1. HK’s International Financial Center Status In Shambles
In early December, Moody’s, an international credit rating agency, lowered the credit rating outlook of mainland China and Hong Kong from “stable” to “negative” in quick succession. Moody’s said that this reflects its assessment of the close political, institutional, economic, and financial ties between Hong Kong and mainland China. Following the implementation of the National Security Law (NSL) in 2020 and changes in the electoral system, “It expects Hong Kong’s political, institutional and economic decision-making autonomy will continue to be eroded further.”The Atlantic Council, a U.S. think tank, issued an assessment report on Hong Kong’s business environment risks in March 2023, pointing out that since the implementation of the NSL, Hong Kong’s judicial structure has undergone fundamental changes, and the original political and business foundation is falling into pieces. The “Report on Annual Survey of Companies in Hong Kong with Parent Companies Located outside Hong Kong,” released by the Census and Statistics Department at the end of December, also showed that the number of foreign regional headquarters in Hong Kong has dropped for four consecutive years, from a peak of 1,541 in 2019 to 1,336 this year.
Although mainland China is the country with the most regional headquarters in Hong Kong, it also sees a drop of four (1.6 percent less) compared with 2022.
2. Crackdown on Dissidents Under the National Security Banner
The NSL continues to be used by the Hong Kong authorities to crack down on dissidents and ordinary citizens alike. The police announced once in July and another in December this year that a total of 13 Hong Kong residents now living overseas were placed under its wanted list, alleging them of endangering national security and colluding with foreign forces, and has a bounty of HK$1 million (US$128,000) on each of them. This was condemned by democratic countries around the world, such as the United Kingdom and the United States, as violating human rights.
In addition, the National Security Department of the Hong Kong Police Force announced the arrest of four people on Dec. 14, saying that they funded former legislators Ted Hui Chi-fung and Nathan Law Kwun-chung through online subscriptions as crowdfunding platforms. After their arrest, the overseas Hong Kong group “Hong Kong Centre for Human Rights” criticized the Hong Kong government’s actions as depriving individuals of their right to access information and spreading fear to the public.
Former Hong Kong Demosisto member Agnes Chow Ting was released from prison in June 2021 after serving a 10-month sentence for the “Wan Chai Police HQs Case.” Since then, she needed to report regularly due to her pending NSL case, and her passport has since been confiscated. On Dec. 3, she said on social networking sites that she had gone to Canada for further study and would not return to Hong Kong. She also mentioned that in August, she paid a one-day visit to mainland China accompanied by several Hong Kong national security police officers; after that, she had her passport returned and was allowed to leave Hong Kong. So far, the government has not confirmed the mainland visit incident and instead just criticized Ms. Chow for abandoning bail.
3. Political Show Trials Still Running
Numerous political trial cases still have no end in sight.The sedition trial of “Stand News” involving conspiracy to publish seditious materials started at the end of October 2022. The trial was supposed to be concluded within 2023. It was originally scheduled to give the verdict on Nov. 15. However, in view of the latest decision of the British Privy Council, it was ruled that to be guilty of inciting violence or unrest, it must be proved to have the intent of doing so. Based on that, the Nov. 15 session was changed to be just for deliberation of the closing statements. The NSL-designated judge for the case will only hand down the verdict on or before March 2024.
The trial of the “47 persons” accused of “conspiracy to commit subversion” in the Democratic primaries began in February. After 118 days of trial, on Dec. 4, after the last two defendants, Lee Yue-shun and Gwyneth Ho Kwai-lam, completed their deliberations and legal arguments, Andrew Chan Hing-wai, the NSL designated judge for this case, said that because he had another case running concurrently, he could only hand down the verdict in about three to four months. But even that was not guaranteed either.
Jimmy Lai, the founder of Next Media, who has been imprisoned for more than a thousand days, was charged, along with three former Apple Daily affiliated companies, with “conspiracy to collude with foreign forces.” The case finally started on Dec. 18 and is expected to last 80 days. Earlier, Mr. Lai planned to hire British King’s Counsel Tim Owen to represent him in the defense. It led to three appeals from the Hong Kong government, which petitioned the National People’s Congress to interpret the law. Later, Jimmy Lai filed a petition with the High Court in April, requesting a declaration that the National People’s Congress Standing Committee’s interpretation of the law would not affect his hiring of Tim Owen. But the appeal was ultimately rejected, and Mr. Lai had to pay the legal costs.
4. The Civic Party and Civic Radio Stations Both a Thing of the Past
On the other hand, under the specter of the NSL, many groups have become history.The Civic Party was established in 2006 and, once tied with the Democratic Party as the largest pro-democracy camp in the Legislative Council, passed a liquidation resolution in May. Chairman Alan Leong Kah-Kit said that since no one had taken to serve as an executive committee member and there was no way to raise funds, the dissolution was expected. On Dec. 23, the liquidator held a final meeting of the party and declared the dissolution of the Civic Party in March 2024. The interim executive committee resigned on Dec. 24.
The Civic Radio Station, which had been in operation for 18 years, fought for the opening of airwaves and repeatedly challenged the Telecommunications Ordinance in the form of civil disobedience, was accused of illegal broadcasting, and stopped operating on June 30. The radio station stated that it was “faced with the drastic change in the political situation, with red lines everywhere,” and with the radio station’s bank account recently “blocked,” it “had no choice but to suspend broadcasting.”
“Hong Kong Language Learning Association,” which was established in 2013 and was dedicated to promoting Cantonese and traditional Chinese characters, announced on Aug. 28. that it would cease operations. Chairman Andrew Chan Lok-hang, revealed that national security officers searched his home and questioned him, saying that an entry in a Cantonese essay competition organized by the Hong Kong Language Learning Association allegedly breached the Hong Kong NSL, and requested its removal. After seeking legal advice, he decided to cease the operation of the “Hong Kong Language Learning Association” and initiate the dissolution process.
5. Virtual Asset Trading Platform Involved in Fraud
The virtual currency trading platform “JPEX” was suspected of conspiracy to commit fraud in September 2023. As of December 6, a total of 67 people were arrested. The police received claims from 2,629 victims, involving approximately HK$1.61 billion (US$206 million).“JPEX” was involved in issuing false and misleading statements through KOLs and foreign exchange shops, claiming that JPEX was licensed and fully recognized, and that some of its products had high returns. It also hired several Hong Kong and Taiwanese artists to help its publicity drive. JPEX has placed advertisements in MTR stations in 2021 and 2022, respectively. As early as July 2022, the Securities Regulatory Commission listed two affiliated companies of JPEX on the “list of unlicensed companies and suspicious websites,” but no further action was taken.
Until Sept. 13, 2023, the Securities and Futures Commission issued a statement naming and warning JPEX and “people who actively promote JPEX to the Hong Kong public and money exchange shops” as involved in at least six suspicious business practices and then announced on Sept. 16 that they would be referred to the police for follow-up.
Since Sept. 19, the police have arrested many well-known KOLs who have promoted JPEX, such as Joseph Lam Chok, Chan Yee, and others. Artists Jacqueline Chong and Julian Cheung Chi-lam took the initiative to go to the police headquarters to assist in the investigation and were not arrested.
The Securities Regulatory Commission was criticized for acting too slowly and for failing to regulate the situation. Later, under pressure from public opinion, it established and announced the list of licensed virtual asset trading platforms, the list of platforms that had gone bust, the list of platforms deemed to be licensed, and the list of the most concerned applicants.
6. Restructured District Council Elections Saw Record Low Voter Turnout
The CCP’s plan to forcefully reform the district council electoral system was released in May. In addition to restoring the appointment system, it also introduced qualification checks and drastically reduced the number of directly elected seats from 452 to 88, accounting for just 19 percent of the total. In addition, 176 seats for the “Three Committees” (district committees, fire prevention committees, and crime prevention committees) were introduced. Candidates for direct elections must be nominated by members of the “three committees” before they can join the elections. In the end, all democratic candidates were excluded. Even the pro-establishment party, Roundtable, had just one member able to participate in the elections.Indeed, well before the vote, all sectors of society already predicted a historically low turnout. The government, therefore, pulled out all the stops to raise the turnout rate, including holding a “District Council Election Fun Day,” and mobilizing all its various departments to shoot videos and distribute leaflets. The government has repeatedly called on civil servants to lead by example in voting and has stated that it will distribute government thank you cards to all after casting their votes. Leung Chau-ting, director-general of the Federation of Public Servants’ Unions, once admitted on a commercial channel program that civil servants and even their families feel the pressure.
The “elections” were held on Dec. 10, and the final total turnout was 27.54 percent, a historic low since the district councils were established in the 1980s.
7. Heavy Rain of the Century, HK Government’s Response Criticized
Heavy rain that officials described as “once in 500 years” struck from the evening of Sept. 7 to Sept. 8. The Observatory HQ recorded a rainfall of 158.1 mm (6.2 in.) in just one hour, the highest since records began in 1884. The black rainstorm warning was issued for more than 16.5 hours during that time, which was also a record.
The government has been criticized for its slow response. For example, it only “reminded” employers at 7:10 a.m. that they should allow their employees to stay at home except for essential personnel. It was not until 10:48 a.m. that the government stated that “the work arrangements of extreme conditions equivalent to those for Tropical Cyclone Warning No. 8 can be applied.” The failure of the government to declare a work stoppage earlier had led to two fatalities, with one worker being swept away by floods on his way to work, and the other while working under “black” rain conditions. The Association for the Rights of Industrial Accident Victims Limited harshly criticized the government’s reluctance to announce a work stoppage. It believed that if the government had announced a work stoppage earlier, the accidents could have been avoided, and urged the government to review it as soon as possible.
Heavy rain caused the entire basement levels of the North Building of Wong Tai Sin Centre to be inundated. In addition, the landslide on Redhill Peninsula in Tai Tam revealed that at least 70 detached seaside houses were involved in unauthorized construction or occupied government land. The government is gradually issuing clearance orders to the relevant detached houses or notifying the owners to demolish illegal structures and stop occupying government land.
8. Violent Crimes on the Rise, Socialite Killed and Mutilated
The government announced that there were 8,373 violent crimes from January to October 2023, an increase of 14.9 percent compared with the same period last year.Among them, 28-year-old socialite Abby Choi was killed in February, with her body mutilated and cooked. The police arrested six people, including four from the deceased’s family: her ex-husband, ex-father-in-law, ex-uncle, and ex-mother-in-law. They were charged with murder and other crimes. The case was divided into many smaller ones and will be referred to the High Court and District Court accordingly or postponed to next year for further hearing.
As if it was continuing the previous year’s trend, there were still many cases known as happening in the “International Sword Center” that is Hong Kong. The most horrific one includes the Yuen Long chainsaw murder case in May, in which a 54-year-old female victim was killed by her 41-year-old stepson with a chainsaw. The suspect is said to have fled abroad. On June 2, a homicide occurred at Hollywood Plaza in Diamond Hill. Two women, aged 26 and 22, were stabbed to death by a man unknown to them wielding a sharp knife. The police said that the 39-year-old suspect had a mental illness record.
9. Emigration Continues, 55 Primary 1 Classes are Slashed, Kindergartens to be Closed
The wave of emigration that was set off after the enactment of the “Hong Kong National Security Law” in 2020 continues. The working population in the third quarter of 2023 was only 3.83 million, which is about 140,000 less than the recent peak of 3.99 million in the second quarter of 2019.After the start of the school year in September 2023, the Education Bureau stated that a total of four primary 1 classes were added to government primary schools in the school year. However, considering the reduction of 59 classes approved by the Education Bureau in the same school year, the number of primary 1 classes was reduced by 55 compared with the previous school year. For government secondary schools, there are seven more Form One classes than when the number of classes was approved in May.
On the other hand, as the birth rate continued to decline and the wave of emigration continued, kindergartens were facing insufficient enrollment and financial constraints. The Education Bureau stated that a total of 41 kindergartens had been closed from the 2020/21 school year to the 2022/23 school year. After the start of the 2023/24 school year, the wave of kindergarten closures continued. Education Bureau figures indicate that as of mid-November, a total of three kindergartens have decided to close at the end of the school year, and one of them would merge with another school.
The most notable kindergarten closure announcement this school year is the “Kentville Kindergarten” in Kowloon Tong, which has been in operation for nearly 60 years. It will stop accepting K1 admission applications from the next school year and will downsize for three school years in succession before closure. Its founder and school supervisor, Priscilla Wong Wing-han, explained there are many reasons for the school’s closure, including a significant decrease in the number of K1 enrollments this school year, Hong Kong’s birth rate falling to a record low, and the school’s target customer group of young families emigrating.
In addition, Rosaryhill School, a private school with 64 years of history, announced in September that it will merge with the Dalton School Hong Kong next school year, with the government-subsidized Rosaryhill Secondary School section to cease operations in three years. Rosaryhill School Supervisor Fr. Hyacinth He You-sun said that one of the reasons for the closure was that the school had more than 2,000 students at its peak, but now it has dropped to about 400, less than 20 percent of the peak. The school issued another announcement at the end of December that all students will transfer to Yu Chun Keung Memorial College No. 2 next year, which means Rosaryhill School will be closed two years earlier than originally planned.
10. Organ Donation Cancellations
While the government is actively exploring the establishment of a regular organ transplant cooperation mechanism with the mainland, there are some people online calling the public to cancel their organ donation registrations. December 2022 was the month when the number of deregistration started to soar, the same month when the Secretary of the Medical and Health Bureau, Dr. Lo Chung-mou, told the party media Xinhua News Agency that he hoped to merge Hong Kong hospitals into the mainland’s “Computer Database of the China Organ Transplant Response System (COTRS).” Some commentators believe that this immediate cancellation stems from Hong Kong people’s distrust and suspicion of the mainland government.In May, the government took the initiative to publish an article accusing naysayers calling on others to cancel organ donation registrations as working contrary to the universal spirit of organ donation. It also said that the Medical and Health Bureau expressed regret for this, which triggered mainstream media reports. Chief Executive John Lee Ka-chiu even asked the police to investigate, further inciting the wave of cancellations. The month ended with 5,816 valid cancellations.
