SinoInsight 1
Hong Kong’s pro-democracy camp won a landslide victory in local district council elections held on Nov. 24, taking 388 out of 452 seats. Pro-establishment lawmakers won only 58 seats.
More than 2.9 million people, or over 70 percent of the electorate, voted in the local elections—the largest turn-out in Hong Kong’s history. Many consider the district council elections to be a referendum of sorts on the Hong Kong government’s handling of the anti-extradition bill protests.
While district councilors are responsible for neighborhood matters and do not have legislative power, they make up nearly 10 percent of the seats on the 1,200-member election committee that selects Hong Kong’s leader. The pro-democracy camp, or pan-democrats, will get to pick all the members of those seats with their landslide victory. District councilors also have six seats in Hong Kong’s 70-seat legislature.
OUR TAKE
1. If the district councilor elections are a referendum, then the message is clear—the Hong Kong people strongly reject the Hong Kong government and CCP’s handling of the anti-extradition bill protests.
We noted in several articles on the Hong Kong protests that popular support for the protesters and protest movement remain strong despite escalating violence on all sides. The district councilor elections indirectly affirm our observation.
2. By holding a majority of district councilor seats, the pan-democrats can, if they are united on the issue, launch investigations into matters like corruption in the handling of public works or earlier corruption allegations against former Hong Kong chief executive Leung Chun-ying.
To ensure that the pan-democrats do not launch investigations into issues that would implicate pro-establishment lawmakers, the Hong Kong government, or the CCP, the CCP will likely find ways to split the pan-democrats or find other ways to prevent investigations from taking place.
3. In considering classic CCP behavior and operations, we caution against excessive optimism about the pan-democrat landslide victory and advice constant vigilance.
The CCP is known to influence all sides of the political spectrum in countries that it has targeted for political interference operations. For example, defecting Chinese spy Wang Liqiang said in a media interview that while the CCP appears to current support the Kuomintang in Taiwanese elections, “actually [the CCP] supports no one; [the CCP] goes this way one time and that way another time.” Because the CCP plays the long game, it has almost certainly long-infiltrated the pan-democrat camp in Hong Kong and will definitely try to win over more pan-democrats over time.
Also, while the pan-democrats are now in the majority, we do not rule out unforeseen political developments that would erode their lead or stymie future attempts to hold the Hong Kong government accountable.
Should the CCP shift the focus of its political interference efforts on the pan-democrats, it would have to “abandon” support for at least some pro-establishment lawmakers and risk alienating the pro-establishment camp. The pro-establishment side will then have to reconsider where their interests lie—continue to follow Beijing and hope to regain support in the future, or try to win over the Hong Kong people by fighting for their interests.
4. We believe that the CCP and the Hong Kong government made a serious miscalculation in allowing the district council elections to take place. Intense international scrutiny, while certainly a factor in pressuring the Hong Kong government and the CCP into holding the elections, was unlikely a decisive reason for why the CCP did not attempt to stop the elections from taking place.
The CCP’s miscalculation was likely due to:
- The Hong Kong police force’s success in suppressing demonstrations at the Chinese University of Hong Kong and the Hong Kong Polytechnic University. The Hong Kong government likely believed that the mass arrest of “brave martial clique” (勇武派) protesters would take the heart out of the protest movement and allow the pro-establishment camp to win at least 50 percent of the seats.
- The CCP and Hong Kong pro-establishment camp were likely deceived by their own propaganda about the Hong Kong protests not having the support of the “silent majority” of the people in the city.
- The Xi Jinping leadership is likely suffering a failure of intelligence due to Xi’s over-centralization of power and various factional struggle reasons (for example, Xi could be receiving and acting on false intelligence compiled by the CCP intelligence apparatus, which has long been swayed by his political enemies).
This is not the first time that the CCP has made a serious miscalculation in recent years. CCP propaganda before the outbreak of the trade war suggests that the CCP had also miscalculated then (see here and here).
5. The results of the Hong Kong district council elections demonstrate to America and the international community that the CCP has lost the hearts and minds of a majority of the people of Hong Kong. Governments worldwide may need to re-evaluate their current China policy before the Sino-U.S. rivalry escalates into a “critical battle of ideology, value systems, and morality.”
SinoInsight 2
On Nov. 19, Han Changfu, the Ministry of Agriculture and Rural Affairs, attended a “new farmers, new technology, new entrepreneur, new innovation” forum in Nanjing. Speaking at the forum, Han said that 8.5 million people “new entrepreneurs and innovators” had returned to rural areas, with the total “new entrepreneurs and innovators” population totaling about 31 million.
OUR TAKE
1. Han Changfu did not give a time frame for the figures that he provided. Regardless, the figures he gave for the number of “new entrepreneurs and innovators” in rural areas indicate that the unemployment situation in China has become very severe.
The CCP tries its best to avoid mentioning “unemployment,” a sensitive term, in its propaganda. Instead, the CCP records “unemployment rate” as “urban registered unemployment rate,” or the number of unemployed people who are registered with local urban employment services agencies (not including unemployed people in the estimated 560 million rural population). Put another way, the so-called “new entrepreneurs and innovators” who have returned to rural areas are in fact unemployed urban workers. Typically, work migration from rural to urban areas is more common due to better employment opportunities in the cities.
According to data from the PRC’s National Bureau of Statistics, there were 288 million rural workers in China at the end of 2018. Of the 288 million workers, 173 million were migrant workers. While it is unclear which time frame Han Changfu is working with, 8.5 million returning “new entrepreneurs and innovators” makes up nearly 5 percent of the migrant worker population in 2018. Also, a total “new entrepreneurs and innovators” population of 39.5 million comprises 13.7 percent of the total rural worker population in China in 2018. Put in perspective, there is now a substantial number of people in rural China currently seeking employment—not an ideal situation for the CCP.
2. The large number of “new entrepreneurs and innovators” returning to rural areas in search of employment indicates that China’s economy is continuing to worsen and unemployment is on the rise.
We believe that the Chinese economy’s deterioration will not be arrested even if China and the U.S. reach a “phase one” trade agreement in December. China’s economic downturn, coupled with soaring food prices and unemployment, will pose a serious threat to the CCP regime.
