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Hong Kong Intelligence Report #129 🇪🇺🇭🇰 Review of the Annual EU Report on Developments in Hong Kong

Updated: Jun 20

Open-source intelligence (OSINT)

Hong Kong Intelligence Report #129 🇪🇺🇭🇰 Review of the Annual EU Report on Developments in Hong Kong
FILE PHOTO: Multi ethnic friends raising a EU flag © Envato

🇪🇺🇭🇰 🔻 IMPORTANT 【重要】EU Report on Developments in Hong Kong


▪️ On June 13, 2024, the European Commission and the High Representative published the 26th annual report on political and economic developments in Hong Kong (it was written in 2023). Again, it was swiftly rejected by the HKSARG and the central government of China in a clichéd way without actually analyzing its content on the spot. Hence, this time my job is to briefly analyze it according to the present political and economic developments of Hong Kong. 


After reading it page by page in detail, several points must be realized:

 

▪️ The EU Report on Developments in Hong Kong (2024) was written by non-IC members clearly in contrast to the US and UK annual/half-year reports on Hong Kong. It lacks military intelligence categories and operational viewpoints. Instead, the EU report is written by someone in business think tanks to monitor business activities mainly by heavily using statics and global rankings of various sectors shared by their colleagues in the same think tank business world. Yes, not only activism but also so-called research institutions, think tanks, or consultation agencies are an industry. They are part of the private business sector in contrast to the purely politicized, blinded eyes of the masses. Moreover, the frequent use of world rankings cited by the report is due to the reliance of HKSARG on their global rankings in PR stunts. It shows political strength, independence, and reliance on the West of the HKSARG. Of course, rankings are purchasable like any other intellectual commodity, a weapon of authorization, through donations to the host agency. Not all organizations, countries, and regions are participants in their world rankings, thus anyone can be absent from their gaslighting rankings. 


▪️ Although it contains ‘standardized’ political concerns about the fate of opposition figures in Hong Kong and abroad, its particular content or part that can’t be found in the US and UK reports is the economic developments about the EU’s competitiveness against the US and UK competitors in Hong Kong. Thus, the EU report is politically not antagonistic, in contrast to the superficial surface of the political content of the report. In other words, the EU and its member states want to take the initiative against the US and UK competitors, while the EU itself has already been the third-largest external business power operating in Hong Kong according to the market share, even though the top is still Mainland China, and the second is Taiwan. The EU report explains their true ambition or message to become a powerful or leading business partner of both Hong Kong and the entire China. The sign is the true political content shown in the report even amid the new launch of the EU’s electric car tariffs on China. Hence, the growing tie between the EU and HKSARG is optimistic and openly confirmed by the report, which is politically openly reprimanded by the HKSARG itself. This contradiction shows the true content of the report. There is nothing harmful to both camps at present. The demonization of the EU is ridiculously wrong and unnecessary. On the contrary, the strongly business-minded EU is the relatively ideal partner for both Hong Kong and China, while the economy is the true politics. In totality, Europeans should be welcomed ‘politically’, too.  


On the part of politics, I must praise the report containing the questionable human rights conditions of Southeast Asian housekeepers in this city. Yes, South East Asian housekeepers indeed have no rights to independently seek residence, and new employers at will conflict with pure market economic principles. This aspect is absent in both the US and UK reports on Hong Kong. In addition to the land privilege of the so-called Indigenous villagers in the New Territories, the full realization of equal human rights for literally all citizens of this city is still far away. Hence, the EU report is still not complete yet. It partially puts focus on the neglected fields of social problems.


▪️ The EU report doesn’t promote ecoactivism, instead, it generally praised and welcomed the green policies of the policy addressed by John Lee Ka-chiu. Like LGBTI -today they don’t say LGBTQ-, the green agenda is met with the EU standard or at least the HKSARG, and the central government is trying to meet the EU demands on the field without antagonism. This also indicates the EU’s true stand on Hong Kong politics, in which they should have strongly promoted the prototype of eco-activism that finally evolved into the nationalism of Ukraine today. And eco-activism is the most powerful, vital, and still active sector of opposition in this city, even under HKNSL and SNSO. However, the EU report excluded ecoactivism totally due to their true goal being to play a leading role in the business sector in this city.


 ▪️ As mentioned above, while the EU lacks any military war intention on either Hong Kong or China clearly shown in the form of the report, advocates of any war involving Hong Kong and China are reactionary. One wing is urging unification with Taiwan by force; the other is a pacifist abandonment of any military measures to solve international disputes. In this, a priori abandonment of unification with Taiwan by force. Both are wrong because those paid propagandists are blind and pointless. The criterion or point of whether China should take a forcible military measure or not depends on how long China can secure its time of peaceful development of the entire society. This mainly means economic development without imperialist expansion.  At present, China is enjoying more than forty years of peaceful development without any war. Hence, both Mainland and Taiwan are clear that the best solution at present is to maintain the status quo without being involved in wars. Again, the criterion on this issue is how long China can secure its time of peaceful development. Furthermore, if both Mainland and Taiwan complete their courses of full economic development in decades or centuries of peaceful time in history without any interruptions by wars, the unification won’t mean any significance in the end, and both will be happy with their achievements.   However, what Hong Kong should do at present in terms of war preparation is to achieve agreements with potential war participants in the Pacific. That kind of agreement is the one made between the UK and Germany during World War II in which Nazi Germany did not bomb Oxford and Cambridge for the UK, while the UK didn't bomb Heidelberg and Göttingen in return. Hong Kong should be exempted from being bombed by any entity. At least, HKSARG should have this concept in mind. 


If you have the criterion in mind, the below case is explainable:


🇨🇳 China Coast Guard's new 60-day detention rules take effect

 

China Coast Guard regulations allowing it to detain foreign nationals suspected of trespassing in waters it claims for up to 60 days took effect on Saturday, stoking fears of escalation amid rising tensions in the disputed South and East China Seas.

 

They stipulate that foreign nationals suspected of violating Chinese immigration regulations or “jeopardizing national security interests or undermining public order” in the country’s claimed waters can be detained for 30 days, or up to 60 days in “complicated cases.”

 

Some observers say the new regulations are the latest example of China expanding its so-called gray zone coercive tactics to wear down its rival claimants without resorting to armed conflict.

 

The map shows China's naval force posture in the South China Sea on Saturday, June 15. About 90 ships are present in the South China Sea, including the Chinese Coast Guard (CCG), the Chinese Maritime Militia (CMM), and the PLA Navy (ships with "Type" in their titles). 

 

🔗LINK


  1. It is the broadest national security concern in maritime, not just about the territorial disputes of the surrounding sea of China. 

  2. For China, it is a deterrence measure, defensive, undeniably against rivals, while it is also offensive to rivals. Thus, it is inevitably escalating in totality if you see it from both sides. Here, de-escalation and escalation are equalized dialectically. The new measure is to de-escalate the present conflicts a priori, while its presence itself is inevitably meant for escalation for rivals. 

  3. In peacetime, the new regulation could prevent maritime surveillance in Chinese territorial waters if it’s accompanied by effective patrolling. 

  4. On this, the Filipino reaction has shown their learning of the Hamas terrorist kidnapping tactic so effective on the Israeli issue. If they use overseas Chinese in the Philippines as political hostages like Iran-Arab-Soros-backed Hamas terrorists do, CCP will be forced to take some strong measures, but it won’t automatically mean one with Putin Russia’s special military operation on Donbas residence. Again, first Russia, and second, Israel are suffering from the global political and media propaganda mechanism of hysteria and hostilities. China is expected to be the third target of the same global mechanism. Political and military forces that learn Ukraine and Hamas tactics to use against China are the enemies of China. This is why China should not take part in global campaigns against Russia and Israel simply because it will turn against China in the next turn. 



📌🔻 NEWS / FACTs 【新聞/事實】

 

▪️Foreign domestic workers in Hong Kong remain a vulnerable group. Between 21 March and 15 May 2023, the government conducted a public consultation on the review of the Code of Practice for Employment Agencies. To discourage so-called ‘job hopping’, the major proposals included requiring employment agencies to explain clearly to foreign domestic helper job seekers that ‘under the prevailing policy, an application for change of an employer in Hong Kong within the two-year contract period would normally not be approved save for exceptional circumstances.’ The NGO International Migrants Alliance criticised this policy, arguing that helpers ought to be able to change jobs at will in a free market. (P.15)

 

▪️Hong Kong has eight free trade agreements (FTAs). These are with mainland China (CEPA, June 2003 and enhanced thereafter), New Zealand (March 2010), the Member States of the European Free Trade Association (EFTA) (June 2011), Chile (September 2012), Macao (October 2017), the Association of Southeast Asian Nations (ASEAN) (November 2017), Georgia (June 2018) and Australia (March 2019). Hong Kong has also signed 23 investment promotion and protection agreements (IPPAs) with foreign economies (including with 10 EU Member States) and negotiations have been concluded (pending signature) with Bahrain, the Maldives and Myanmar.  (P.21)

 

▪️Mainland China was Hong Kong’s largest trading partner in goods during the year, accounting for 49.2% of Hong Kong’s total trade. In turn, Hong Kong was an important trading hub for mainland China and ranked as China’s fifth largest trading partner in 2023. The province of Guangdong remained an important outward-processing base for Hong Kong. The Closer Economic Partnership Arrangement (CEPA) with mainland China (2003) was Hong Kong’s most substantial trade agreement. There was no major amendment to the agreement in 2023. The value of goods re-exported through Hong Kong from and to mainland China accounted for about 85.4% of Hong Kong’s total re-export trade value (2022). Hong Kong remained mainland China’s key offshore financial centre and investment hub. At the end of 2022, mainland China was Hong Kong’s largest source of inward foreign direct investment, excluding offshore centres, and the first destination for Hong Kong’s outward FDI, accounting for 30% and 49% of total stocks respectively. In turn, Hong Kong was the largest source of FDI in mainland China, accounting for 55.9% of the total FDI into the mainland (at the end of 2022), and the leading destination for mainland China’s FDI, with 55.9% of the total (at the end of 2022). There were 1447 mainland enterprises listed in Hong Kong, accounting for 76.5% of the total market capitalisation and 86.5% of the equity turnover. Hong Kong and mainland China’s capital markets are connected via the ‘Stock Connect’ scheme, linking the Hong Kong Stock Exchange with its counterparts in Shanghai and Shenzhen, and the ‘Bond Connect’ mutual market access scheme for bond markets. This was complemented in September 2021 by the launching of a ‘Wealth Management Connect’ scheme for the GBA, allowing eligible mainland Chinese, Hong Kong and Macao residents to invest in wealth management products distributed by banks in each other’s market. In 2023, the ‘Stock Connect’ schemes were enhanced and the northbound trading leg of the ‘Swap Connect’ scheme was launched. (PP.23-24)

 

▪️The Head of the EU Office and Member State Consuls-General engaged in regular dialogue with senior officials of the Hong Kong government, including the Chief Executive. The EU Office, together with the European Chamber of Commerce in Hong Kong (Eurocham), organised the second edition of the ‘Green Way’ event with high-level participation, resulting in recommendations that would allow greater participation of EU industry and standards in support of Hong Kong’s environmental agenda. In addition, public outreach took place on relevant EU policies including the Carbon Border Adjustment Mechanism, the Due Diligence Directive, circularity, the Battery Regulation, green finance, ESG reporting standards, etc. The EU and Hong Kong continued their dialogue on taxation issues and Hong Kong amended its tax regime with regard to foreign sourced income exemptions. Hong Kong and the EU also agreed on equivalence of the digital COVID certificate. In 2023, the Hong Kong authorities decided to continue supporting the participation of Hong Kong entities in ‘Horizon Europe’. The Hong Kong Research Grants Council proposed the ‘EU-Hong Kong Research Cooperation Co-funding Mechanism by the Research Grants Council’ to financially support entities based in Hong Kong seeking to join Horizon Europe consortia. Events promoting people-to-people exchanges between the EU and Hong Kong were organised. The EU remained the largest foreign business community in the city, ahead of Japan, the US and the UK, according to the annual survey on foreign companies by the Hong Kong Census and Statistics Department. As of June 2023, at least 1548 EU companies had set up business in Hong Kong. Many of them (797) were using the city as their regional headquarters or regional offices. EU businesses were present in a wide range of sectors, including financial and business services, trading and logistics, retail, food and beverage, and construction. In the survey, the number of EU companies recorded a decrease of 3.4% from their pre-COVID level (June 2019), while the total number of non-Chinese foreign companies dropped by 5.2% in the period. This indicates that EU companies were more resilient to local developments than other foreign business communities. However, EU companies that have cut or relocated some activities and/or staff while remaining in Hong Kong are not reflected in these statistics. In the first 11 months of 2023, bilateral trade in goods between the EU and Hong Kong amounted to EUR 28.5 billion, an increase of 4.2% on the same period in 2022. EU exports of goods to Hong Kong amounted to EUR 23.4 billion, while imports from Hong Kong totalled EUR 5.1 billion, resulting in a surplus of EUR 18.2 billion for the EU. The EU was Hong Kong’s third largest trading partner in goods in 2023, after mainland China and Taiwan. Hong Kong remained an important platform for trade between mainland China and the EU. The EU was Hong Kong’s third largest trading partner in services (latest available data, Hong Kong statistics). In 2022, Hong Kong was the EU’s 10th largest partner for Extra EU imports of services and eighth largest partner for Extra EU exports of services (Eurostat). Eurostat data shows that EU trade volumes in services with Hong Kong reached a total of about EUR 41 billion in 2022, with increases in recent years (+8% in 2022, +30% in 2021). The main services traded are transport, telecommunications, financial services and other business services. The EU was the fifth largest investor in Hong Kong and the second destination for Hong Kong’s foreign direct investment globally. (PP.24-25)

 

🔗LINK

Annual EU report illustrates continuous deterioration of fundamental freedoms in Hong Kong

 

🔗LINK

Europe’s electric car tariffs sting China but won’t halt BYD’s advance

 

🔗LINK

‘We should also arrest Chinese trespassers in EEZ’

 

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The Philippines's fishermen are urged to keep going to the South China Sea as new enforcement rules for the China Coast Guard take effect. 華海警新執法規定生效 菲籲漁民續赴南海


🔻 COMMENT 【評語】

 

In contrast to the public tit-for-tat exchange of blame, the EU report clearly shows their political intention to be the leading business partner of Hong Kong while in competition with the US and UK. Hence, the business-minded attitude of the EU to Hong Kong is nothing harmful to anyone. Their true political intentions shouldn’t be misread.



 

Hong Kong Intelligence Report #129 🇪🇺🇭🇰 Review of the Annual EU Report on Developments in Hong Kong

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