hyped initial public offering in New York. Yet on July 2, soon after the New York listing, Beijing’s Cyber Administration announced an investigation into Didi for potential violations of the country’s Data Security Law.

Under Chinese security laws, the definition of national security is broad and vague. The laws purport to cover all key industries, culture, infrastructure, cybersecurity and data. Under Xi Jinping’s leadership, the country is increasingly obsessed with national security. Even a film or a children’s textbook could be a threat to national security.

Adopted in June 2021, the Data Security Law covers pretty much anything. This new layer of regulatory control, when combined with the Cybersecurity Law and the Personal Information Protection Law, makes it almost impossible for any company, domestic or international, to comply fully with Chinese legal requirements.

Mr. Xi and other leaders in Beijing have long expressed the need for cybersecurity, data localization and control. In public speeches in 2016 and in 2018, Mr. Xi repeatedly stressed the need for the Chinese state to strengthen cybersecurity and data security, and urged all officials to grasp firmly the opportunities brought about by “informatization,” meaning the centralization and harnessing of data. Mr. Xi saw the lack of control in these areas as a threat to national security. To allow foreign regulators access to the data held by Didi presents an unacceptable risk.

These legal and regulatory risks won’t disappear simply by relisting in Hong Kong. The Hong Kong National Security Law also doesn’t clearly define “national security.” When Hong Kong’s chief secretary outlined the scope of national security in an article published in April, it was as wide as on the mainland.

The Cyber Administration in Beijing recently added a new requirement for listings in Hong Kong. All companies must satisfy a cybersecurity review if they “affect or may affect national security.” Listing in Hong Kong means Beijing could readily enforce its laws and regulations over Chinese companies while avoiding scrutiny by foreign regulators. Last week, the U.S. Securities and Exchange Commission mandated that all Chinese companies listed on U.S. exchanges disclose their ownership or control by any government entities.

The complex web of Chinese laws and regulations allows Beijing to operate with impunity, since it can find a violation by almost any company. This is in addition to the legal risks surrounding the structure known as the variable-interest entity. The National Security Law in Hong Kong imposes a legal duty on all organizations and individuals to “safeguard national security.” This includes the Hong Kong Stock Exchange and securities regulators such as the Securities and Futures Commission. Even if Hong Kong regulators give their green light for Didi to relist, nothing prevents the authorities from future crackdowns in the name of national security.

“Fool me once, shame on you. Fool me twice, shame on me.” Didi has no choice, but the international investment community should think twice before getting fooled again.

Mr. Kwok is a senior fellow at the Harvard Kennedy School’s Ash Center. Mr. Mok is founder and director of Tech for Good Asia. Both served as members of the Hong Kong Legislative Council, 2012-20.

Published: The Wall Street Journal, Dec 8 2022

Monday, November 15, 2021

[FNF] How China Defines Human Rights

On September 9, 2021, the Information Office of China's State Council, basically the country's government cabinet, released a document titled: "Human Rights Action Plan of China (2021-2025)" , that is, an action plan on human rights in China. Despite the title, the paper received little international attention. Other issues dominated the headlines, such as the People's Republic's real estate and energy crisis and Beijing's military aggression against Taiwan. But it is worth paying attention to the action plan. After all, the leadership in Beijing is using it to try to counter the Western definition of human rights.

China has issued several such action plans since 2009. Now, however, the paper testifies to the expanded scope and increased self-confidence of a regime that wants to rise to become a technocratic autocracy with global influence.

The Chinese narrative on human rights in the action plans is rather defensive. The "livelihood security" of the people is placed above individual rights. Occasionally, the authors denounce Western failures such as racial discrimination and criminal cases. On the Chinese side, on the other hand, success in building "moderate prosperity" in society is celebrated as proof of the CP's human rights achievements.

The issue is overloaded: Everything is "human rights"

An examination of the six sections of “rights” in the action plan will reveal a lot about China’s motivation, justification and narrative. The first section on “economic, social and cultural rights” and the third section on “environmental rights” are essentially long lists of actions to guarantee the rights to basic livelihood, to work, and in health and education, as well as for a green and sustainable development. The long list is detailed and includes matters such as food and water supply to earthquake-safe housing, from workers retraining to coal mining safety, and of course environmental protection. It even sets a target to limit short-sightedness among students to under 65 percent, as a matter of human rights.

Like recapping a mini “state of the union,” the ruling regime predictably continues to place the economic development of the entire society ahead of the basic rights of individuals. To put this into perspective, if these measures can be claimed to constitute basic human rights protections, then the whole annual federal budget of any country might as well be lauded as “human rights achievements” by that government, which may not be entirely wrong, but night serve to diffuse the attention on real human rights problems.

Voters to be "mobilized"

The second section of the action plan, “civil and political rights,” most notably spelt out some of the proposed protections for individuals’ judicial, electoral, religious and other rights. For instance, a proposal to reduce custody periods before trials for the defendants contrasts greatly the current reality in post-National Security Law Hong Kong where large number of individuals were denied bail and held in custody for more than half a year or even longer than one year for some. Obviously the real situation is even worse in the Mainland of China. While there may be some attempts at judicial reforms to tackle this problem at the local level for non-political crimes, it is unlikely that there has been any re-awakening for self-restraint at the central government level for the plenty of those accused of charges of national security or political natures. After all, it goes without saying that any matters that the ruling regime considers to be national security in nature would be dealt with above any other laws or legal, including human rights, protections.

In this section, under electoral rights, China will also target to “mobilise” its more than 1 billion voters to participate in the upcoming elections at all levels. That will easily make China the largest “democracy” in the world, although the document never used that particular word. On the other hand, this shows China’s confidence to manifest people’s participation to achieve the justification for the regime’s rule under its “one-party” constitutional confines, using all the mechanisms that are being tested and carried out right now in Hong Kong and Macau to vet, disqualify and detain undesirable candidates before they can stand to run.

However, the fourth section on “protecting the rights of particular groups” lacks the same level of details and setting of goals to achieve as in other sections. These “particular groups” include minorities, women, children, elderlies and the physically challenged. Most notably, for the section on minorities, the stated objective is to “perfect the regional autonomous rule system, consolidate the unified Chinese cultural agenda, support faster development of regions of minority races, and protect the lawful rights of minorities.” In other words, it is akin to a colonial statement of rule rather than protecting minority self-rights or even against discrimination. Also missing, of course, are the LGBTQ+ community among these “particular groups” to be protected.

The long goal: Redefine global human rights standards

Having defined the scope and itemised the Chinese human rights action plan, the last two sections “human rights education and research” and “participating in global human rights governance” shows China’s will to expand the influence of its human rights narrative both domestically and internationally. The regime is confident enough not to completely avoid the discussion of the human rights issue domestically, and at the same time go on the offensive to advocate this vision globally, redefining the basic ideals, principles and priorities of human rights, through “thorough participation in the United Nations’ human rights organization, taking a leadership and constructive role to ensure the healthy and sustainable development of international human rights.”

While one may be easily tempted to write off China’s narrative as self-gratification, the serious global observers would do better by understanding and realising the immense appeal of this narrative to the masses in China as well as many in other countries in the world, from developing nations to even western countries with liberal democracy traditions. As the west continues to be stuck in a quagmire stemming from a combination of ineffective political leadership, divisive politics, racial tensions, COVID-19 and more, China, having absolute control in all aspects political, economic and social, and with its vast market potentials for profits to offer, has its appeal to become the dominant source of political philosophy of the next century — at least so its leaders have come to confidently believe.

The global observers must seek to respond to this Chinese human rights narrative by focusing on its diversion from real protections for individuals’ rights to regime-building exercise for autocracy and the monopoly on truth. This response may well borrow from the last two chapters of the Chinese action plan to include education and research on these contrasting views on human rights, and challenging to take leadership in global human rights governance, including United Nations and beyond.

The Chinese human rights narrative reinterprets the protection of individual rights as a prop for autocracy. While China helped develop the United Nations Universal Declaration of Human Rights (UDHR) and even ratified the International Covenant on Social, Economic and Cultural Rights, China's actual policies are markedly different: Beijing states that it “will promote the free, well-rounded and common development of all individuals as the general goal — that is, “all individuals” as a group. This allows the ruling regime to redefine such common wellbeing for all to be one conducive to consolidate its own absolute rule, in a society already devoid of democratic institutions and judicial independence, with little regard for the “inalienable rights” of each individual member of society that is supposed to be protected by the UDHR.

Yet, the confidence demonstrated by the Chinese leadership in advocating these new global standards — similar to the recent populist crackdown on big businesses and persons of influence including entertainers — stems from the perception of their own success in stoking domestic nationalist fervors in a highly controlled society with relatively stable economic conditions. This is obviously a model of governance and the human rights narrative that China looks to export to the rest of the world where democratic institutions are lacking, or those nations whose rulers wish to follow China’s authoritarian control on political power, by adopting new laws on “national security,” “foreign interference” and other measures to legitimise their autocratic systems.

In the end, it must be reiterated that without objective, meaningful and enforceable legal and constitutional protections for individuals’ rights, including a bill of rights for every citizen, backed up by an independent judiciary and real rule of law, any talk about human rights agenda is not standing on firm ground. Any other ways to redefine human rights are simply attempts to hijack the cause.

Published: Friedrich Naumann Foundation, Nov 15 2021

Wie China Menschenrechte definiert
Aktionsplan aus Peking

Der Führung in China werden immer wieder Menschenrechtsverletzungen vorgeworfen, etwa im Zusammenhang mit den Lagern für Uiguren in Xinjiang. Peking wehrt sich dagegen – und hat einen Aktionsplan für Menschenrechte in der Volksrepublik für die nächsten Jahre vorgelegt. Das Papier verrät viel über Chinas Motivation, Rechtfertigung und Narrativ.

Am 9. September 2021 veröffentlichte das Informationsbüro des chinesischen Staatsrats, im Grunde das Regierungskabinett des Landes, ein Dokument mit dem Titel: "Human Rights Action Plan of China (2021-2025)" , also einen Aktionsplan zum Thema Menschenrechte in China. Trotz des Titels bekam das Papier kaum internationale Aufmerksamkeit. Andere Themen bestimmten die Schlagzeilen, etwa die Immobilien- und Energiekrise der Volksrepublik und die militärische Aggression Pekings gegenüber Taiwan. Es lohnt sich aber, dem Aktionsplan Beachtung zu schenken. Denn die Führung in Peking versucht damit, die westliche Definition der Menschenrechte zu konterkarieren.

China hat seit 2009 mehrere solche Aktionspläne herausgegeben. Nun zeugt das Papier aber vom ausgeweiteten Geltungsbereich und dem gesteigerten Selbstvertrauen eines Regimes, das sich zu einer technokratischen Autokratie mit globalem Einfluss aufschwingen möchte.

Das chinesische Narrativ zum Thema Menschenrechten in den Aktionsplänen ist eher defensiv. Die „Existenzsicherung“ des Volkes wird über die Rechte des Einzelnen gestellt. Gelegentlich prangern die Verfasser westliche Versäumnisse wie Rassendiskriminierung und Kriminalfälle an. Auf chinesischer Seite wird hingegen der Erfolg beim Aufbau eines “moderaten Wohlstands" in der Gesellschaft gefeiert als Beweis für die Errungenschaften der KP im Bereich der Menschenrechte.

Das Thema wird überfrachtet: Alles ist "Menschenrechte"

Eine genauere Untersuchung der sechs Kapitel des neuen Aktionsplans verrät viel über Chinas Motivation, Rechtfertigung und Narrativ. Das erste Kapitel über "wirtschaftliche, soziale und kulturelle Rechte” und das dritte Kapitel über "Umweltrechte" sind im Wesentlichen lange Listen von Maßnahmen zur Gewährleistung der Rechte auf eine gesicherte Existenzgrundlage, auf Arbeit, auf Gesundheit und Bildung sowie auf eine grüne und nachhaltige Entwicklung. Die Liste ist detailliert und umfasst Themen von der Lebensmittel- und Wasserversorgung bis zu erdbebensicheren Wohnungen, von der Umschulung der Arbeitnehmerinnen und Arbeitnehmern bis zur Sicherheit im Kohlebergbau und natürlich dem Umweltschutz. Sogar das Ziel, die Kurzsichtigkeit unter Schülerinnen und Schülern auf unter 65 Prozent zu begrenzen, wird als eine Frage der Menschenrechte bezeichnet.

Wie bei einer kleinen “Rede zur Lage der Nation" stellt Peking weiterhin die wirtschaftliche Entwicklung der gesamten Gesellschaft über die Grundrechte des Einzelnen. Zum Vergleich: Wenn diese Maßnahmen als grundlegender Schutz der Menschenrechte gelten, könnte der gesamte Jahreshaushalt eines Landes als "Errungenschaften im Bereich der Menschenrechte" der jeweiligen Regierung gepriesen werden. Das ist vielleicht nicht ganz falsch, könnte aber dazu dienen, die Aufmerksamkeit von den tatsächlichen Menschenrechtsproblemen abzulenken.

Wähler sollen „mobilisiert“ werden

Das zweite Kapitel des Aktionsplans, "bürgerliche und politische Rechte", enthält vor allem vorgeschlagene Maßnahmen zum Schutz der gerichtlichen, wahlrechtlichen, religiösen und sonstigen Rechte des Einzelnen. Doch steht beispielsweise der Vorschlag, die Dauer der Untersuchungshaft für Angeklagte zu verkürzen, in starkem Kontrast zur derzeitigen Realität in Hongkong, wo seit Mitte 2020 das sogenannte Nationale Sicherheitsgesetz gilt. Behörden haben dort vielen Beschuldigten eine Kaution verweigert. So saßen sie mehr als ein halbes Jahr im Gefängnis, manche sogar länger als ein Jahr. Auf dem chinesischen Festland ist die Situation noch schlimmer. Es mag zwar einige Versuche geben, lange Untersuchungshaft auf lokaler Ebene durch Justizreformen für nichtpolitische Straftaten zu verkürzen. Doch in Anbetracht der vielen Menschen, die wegen vermeintlicher Vergehen gegen die nationale Sicherheit oder anderer politischer Straftaten angeklagt sind, kann von struktureller Verbesserung keine Rede sein. Schließlich versteht es sich von selbst, dass in China Gesetze zur nationalen Sicherheit über allen anderen Gesetzen und rechtlichen Bestimmungen stehen, einschließlich des Schutzes der Menschenrechte.

Unter dem Punkt „Wahlrecht“ will China anstreben, seine mehr als eine Milliarde Wählerinnen und Wähler zur Teilnahme an den bevorstehenden Wahlen auf allen Ebenen zu "mobilisieren". Damit wird China mit Leichtigkeit zur größten "Demokratie" der Welt, obwohl dieses Wort in dem Dokument nie verwendet wird. In Wahrheit will das Regime seine Herrschaft im Rahmen seiner "Einparteien"-Verfassung rechtfertigen. Die Mechanismen, das zu erreichen, sind bereits in Hongkong und Macau erprobt und angewandt. Dort werden unerwünschte Kandidaten überprüft, disqualifiziert und manchmal sogar in Gewahrsam genommen, bevor sie sich zur Wahl stellen können.

LGBTQ+-Gemeinde nicht unter "besonderen Gruppen", die geschützt werden sollen
Das vierte Kapitel über den "Schutz der Rechte bestimmter Gruppen" ist weitaus weniger detailliert und mit deutlich weniger Zielvorgaben versehen als die anderen Kapitel. Zu den "besonderen Gruppen” gehören Minderheiten, Frauen, Kinder, ältere Menschen und Menschen mit körperlichen Behinderungen. Es wird vor allem das Ziel genannt, "das System der regionalen Selbstverwaltung zu vervollkommnen, die einheitliche chinesische Kulturagenda zu konsolidieren, die schnellere (wirtschaftliche) Entwicklung der Regionen der Minderheitenvölker zu unterstützen und die gesetzlichen Rechte der Minderheiten zu schützen". Das Kapitel gleicht eher einer kolonialen Herrschaftserklärung als einer Erklärung zum Schutz der Selbstrechte von Minderheiten oder gar zum Schutz vor Diskriminierung. Die LGBTQ+ Gemeinde fehlt unter diesen "besonderen Gruppen", die geschützt werden sollen.

Das langfristige Ziel: Die globalen Menschenrechtsstandards neu definieren

Die letzten beiden Kapitel "Menschenrechtserziehung und -forschung" und "Beteiligung an der globalen Menschenrechtspolitik" zeigen den Willen Chinas, den Einfluss seines Menschenrechts-Narratives sowohl im eigenen Land als auch auf internationaler Ebene auszuweiten. Das Regime ist selbstbewusst genug, um die Diskussion der Menschenrechtsfrage im Inland nicht völlig zu vermeiden. Gleichzeitig geht es in die Offensive: China formuliert eine globale Vision durch neue Definitionen grundlegender Ideale, Prinzipien und Prioritäten der Menschenrechte. Dieses Ziel will China erreichen durch "gründliche Beteiligung an der Menschenrechtsorganisation der Vereinten Nationen, durch die Übernahme einer führenden und konstruktiven Rolle, um eine gesunde und nachhaltige Entwicklung der internationalen Menschenrechte zu gewährleisten."

Dieses Ziel könnte leicht als Selbstgefälligkeit abgetan werden. Jedoch darf die immense Anziehungskraft des chinesischen Narratives nicht außer Acht gelassen werden – sowohl auf die Menschen in China wie auch auf Bürgerinnen und Bürger vieler anderer Länder der Welt, von Entwicklungsländern bis hin zu westlichen Ländern mit liberalen demokratischen Traditionen. Während der Westen weiterhin vermeintlich in einem Sumpf feststeckt, der aus einer Kombination von ineffektiver politischer Führung, spaltender Politik, Rassismus, COVID-19 und vielem mehr entstanden ist, hat China mit seiner absoluten Kontrolle in allen politischen, wirtschaftlichen und sozialen Aspekten und mit seinem riesigen Marktpotenzial enorme Anziehungskraft. Diese könnte es zur vorherrschende Quelle für die politische Philosophie des nächsten Jahrhunderts werden lassen – zumindest ist die Führung in Peking zuversichtlich, dass dies so sein wird.

Export-Modell für Staatsführung und für das Menschenrechts-Narrativ

Das chinesische Narrativ der Menschenrechte deutet den Schutz der Rechte des Einzelnen zu einer Stütze für die Autokratie um. Während China die Allgemeine Erklärung der Menschenrechte der Vereinten Nationen (AEMR) mit entwickelt und den Internationalen Pakt über soziale, wirtschaftliche und kulturelle gar ratifiziert hat, ist Chinas tatsächliche Politik deutlich anders: Peking erklärt, dass es "die freie, umfassende und gemeinsame Entwicklung aller Individuen als allgemeines Ziel fördern wird" – "alle Individuen" werden damit quasi zur Gruppe. Dies ermöglicht es der Führung, dieses gemeinsame Wohlergehen für alle so umzudefinieren, dass es der Festigung seiner eigenen absoluten Herrschaft dient. Und das in einem Staat, in der es bereits keine demokratischen Institutionen und keine Unabhängigkeit der Justiz mehr gibt, und in dem die "unveräußerlichen Rechte" jedes einzelnen Mitglieds der Gesellschaft, die durch die AEMR geschützt werden sollen, wenig Beachtung finden.

Die Zuversicht, mit der die chinesische Führung für diese neuen globalen Standards eintritt, beruht auf der Einschätzung, dass es ihr gelungen ist, in einer stark kontrollierten Gesellschaft mit relativ stabilen wirtschaftlichen Verhältnissen nationalistische Begeisterung zu schüren. Dies ist offensichtlich ein Modell für Staatsführung und für das Menschenrechts-Narrativ, das China in den Rest der Welt exportieren will, und zwar vor allem dorthin, wo demokratische Institutionen fehlen. Oder in jene Nationen, deren Herrscher Chinas autoritärer Kontrolle der politischen Macht folgen wollen, indem sie neue Gesetze zur "Nationalen Sicherheit", gegen “Ausländischen Einmischung" und andere Maßnahmen zur Legitimierung ihrer autokratischen Systeme verabschieden.

Fest steht, dass jede Debatte über eine Menschenrechtsagenda auf wackligen Beinen steht ohne einen objektiven, sinnvollen und durchsetzbaren rechtlichen und verfassungsmäßigen Schutz der Rechte des Einzelnen, einschließlich einer Charta der Rechte für jeden Bürger, die durch eine unabhängige Justiz und echte Rechtsstaatlichkeit gestützt wird. Jede Art, die Menschenrechte neu zu definieren, ist lediglich ein Versuch, sie für die eigenen Zwecke zu kapern.

German version:

Wednesday, November 03, 2021

[Diplomat] China’s Neo-Nationalism Poses Risks for International Businesses

Companies and firms that used to straddle both the West and China with ease – like LinkedIn and Mayer Brown – are now finding themselves in uncharted territory.

By Charles Mok and Dennis Kwok

November 02, 2021

The policies and regulatory decisions coming out of Beijing nowadays show that nothing is too big or too small for the Chinese state to exert control over. Critics of the film “The Battle of Changjin Lake,” a film that glorifies the Korean War against the United States, promptly faced criminal prosecution for dishonoring national heroes. The launch of a new product by Sony was heavily fined by the Chinese authorities for coinciding with the anniversary of the Marco Polo Bridge incident in 1937, marking the Japanese invasion of China. The rise of neo-nationalism within the country increasingly drives the many actions taken by the state against the private sector.

This wave of Chinese neo-nationalism is increasingly putting international firms and companies in a precarious position. Companies and firms that used to straddle both the West and China with ease are now finding themselves in uncharted territory.

In October, the U.S. law firm Mayer Brown accepted instructions to act on behalf of its client, the University of Hong Kong, in its attempt to remove the statue “The Pillar of Shame” from the campus. The statue was put there nearly a quarter of a century ago to commemorate the Tiananmen Massacre in 1989. It was not only a fixture but also a symbol of freedom in the campus of Hong Kong’s oldest university. The institution helped nurture the likes of Dr. Sun Yat-sen, Professor Benny Tai, and Edward Leung, who fought for democracy and freedom (the latter two are now both in jail). After outcry overseas, Mayer Brown eventually and rightly withdrew its representation from the University of Hong Kong. This in turn led to angry pro-Beijing politicians in Hong Kong calling on all Chinese firms to boycott Mayer Brown. The firm has a long history in China with many clients in the region.

Another global company facing the same dilemma of staying in the China market under increasing pressures would be the career-oriented social network LinkedIn. On October 14, Microsoft, which owns and operates LinkedIn, announced its decision to cease its present LinkedIn China service by the end of the year, citing a “significantly more challenging operating environment and greater compliance requirements in China.”

In March of this year, China’s internet regulator, the Cyberspace Administration of China (CAC), told LinkedIn to improve its content moderation — i.e. censorship in China’s context — and the company was ordered to temporarily halt registration of new users. Since then, scores of scholars and journalists have seen their profiles blocked in China, and an outcry from affected users ensued on social media all over the world.

But such censorship is hardly anything new for LinkedIn, which has operated in China since 2014 under a joint venture arrangement with its Chinese partners. For years, LinkedIn was an exemplary case of a model favored by Chinese authorities, so as to maintain operational, financial, and data control on internet services provided by foreign companies. Since the beginning, LinkedIn users have found that certain content is blocked in China, and some users were even summarily told that their posts would not be seen in China. One of the authors of this piece received notices from LinkedIn back in 2014, when the company admitted users’ “public activity visibility” in China would be limited under “specific requirements within China to block certain content.” In short, it was a notice that a user’s posts are banned in China.

Western media and politicians would probably have continued to turn a blind eye to such practices, but their hands were forced thanks in part to China turning up the heat in its recent campaign against other Chinese internet and tech companies. It began last year with actions targeting Ant Financial and Tencent, and continued this summer with action against Didi Chuxing for its IPO in New York. A Yahoo Finance app was recently taken down in China in an attempt to control financial news about China’s economy and markets.

However, it must be pointed out that many Western reports have mistakenly characterized LinkedIn’s move as an “exit” from the China market, comparing it with Google’s termination of its search engine business in China in 2020. Such comparison are inaccurate, given that the company also said it would replace its existing service with a new recruitment-only portal called InJobs, without the fuss of news and social networking, for its Chinese mainland users. In fact, LinkedIn’s China chief issued a “clarification” on the same day of its headquarters’ global announcement, but in China only. On Weibo, China’s Twitter-like service, he reassured Chinese users that LinkedIn was not leaving China, and would focus on providing value in “connecting job opportunities” for users in China, with InJobs. This “for-China-only” message apparently was not made available in English and hence was largely overlooked by Western media, which chose to report on the company’s move as an “exit.”

In any case, LinkedIn’s move casts doubt on the business environment for foreign companies in China, and in particular the viability of the Chinese joint venture model for service operations in China by foreign firms – the same model that LinkedIn excelled in before its demise. Microsoft’s cloud service, Azure, and its Office 365 and Dynamics 365 platforms still operate with a local joint venture partner in China, and so does its chief global cloud competitor, Amazon’s AWS, with its own local Chinese partners. Likewise, Apple operates its iCloud service for Chinese users at its data center in Guizhou province with another local Chinese partner. Will the “more challenging environment” and “greater compliance requirements” LinkedIn pointed to cause these Western tech giants to also reconsider their China-based operations? Time will tell, and it may not take very long.

China’s Data Security law creates a new layer of data called “national core data.” As defined by Article 21, this category consists of data that is vital to national security, national economy, people’s livelihood, and major public interest. A more stringent regulatory system is in place to regulate this “core data.” Intermediaries who deal with such core data are also subject to strict regulations. Given the broad definition of this new category of “core data,” many forms of data held by international firms would be subject to this stringent regulatory system.

The same applies to Wall Street finance firms that are moving more of their operations and investments into China. The financial data held by these firms would likely be subject to regulation as “core data” given that financial security is a key part of national security as pointed out by Xi Jinping in a 2017 speech. In addition, the process of data export management would be subject to the Cybersecurity Law and require approvals from the relevant authorities in China. Foreign firms who wish to export data stored in China to overseas servers or branches would be well advised to follow such legal requirements. Fines could go up to 10 million renminbi plus criminal liabilities may follow, putting China-based employees directly at risk.

From the point of view of the Chinese Communist Party (CCP), the main political motivation behind enacting such laws is to manage and control data security that poses a potential threat to national security. The fear is that if foreign governments and regulators could obtain access to these data, they could be used against the Chinese state. The other aim is to rein in domestic tech firms that have grown too big and too powerful which threatens the position of Xi and the CCP, as well as foreign tech firms that the regime would trust even less.

With the recent reappearance of Jack Ma in Hong Kong and Europe, many wonder whether this is a sign that the recent waves of controls and regulatory actions by the CCP on the private sector will ease up. Wall Street is divided on whether to invest in or avoid the China market, with major firms such as Blackrock and UBS recommending investors to double down on China.

Another developing front for companies invested in China is increased pressure from the West stemming from a new emphasis on environmental, social, and governance (ESG) factors. Many international firms and companies have signed on to ESG pledges. Traditionally, however, very little attention has been paid to the “S,” including human rights considerations. There is now the beginning of a conversation to change this.

Speaking at Hong Kong Watch’s report launch at the Conservative Party Conference on Sunday evening, Baroness Helena Morrissey, the chair designate of AJ Bell, recently spoke about why ESG investors must start taking their human rights commitments seriously, particularly in the context of China.  Morrissey said it is time to “call out investor hypocrisy” and that investors must “rethink their dealings in areas where there are clear human rights abuses.” She referred to a range of international standards to illustrate that investors have a responsibility to protect human rights, including the U.N. principles for responsible investing, the U.N. Guiding Principles on Business and Human Rights, the elaboration in 2017 of a reporting framework on business and human rights, and just over a year ago, the development of further guidance for investors.

From now leading up to the National People’s Congress of March 2022, we predict that Xi will continue to drive up nationalism by using populist policies against private enterprises. Political considerations for the CCP would be paramount, trumping economic ones. Foreign firms would find themselves ever more at risk in this new market environment, as they continue to be squeezed between the West and China.

Published: The Diplomat, November 2 2021 

Wednesday, September 15, 2021

[Diplomat] The Downfall of Hong Kong’s Privacy Law

Instead of protecting citizens’ privacy, Hong Kong’s latest privacy law amendment is all about anti-doxxing. How did we get here?

Doxxing – exposing previously private personal information to the public without consent, often over the internet – has become a familiar but harmful and irreversible tactic by groups holding a grudge against one another. During the 2019 Hong Kong protests, both sides engaged in doxxing to inflict harms on the other: protesters against the police and their families, and pro-government supporters against the protesters and their supporters.

Complaints from both sides were lodged to the Office of the Privacy Commissioner for Personal Data (PCPD), Hong Kong’s privacy regulator. But in most cases, as most of the exposed content was placed on servers or services outside of Hong Kong, the regulator lacked the extraterritorial jurisdiction to order takedowns.

So, on July 21, the Hong Kong government tabled amendments to the Personal Data (Privacy) Ordinance (PDPO) to deal with doxxing. The bill is expected to be passed by October.

But the reactions from global “big tech” players were quick and negative. The Singapore-based Asia Internet Coalition – an industry group representing major American tech players such as Apple, Amazon, Facebook, Google, LinkedIn, and Twitter – wrote to the Hong Kong government to express its concerns about the law “putting their staff at risk of criminal investigations or prosecutions” for what their users post online. Media headlines flashed around the world that these companies threatened to leave Hong Kong should the new law be passed.

While a complete pull-out is highly unlikely, these companies’ reaction was high-profile enough that the privacy commissioner met with their representatives in an online meeting shortly afterwards in order to assuage their concerns. However, Hong Kong Chief Executive Carrie Lam took a tougher stance, insisting the companies’ worries were unwarranted, and they would be “proved wrong” as the new law takes effect, just as “the national security law did not lead to situations as described by people who smeared it.”

From First to Last

Hong Kong’s PDPO was first passed in 1995, and took effect from December 1996, shortly before the territory’s handover to China. It was proudly one of Asia’s earliest comprehensive privacy protection laws. The establishment of an independent regulator ensured its regulatory decisions would be made at arms’ length from the administration.

This independence was evident in an early investigation into the Xinhua News Agency, China’s de facto representative in Hong Kong prior to the handover. Right after the law’s enactment, an opposition legislator, Emily Lau, requested Xinhua to disclose any records it kept on her. The agency ignored her beyond the legally required period of 40 days to respond. The PCPD investigated, and only then did Xinhua send Lau a one-line reply, claiming that it kept no records on her.

Remarkably, in February 1998, just over half a year after the handover, the PCPD referred the case to Hong Kong’s secretary for justice for possible prosecution, although the secretary decided not to prosecute. That was 23 years ago. At least the regulator seemed to have tried.

Over Two Decades of Inaction

Hong Kong’s government has a tradition of introducing new laws with a “gradual progress” approach, being light-handed at first and refraining from harsh punishments in order to allow those affected, especially the business sector, to “have time to adjust.” The PDPO was no exception. The law lacked a mandatory breach notification requirement; fines for data breaches were low to non-existent, and the regulator had insufficient power to investigate and prosecute.

In the first version of the law, in case of a data breach incident, the regulator could only issue an “enforcement notice,” which directed the entity involved to take remedial steps. If it happened again, all the regulator could do was to issue yet another enforcement notice.

It was only almost 15 years after the law’s first passage, in 2010, that the government proposed and later passed a law imposing a fine of HK$50,000 (US$6,410), or up to two years’ imprisonment, if a firm were still found in violation of the data protection principles after the first enforcement notice had been served. It was still too little and too late.

Other suggestions for updating the law were rejected, including a mandatory breach notification and the introduction of a “sensitive personal data” category – such as biometrics – to enable stricter protection. Instead, to occupy public attention, an “opt-in” procedure against the relatively minor though irritating practice of direct marketing was introduced, with fines for failure to comply. Still, nothing was done about the more serious issue of data breaches, however large in scale.

Hong Kong Left Behind

As Hong Kong fiddled around, other Asian countries passed privacy laws and even updated them, including mandatory breach notifications in Singapore and Australia for certain critical infrastructure providers or government agencies. In 2018, the European Union’s General Data Protection Regulation (GDPR) came into effect. Even China has just passed its Personal Information Protection Law, said to be among “the strictest in the world,” going into effect on November 1, 2021.

It is ironic that Hong Kong firms will have to follow much stricter global and Chinese laws, with their extraterritorial jurisdiction, but can get off easily at home. That means dubious protection for Hong Kong’s citizens.

One of most glaring deficiencies of Hong Kong’s privacy law is its Section 33. Back when the law was passed in 1995, this section on “data residency” – which would limit the transfer of personal data of Hong Kong subjects to outside of its territory – was included, but not enacted. It is quite incredible that after more than 25 years, this section exists “on paper” but is not yet in effect. Hong Kongers’ personal data can still flow to other countries or mainland China with virtually no restrictions.

Then, in 2018, Cathay Pacific, Hong Kong’s flag-carrying airline, lost the personal data of 9.4 million customers to hackers. A huge public outcry ensued. In a hearing in the legislature, legislators including myself lamented that, under the existing law, even if the airline was to be hacked again and fined, the maximum penalty would cost them less than a single business class ticket to the other side of the world.

By comparison, in March 2020, the U.K.’s Information Commissioner’s Office levied Cathay Pacific with a penalty of 500,000 British pounds, the maximum under their law, as the breach affected 111,578 British subjects.

So, finally, the Hong Kong government promised to update the law, and after some delay, in January, 2020, in a paper to the legislature, it made a list of proposed amendments, including establishing a mandatory data breach notification mechanism, introducing an administrative fine linked to the annual turnover of the company whose data was breached, formulating a clearer data retention period for personal data collected, clarifying the regulation of data processors and intermediaries, and updating the definition of personal data.

Sadly, all these suggestions have now just disappeared in the amendment bill, leaving one single issue remaining: doxxing.

Privacy Protection Is More Than Anti-Doxxing

Doxxing is wrong and should not be heralded for any purpose. But, without clear safeguards allowing for the free flow of information, anti-doxxing laws may severely limit journalism, whistleblowing, and the public’s right to know. Equating privacy regulation with anti-doxxing alone, and ignoring everything else needed in a modern data protection regime, is just as irresponsible as doxxing itself. The government may only want to weaponize the privacy law to arm itself with yet another tool against expression of dissent, rather than genuinely protecting people’s privacy.

Also, under the amendment bill, the PCPD will suddenly be transformed from a “toothless tiger” to an agency with unchecked power. A summary offense of disclosing personal data without the subject’s consent will be punishable by a maximum fine of HK$100,000 (US$12,820) and two years’ imprisonment. The higher tier offense of doxxing that causes a broad yet vague list of “specified harms” – “harassment, molestation, threats, intimidation, and physical and psychological injury which could cause a victim to be concerned about their safety or damage to their property” – to the subject or their family members can result in a maximum fine of HK$1 million (US$128,200) and five years’ imprisonment.

The PCPD may conduct searches on service providers’ electronic equipment and order arrests without a warrant, using “reasonable force.” It can request that content be removed from websites hosted outside Hong Kong. If a firm fails to comply, it and its local representatives may face up to HK$100,000 in fines and two years’ imprisonment.

Global tech platforms are right to be concerned. They have seen similar threats elsewhere, like in India, where threats were made about arresting their executives. But smaller local information providers, telecommunications firms, journalists, or just about any average internet users will have even fewer resources to fight the government.

The chilling effects will be immense, leading to even more self-censorship and further erosion of Hong Kong’s freedom of expression. It will not only be another brick in the territory’s new great firewall of internet censorship, but also leave Hong Kong’s privacy protection regime further behind the rest of the world.

Published: The Diplomat, September 15 2021

Saturday, August 21, 2021

[FNF] More than a Tech Crackdown, It’s Farewell to China’s Economic Reform

It started with China’s Big Tech sector – and continues throughout all other sectors. This crackdown clearly focusses on the private sector, and chimes in the end of Deng Xiao Ping’s Economic Reforms that helped to turn China into the economic powerhouse it is today. The resulting disruption on China’s economy, the nation’s innovative drive and its private firms may become ultimately a price too high to pay analyses Charles Mok for

Less than two months into the crackdown season on China’s tech sector, starting with the sanctions and investigations targeted against Didi Chuxing on July 2, two days after the U.S. initial public offering of its parent Didi Global, the ferocity of the campaign has only intensified, with its scope widened to more and more sectors, with no end in sight.

What was initially perceived by the media and the public as a campaign against Big Tech had turned out to be much more than that. Surely many leading tech companies were involved, going back to the “first blood” with Ant Financial’s forced cancellation of its IPO in Hong Kong in November 2020, to Didi Chuxing, and spreading to other giants like Tencent, then onward to many other sectors, through multiple legal and administrative means.

The crackdown is rolling on, leaving no sector untouched?

Here are some examples of recent actions against a wide range of sectors:

- Social media: The Haidian People’s Procuratorate, in an administrative district in the city of Beijing, filed a public interest lawsuit against Tencent, alleging the “youth mode” of its WeChat social media platform failed to comply with laws to protect minors.

- Online games: Singling out Tencent and its popular online game Honor of Kings, state-owned newspaper Economic Information Daily published an article criticising electronic games as “electronic drugs” and “spiritual opium,” only to remove that article from its website shortly afterwards.

- Online music: Tencent Music Entertainment Group’s plan to for a US$5 billion IPO in 2021 will be halted, even though the plan was for a listing in Hong Kong, not the U.S. This came after its chief Chinese competitor, Netease’s Cloud Village, also decided to delay its Hong Kong IPO for US$1 billion.

- Online streaming: The National Radio and Television Administration, the country’s media regulator, launched a month-long review on online variety shows, cracking down on their “rampant commercialization,” hypes and extreme behaviors from idol-worshipping fans, by targeting online streaming platforms owned by Tencent and iQIYI. Separately but along the same line, the Cyberspace Administration of China removed 150,000 pieces of “harmful online content” and punished more than 4,000 fan club related online accounts, leading to the shutdown of some social media services such as Weibo’s “Star Power Ranking List,” and many fan clubs themselves. In addition, the Ministry of Commerce initiated a consultation on further regulations for the online streaming e-commerce platforms to prevent frauds or inaccurate product claims, so as to better protect consumers.

- Karaoke: The Ministry of Culture and Tourism issued a directive to establish a national karaoke content screening mechanism to censor certain musical content that might be deemed to be against national unity, racial harmony, national religious policies, or concerning other illegal activities. This new system will be effective by October 1 this year.

- Ride-hailing: Didi Chuxing’s troubles in China is far from over, besides the ongoing investigation of its U.S. IPO. It is facing numerous investigations from all government levels, on concerns ranging from the vetting of drivers to vehicle safety and local licensing. The latest order concerning all ride-hailing platforms is a review of the industry’s pricing, commission setting, and employment practices, to better protect the wellbeing of the consumers and the drivers, in a multi-departmental effort led by the Ministry of Transport.

- Education: After the State Council and the Chinese Communist Party issued a statement on July 24 requiring education companies to become nonprofit organizations, forbidding them from raising capitals or going public, it thereby effectively terminated a vibrant business sector that included large enterprises such as TAL Education Group, New Oriental Education & Technology Group, that combined for over US$126 billion in market capitalization on domestic and foreign exchanges. Wall Street English, an Italian company specializing in English training, reportedly would announce the bankruptcy of its Chinese branch, becoming the first casualty of the crackdown on the education sector. Also, the city of Shanghai announced that it would no longer require local primary schools to administer final exams for English from the third to fifth grade, leaving only Chinese and mathematics as compulsory subjects.

- Food Delivery: The Administration for Market Regulation (SAMR), the country’s anti-trust regulator, is said to be ready to impose a US$1 billion fine on Meituan, an online marketplace for restaurants and the largest food-delivery provider, for abuse of its dominant market position.

- Property: The SAMR initiated a review of a general offer by Blackstone Group, a U.S. private equity firm, for the control of SOHO China, China’s largest prime office property developer — a deal worth over US$3 billion. Although this review is a necessary legal step in the takeover process, the market is mindful of the effect of the SMAR’s strict enforcement of the anti-trust law on its decision in this case, at this point in time.

Insurance: The China Banking and Insurance Regulatory Commission (CBIRC) issued instructions to order insurance companies to review any of its “improper marketing and pricing practices” as well as its customer privacy protection, or risk facing “serious punishment.”

- From all these examples, it can be observed that despite the picture being painted by the media and the public of a “tech crackdown” — due to the high-profiled attention on the cases involving Ant Financial and Didi Chuxing — it is indeed much more than that. The commonalties among those sectors being targeted appear to be, first, those which may gather substantial customer data; second, those with an ideological influence on the public, especially the younger generation, and their values; and, third, those that are prone to be dominated by a small number of influential market players.

No part of government wants to be left behind

These regulatory actions will certainly continue in the near future and even escalate in their force and expand in their scope. The State Council along with the Chinese Communist Party’s Central Committee just jointly published a blueprint document to call on the government at all levels to “improve and enhance anti-monopoly law enforcement” in its upcoming Five Years Plan for 2021 to 2025. The SAMR also issued a set of draft regulations on August 17 for consultation that would further strengthen rules against unfair competition, illicit trade practices, and restricting misuse of customer data.

In additional to the Data Security Law (DSL), which will go into effect by September, a new Personal Information Protection Law (PIPL), now in the third review stage at the Legislative Affairs Commission of the People’s National Congress Standing Committee, is expected to be launched in China in 2021. Provisions will be included to halt practices such as mobile apps that collect excessive personal data, algorithmic discrimination that involves differential and unfair pricing, and so on.

Not to be outdone, in addition to the cross-sectoral regulators on competition, securities, online services, data and privacy, many other government agencies are getting in the act. In addition to those mentioned above, such as the media regulator and the ministry for culture, transport, commerce, etc., the Ministry of Industry and Information Technology (MIIT) also announced a six-month probe to gather violations over “improper antitrust and consumer protection practices.” As part of that effort, the MIIT just announced a directive ordering 43 mobile apps, including Tencent’s WeChat and video app, iQIYI’s streaming app, Ctrip’s travel booking app etc., to rectify their illegal use of users’ phone book and locational data, as well as the use of pop-up windows that caused user annoyance. Such micro-managing of apps and services from a wide range of sectors, based on relatively broad but vaguely defined principles with tough enforcement power vested to the authorities, is increasingly the norm in China. 

Such a pervasive campaign will be difficult to coordinate. Overlapping investigations and enforcements with unclear demarcation of jurisdiction will result in unintended and undesirable consequences, adding to the overall market confusion. Other potential pitfalls may also include higher than necessary costs of compliance by firms, thereby undermining their competitiveness and innovativeness, with potentially irreversible consequences.

Ideological control is paramount

Let’s go back to the most basic question: why do the Chinese government and the Chinese Communist Party have to do all this now?

To be fair, many of these big tech titans do have a lot of problems with their trade practices, monopolistic behaviors, unchecked use of customer data and so on. However, part of that comes from a lack of clearly defined regulations to follow, and a general atmosphere of “experiment first, regulate later” which was arguably condoned and even encouraged by the authorities and regulators themselves. Indeed, it was not too long ago when the unbridled use of data in China by online firms was celebrated as a competitive advantage in developing artificial intelligence applications and data science over the west, where the use of such data had been regulated more stridently.

And it is also true that the big tech companies in China, with their rapid and unrestrained growth toward domination in the last couple of decades, have come to develop the kind of corporate cultures that can only be described as arrogant and misogynist, and the work ethics demanded of their employees is increasingly seen as unconscionably excessive. In recent years, public sentiments quickly turned against these tech billionaires, many of whom were admired as idols of success even up to a couple of years ago. This change in the mass mentality in China is especially evident under the unpredictable economic outlook in China now, due to slowing growth and the uncertainties and changes brought on by COVID-19.

It is therefore not surprising that Chinese President Xi Jinping has found this populist cause to “rein in the big tech” as both timely and right on the spot. With the relentless campaign to right the wrongs of the private industry, in order to protect the interests of the consumers, the welfare of the workers, the wellbeing of the children (against the exam cram culture and excessive online gaming), all the right chords are struck for the paternal state, allowing the Party a chance to impose further ideological control by rectifying education in a outwardly most benevolent manner, and to regain the economic control over its richest private firms and individuals after a couple of decades of runaway “get rich” capitalism.

Unexpected allies for Xi -but for how long?

And it is here where Xi seems to have also found an unexpected ally in the Chinese youth: In a period of slower economic growth, social uncertainty and more global isolation for China, the public and especially the young are increasingly frustrated with issues such as workers’ rights as well as educational and economic inequities. So when the government comes in to “get tough on the businesses,” it becomes music to the ears of the people. However, for such populist campaigns to be sustainable and not just a diversion of attention, the economic and social issues must be handled with positive results. More opportunities and jobs must be created, which may be an even bigger challenge now that the private sector is under strict scrutiny and may not be as entrepreneurial and risk-taking as before. Consequentially, hirings will slow.

Likewise, it is equally doubtful how sustainable the young people’s support for the authorities’ control over online game content and playing time, as another example, would also be in the long run quite doubtful, to say the least. While many parents may dislike the cram exam culture, it is also many of these and other parents who send their children to tutoring in order to score well in public exams in order to get into one of the top universities. In the end, it is the government itself that runs the public examinations and controls all the universities, and ultimately, builds the economy that may create the good jobs. Blaming the current problems on the cram schools can only go so far.

Most recently, Xi even started to openly advocate for “common prosperity,” seen as a call to return to the communist philosophy for a redistribution of wealth in Chinese society, when he spoke at the 10th meeting of the Central Committee for Financial and Economic Affairs, a top-level strategy body that he chaired. Calling for the need to “strengthen the regulation and adjustment of high income, protect legal income, reasonably adjust excessive income, and encourage high-income groups and enterprises to give back to society more,” Xi did insist that this was not “equal distribution.” As populist and attractive as it may sound to the masses, it is still uncertain how such a strategy will be welcomed by the people who have had a taste of capitalism in the last several decades. Beyond the populism and nationalist zeal, it will be a great challenge for Xi’s regime to sustain China’s success in continuously improving the economic wellbeing of all levels of society, especially the new middle class.

Under Xi Jinping, the slogan and gradual revision toward 國進民退 (“the state enterprises advance, the private sectors retreat”) has gained huge ground over the previous reformist emphases on market liberalization and entrepreneurship.

Economic control on capital with central planning and digital service restructuring

Besides ideology, the current campaign also serves to allow authorities to regain the total control of the economic structure of the country. In many ways, it symbolizes a reversal of the “capitalism with communist characteristics” formula and economic reform strategy of the past more than forty years, brought forward by the late Deng Xiaoping. Under Xi Jinping, the slogan and gradual revision toward 國進民退 (“the state enterprises advance, the private sectors retreat”) has gained huge ground over the previous reformist emphases on market liberalization and entrepreneurship.

Critical to Xi’s economic philosophy is the central economic planning for all key sectors in China. Thereby, the government is taking back control from the rich and influential tycoons and their webs of connections and circles of influence developed in the last several decades. This particularly relates to those making their fortunes from the Internet and technology sector mostly through domestic and international public listings. Coupled with the trend in the U.S. to adopt securities and other legislations to enforce financial and customer data disclosure over foreign companies listed in the U.S., the Chinese government is understandably increasingly wary of such foreign investments and listings. The central government’s narrative to “contain disorderly expansion of capital” since late 2020, later documented into a policy goal in early 2021, is evidently a move to limit China’s perceived exposure from such capital exercises undertaken by the red hot China tech sector with great speed and scale.

Also, the central government is clearly working toward redefining the Chinese industry through more central planning. The previously heavily promoted strategy initiative of “Made in China 2025,” issued since 2015, unfortunately had to confront a hostile U.S. president Donald Trump from 2016 to 2020 and his “trade war,” ending up largely under-achieving. With the emerging and likely protracted “technology war” between China and the U.S., China can be expected to refocus its effort on high technology manufacturing, especially in the areas of semiconductors, electronics and other key technology components, as well as research and development in critical scientific fields such as advanced artificial intelligence and quantum computing.

One of the possibly welcome side effects of the current campaign may be the redirection of the nation’s collective efforts and manpower toward these critical technology areas and deep sciences, away from the “digital economy” type of service-oriented business models that dominated both investments and manpower consumption in the past twenty years, while creating a host of problems in consumer interests, privacy, and monopolistic trade practices.

Such an industry redirection strategy may be laudable, but its success is not guaranteed. Over the last several decades, the Chinese semiconductor and electronics sector has continued to lag behind competitors from the west as well as Taiwan and Korea in the higher end of the market. Those sectors in China had already been receiving massive state support and subsidies. Yet, they domestically still lagged behind the private digital economy and service sector, led by private companies and entrepreneurs, in terms of investments, financial returns or even the number of jobs created. Most certainly, reining in commercially successfully companies in some sectors will not necessarily make companies in other laggard sectors more likely to succeed because of central planning, which did not work well before anyway.

For those digital economy and service sector companies, which have built some of the most successful and prevalent platforms around the world, such as AliPay and WeChat, in addition to the current regulatory campaigns of which they are the targets, the central government will gradually aim to redefine the marketplace structure to be dictated and led by the government. An example is the central bank digital currency (CBDC) development in China, widely regarded as the global leader, where the commercial e-wallets and payment service providers will be greatly diminished to a secondary and supporting role, as the core transactions and data will be largely controlled by state-owned player, in this case the People’s Bank of China. It is not inconceivable that the central government will try to replicate such marketplace restructuring to maximize its stranglehold on private firms in other digital service verticals.

It’s easy to start a fire, but hard to put one out

Moreover, other administrative measures to ensure further control over private firms are also taking shape. Recent reports indicated that Bytedance, the Chinese owner of TikTok, had sold 1% of its stake to a state-owned firm which is owned by the Cyberspace Administration of China plus two other government agencies, thus allowing the government to effectively appoint a representative on its board. Such tactics are not entirely new, but they are likely to become more common.

So does that mean that the “gold rush” days of China tech investment is over? Very likely: yes. At the very least, things will never be the same again. Since July, global investors have lost billions in stocks from many of these Chinese tech players, from newly-listed Didi Global to those already listed before in the U.S., in Hong Kong, and even domestically in China’s exchanges. Softbank, a leading investor in many Chinese tech players, including Alibaba, Tencent as well as Didi, recently admitted that it would “significantly cut back” its investments in China amidst the current uncertainties. Richard MacGregor, a senior fellow at Lowy Institute in Sydney, even bluntly stated that “Xi has many priorities. Building socialism is at the top of the list. Helping foreign investors is not.”

Finally, the biggest risk factor of all may just be that the current campaign will turn into a runaway train, whose engine is easily revved up but much harder to stop. This risk is exacerbated by the involvement of so many government ministries, regulators and agencies getting in the act and intuitively trying to outdo one another, in addition to the difficulties in coordination and the concerns of unexpected side effects. It’s always much easier to start a fire than to put it out. If that happens, the disruption on China’s economy, the nation’s innovative drive and its private firms may become a price too high to pay.

Published: Friedrich Naumann Foundation, Aug 20 2021