As an influential hub and a common bridge between East and West, Hong Kong has always been notable for it’s highly advanced technology and financial sectors. It is often suggested that the unique mix of Western law and Eastern creativity has always been the driving force behind the ‘trust’ Hong Kong has enjoyed. That period of trust seems to be quickly coming to an end.
Financially, there are cracks starting to show in the system. Hong Kong Airlines (a subsidiary of HNA Group, Wang Jian’s multinational conglomerate) is unable to continue in-flight entertainment services.
It’s probably because they’re out of money — even after announcing they’ve secured a loan for 560+ million dollars. I believe that this is the historical nature of the command economy. Central planning just doesn’t work over the long term. The CCP decided to ban satellite dishes in the country for cultural reasons. If your nearest neighbors capable of delivering services (perhaps Japan or South Korea) to planes in-flight don’t settle in Yuan, HNA Group may have had some hard choices to make. This lack of openness on behalf of the CCP has been the primary force behind keeping the world economy from exploding into its next phase of creativity and growth.
From what I have learned about the economy of the mainland, the tariffs and trade exclusions have utterly obliterated the CCP’s economy over the last few years. More than 90% of car dealerships have shut down. “Channel stuffing” of excess vehicle inventory has taken place on a massive scale. The bike sharing programs led to oversaturated markets and graveyards visible from satellite photos filled with even more mass produced economic waste. This was driven by decades of capital misallocation, nepotism, greed, and cronyism from all of our governments, no matter who was in office.
The West has done enriched and educate the families of CCP members at its own expense. We aren’t simply vassal states of the CCP. We are not clients, and we are not all vulnerable to the CCPs ruthless corruption in the same ways. The CCP has now committed a genocidal Holocaust across the entirety of Xinjiang. It is simultaneously recolonizing Africa, and freely destroying Hong Kong. The CCP has also played a significant role in helping Mexico turn into a warzone, by supplying it with drugs and weapons.
When it came time to vote, in both the House and Senate, and then onto Trump, news reports stated that Trump was going to veto the HK HRDA. We knew this was a case of “fake news” because this is the only United States President we have seen to take any stance other than appeasement on China. Federal law enforcement agencies in the United States have been empowered to pursue the corrupted and criminal elements responsible for aiding this multinational crime syndicate.
The failure of command economies typically follow the same patterns. First, the government implements price controls in order to keep the market stabilized. It can do this because it uses slave labor.
At some point, those price controls fail and the country must implement strict restrictions called ‘capital controls’ that limit, for example, the amount of dollars you can take out of an ATM. These ‘capital controls’ have been implemented in China for months, if not a year.
The next failure is in the price controls themselves. Several price controls on the mainland economy, including liquid natural gas and pork, have already started to fail for a number of reasons. I expect that peripheral supply chains will be impacted next, with imports grinding to a halt. Exports will probably continue because the CCP will always take in foreign currency, but it appears to be no different than the Soviet Union’s internal leadership collapsing from the inside out.
The final failure is the government itself. When soldiers and military officials can no longer use their own currency, they won’t show up to work.