Between a dubious decision by our market regulator and talk of sedition, are Hong Kong freedoms under threat?
Philip Bowring warns of the insidious erosion of Hong Kong’s freedom of speech, as can be seen in two separate incidents – an SFC ruling, and talk of sedition charges against advocates of independence
Freedom of speech and belief are the most fundamental supports of other freedoms. If in doubt about that, just ask a Saudi Arabian or North Korean. But there are plenty of lesser threats than those two extreme examples, as money, ideology and plain ignorance erode freedom at the edges.
An unlikely source of concern, particularly for an economy dominated by financial services, is Hong Kong’s Securities and Futures Commission (SFC). In a ruling little noticed by anyone other than shareholder watchdog David Webb, the commission’s appeals tribunal fined Moody’s Investors Service HK$11 million for an allegedly inaccurate report in 2011 titled “Red Flags for Emerging-Market Companies”. The report had named various companies which met certain debt and governance criteria to warrant “red flag” warnings.
The errors in the report were minor and technical while the substance of the red flags was proven justified. Of the six companies identified as “negative outliers”, four have since defaulted on their debts and/or filed for bankruptcy and two massively underperformed. That is an impressive record by Moody’s, a firm more often accused of being too favourable to debt issuers.
The SFC apparently views negative comments on companies as improper, however well supported by data. Meanwhile, any amount of salesman’s bull talk based on nothing more than pie-in-the-sky analyst fantasies is pumped out by the financial intermediaries the SFC licences.
Indeed, the SFC should know that well, given that a member of the three-person tribunal who made the Moody’s judgment was Ding Chen, head of mainland-based CSOP Asset Management. She was, notes Webb, making bullish comments on mainland stocks at the height of the 2015 bubble. An outsider might wonder whether this was based on analysis and data or the interest of her company in selling exchange-traded funds. Another member was an associate professor from Baptist University who sits on a multitude of government yes-minister bodies. The chairman was Mr Justice Michael Hartmann, a lifelong member of a profession not known for financial expertise or competition.
The bottom line is that honest, hard-nosed criticism of listed companies is endangered. Meanwhile, self-serving investment banks, brokers and fund managers can get away with any amount of nonsense about corporate and market prospects. Of course, licensed intermediaries have a responsibility to be diligent and write honestly. But the SFC clearly has a grossly lopsided version of the scales of justice.
That, of course, may be a minor issue compared with threats of sedition charges against independence advocates. Sedition talk remains just that, for now. It is worrying nonetheless. The notion of Hong Kong independence may be absurd under currently conceivable circumstances – though one might have said the same about Singapore 70 years ago. But if mere advocacy is to be a serious crime, where will this stop? Will it also be applied to anyone in Hong Kong who supports Taiwan’s right to self-determination, given both its current wishes and a history of having been part of the Chinese state for a mere 200 of the past 2,000 years? Or that Tibet (西藏) and Xinjiang (新疆) may want to go their own way, as Kazakhstan, Uzbekistan and others made a peaceful exit from the Russian empire following the collapse of the Soviet Union? Or that it is seditious to suggest China’s claim to almost the whole South China Sea is historically absurd and based either on expansionist aims or racist views of its non-Han neighbours?
Indeed, it is a puzzle why China is making so many regional enemies at a time when its soft power has been making huge inroads into traditionally liberal societies. Take Australia. So beholden has it become to Chinese investment and trade that the Australian Broadcasting Corporation, a public service broadcaster, has abandoned providing political news and current events on its Chinese-language website. The Chinese version of its Australis Plus website is now put out in China in conjunction with Shanghai Media and operates within the mainland firewall. In contrast, the website in other Asian languages carry the complete range of programming. There is a commercial reason behind this. The site can attract advertising revenue, helping the broadcaster’s squeezed budget. But the self-censorship makes a mockery of public service broadcasting.
It is doubly threatening at a time when public service broadcasters are badly needed to counteract the shallow reporting and name-calling commentary to which much of the Western media has been reduced, in response to falling revenues and the challenges of the even more superficial social media. Barely concealed advertorials masquerading as news and the franchising of familiar media names to companies with scant interest in standards of journalism open the way for media controlled by the mainland or by its overseas Chinese surrogates.
There is a danger, too, for China in all this. Overt obeisance to Beijing’s media or commercial agenda by ethnic Chinese tycoons will, in the longer run, only create reaction against their communities, especially in countries such as Malaysia and the Philippines that are subject to China’s territorial claims.
Philip Bowring is a Hong Kong-based journalist and commentator